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Posts Tagged ‘David Stevens’

Lenders Receive Reprieve on Minor Errors in Closings

December 31st, 2015 Comments off

mortgage  housingwire creditThe Consumer Financial Protection Bureau (CFPB) gave lenders a slight reprieve on the Know Before You Owe rule that provides borrowers with all the charges, fees and line items three days before closing instead of at closing, saying they will not be held accountable for most minor errors in loan processing and paperwork.

By trying to avoid the opportunity for unscrupulous lenders and real estate agents to slip in higher interest rates and hidden fees, like what happened during the housing boom, some disruptions have occurred in home lending and closings.

CFPB Director Richard Cordray, in a letter to Mortgage Bankers Association (MBA) president David Stevens, said, “We believe that the risk of private liability to investors is negligible for good-faith formatting errors and the like,” Cordray wrote to MBA president David Stevens. “We recognize that a certain level of minor errors in the early days of implementation is to be expected,” as he noted that the GSEs and the CFPB are seeking good-faith efforts to come into compliance.

Lenders, realtors and title companies have seen the average time for closing loans rise as much as a week, which has cost some borrowers more in fees to lock in specific interest rates. “Needless to say, we think this is a very positive development,” said Pete Mills, a senior vice president at the MBA. ##

(Image credit: housingwire)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

FHFA Proposal could Reform Sale of Manufactured Homes

December 16th, 2015 Comments off

federal_housing_finance_agency__logoThe Federal Housing Finance Agency (FHFA) released a plan today, Dec. 15, 2015, that gives owners of manufactured home communities (MHCs) the opportunity to access financing by Fannie Mae and Freddie Mac (the GSEs), according to what nationalmortgagenews tells MHProNews. It also would provide incentives for states to convert manufactured homes, not secured by real estate, from chattel loans to real estate loans.

Under the proposal, GSEs would be required to offer financing for small MHCs with 150 or fewer home sites, which would allow them to earn “duty to serve” credits if they make blanket loans secured by the land and the home site in those communities. However, for this to work, the MHC owner must grant the residents a minimum one-year lease, and the right to post for sale signs and be able to sell their home on its current site.

The FHFA proposal would also require MHC owners to offer their communities for sale to the residents if they decide to sell.

In addition, the plan would create an opportunity for a secondary market for manufactured housing loans that are secured by real estate. Currently, lenders for buyers of MH have to carry their own paper. The Consumer Financial Protection Bureau (CFPB) reports, while two-thirds of MH buyers site their homes on land they own, they tend to finance the homes using chattel loans.

An FHFA official said, “A growing number of manufactured housing buyers are opting to place their homes on land they are purchasing or already own. These real estate loans perform better and have lower default rates than chattel loans.

Moreover, the FHFA is encouraging the GSEs to conduct a pilot program financing manufactured home loans not secured by land, and is also seeking comment on how chattel loans could be made safer for purchase by the GSEs.

David Stevens, president and chief executive of the Mortgage Bankers Association (MBA), said, “Manufactured housing is an important entry point for many low income homebuyers. Conducting a pilot program in order to gauge the effectiveness of purchasing these types of loans is the smartest, most efficient way to understand their performance.##

(Image credit: Federal Housing Finance Agency)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Housing Finance Reform Bill Balances Public vs Private

March 23rd, 2015 Comments off

mortgage app  housingwire creditIn a measure to preserve housing affordability while shielding taxpayers from another bailout, nationalmortgageprofessional tells MHProNews three Democratic representatives on the House Financial Services Committee have reintroduced housing finance reform legislation.

Reps. John Carney (D-DE), John K. Delaney (D-MD) and Jim Himes (D-CT) first introduced the Partnership to Strengthen Homeownership Act last summer. The bill pares down the government-sponsored enterprises (GSE) for sale into the private market

The measure also offers insurance through Ginnie Mae, supporting all single-and-multi-family mortgage backed securities (MBS) with five percent private sector capital, which is in a first loss position. The 95 percent remaining risk will be divided between Ginnie and a private re-insurer, and fees paid to Ginnie will go toward affordable housing programs.

Noting this approach veers toward middle ground between private and public sector housing reform, Rep Carney says, If we to want to preserve the dream of homeownership and make sure taxpayers aren’t on the hook for another bailout—the status quo has to change. Our bill is the right policy, and it’s also an approach that appeals to both sides of the aisle.

Mortgage industry leaders have responded positively to this bill. Mortgage Bankers Association President and CEO David H. Stevens said, We particularly appreciate the bill’s approach regarding the appropriate level of private ‘first-loss’ capital required, its mechanisms for the pricing of a federal guarantee, and its recognition of the unique attributes and importance of the multifamily finance market.

