FHA jumbo loan production rose nearly 36.9 percent in the first quarter, ending the period with $3.8 billion in new volume, according to an Inside FHA/VA Lending analysis of agency data. Volume includes all FHA loans exceeding $417,000. It was also up significantly, 59.6 percent, from the same period a year ago. Purchase loans accounted for 52.8 percent of FHA jumbos originated during the first three months of 2015, and 93 percent were fixed-rate purchase and refinance loans. The top five FHA jumbo lenders – Quicken Loans, Wells Fargo Bank, Prospect Mortgage, Pinnacle Capital Mortgage Corp., and LoanDepot – reported increases on a quarter-to-quarter basis. Together, the elite group accounted for 13.0 percent of the FHA jumbo market. The largest quarter-to-quarter increases were mostly mid-level FHA jumbo lenders. For example, 12th-ranked Freedom Mortgage, a top player in the ... [ 1 chart ]

The frequently-asked-questions guidance to using the FHA’s consolidated Single Family Policy Handbook is good to have though it shows just how complicated the FHA’s mortgage origination process is, according to lenders. In fact, the updated FHA handbook could still be confusing to borrowers simply because a lot more information is concentrated in one source, lenders said. According to the FHA, the more than 290 FAQs will enable lenders to make operation adjustments before the handbook goes into effect on Sept. 14, 2015. The FAQs are for information purposes only and do not apply to current FHA policies. They do not establish or modify policy contained in the handbook. The FAQs reiterate information in the handbook under headings such as Credit Underwriting, Closing and Insuring, FHA System Support and Consumer Information. Industry observers noted that the FAQs did not ...

Lenders are accounting for an increasing share of home purchase financing as investors decrease their largely cash buying. Purchases by first-time homebuyers are rising, helped by FHA financing. “First-time homebuyers rarely buy homes with cash and with their increasing participation in the housing market, we expectedly see the proportion of cash-financed transactions falling,” said Tom Popik, research director of Campbell Surveys. The non-cash share of financing for home purchases increased...

The VA maintained a sizeable lead in first-lien mortgage refinancing over FHA and private mortgage insurers in the first quarter of 2015 but yielded to both in purchase originations during the same period. According to the Inside Mortgage Finance database, mortgage lenders originated approximately $221.0 billion of refi loans in the first quarter, a 51.4 percent increase from a revised fourth-quarter production estimate of $146.0 billion. Of first-quarter mortgages securitized by Fannie Mae, Freddie Mac and Ginnie Mae, refi loans comprised 61.4 percent, up sharply from 37.6 percent for all of 2014. VA streamline refis accounted for $20.4 billion while FHA refis made up $12.2 billion of refis pooled in agency mortgage-backed securities. FHA’s refi production jumped 57.8 percent in the first quarter. On the other hand, refi loans with private MI accounted for $14.2 billion produced during the ...

First Tennessee Bank’s agreement with federal agencies to pay $212.5 million to resolve allegations of violation of the False Claims Act is the latest proof of the government’s unrelenting pursuit of FHA lenders over underwriting and quality control issues. The settlement once again demonstrates the federal government’s commitment to combat FHA fraud using the FCA to recover taxpayer losses, according to an analysis by Boston law firm Greene LLP. “[The Department of Housing and Urban Development] made a point of saying that this behavior is exactly what led to the financial crisis and housing market downturn,” Greene’s compliance attorneys said. HUD and the Department of Justice have vowed to continue to pursue and hold accountable lenders who put profits ahead of their customers and legal obligations, the attorneys added. According to the DOJ, First Tennessee, a regional bank, admitted ...

Total originations of reverse mortgages with FHA insurance increased in the first three months of 2015, according to an Inside FHA/VA Lending analysis of agency data. Home Equity Conversion Mortgage production, overall, rose 3.0 percent to $3.9 billion from the fourth quarter of 2014 and was down 2.0 percent on a year-over-year basis. HECM purchase loans far outpaced refinances, which accounted for only 14.5 percent of total HECM volume in the first quarter. Lenders reported a total of $2.3 billion in initial HECM principal amount at loan origination. Meanwhile, there is continued investor interest in HECM mortgage-backed securities (HMBS), according to Ginnie Mae. The unpaid principal balance of HMBS climbed to $48.9 billion in FY 2014 and the number of participations (the funded portions of HECM loans that have been securitized) has increased to 6,585, 856. HMBS issuance was ... [1 chart]

The National Reverse Mortgage Lenders Association is seeking guidance from the Consumer Financial Protection Bureau on how to design reverse mortgage advertisements without triggering regulatory scrutiny. Peter Bell, NRMLA president and chief executive, said he had sent a Freedom of Information Act request seeking access to the particular ads that the CFPB sought comment on in a recent study on reverse mortgage advertisements. The study found that consumers who viewed the ads were left with misimpressions about reverse mortgages. For example, consumers were confused about reverse mortgages being loans. Some thought that home-equity conversion mortgages are a “government benefit” or that they could ensure that homeowners could stay in their homes for the rest of their lives. Others complained of difficulty reading the fine print and that ...

The FHA plans to issue a proposed rule in the fall that would allow it to insure single-family condominium units in multifamily projects, according to the agency’s regulatory agenda for the second half of 2015. The proposed rule would cover condo units that are attached, detached, semi-detached or manufactured. It would apply as well to undivided interests in the common areas and facilities that serve the project. The proposed change would clarify and ensure lender compliance with the Housing and Economic Recovery Act of 2008. HERA moved FHA’s authority to insure single-family condominiums from Section 234 to Section 203 of the National Housing Act. However, because Section 203 does not provide the same authority for FHA, rulemaking became necessary. HERA also granted FHA the authority to issue administrative notices to convey condominium policy guidance until a ...

An FHA proposal aimed at clarifying loan-certification rules is a step in the right direction but it needs more work, according to industry observers. Lenders declined to comment on the proposed form changes but they all agree that the proposal does not go far enough. The revisions aim to make the language in Form 92900-A (HUD Addendum to Uniform Residential Loan Application) clearer for both borrower and lender. Applicants for an FHA or a VA loan sign the addendum to certify to the government that the information provided by the borrower on the mortgage loan application is correct. By signing the addendum, the borrower certifies that he or she will make payments on the home loan or become indebted to the federal government upon failure to repay the loan. For lenders, signing the form certifies that the loan application meets all of FHA’s insurance requirements. This is where lenders often ...

Security issuances backed by VA loans totaled $35.5 billion in the first quarter of 2015, with VA streamline refinance loans accounting for 57.7 percent, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. Approximately $20.5 billion in VA interest rate reduction refinancing loans were securitized during the first three months as borrowers took advantage of lower interest rates.“For the last three to four months, rates have been bottoming out again, and if rates are lower it makes sense to refinance,” said Jon Shrum, vice president of Commerce Home Mortgage, a VA-certified lender in Huntington Beach, CA. An estimated $14.5 billion in VA purchase mortgages also were securitized during period. VA loans comprised 13.1 percent of all loans in Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities. California, Virginia, Texas, Florida and Washington, ... [2 charts]