Safeguard Properties

HARP Volumes Shrink as Refi Numbers Retreat

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Investor Update
September 16, 2016

The number of mortgage loans backed by Fannie Mae and Freddie Mac that refinanced reversed course in July, declining after three months of gains as mortgage rates hover slightly above record lows, according to the FHFA’s July 2016 Refinance Report released Friday.

The GSEs combined to refinance approximately 170,000 mortgage loans during July; 5,121 of those loans (3 percent) were refinanced through the FHFA’s Home Affordable Refinance Program (HARP), bringing the total number of loans refinanced through HARP up to nearly 3.424 million since the program’s inception in 2009.

HARP numbers have been shrinking since the third quarter of 2012 when they peaked at 319,000 for the three-month period. HARP refis totaled 18,000 for the second quarter of 2016. FHFA estimates that eligible borrowers who refinance through HARP can save approximately $2,400 per year on mortgage payments. The Agency has made attempts to reach borrowers eligible for HARP through a series of outreach events in cities with the most eligible borrowers (Chicago, Atlanta, Detroit, Miami, Newark, and Phoenix), webinars, websites, and social media campaigns.

The program, which was set to expire at the end of 2016, was extended in August 2016 for the fifth time, this time until the end of September 2017, as the FHFA continues to try to reach the approximately 323,000 borrowers nationwide that are eligible to refinance through HARP as of March 31, 2016.

FHFA launched HARP in early 2009 as a way for borrowers who are current on their mortgages but have little or no equity to take advantage of low interest rates and other refinancing benefits. Five percent of the loans refinanced through HARP in July had a loan-to?value ratio greater than 125 percent. Slightly more than one-quarter (26 percent) of HARP refinances in July were for shorter-term 15- of 20-year mortgages, which typically build equity faster than 30-year mortgages.

According to FHFA, about 60 percent of the 323,000 borrowers with an incentive to refinance through HARP are concentrated in 10 states: Florida (37,662), Illinois (30,205), Ohio (27,514), Michigan (25,272), Georgia (19,946), Pennsylvania (15,190), New Jersey (14,496), California (12,272), New York (12,192), and Maryland (11,890).

Click here to view the FHFA’s complete report.

Source: MReport (full article)

GAO-16-831: Troubled Asset Relief Program: Status of Prior GAO Recommendations

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Investor Update
September 6, 2016

What GAO Found

As of August 2016, GAO’s performance audits of the Troubled Asset Relief Program (TARP) activities have resulted in 74 recommendations to the Department of the Treasury (Treasury). Treasury has implemented 62 of the 74 recommendations, some of which were aimed at improving the transparency and internal controls of TARP. Five recommendations remain open, all pertaining to the Making Home Affordable (MHA) program, a collection of housing programs designed to help homeowners avoid foreclosure. Of the five:

  • Treasury has partially implemented three open MHA recommendations—that is, it has taken some steps toward implementation but needs to take more actions. For example, in March 2016, GAO recommended that Treasury deobligate funds that its review showed would likely not be expended. Treasury’s most recent estimates identified $4.7 billion in potential excess funds, of which Treasury has deobligated $2 billion as of August 2016.
  • Two additional MHA recommendations remain open—that is, Treasury has not taken steps to implement them. GAO recommended that Treasury take steps to assess the extent to which servicers have established internal control programs that monitor compliance with fair lending laws applicable to MHA programs. GAO also recommended that Treasury establish a standard process to better ensure that changes to TARP-funded MHA programs are based on comprehensive cost-benefit analyses. Treasury told GAO they would consider this recommendation but has noted that it plans no major program policy changes given the December 30, 2016, application deadline for the MHA program.

Seven recommendations have been closed but were not implemented. Five were related to the Capital Purchase Program (CPP) and MHA and two to other TARP activities. Generally, these recommendations were closed because GAO determined that the recommendations were no longer applicable.

Why GAO Did This Study
 
The Emergency Economic Stabilization Act of 2008 (EESA) authorized the creation of TARP to address the most severe crisis that the financial system had faced in decades. Treasury has been the primary agency responsible for TARP programs. EESA provided GAO with broad oversight authorities for actions taken under TARP and included a provision that GAO report at least every 60 days on TARP activities and performance.
 
This 60-day report describes the status of GAO’s prior TARP performance audit recommendations to Treasury as of August 2016. In particular, this report discusses Treasury’s implementation of GAO’s recommendations focusing on two programs: CPP and MHA. GAO’s methodologies included assessing relevant documentation from Treasury, interviewing Treasury officials, and reviewing prior TARP reports issued by GAO.
 
