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Posts Tagged ‘federal housing authority’

Separate FHA Reform Bill may Pass Congress

December 16th, 2013 Comments off

If Congress cannot decide on the feasibility of passing overall housing reform legislation, banking committee leaders from both houses may just pass Federal Housing Authority (FHA) reform as a stand-alone bill, legislation which almost passed in 2012 with bipartisan support. Overall reform might also include the future of Fannie Mae and Freddie Mac, two very hot topics. FBR Capital Markets policy analyst Edward Mills says the improving performance of the FHA fund decreases the “threat of large-scale congressional changes to the program that could have contracted credit availability.” As nationalmortgagenews informs MHProNews, the House Financial Services Committee passed a housing reform finance bill last summer but the full House has not been given the opportunity to vote on the bill.

(Image credit: Federal Housing Authority)

Support for Governmental Backstop for Mortgage Financing Remains

September 18th, 2013 Comments off

A “future-of-housing” forum sponsored by the National Association of Home Builders (NAHB) in Washington, D. C., with housing industry experts and Senators Bob Corker (R-TN), Jon Tester (D-MT) and Johnny Isakson (R-GA) indicated most participants agree the private sector should play a greater role in mortgage financing, but with some level of government support to ensure stability and liquidity. Peter Wallison of the American Enterprise Institute says lowering the conforming limits of the government sponsored enterprises (GSEs) will make a path for the private sector to take that business. “If you simply made those changes and authorized the withdrawal of the GSEs, you would find we would gradually move to a completely private system, which is where I think we should be going,” he states. Others say during a tough time for the housing industry private credit would simply disappear, and that the Federal Housing Authority (FHA) saved the day during the recent crisis. Sens. Corker and Tester are among ten bipartisan sponsors of the Housing Finance Reform and Taxpayer Protection Act (S. 1217), which provides a federal backstop to mortgage lending. Isakson says every provision in the Tax Code must be thoroughly examined to determine if it is viable in the long term. Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard University says household formation is particularly slow, as many over 30 children remain with their parents due to economic necessity. NAHB Chief Economist David Crowe says the housing market is about half-way back, as credit remains tight and buildable lots are scarce. On the topic of tax reform, several housing experts agree the mortgage interest deduction plays an important role in shaping housing demand. NAHB Economist Robert Dietz says, “The nonpartisan Tax Foundation found that if we repealed the mortgage interest deduction and lowered marginal tax rates then GDP would decline by $100 billion annually,” plus it would cause home values to decline. AS MHProNews learned, he added, “Considering it only takes a 6 percent drop in home values to wipe out $1 trillion in household wealth, the economic consequences could be significant.”

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Mortgage Applications and Rates on the Rise

June 13th, 2013 Comments off

Mortgage applications rose five percent for the week ending June 7, a turnaround from the 11.5 percent drop the previous week, according to what the Mortgage Bankers Association (MBA) tells HousingWire. Although 11 percent lower than the two weeks prior, and 36 percent below the high point at the beginning of May, the refinance rate rose five percent for the week ending June 7. MHProNews has learned the refinance portion of mortgage activity inched up one point to 69 percent from a week earlier. In addition, the average 30-year fixed rate mortgage (FRM) backed by the Federal Housing Authority (FHA) rose to 3.81 percent, the highest rate since April 2012.

(Image credit: HousingWire)

Policymakers should Deal Gingerly with FHA

May 13th, 2013 Comments off

While many call for the Federal Housing Authority (FHA) to reduce its presence in the mortgage market, it would not be a wise move with purchase loans as low as they are. MHProNews has learned from nationalmortgagenews, even though much of the housing market news is encouraging, only 2.3 million purchase loans were originated in 2011, according to data from the Home Mortgage Disclosure Act, and figures from 2012 show little improvement. Federal Reserve Governor Elizabeth Duke says, “The purchase market is at the lowest levels since the 1990s.” Activity in the purchase mortgage market is nearly 50 percent below that of 2000, and 23 percent below 2008 levels. Currently the government backs around 90 percent of the mortgage market. In particular, lower income and younger homebuyers are the hardest hit. Gov. Duke says, “From late 2009 to 2011, the fraction of individuals under 40 years of age getting a mortgage for the first time was half of what it was in the early 2000s.” Now 13% lower than even the pre-bubble level of 2000, FHA purchase activity has declined 34% since fiscal 2010. Returning the FHA share of the market to 10-15 percent would cut FHA purchase activity to less than 50 percent of the current volume, and restrict home-buying to the wealthier who can qualify for a mortgage. Such a move would increasingly shut the door on creditworthy families’ ability to buy a home, and likely turn the economy back on its head.

