FHA's Mortgage Insurance Fund Improvement Has Come a Long Way

Posted To: MND NewsWire

The Federal Housing Administration (FHA) released its annual Report to Congress several weeks ago, reporting significant improvement in its Mutual Mortgage Insurance (MMI) Fund. Late last week Brian D. Montgomery, FHA Commission and Assistant Secretary of the Department of Housing and Urban Development (HUD), testified regarding the report to a hearing of the House Financial Services Committee. Montgomery said the MMI’s capital ratio increased to 4.84 percent in the 2019 fiscal year (FY2019) from 2.76 percent in FY2018, well above the 2.00 percent statutory minimum. Additionally, MMI Capital was $62.38 billion, an increase of more than $27.52 billion from FY 2018, and perhaps the highest ever. While attributing a significant portion of the improvement both to the fund and FHA’s financial position…(read more)

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FHA's Mortgage Insurance Fund Improvement Has Come a Long Way
FHA's Mortgage Insurance Fund Improvement Has Come a Long Way

Lots of Refinancing, So Why Are Servicers Losing Business?

Posted To: MND NewsWire

Black Knight continues to review, in its new Mortgage Monitor , how the effects of nearly a year of lower interest rates have ricocheted throughout the industry. This month’s Monitor looks both at loan data from October and from the third quarter of 2019. Prepayments are still running at record high levels , increasing by what the company called “an eye-popping” 132 percent compared to the same time last year. The single month mortality (SMM) rate increased by double digit percentages for every one of the last 15 vintages of loans during September and October with some of the largest gains among loans originated during the housing bubble of 2005 to 2007. By product type, those loans guaranteed through GNMA (VA, FHA, USDA) once again had the highest payoff rate although they increased in October…(read more)

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Lots of Refinancing, So Why Are Servicers Losing Business?
Lots of Refinancing, So Why Are Servicers Losing Business?

Loan Characteristics Mostly Account for Conforming/Jumbo Spread

Posted To: MND NewsWire

For many years homebuyers looking for homes priced above entry level employed every device they could to keep their loan amount below whatever might be the current limit for conforming (Fannie Mae, Freddie Mac) loans. It might mean determining between the purchase of two similarly priced homes if only one squeaked by under the limit. Buyers came up with larger down payments, dipping more deeply into savings, hitting up the bank of mom and dad, or employing piggy-back second mortgages. Why? Because a jumbo loan would almost always have a higher interest rate than a conforming loan. That higher monthly payment could even mean the difference between qualifying for the loan or not. However, starting in 2013 the spread between a conforming and a jumbo loan began to narrow, and today’s jumbo loans…(read more)

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Loan Characteristics Mostly Account for Conforming/Jumbo Spread
Loan Characteristics Mostly Account for Conforming/Jumbo Spread

October's Increases Suggest a Reversal in Home Price Slump

Posted To: MND NewsWire

After slowing for 17 months, home price gains rose 3.8 percent in July and then held nearly flat in August according to Black Knight’s Home Price Index. Now the first tranche of price data for October seems to indicate a rapid shift into an acceleration of gains. The company says the rate of annual price gains during the month was 4.25 percent. This is growth of 0.35 percent from the 3.9 percent annual appreciation in September and the largest month-to-month change since July 2013. The annual increase is also the largest in nine months. The September to October change was 0.33 percent, also notable as it is nearly six times the long-term (five-year) average increase for October and the largest increase in any October since 2005. The company says these numbers reflect home sale activity for…(read more)

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October's Increases Suggest a Reversal in Home Price Slump
October's Increases Suggest a Reversal in Home Price Slump

Access to Government Backed Mortgages Finally Improves

Posted To: MND NewsWire

The Mortgage Bankers Association’s (MBA’s) Mortgage Credit Availability Index (MCAI) moved significantly higher in November, gaining 2.1 percent compared to October. The index measures borrower access to mortgage credit and has components for each of the major product types. A higher index number indicates that access is improving. The Index level for the month was 188.9. The Government MCAI increased by 2.9 percent and the Conventional MCAI moved 1.4 percent higher. The two components of the Conventional MCAI, the Jumbo MCAI and the Conforming MCAI rose 2.2 percent and 0.2 percent respectively. “Credit availability rose for the third straight month in November, with an increase in supply across all loan types ,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting…(read more)

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Access to Government Backed Mortgages Finally Improves
Access to Government Backed Mortgages Finally Improves