What GAO Recommends
 
GAO continues to maintain that Treasury should take action to fully implement the three partially implemented and two open MHA recommendations. GAO will continue to assess the status of these recommendations considering new program activity and any further actions taken by Treasury.
 
For more information, contact Daniel Garcia-Diaz at (202) 512-8678 or garciadiazd@gao.gov.

Source: GAO (GAO-16-831 full version)

Additional Resource:
GAO-16-831 Full Report [pdf]

First-Lien Mortgages Get an A+

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Investor Update
September 30, 2016

Performance of first-lien mortgages improved during the second quarter of 2016 compared with a year earlier, according to the Office of the Comptroller of the Currency’s (OCC) Mortgage Metrics Report.

The overall performance of mortgages remained relatively unchanged from the previous quarter but improved from a year earlier. The percentage of mortgages that were current and performing at the end of the second quarter of 2016 was 94.7 percent, compared with 93.8 percent a year earlier.

The first-lien mortgages included in the OCC’s quarterly report comprise of 37 percent of all residential mortgages outstanding in the United States or about 20.7 million loans totaling $3.6 trillion in principal balances as of June 30, 2016.

The OCC broke down this data further to show that servicers initiated 48,732 new foreclosures in the second quarter of 2016. This was a decrease of 17.3 percent from the previous quarter and 31.1 percent from a year earlier.

Additionally, home forfeiture actions, such as completed foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions, decreased 29.0 percent from a year earlier, to 33,344.

Servicers were also reported to have completed 34,604 modifications during the second quarter of 2016. Among the 34,604 modifications completed during the quarter, 30,179, or 87.2 percent, reduced the loan’s pre-modification monthly payment.

Broken down even further, of these 34,604 modifications, 94.2 percent were “combination modifications”, or modifications that included multiple actions affecting affordability and sustainability of the loan, such as an interest rate reduction and a term extension.

Among the 32,592 combination modifications completed during the quarter, 93.9 percent included capitalization of delinquent interest and fees, 81.8 percent included an interest rate reduction or freeze, 87.6 percent included a term extension, 7.5 percent had principal reduced, and 11.9 percent had principal deferred. An additional 1,855 loan modifications received only a single action.

The fourth quarter of 2015 is the first quarter for which all loans modified during the quarter could have aged at least six months by June 30, 2016. Among modifications that were completed during the fourth quarter of 2015, servicers reported that 4,404 were 60 or more days past due or in the process of foreclosure at the end of the month that they became six months old.

Source: DS News

FHLMC Guide Bulletin 2016-18: Freddie Mac Principal Reduction Modification Update

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Investor Update
September 21, 2016

In Single-Family Seller/Servicer Guide (Guide) Bulletin 2016-18 [pdf], we’re announcing new Form 1205-PR, Post Settlement Correction Request for the Principal Reduction, to facilitate the processing of the Freddie Mac Principal Reduction Modification.
 
Effective October 1, Servicers must follow the new submission requirements for Form 1205-PR, which are included in this Guide Bulletin, along with Form 1205-PR as Attachment A.
 
Freddie Mac Outreach to Borrowers
 
Visit our temporary Principal Reduction Modification web page, which we created to help you with borrower inquiries. Learn about our outreach efforts to borrowers, including borrower letter/call campaigns, in-person events, online resources, and more! The national letter/call campaigns are underway now through November.
 
For More Information

Source: Freddie Mac

FHLMC Guide Bulletin 2016-17: Servicing Updates

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Investor Update
September 14, 2016

In today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2016-17, we’re announcing the new and improved 2017 Freddie Mac Servicer Success Scorecard (Scorecard) and updating other servicing requirements. Many of the Scorecard improvements below are based directly on your feedback.
 
Your 2017 Scorecard

We’re starting clean in 2017 by refreshing the look and feel of your Scorecard. We’re making it easier to access the information that’s important to you by simplifying the existing navigation and providing a more intuitive user interface. When you log in, you’ll arrive directly at a global view of your Scorecard – just one- or two-clicks away from drilling further down into your data.

Source: Freddie Mac (full update)

FHFA: Three Easy Steps to HARP: How Homeowners Can Save Thousands

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Investor Update
September 13, 2016

The Federal Housing Finance Agency (FHFA) just extended the deadline for the Home Affordable Refinance Program, or HARP, to September 30, 2017, but with current rates at historic lows there is still time to act.  Refinancing through HARP is a streamlined process, and more than 3.4 million homeowners have already done it, but there are still more than 323,000 homeowners who could save an average of $2,400 per year with a HARP refinance.
 
