The mortgage industry saw a substantial 28.4 percent dive in FHA-insured mortgage loan production in the first half of 2011 compared to the same period last year, according to Inside FHA Lending’s latest analysis of government data. Approved lenders and their sponsored third-party originators combined for $100.12 billion in FHA loan originations at the end of the first six months. The top 50 FHA lenders accounted for more than half of the six-month output with an aggregated total of $53.4 billion ... [includes one data chart and one graph] Read More

The Department of Housing and Urban Development said it will soon issue guidance regarding audit requirements for small FHA direct lenders. A department spokesman said HUD is “very close” to issuing a mortgagee letter on revised compliance audit requirements needed for FHA lender approval or renewal. No date was given for the mortgagee letter’s release. On April 12, the FHA confirmed in an email to the American Bankers Association that it has approved ... Read More

Most state-licensed mortgage companies in the Nationwide Mortgage Licensing System and Registry are mortgage brokers, of which a significant portion does FHA loan correspondent business, according to a recent report issued by the Conference of State Bank Supervisors. As of the end of the first quarter, 14,980 companies possessed 28,415 licenses – an average of two state licenses per company, according to the report, “A Nationwide View on State-Licensed Mortgage Entities, Quarter I, 2011.” The licensee/registrant reports ... Read More

The Department of Housing and Urban Development is seeking comment on a proposed rule requiring appraisers to be certified, rather than licensed, by a state appraisal licensing board in order to be placed on the FHA appraiser roster. Mandated by the Housing and Economy Recovery Act of 2008, the proposed requirement would supersede HUD’s current practice of listing only state-licensed appraisers on the FHA roster. Although the practice complies with the statutory mandate, HUD believes the policy is outdated. There are approximately 55,000 state-certified appraisers on the FHA roster who would be ... Read More

With the days winding down to the effective date for permanent lower loan limits set by the Housing and Economic Recovery Act, the mortgage industry is strongly urging Congress to extend the current temporary higher loan limits to enable the FHA, Fannie Mae and Freddie Mac to continue providing liquidity until the housing market recovers sufficiently. If the temporary limits are allowed to expire on Oct. 1, getting financing for home purchases or refinancing will become more difficult and expensive for many borrowers, which may result in ... Read More

The impact of lower loan limits on the supply of Ginnie Mae mortgage-backed securities and other agency MBS would be very modest and that such loan limit changes should not affect Ginnie Mae prepayments, according to a recent analysis by Barclays Capital. With respect to agency MBS supply, the “permanent” lower loan limit established by the Housing and Economic Recovery Act of 2008 should cut the combined issuance of both conventional and Ginnie Mae pools by about 5 percent, the report said. The report, among other things ... Read More

As FHA tightens its underwriting further to give more room for private capital in the mortgage market, the federal single-family mortgage insurance program may no longer provide mortgage alternatives for as many “non-qualified residential mortgage” borrowers as it would have in the past, according to a new report issued by the Government Accountability Office. Analyzing the impact of the Dodd-Frank Act on homeowners and the mortgage market, the GAO report concludes that potential changes in the FHA’s role could influence ... Read More

The Department of Housing and Urban Affairs’ Office of the Inspector General recommended that HUD obtain complete documentation to close Ginnie Mae contracts after an audit uncovered flawed procedures at the Office of the Chief Procurement Officer. The OIG called for tighter procedures after finding that the procurement office did not get documentation from Ginnie Mae to close out completed and expired Ginnie Mae contracts in a timely manner. That was a violation of HUD’s guidelines for contract closeout procedures, the internal watchdog unit said. In addition, Ginnie Mae did not follow department guidelines ... Read More

A California mortgage lender that recently reached a settlement agreement with the Department of Housing and Urban Development over branch issues could land before HUD’s Mortgagee Review Board for branch-related loan quality issues. HUD’s Office of the Inspector General said an audit of Prospect Mortgage’s branches uncovered high default rates due to numerous violations of HUD underwriting and quality control requirements. The OIG recommended requiring Prospect to reimburse HUD $344,326 for ... Read More

Some federally supervised depository institutions with FHA businesses are in danger of missing the July 29 deadline for registering with the Nationwide Mortgage Licensing System and Registry and could be sanctioned. The delay in registration is apparently due to confusion and uncertainty as to whether certain employees meet the definition of a “mortgage loan originator” (MLO) and should be registered as required by the Secure and Fair Enforcement for Mortgage Licensing Act, said compliance experts. The mortgage-related activities of such employees do not clearly meet the MLO definition and they include ... Read More