Total FHA forward mortgage originations fell to $190.3 million in 2011, a 32.8 percent decline from 2010 even as mounting FHA delinquencies continue to raise concerns of a costly taxpayer bailout. Five lenders accounted for a fourth of total production with a combined $48.2 billion and an aggregate market share of 25.3 percent, according to Inside FHA Lending’s 2011 ranking and analysis of top FHA lenders. The data do not include FHA reverse mortgages. However, the total output of the top five declined on a quarterly and yearly basis by 15.6 percent and a hefty 39.0 percent, respectively. Those five elite lenders included ... (includes one chart)
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The Department of Housing and Urban Development this week announced new regulations strengthening the process by which it requires errant lenders to indemnify the agency for insurance claims paid on ineligible mortgages. The final rule is the latest in a series of steps HUD says it has undertaken to protect and strengthen the FHA’s Mutual Mortgage Insurance Fund while providing qualified borrowers access to government-backed mortgage financing. The health of the MMI fund has come under scrutiny after a recent independent audit reported further decline in the FHA’s capital reserves for unexpected losses. Testifying before Congress in December, HUD Secretary Shaun Donovan discussed ...
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Congress should repeal legislation raising the FHA’s maximum loan limit before the agency’s losses skyrocket, triggering a massive taxpayer bailout, warned the American Enterprise Institute. In a new research paper, Peter Wallison and Edward Pinto, resident fellows at the AEI, urged Congress to correct its mistake of restoring the pre-Oct. 1 temporary maximum loan limits of $729,750 for FHA while leaving Fannie Mae and Freddie Mac at the lower “permanent” high-cost loan limit of $625,500 set by Congress in 2008. “Congress should bite the bullet – recognize the losses that are already embedded in the FHA’s insurance fund and adopt reforms to the agency’s accounting and underwriting that will stop the bleeding,” the two public policy analysts said. Last fall, the FHA came under fire from Republicans and conservatives after an independent actuarial review of the agency’s Mutual Mortgage Insurance Fund found ...
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Fewer mortgage lenders were terminated in 2011 through the FHA Credit Watch Termination Initiative than in the preceding three years. According to the Department of Housing and Urban Development’s 2011 Credit Watch termination list, only 20 approved lenders lost their authority to originate and underwrite FHA loans. The number was way down from 2010, when a record 122 mortgagees had their origination approval agreements with HUD and the FHA ended. Poor performance of FHA-insured loans originated by the mortgagee results in a termination. Specifically, an agreement with a lender may be terminated if ... (includes one chart)
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The Department of Housing and Urban Development has proposed to eliminate an outmoded appeals process for determining the maximum FHA mortgage loan limits in certain areas. Published in the Jan. 13 Federal Register, the proposed rule specifically would do away with regulations that allow HUD to set the area-based loan limits on a yearly basis and permit appeals of these loan limits. The appeals were once an important source of data for HUD because it allows any party to submit documentation in support of alternative mortgage limits if that party believes the limit set by HUD did not reflect the median house prices in an area. The loan limit appeals process was set ...
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MetLife Home Loans (MHL), one of the top FHA-approved mortgage lenders and FHA servicers, has quit the loan origination business and stopped accepting new applications for forward mortgages. A residential mortgage arm of MetLife Bank, MHL said it is shutting down its various residential and construction loan programs and continuing its reverse mortgage program. The home loan division will honor all contractual commitments for loans in process and expects the majority of loans to close in 90 days. MHL began originating traditional, jumbo and reverse mortgages in 2008. However, dwindling revenues prompted ...
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FHA-approved mortgage lenders are now required to disclose whether a purchase transaction was sold previously as a real estate owned property, including home equity conversion mortgages. In a general notice to lenders, the Department of Housing and Urban Development said all previous REOs sold in a purchase transaction must show their former REO case number in FHA Connection. The notice applies to HECM loans as well because an assigned HECM loan can become an REO property, explained a HUD spokesman. It became effective on Jan. 14. Meanwhile, HUD also announced ...
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Two independent mortgage firms have made key changes to their operations to provide better subservicing solutions to FHA and VA lenders as well as reverse mortgage originators. Gateway Mortgage Group, a privately held mortgage bank based in Tulsa, OK, recently announced a new in-house subservicing unit dedicated solely to specialty and default servicing of FHA and VA loans. The decision to set up a subservicing shop became necessary due to the more stringent government loan requirements and increased oversight by regulators, according to Kevin Osuna, vice president of default services. Community bank servicers and smaller institutions were struggling ...
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