Closing Complex Loans Faster With a Digitized Client Workflow

Join us for a discussion on changes in market demographics, suppliers and how focusing on customer experience and a few simple steps during the mortgage loan process can close deals 3x faster.

engage.marketing event: All eyes on purchase

To help power your business forward, we’re bringing together the smartest minds in purchase mortgage marketing to share the insights, tactics and strategies that set leaders apart.

Home appraisal’s ugly history and uncertain future

This is Part I of a deep dive into the home appraisal industry. Today we explore the origins of the appraisal industry and its current lack of diversity.

The digital journey starts at acquisition

Download this white paper to learn how to build a tech-enabled acquisition strategy that will directly contribute to a lender’s ability to maximize profitability and remain competitive.

Mortgage

HUD secretary sounds alarm on FHA taxpayer bailout

Members of the House Committee on Appropriations fired off questions Wednesday to Shaun Donovan, secretary of the Department of Housing and Urban Development, seeking answers to how the Federal Housing Administration will avoid a potential $943 million first-time Treasury draw. 

The tap into taxpayer bailout funds has significantly shrunk from the negative $13.5 billion projected in the actuarial report last fall.

Nonetheless, many members of the committee are concerned about the long-term health of FHA and the difficult choices that lay ahead for the agency, particularly the deficit. 

On a similar note, Donovan is also concerned that the FHA will need to draw at the end of the fiscal year given the current state of the agency.

However, he pointed out that FHA will not make a final decision on whether or not to take the aid until September 30 and will not give up until time has run out.

Last year, HUD had a negative estimate in the budget for roughly $700 million. However, the agency reported a nearly $4 billion surplus for 2012 due to loan volumes. Donovan is hoping for a repeat this year.

The biggest headache for the FHA is the reverse mortgage program (HECM) that lost roughly $5 million on the agency’s books. 

However, FHA lifelines include the institution of new premium hikes and recovery of older loans has led to strong results of avoiding a taxpayer bailout, Donovan said.

Nonetheless, FHA attributes any remaining financial stress to loans insured in 2009 and prior and from mortgages insured under the reverse mortgage programs. 

In order to speed up the process of protecting the MMI Fund, Donovan told members that instead of going through the notice and comment rulemaking process, Congress should allow the agency to use mortgagee letters to make reforms.

“If we’re not allowed to do so, we’re going to have negative impacts on households, specifically seniors. We are working with authorizers to make sure we are moving quickly on that,” Donovan said.

Additionally, because FHA is making money on new loans at a rapid pace, Donovan urged for help on better collecting loans as well as making better returns on older loans. 

However, one of the major concerns Donovan has is the future of the housing finance system.

While many lawmakers — including Donovan — are pushing for a wind down of Fannie Mae and Freddie Mac, the secretary wants FHA reform to be done in unison with both government-sponsored enterprises.

“We need to move quickly on shortening the fund and not delay on what might happen in the broader housing reform,” Donovan said. 

cmlynski@housingwire.com

Most Popular Articles

Fannie Mae, and the housing market’s inflation problem

Another month of steadily increasing home prices and insatiable demand led Fannie Mae’s Economic and Strategic Research Group to alter many of its 2021 predictions – in particular, its outlook on the symbiotic relationship between the housing market and inflation measures.

Jun 16, 2021 By

Latest Articles

Doug Duncan and the housing market’s supply conundrum

The housing market has suffered due to high material prices, spend-anything buyers & a lack of supply. A return to normalcy will require big changes. HW+ Premium Content

Jun 18, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please