Tag Archives: FHA

Less than two years after being confirmed as the head of the Federal Housing Administration (FHA), Commissioner Carol Galante is making plans to step down from her post.

According to the American Enterprise Institute's (AEI) latest National Mortgage Risk Index, the share of home purchase loans at risk of going sour in the event of an economic downturn fell nearly half a percentage point last month to 11.44 percent. According to the group, the risk value of loans securitized in Fannie and Freddie's portfolios fell slightly to 5.8 percent, while the risk index for FHA slipped to 23.6.

In a conference call Tuesday,JPMorgan CEO Jamie Dimon took the time to single out FHA-backed lending as a source of risk for the megabank. "[T]he real question is should we be in the FHA business at all? We're still struggling with that," Dimon said. "Until they come up with some kind of safe harbors or something, we're going to be very, very cautious in that line of business."

The Mortgage Bankers Association's (MBA) Builder Applications Survey (BAS), a gauge of application volume from mortgage subsidiaries of homebuilders, suggests new home purchase applications slipped 5 percent from May to June, the group reported Thursday. The change does not include any adjustments for typical seasonal movements.

The Mortgage Bankers Association (MBA) reported Tuesday a 0.6 percent increase in its Mortgage Credit Availability Index (MCAI) from May to June, putting the index at 115.8. The group links the increase in the headline index to "a slight net loosening in lender criteria regarding Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans with respect to minimum credit scores and maximum loan-to-value (LTV) ratios."

In a letter sent to HUD, the National Association of Realtors reiterated its appreciation for the Federal Housing Administration's (FHA) efforts to provide reduced mortgage insurance premiums to first-time homebuyers but complained about the high mortgage insurance premiums and counseling fees that come along.

The Justice Department announced that U.S. Bank has agreed to a $200 million settlement on claims it underwrote FHA-insured loans that did not meet eligibility requirements. U.S. Bank also admitted that its quality control program fell short of FHA requirements. Consequently, the bank failed to identify shortcomings in many of the loans it had certified for FHA insurance.

AEI's National Mortgage Risk Index (NMRI), released monthly through the institute's International Center on Housing Risk, registered 11.87 percent for May, down from April's revised reading. The institute considers any index value below 6 percent as "indicative of conditions conducive to a stable market." The index acts as a stress test, measuring the percentage of loans at risk of default in the event of another economic crisis.

HUD issued a new Mortgagee Letter warning lenders participating in the FHA's reverse mortgage program against using deceptive advertising regarding the program. FHA Commissioner Carol Galante explained the guidance "is intended to make sure lenders know we're keeping a watchful eye on their marketing and advertising practices that might steer borrowers toward reverse mortgage options that limit their available choices."

A federal appeals court has rejected an attempt by Wells Fargo to block a government suit alleging the bank falsely certified the underwriting credit of loans it originated as a direct endorsement lender for the Federal Housing Administration (FHA). In its attempt to have the suit dismissed, Wells Fargo argued the agreement outlined in 2012's National Mortgage Settlement barred the types of claims the government is now making.