Adam Constantine on MLK Jr.’s impact on housing equality

During the interview, Constantine explains why the industry needs to focus on evoking intentional change rather than launching lackluster initiatives.

Managing Credit Risk in 2021 and Beyond

Join a panel of industry experts as they provide an economic outlook for 2021 and a discussion with regional bankers on how they are managing credit risk over the next several years.

Amid record-high origination volumes, mortgage fraud risk is down

CoreLogic's recently released Mortgage Fraud Report is the industry standard for nationwide fraud monitoring and analysis. Read the findings here.

Empowering women to be financially great with Dava Davin

Women of Influence winner Dava Davin joins Girlfunds to discuss everything from her best financial tip to her advice on starting the home-buying process.


FHA seeks second opinion on MMI Fund

Agency reports negative $3 billion balance for 3Q

The Federal Housing Administration is seeking an additional independent analyst of to review the financial health of its mutual mortgage insurance fund, according to its quarterly report to Congress.

In April, the White House announced that the agency could potential tap up to $943 million in taxpayer bailout funds, which would be the first time in the history of the FHA.

The goal of bringing in additional analysis is to increase the larger overall effort of transparency to provide another perspective as FHA continues to work to develop enhanced internal capabilities, explained FHA deputy assistant secretary of risk management and regulatory affairs Frank Vetrano.

"The IFE-developed analysis will once again incorporate stochastic modeling in addition to any modeling refinements determined appropriate by that contractor," Vetrano stated.

He added, "I believe that a second independent view of the Fund’s expected value will provide valuable insights and look forward to making these findings available to you later this year."

The MMI Fund core business operations cash flow for the third quarter has a negative balance of $3 billion, which is down from a negative balance of $1 billion in the second quarter, and a significant drop from $495 million in the fourth quarter of 2012.

Claims payments reached a record $8.2 billion, as the Department of Housing and Urban Development accelerated its efforts to sell delinquent mortgages out of the foreclosure pipeline through the Distressed Asset Stabilization Program — pools of nonperforming loans are sold to investors prior to foreclosure.

Additionally, claims payments were partially recovered by nearly $3 billion in premiums and $2.3 billion in property sales, the report stated.

Meanwhile, total capital resources declined in the third quarter by $3 billion to $33.1 billion.

Prepayments were 823,022 in the third quarter, which is the highest level seen since the fourth quarter of 2004, FHA revealed.

Year-to-date, prepayments were 161% above what was predicted by the independent actuaries due to two factors, including continued low interest rates and FHA permitting borrowers with loans endorsed before June 2009 to streamline refinance without an increase in their annual premium rate.

At the same time, the rate at which prepayments were returning was 37%, down from 58% in the previous quarter, and also down 44% from the same time last year.

Net loss rates on full claim actions are trending down due to various factors and currently outperforming the predicted rates by more than 9%, according to report.

An increase in home prices for distressed properties is helping recoveries on real estate-owned property sales. Additionally, the FHA’s recent efforts to increase the use of pre-REO alternatives have reduced loss severity stems. 

Most Popular Articles

Prepare for the rise in mortgage rates

Economists offer their takes on how high mortgage rates will climb, how lenders will respond and what impact this will have on the housing market. HW+ Premium Content

Jan 18, 2021 By

Latest Articles

CFPB clarifies role of supervisory guidance

The Consumer Financial Protection Bureau issued a final rule Tuesday clarifying that supervisory guidance is not backed by the same force as law or regulation.

Jan 19, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please