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FHA: The incredible, shrinking mortgage resource

21.01.2014
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Is FHA sending its most profitable, lowest-risk customers — homebuyers who have very good to excellent credit — to Fannie and Freddie for their mortgages, thereby losing significant market share?

Yes.

Are FHA’s multiple and costly hikes to its insurance premiums — and worst of all, its revocation of borrowers’ rights to cancel premium payments during the term of the loan — beginning to have a negative impact on its ability to retain good-quality homebuyers?

Yes.

Are credit scores on the downgrade at FHA as the agency turns off new buyers with FICO scores above 700?

Absolutely.
But is all this necessarily bad news? Does it point to an emerging case of adverse selection — something that’s especially ill-timed given Congress’ mandate to the agency to rebuild its depleted insurance fund reserves in the wake of the agency’s first federal bailout in its history?

Or does it simply mean […]

Did Fannie Mae run afoul of California’s short sale laws?

21.01.2014
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Fannie Mae and its servicers maybe broke the law in California when collecting contributions from borrowers on short sales, the office of the inspector general for theFederal Housing Finance Agency claims in a new report. The government-sponsored entity, while not admitting culpability, said a data error may be to blame.

The detailed report, which is available here, prompted the FHFA to issue a response, saying while it “recognizes the GSEs’ obligations” to protect borrower interests, it is “unclear whether or not actions occurred that run contrary to California law as noted by the FHFA-OIG.”

Back in July 2011, California issued a law prohibiting note holders from requiring a borrower to pay added compensation when the homeowner provides a written consent to a short sale.

Despite the rule going live, the FHFA-OIG claims Fannie servicers collected borrower contributions on 124 short sales completed […]

New mortgage rules aim to protect home buyers, owners

16.01.2014
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Six years after the housing meltdown exposed fissures in the system, new mortgage rules that will take effect Friday stand to remodel the market.

Housing groups worry that changes meant to shield Americans from abusive lending practices that contributed to the financial crisis will make it harder for many to buy homes. But experts say the rules will create sustainable homeownership by ensuring that borrowers can afford to repay their home loans.

“The rules may cut some credit [availability] at the margins, but as a whole they will ensure that borrowers have a product they can afford,” said Sam Khater, deputy chief economist at the housing data provider CoreLogic. “The terms of the debate are always about access to credit, but it’s also about access to sustainable homeownership.”

The reforms written by the Consumer Financial Protection Bureau aim to protect Americans in the process of buying a home and […]

5 ways the jumbo mortgage market will change in 2014

16.01.2014
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Big changes are coming to jumbo mortgages.
Wealthy home buyers signed up for these loans in droves last year because of their low rates and flexible repayment options. The total dollar amount of originated private jumbo mortgages—which exceed $417,000 in most parts of the country and $625,500 in pricey housing markets such as New York and San Francisco—was on track to be the highest since 2007.
But the jumbo-mortgage landscape is shifting this year. New mortgage rules from the Consumer Financial Protection Bureau, which go into effect on Jan. 10, could limit choices. Other regulatory actions are also expected to kick in that could make credit access on the high end more expensive.
Despite the changes, there is a silver lining for wealthy buyers: More lenders are competing for their attention, which means that rates on jumbo mortgages could rise at a slower pace than […]

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