Here are 3 Easy Steps Homeowners Can Take:

1.Check eligibility, including whether Freddie Mac or Fannie Mae own their current loan.

2.Gather information. Pull together their mortgage statements, tax returns, and bank statements.

3.Contact an approved HARP lender.  Check here for Freddie Mac or Fannie Mae.  Lenders who participate in HARP will walk homeowners through the entire process, all the way through to closing.

Two Ways to Save

There are two ways to save money with HARP:  Homeowners can either refinance to a lower interest rate and experience significant savings on their monthly mortgage payment, or refinance to a shorter-term mortgage, which translates to greater savings over the long term and helps build equity faster.

Even if a homeowner has been previously turned down for HARP, he or she may still qualify and can try again.  Additionally, homeowners who have previously modified their mortgage through the Home Affordable Modification Program (HAMP) are not disqualified from HARP and should check their eligibility to further reduce their payment.

If you are eligible for HARP, this is a unique opportunity to save on your mortgage.  Follow us @FHFA on Twitter, LinkedIn and YouTube for more information or go to www.HARP.gov today to learn more about a HARP refinance.

Source: FHFA (full blog post)

FHFA Second Quarter Foreclosure Prevention Report Shows Continuing Progress on Foreclosure Preventions

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Investor Update
September 28, 2016

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today released its second quarter Foreclosure Prevention Report which shows that Fannie Mae and Freddie Mac completed 48,438 foreclosure prevention actions in the second quarter of 2016, bringing the total number of foreclosure prevention actions to more than 3.7 million since the start of the conservatorships in September 2008.  The report also shows that the serious delinquency rates of Fannie Mae and Freddie Mac loans declined to their lowest levels since 2008.

FHFA’s report also includes data on Fannie Mae and Freddie Mac home retention actions, delinquency data and real estate owned (REO) inventory.  FHFA publishes the report data in an online, interactive Borrower Assistance Map on FHFA.gov.  Other foreclosure prevention data noted in the quarterly report include:

  • The serious delinquency rate of Fannie Mae and Freddie Mac loans fell to 1.2 percent at the end of the second quarter, the lowest level since the start of conservatorships in 2008.
  • The number of Fannie Mae and Freddie Mac loans 60+ days delinquent declined another 6 percent during the quarter.
  • Fannie Mae and Freddie Mac’s REO inventory declined 13 percent in the second quarter to 57,937 as property dispositions continued to outpace property acquisitions.

Link to Report

Contacts:
Media: Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030
Consumers: Consumer Communications or (202) 649-3811

Source: FHFA

FHA INFO #16-64: Single Family Housing Policy Handbook 4000.1 September Update

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Investor Update
September 30, 2016

Single Family Housing Policy Handbook 4000.1 September Update

Today, the Federal Housing Administration (FHA) published an update to the Single Family Housing Policy Handbook 4000.1 (SF Handbook), which furthers FHA’s goal of a comprehensive and consistent source of FHA Single Family Housing policy.

The September 30th SF Handbook update contains technical changes for consistency and clarity, and several policy updates. All stakeholders in FHA transactions should review the changes to the SF Handbook in the September 30th Transmittal available in FHA’s Online Housing Policy Library. For a detailed summary of today’s SF Handbook update, read FHA’s online article.

Also, concurrent with this update:

  • The previously published sections for Claims and Disposition for Title II forward mortgages became effective today.
  • A new, pre-recorded training webinar, SF Handbook Module 9: Nonprofit Approval and Governmental Entities, became available. This new module augments FHA’s recently updated series of SF Handbook self-paced, pre-recorded webinars.

Quick Links

New FHA Connection System Data Fields Support Property Assessed Clean Energy Obligations

On September 24th, 2016, the Federal Housing Administration (FHA) implemented two new data fields on the Loan Application screen in its FHA Connection (FHAC) system that support the endorsement of new Title II forward mortgages on properties with an existing Property Assessed Clean Energy (PACE) obligation that meets FHA’s PACE requirements.

The following PACE-specific data fields now appear on the FHAC Insurance Application screen:

  • PACE Indicator: a drop-down menu option for mortgagees to indicate a “YES” if the property has an eligible PACE obligation, or “NO” if the property does not have an eligible PACE obligation.
  • PACE Amount: visible only if a mortgagee indicates “YES” in the PACE Indicator field, the PACE Amount data field should be filled in by mortgagees with the dollar amount outstanding on the eligible PACE obligation. This field only supports whole dollars.

Mortgagees may begin using these fields to indicate mortgages being insured with outstanding PACE obligations. Mortgagees that indicate a “YES” in the PACE Indicator field should also provide a dollar amount in the PACE Amount data field; however, completion of this field is optional at this time.