Said John Dalton, president of the Financial Services Roundtable’s Housing Policy Council: This bill shows there are thoughtful members on both sides of the aisle who recognize the need for change. ##

(Image credit: housingwire)

matthew-silver-daily-business-news-mhpronews-com   Article submitted by Matthew J. Silver to Daily Business News-MHProNews.

FHA loan performance and fund improving, report replete with irony for Manufactured Housing Lenders

November 19th, 2014 Comments off

projected-mmi-fund-fha-loans-credit=nationalmortgage-news-mhpronews-com-The Federal Housing Administration (FHA) recent actuarial report shows that the mortgage insurance fund is back in the black. FHA Title II loans are used for the financing of manufactured and modular homes as well as conventional housing.

NationalMortgageNews informs MHProNews that “the FHA’s Mortgage Insurance Fund reached a 0.41% capital ratio in fiscal year 2014, which ended Sept. 30, up from a negative 0.11% in the year prior. While the improvement was good news, the fund’s ratio was well below its statutory minimum of 2%.”

This report was part of Julian Castro’s recent interview with BloombergTV – which also covered the Obama Adminstrations goals for GSE reform – see the interview, linked here.

House Republicans are skeptical about the overall positive report.

We’ve heard similar rosy predictions about FHA finances for years,” House Financial Services Committee Chairman Jeb Hensarling said in a press statement. “Some in Washington are now clamoring for the FHA to lower its annual mortgage insurance premiums. But until the FHA fulfills its statutory requirement, that should be a non-starter.”

Chairman Hensarling is correct in saying there are calls for premium reductions, including from the National Association of Realtors (NAR), which said that 400,000 potential buyers were knocked out of the market in 2013 by the higher FHA premiums. Depending on loan size, analysts say the higher FHA risk premiums can cost a borrower $200-400 more monthly.

With the FHA’s MMI fund “on the path to recovery, NAR urges FHA to lower its annual mortgage insurance premiums and eliminate the requirement that mortgage insurance be held for the life of the loan,” said NAR President Chris Polychron.

Mortgage Bankers Association (MBA) President David Stevens – a professional who seems warm to manufactured housing – agreed.

FHA premiums are currently at an all-time high,” said Stevens, who was also a former FHA commissioner. “FHA needs to find the right balance so it can meet its mission and further grow its reserves by sustaining increasing volumes without being adversely selected.”

NMN’s Brian Collins, stated that “FHA endorsed nearly 566,500 forward loans in fiscal 2014, compared to 892,400 ten years ago. FHA also endorsed 40,500 reverse mortgage loans in fiscal 2014, compared to 37,800 in FY 2004.

Ironic Oversight in Facts?

What is lost these flying facts is that the CFPB in its recent report on manufactured housing lending comes off as seemingly crying foul for MH lenders charging to cover their risks and costs, while the FHA is praised by some for hiking premiums to cover risks in order for it to remain financially sound. Is that a double standard?

The Government Sponsored Enterprises (GSEs) have suggested they will lower down payments and essentially compete with FHA for the business it has traditional done. This comes at a time when FHA endorsed only some 566,500 forward loans in fiscal 2014, compared to 892,400 ten years ago.

As lending is a life-blood for all big ticket and home sales – including manufactured housing – MHProNews will continue to track such developments. ##

(Image credit: National Mortgage News)

Apprehensive Lenders, Changing Homebuyer Demographics Create Challenges

September 15th, 2014 Comments off

mortgage app   texaslendingtoday creditExperts at the American Mortgage Conference say the combination of lenders apprehensive about making mistakes on loan apps and the qualified mortgage rule, and the need for low-cost financing to meet the changing demographics of minority and women home buyers whose income is not apt to rise, are two major challenges facing the housing industry. David Stevens, president and CEO of Mortgage Bankers Association (MBA), says originations this year are expected to fall 45 percent over 2013 due to a decline in refinance activity, resulting in the housing market having its slowest level of purchase activity since 1995. “If we don’t figure this out, you can go ahead and shut down your mortgage offices,” Stevens told attendees. “We have to have a national dialogue with proposed solutions. [Lenders and Washington policymakers] need to move beyond issues with distrust.”

