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Tag Archives: FHA

FHFA Begins Devising Alternatives for Mortgage Servicing Compensation

The Federal Housing Finance Agency (FHFA) has issued a 28-page document that presents several alternatives it plans to consider for how Fannie Mae and Freddie Mac compensate mortgage servicers. The agency says today's model does not provide the flexibility needed for the servicing of nonperforming loans during times of high defaults. Alternatives being considered include a fee-for-service compensation structure for nonperforming loans and reducing or eliminating the minimum servicing fee for performing loans.

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House Hearing Outlines Government Barriers to Housing Recovery

On Wednesday a House subcommittee held a hearing to examine private sector involvement in the housing market, in order to determine if the high amount of government participation is a hindrance to the sector's recovery. Rep. Judy Biggert, subcommittee chair, said government intervention in the housing market reached record levels during the financial crisis, resulting in a cost to taxpayers of hundreds of billions of dollars. The hearing examined options for removing barriers to private investment in the housing market.

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FHA Raises Annual Mortgage Insurance Premiums

The Federal Housing Administration (FHA) is wasting no time putting at least one of the Obama administration's housing finance reforms into place. The agency announced this week that it is implementing a new premium structure for FHA-insured mortgage loans. The agency is increasing its annual mortgage insurance premium by a quarter of a percentage point on all 30- and 15-year loans. The new structure applies to new loans insured by FHA on or after April 18, 2011.

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Obama’s 2012 Budget Aims to Reduce Deficit by More Than $1 Trillion

The budget proposal released Monday by the Obama administration calls for more than $3.7 trillion in spending for fiscal year 2012, and cuts of more than $1 trillion. The budget is centered around a theme of tough decisions that must be made, and the president says there must be efforts to cut or consolidate a number of programs. The proposal says the administration is committed to presenting a framework of principles that will build a new housing finance system that minimizes taxpayer exposure to financial risk.

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Housing Finance … Seven Years Down the Road

On top of the more imminent reform measures laid out Friday to begin winding down Fannie Mae and Freddie Mac, the Obama administration's proposal outlines three options for long-term reform and structuring the government's future role in housing. One approach would pull the government completely out of the mortgage guarantee business except for insurance provided through FHA. A second option would add a backstop mechanism during times of crisis to the mix. And a third option would provide an FDIC-type insurance guarantee for certain mortgage securities.

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George Washington University Study Says FHA Carrying Too Much Risk

A study by George Washington University suggests the Federal Housing Administration (FHA) is carrying too much risk in insuring such a large percentage of large loans. In 2007 the FHA share of the home purchase market was at 6 percent. In 2009 that number came in at more than 56 percent. During that time, the size of the agency's loan limits more than doubled. The administration's plan for reforming the housing finance market indicates the government is planning to return FHA to its traditional role.

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Administration Lays Out Plan for Winding Down Fannie and Freddie

The Obama administration says its plan for reforming the housing finance system will dramatically reduce the government's role in the mortgage market and bring an end to Fannie Mae and Freddie Mac within seven years. Key actions for phasing out the GSEs include pricing their guarantees based on the same capital standards as private lenders and increasing down payment requirements to 10 percent. The proposal also outlines near-term reforms to correct problems in foreclosure processing such as setting national standards for mortgage servicing.

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Administration Expected to Propose Controlled End to Fannie, Freddie

The industry is abuzz with news that the federal government could unveil its proposal for overhauling Fannie Mae and Freddie Mac as early as Friday. The GSEs haven't had a profitable quarter in over three and a half years and were placed under government control in 2008 to avert their collapse. Since then, Treasury has pumped more than $150 billion into the two GSEs and cries for their reform have grown louder. The forthcoming proposal is expected to lay out three recommendations that call for phasing out the nation's two largest housing-finance companies.

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Easing of Lending Standards May Encourage Market Growth

The latest loan officer survey from the Federal Reserve shows a more positive outlook for certain sectors of the lending industry, but says little improvement is expected in residential real estate this year. Although, about 45 percent of banks responded that they experienced recent growth in their residential mortgage portfolios, despite weakened demand. Around one-third reported having originated a large amount of loans that are not eligible for guarantee by the Federal Housing Administration and cannot be sold to Fannie Mae and Freddie Mac.

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New Vista Approved for HUD’s Oversight Program of REO Vendors

New Vista Asset Management has been approved by HUD to serve as a subcontractor to RiskSpan's oversight and review of the HUD Homes REO disposition program. RiskSpan selected New Vista to augment its team to support the HUD oversight contract activities, including review of the structure and content for key performance and process reports used to determine the effectiveness of HUD's third generation of Management and Marketing (M&M III) contractors.

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