The Mortgage Insurance Companies of America is urging federal banking regulators to "quickly" finalize underwriting guidance on interest-only and payment-option mortgages to stop lenders from making risky and unsuitable loans.Private mortgage insurers are "deeply concerned about the potential contagion effect of poorly-underwritten or unsuitable mortgages, " MICA executive vice president Suzanne Hutchinson says in a July 10 letter. The comment period on the proposed guidance ended March 29, and the regulators are not expected to issue final guidance for another few months. However, MICA says it is concerned that lenders are not taking the guidance seriously and have not reduced originations of IO and option adjustable-rate mortgages with "piggyback" or simultaneous second loans. MICA said the final guidance should make clear that simultaneous second loans are "risky in and of themselves," and that the risks are heightened when layered on IOs and option ARMs. In addition, the regulators should include "clear penalties" for lenders who disregard the guidance, MICA says.
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The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
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In a Senate hearing, Director Sandra Thompson said a raise to the required income threshold provided to affordable housing was on the table, while housing regulators also faced questions related to property insurance hikes and title insurance waivers.
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The nonpayment rate for non-qualified mortgages is up 21 basis points from February and 134 basis points from March 2023, Morningstar DBRS said.
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The government mortgage-bond guarantor will require additional information on foreclosure prevention actions, and retire some forbearance reporting.
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But views are split, at least in the near-term on whether rising mortgage rates are holding back the Spring home purchase season.
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The top five producers had an average dollar volume of FHA loans of more than $50 million in 2023.
April 18