Carol Galante, the outgoing Federal Housing Administration (FHA) commissioner, says, “The FHA has got to think about affordability” of its products. “We need to responsibly improve access,” according to nationalmortgagenews.com. Complicating the FHA’s position is its need to have a two percent capital ratio, which keeps its insurance premiums high, as MHProNews reported here Sept. 12, 2014, which leads to many consumers doing business with Fannie Mae and Freddie Mac instead. Galante suggested the FHA could encourage lease-to-own arrangements. “There is an idea of testing a vehicle that would let people use FHA loans and structured agreements to allow [renters] to assume an FHA loan after renting for some time,” she says. “As we go into this new world, helping people transition into homeownership … is going to be really important.” ##

(Image credit: texaslendingtoday.com)

Single Security Structure to Replace Fannie and Feddie

August 13th, 2014 Comments off

freddie mac  globest   creditThe Federal Housing Finance Agency (FHFA) wants to use the best elements of both government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to develop a single common security that “will improve liquidity in the housing finance markets,” according to FHFA Director Mel Watt. Currently, Freddie MBS (mortgage-backed securities) trade at a discount to Fannie, requiring Freddie to compensate investors for the price differential which fannie mae hq    yahoo! and reuters   jonathan ernst creditalso reduces its revenue, according to nationalmortgagenews.com. The agency is seeking public comment on the transition to a single security structure, and is especially concerned about possible market disruption, as MHProNews understands. David Stevens, Mortgage Bankers Association (MBA) president and CEO, says, “The move to a single security will enable the two GSEs to compete on a more level playing field, and this competition will be beneficial to both homebuyers and lenders. Today’s announcement takes what many told us was an unworkable fantasy and brings it closer to reality.” The open comment period is set to end Oct. 14, 2014. ##

(Photo credit: Freddie Mac–globest.com: Fannie Mae–Jonathan Ernst/Reuters and Yahoo.com)

Incoming FHFA Director Mel Watt to Sideline Planned Fee Increase

December 24th, 2013 Comments off

While the previous story MHProNews posted questions the rationale of the Federal Housing Finance Administration’s (FHFA) desire to raise certain mortgage fees for Fannie Mae and Freddie Mac-backed mortgages, incoming director of the FHFA, Mel Watt, says he will postpone the fees and possibly cancel them altogether. Set to take effect April 1, the FHFA announced earlier this month of its plan to raise the fees, which housing experts say will penalize those with less than perfect credit scores. As housingwire.com reports, mortgages will likely become more expensive anyhow when the Federal Reserve tapers its quantitative easing, which was designed to keep interest rates low. David Stevens, CEO of the Mortgage Bankers Association (MBA), states Fannie and Freddie have returned to profitability, and have paid back most of their $187 billion taxpayer-funded bailout. “The GSEs are making a lot of money,” said Stevens. “There’s no rationale for the increases.”

(Image credit: housingwire.com–mortgage figuring)

Federal Housing Administration Bailout Mandated by Law

October 1st, 2013 Comments off

Following a story from yesterday, Sept. 30, regarding the need for a $1.7 billion bailout of the Federal Housing Administration (FHA) by Treasury, FHA Commissioner Carol Galante says the request for funds comes from an estimate of forecasted losses from Dec. 2012 that cannot be altered due to mandated accounting rules. She says the next report will document that the agency is in better shape than one year ago. But critics argue the FHA was too lax with bad lenders and borrowers with high default rates. Republican leaders want swift passage of the Protecting American Taxpayers and Homeowners (PATH) Act which will eliminate Fannie Mae and Freddie Mac and reform FHA’s accounting system. As nationalmortgagenews reports, earlier this year the White House had projected a shortfall of $943 million, but that number has grown due to the slowdown of mortgage applications recently. However, Galante says the main reason is due to accounting, MHProNews has learned. The Federal Credit Reform Act of 1990 requires the agency to cover all expected future losses for 30 years and maintain a 2% capital reserve. “No bank in America reserves for credit losses on a 30-year terms, instead banks get to adjust reserves based on economic conditions,” says David Stevens, president of Mortgage Bankers Association (MBA). “But this is very complicated, very unique accounting and technically they have to draw the funds even if they don’t need the money.”

(Image credit: Federal Housing Administration)

FHA’s Carol Galante is Galloping

October 12th, 2011 Comments off

OriginationNews reports that two years after leaving affordable housing developer Bridge Housing Corporation to run the Federal Housing Administration’s (FHA) multi-family program, Carol Galante is operating the entire agency. After David Stevens left the FHA to head the Mortgage Banker’s Association (MBA), Galante has become the acting commissioner. She now oversees FHA’s single-family program, is working on a program to sell government-backed foreclosed properties in bulk to investors to rent out, and a program to allow underwater borrowers to refinance at lower mortgage rates. “There are a lot of folks underwater who are still making their payments,” she adds. Galante is overhauling the reverse mortgage program to adapt to seniors’ needs of paying increasing property taxes and homeowners insurance. One of her goals is to make credit more accessible for new homeowners. “On the single-family side, FHA needs to be an important source of financing for underserved communities, and low-and moderate-income borrowers,” she says.

(Graphic credit: FHA)