Some in the industry are concerned that HAMP interest-rate resets, which begin later this year, could cause defaults on modified loans to increase, lowering the number of successful modifications under the program.
Lack of Congressional funding, however, has put a damper on the initiative. And lenders generally oppose proposals where they would be charged a subsidy fee.
The high cost of FHA loans, due mainly to higher MI premiums and a requirement to maintain mortgage insurance for the life of the loan, has made it difficult for borrowers to obtain credit.
Among the largest servicers, Ocwen Financial Corp. and RoundPoint Mortgage had the highest overall delinquency rates during the first quarter. However, both firms specialize in “high touch” product.
But legislators denied federal funding for a new pilot program – Homeowners Armed with Knowledge – that would broaden use of housing counseling tied to FHA originations and servicing.
All lenders authorized to process VA loans automatically are required to maintain a QC plan and execute it in the course of originating government backed mortgages.
Johnson-Crapo requires 12 percent mortgage insurance if the LTV exceeds 80 percent but is no more than 85 percent; 25 percent MI if the LTV exceeds 85 percent but no more than 90 percent; and 30 percent MI if the LTV exceeds 90 percent.
Reverse mortgages guaranteed by the government are due and payable upon the death of the homeowner, the sale of the home, and other conditions, including the failure to reside in the property or pay the taxes and insurance.