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Housing Recovery? Must the Deck Clear First?

August 10th, 2012 Comments off

The Mortgage Bankers Association (MBA) reports that Federal Housing Authority (FHA) foreclosures started spiked 60% from the first quarter, hitting 1.53%, the highest point in several years. Excluding foreclosures, according to NationalMortgageNews, FHA delinquencies fell to 11.89% from the first quarter’s 12%, while the inventory of FHA foreclosures increased to 4.23% in Q2 from 3.89% in Q1 2012. With approximately $1.2 trillion in VA and FHA loans on the books, the MBA estimates $100 billion in FHA mortgages are delinquent. One year ago the delinquency rate on all residential mortgages stood at 8.44%. They had fallen to 7.4% by the end of the first quarter 2012, but climbed back to 7.58% by the end of the second quarter, MHProNews has learned. According to the MBA, excluding foreclosures, $675 billion of home mortgages were in some stage of arrears as of June 30.

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FHA Loan Restrictions Eased

July 2nd, 2012 Comments off

According to the Arizona Daily Star, the tough new Federal Housing Authority (FHA) loan restrictions that could have negatively affected one third of mortgage applications have been lifted to be replaced with a more lenient policy. Scheduled to have taken effect July 1, 1012, the original plan would have required borrowers with $1,000 or more collections or disputed unpaid bills to either resolve or make arrangements for payment before FHA financing could be approved. Disputed bills are not that unusual, but an open collection account may indicate nonpayment over an extended period of time, and therefore more of a risk. MHProNews.com has learned the new rule, not yet issued, will separate borrowers’ disputed bills from collection accounts rather than lumping them together.

(Image credit: Federal Housing Administration)

CFPB to Exclude GSEs from LO Comp?

June 11th, 2012 Comments off

Writing in NationalMortgageNews, Paul Muolo says some industry officials are suggesting the Consumer Financial Protection Bureau (CFPB) exclude Fannie Mae, Freddie, Mac and Federal Housing Authority (FHA) loans from its loan origination compensation proposals. MHProNews.com has learned the National Association of Independent Housing Professionals says: “As an alternative to the proposed changes in mortgage loan origination standards, the CFPB should exercise its exemption authority under Dodd-Frank, by specifically exempting all prime/traditional and government loans from the MLO Compensation regulations, while retaining the proposed restrictions for high cost and subprime mortgages. It would eliminate any incentive for placing a prime qualified borrower in a high cost mortgage for the purpose of greater financial gain and would be a far less burdensome solution. Moreover, it would establish a firewall to protect consumers from steering, while restoring consumer choice to the prime market. We urge the CFPB to adopt this alternative.”

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MHI Sluggers come to Louisville, Part I

January 16th, 2012 Comments off

In speaking to a packed room at the Louisville Manufactured Housing Show Jan. 12, Joe Stegmayer, CEO of Cavco/Fleetwood and MHI Chairman told attendees about the ongoing efforts of MHI to advance the Industry’s agenda in Washington. Stegmayer spoke of the critical nature of involvement by state associations, because “all politics are local.” Stegmayer said MHI and MHARR have been working together on some issues coming out of Washington. Both organizations participated in a conference call Nov. 22, 2011 with Federal Housing Authority (FHA) Commissioner Carole Galante and Housing and Urban Development (HUD)’s program manager Henry Czauski. They discussed tight credit, a non-career administrator for the MH program, and representation on the Manufactured Housing Consensus Committee (MHCC). Stegmayer said he hopes they can work even more closely with each other in the days to come. He said MHI is carefully looking for a replacement for Thayer Long, and suggestions on a possible replacement should be sent to jboehlert@mfghome..org. Sources tell MHProNews that the goal is to have a replacement for Thayer Long in place on or before March 2012. Some of the biggest names in the Industry were in attendance for Stegmayer’s address, along with a healthy dose of ‘mom and pop’ operators who make up the majority of the players in the Manufactured Housing Industry today.

(Photo credit: MHProNews)