Tag Archives: Financial Services

MBA Testimony to Financial Services Subcommittee: Steps to Strengthen FHA

17 Apr

On April 10, David H. Stevens, President and CEO of the Mortgage Bankers Association, testified before a House of Representatives’ Financial Services Subcommittee.  Mr. Stevens’ oral testimony was released by the MBA to its members.

Stevens highlighted the steps that FHA has implemented to address losses in its single-family portfolio, like raising insurance premiums and increasing down payment requirements.  He lauds FHA as “moving swiftly to protect taxpayers and the (MMI) fund,” while citing rising FHA average credit scores.  Stevens then outlines three priorities MBA identifies as necessary in future programmatic changes within FHA:

  1. Restoring financial solvency
  2. Preserving FHA’s critical housing mission
  3. Maintaining FHA’s countercyclical role.

Stevens also listed “a number of steps to further strengthen FHA and promote the return of private capital,’ such as lowering loan limits that were necessary at the height of the housing crisis and adjusting down payment requirements to mitigate risk factors like low credit scores.  He stressed the need to find the right balance of credit controls to offset risk.

Warnings abounded in regards to the restrictive influence of the fear of risk and subsequent attempts to reign it in. He paints the road to homeownership as wrought with challenges and says, “there may be families with good credit willing to put down substantial down payments that are being frozen out of the market because the risks of making any mistake are too great – and the rules of the road are unclear – and often contradictory.”  He warned of unrealistic requirements allowing only people with perfect credit to benefit from FHA’s programs, which would limit options for FHA’s actual target population.

The crux of Stevens’ statement was the need to clear up uncertainty in our real estate finance system. He added, “that includes not just FHA, but also examining the future of the entire housing finance system.”

Read the complete testimony here:


The House Financial Services Committee Set to Examine New Compensation Rule

16 Feb
Members of the Committee on Financial Services...

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The  Financial Services Committee will look at implementation of the Federal Reserve’s rule that changes the compensation model for mortgage originators prior to the effective date of April 1.  The committee said it’s concerned the rules may have an adverse impact on the ability of small businesses that originate mortgages to remain in business.

Drafted earlier this year, the Fed’s rule is designed to prevent compensation based on a loans terms or conditions and to prohibit steering a consumer into a higher rate to receive additional compensation.  The Mortgage Bankers Association joined other trade groups in asking the Fed to delay the implementation of the rule. 

“The Rule is far-reaching and requires major changes to long-operating compensation practices that heretofore have been both legal and prevalent,” said the MBA. “Unfortunately, in our view, the Rule does not definitively address many matters of particular importance, and has engendered numerous questions from creditors and loan originators seeking to comply.”

The National Association of Mortgage Brokers praised the committees decision to look into the proposal.  The association argued that mortgage brokers and lenders are ill-equipped with how to fully comply.

adapted from Reverse Mortgage Daily

Tradition Title Agency offers special assistance to Reverse Mortgage LOs

14 Dec
City flag of New Orleans, Louisiana, USA

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Last month owner Karen Keating attended the NRMLA (National Reverse Mortgage Lender’s Association) 2010 ANNUAL MEETING & EXPO in New Orleans and picked up some valuable information relevant to reverse mortgages.

Interestingly, the demographic for these loans is shifting, from what was at one time primarily a 72- year-old widow, for example, to an active adult couple in their sixties or single male borrower. 

Karen is happy to pass on some of the other information that was disseminated, including specifics on the new HECM Saver and what constitutes qualifying funds for a HECM for purchase.  Contact her at kkeating@traditionta.com to find out how Tradition Title Agency assists our reverse mortgage LO partners.

We look forward to working with new reverse mortgage LOs in 2011!