FHA published its policy on using FHA insurance on new Title II forward mortgages for single family homes with Property Assessed Clean Energy (PACE) obligations in its July 19th, 2016, Mortgagee Letter 2016-11. FHA integrated the PACE policy from Mortgagee Letter 2016-11 into the Single Family Housing Policy Handbook 4000.1 as of today.

New, Pre-Recorded Training Webinars Now Available

New, pre-recorded training webinars are now available on FHA’s Single Family Housing Events and Training web pages:

  • Home Equity Conversion Mortgage (HECM) Financial Assessment Update (recorded on 9/22/16)
  • Navigating the FHA Condominium Project Approval Process (recorded on 9/21/16)
  • FHA Appraisal Essentials – An In-Depth Look (recorded on 9/14/16)
  • 104 Electronic Appraisal Delivery Portal (EAD) Onboarding and Use Tips (recorded on 9/6/16)

Plus, check out upcoming events and training on FHA’s Single Family Housing Events and Training web pages.

FHA Publishes Lender Insight – Issue #13
Today, the Federal Housing Administration (FHA) published its quarterly Lender Insight newsletter. Issue #13 includes information on:

  • Certification and recertification requirements; and
  • The quarterly Loan Review Update for fiscal Quarter 3.

The objective of Lender Insight is to provide lenders with information about what FHA is seeing in recertifications, quarterly loan review updates, and other topics of interest to the lending community. Each issue also contains information designed to help lenders better understand the trends and policies that affect their business.

The Lender Insight newsletter is published online, with current and past versions accessible from the FHA Lender page on hud.gov, under the “Performance” tab. An email notice is sent to those who have subscribed to receive email notices
from FHA. If you would like to be included on the FHA notification list, including notifications of when future issues of Lender Insight are published, visit the FHA INFO subscription page to subscribe.

Quick Links

Resources

Contact the FHA Resource Center:

  • Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at:
    www.hud.gov/answers.
  • E-mail the FHA Resource Center at: answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
  • Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

Source: HUD (FHA INFO #16-64 full version)

FHA INFO #16-62: Extension of Effective Date for Home Equity Conversion Mortgage Servicing Fee Set-Aside Growth Rate

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Investor Update
September 26, 2016

Today, the Federal Housing Administration (FHA) is announcing that it plans to issue guidance that would extend the October 3, 2016, effective date for revisions to the Servicing Fee Set-Aside compounding interest rate (growth rate) for the Home Equity Conversion Mortgage (HECM) program.

Mortgagee Letter 2016-10, published on July 13, 2016, established the use of the Note Rate to calculate the growth rate (compounding interest rate) for HECM Servicing Fee Set-Asides, effective for HECM case numbers assigned on or after October 3, 2016. An upcoming Mortgagee Letter will supersede the references to the Servicing Fee Set-Aside growth rate effective date only. This extension will allow both mortgagees and FHA to complete technology updates needed to operationalize this change.

Mortgagees should note that all other provisions contained in Mortgagee Letter 2016-10 will remain in effect.

Quick Links

Resources

Contact the FHA Resource Center:

  • Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at: www.hud.gov/answers.
  • E-mail the FHA Resource Center at: answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
  • Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

Source: HUD

FHA INFO #16-61: New FHA Connection Functionality Allows Electronic Claims Filing for Claims Without Conveyance of Title Procedure

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Investor Update
September 21, 2016

Servicers filing claims related to the Federal Housing Administration’s (FHA) Claims Without Conveyance of Title (CWCOT) procedure can now file these CWCOT claims electronically through the FHA Connection (FHAC) system. New FHAC functionality now allows electronic submission of these claims, providing more efficient submission of CWCOT claims for servicers, and more efficient claims processing by FHA.

The new function is accessible in FHAC by:

  • Accessing the Single Family FHA screen;
  • Selecting the Single Family Servicing option;
  • From the Single Family Servicing screen, accessing the Claims Processing screen; and
  • Choosing the “Claim Type 06” link under the Claims Input section of the Claims Processing screen.

FHA encourages all servicers to take advantage of the process efficiencies inherent in electronic CWCOT claim submissions via FHAC, or the existing Electronic Data Interchange (EDI) file submission capability, as soon as possible. However, servicers that have already submitted paper-based CWCOT claims should not resubmit these claims. Such claim submissions will continue to be processed as normal.

Quick Links

Resources

Contact the FHA Resource Center:

  • Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at:
    www.hud.gov/answers.
  • E-mail the FHA Resource Center at: answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
  • Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

Source: HUD