FHA 2020 Loan Limits Set

Posted To: MND NewsWire

Federal Housing Administration (FHA) Commissioner Brian D. Montgomery has announced the loan limits for FHA forward mortgages in 2020. The limits are based on the conforming loan limis announced last week by the Federal Housing Finance Agency (FHFA) for loans acquired by Fannie Mae and Freddie Mac. That basic conforming limit will be $510,400 for most of the United States, up from $484,350 in 2019. The conforming loan limits are calculated based on the annual increase in the 2019 FHFA Housing Price Index for the third quarter of the year which was 5.38 percent. Using that limit, FHA sets its own limits with a floor and a ceiling. The floor applies to those areas where 115 percent of the median home price is less than 65 percent of the base limit for 2020 that low cost limit will be $331,760…(read more)

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FHA 2020 Loan Limits Set
FHA 2020 Loan Limits Set

Housing Construction too Slow for Growing Population of Millennials

Posted To: MND NewsWire

There is widespread industry concern that new homes and apartment buildings are not being constructed fast enough to keep up with demand and now the National Association of Home Builders (NAHB) says there is a mismatch between where they are being built and where they are truly needed . Litic Mulali analyzed the third quarter edition of NAHB’s Home Building Geography Index (HBGI) for a post in the association’s Eye on Housing blog. The HBGI identified “Millennial counties,” those counties in which Millennials, persons born between 1981 and 1997, make up at least a 26 percent share of the local population. The top 25 percent of counties with a high millennial concentration also contain 62 percent of the total U.S. population. In a third quarter analysis of HBGI, NAHB found that those counties…(read more)

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Housing Construction too Slow for Growing Population of Millennials
Housing Construction too Slow for Growing Population of Millennials

Mortgage Apps Hit on a Technicality, But Purchases Still Increased

Posted To: MND NewsWire

Mortgage activity during the week ended November 29 was predictably impacted by the Thanksgiving Day holiday which effectively shortened the business week to three days. The Mortgage Bankers Association (MBA) says its data on application volume contains an adjustment to account for the holiday. MBA’s Market Composite Index, a measure of that volume, fell by 9.2 percent on a seasonally adjusted basis from one week earlier and was down 38 percent on an unadjusted basis. The Refinance Index decreased 16 percent from the week ended November 22 but was still 61 percent higher than the same week one year ago which did not contain a holiday. The refinance share of mortgage activity decreased to 59.0 percent of total applications from 62.0 percent the previous week. The seasonally adjusted Purchase…(read more)

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Mortgage Apps Hit on a Technicality, But Purchases Still Increased
Mortgage Apps Hit on a Technicality, But Purchases Still Increased

Could FHA's Recovery Lead to Reduced Mortgage Insurance Premiums?

Posted To: MND NewsWire

The Federal Housing Finance Agency (FHA) had to be bailed out by the U.S. Treasury during the financial crisis after its Mutual Mortgage Insurance Fund was nearly depleted. Congress has long mandated a 2.0 percent ratio in its fund, but the agency’s 2011 annual report reported the fund was down to 0.24 percent of its balance of guaranteed loans. In its annual report this November FHA reported the FY2019 capital ratio of the fund was 4.85 percent. This is a notable recovery , but even more so when compared to the ratio in FY2018, 2.76 percent. Both the forward portfolio with insurance on $1.2 trillion of mortgages and the reverse mortgage portfolio with insurance on $64 billion showed large improvements Urban Institute (UI) analysts Laurie Goodman and Edward Goldman took a deeper look at what…(read more)

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Could FHA's Recovery Lead to Reduced Mortgage Insurance Premiums?
Could FHA's Recovery Lead to Reduced Mortgage Insurance Premiums?

Home Price Gains Aren't For Everyone (Or Everywhere)

Posted To: MND NewsWire

Home prices increased on an annual basis by 3.5 percent in October according to CoreLogic’s Home Price Index (HPI). The index rose 0.2 percent from the previous month. The rate of increase in home prices appears to have stabilized for the moment. After trending higher for several years, the HPI hit a recent peak of 6.62 percent in April 2018, then decelerated to 3.53 percent by the following March. Since then it has moved back and forth over a narrow range, 3.3 to 3.6 percent. The highest annual gain was again in Idaho at 10.9 percent. Maine and Indiana followed with increases of 7.5 percent and 7.1 percent respectively. Among metro areas, Denver saw the highest appreciation at 3.4 percent. Frank Nothaft, CoreLogic’s chief economist, said “Local home-price growth can deviate widely from the…(read more)

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Home Price Gains Aren't For Everyone (Or Everywhere)
Home Price Gains Aren't For Everyone (Or Everywhere)