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Current andUpcomingProgram Changesfor FHA, VA &RHS
FHA’s Office of Single Family Housing
CONFIDENTIAL. PROPRIETARY. INTERNAL USE ONLY
Ginnie Mae Summit 2015INDUSTRY CONCERNS: Current and Upcoming Program Changes for
FHA, VA and RHS
FHA UpdateSeptember 21, 2015
Presented by:Kevin StevensDirectorHome Mortgage Insurance Division
FHA’s Office of Single Family Housing
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FHA Single Family Priorities
Working with the industry participants toenhance business processes,
communication, and policy clarity.
Making it Easier to Do Business
Implementing responsible ways ofproviding first-time homebuyers and
underserved, credit worthy borrowersaccess to credit to ensure long-term
homeownership success.
Expanding Access to Credit
Balancing our mission with sound lendingpractices to ensure the health of the Mutual
Mortgage Insurance Fund.
Ensure Long-term Viability of MMIFund
FHA’s Office of Single Family Housing
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Today’s Presentation
• FHA Single Family Housing Priorities
• Expanding Access to Credit— Single Family Housing Policy Handbook— Quality Assurance Framework— Home Equity Conversion Mortgages
• Ensuring Long-term Viability of the Mutual MortgageInsurance Fund
• Making it Easier to Do Business with FHA— Strategies for Moving Forward— Electronic Appraisal Delivery Portal
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FHA’s Office of Single Family Housing
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Implementing responsible ways of providing first-timehomebuyers and underserved, credit worthy borrowers
access to credit to ensure long-term homeownership success.
Expanding Access to Credit
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FHA’s Office of Single Family Housing
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FHA Purchases and Access to Credit
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2010 2011 2012 2013 2014 2015 (on7/31)
Non-First
First
28%
30% 27%27%
18%72% 70% 73% 73%
82%
Source: FHA Home Mortgage Insurance Division
FHA Share of Portfolio: First-Time Homebuyers
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FHA’s Office of Single Family Housing
8Source: HUD
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A Half Percentage Point Reduction in the Annual MIPPremium…
1. Based on average loan size of $180,000
Saves $900 annually for an average household.1
Saves $2-$3 billion for these households.
Benefits 2-3 million households over the next 3 years.
Nearly 250,000 additional creditworthy, responsible families will
be able to afford to buy over the next 3 years.
FHA’s Office of Single Family Housing
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Affect of MIP Reduction
FHA’s Office of Single Family Housing
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Takes a targeted approach to expanding accessand affordability.
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Blueprint for Access
Quality Assurance Framework
• Provide clarity and transparency
• Four components:1. FHA Single Family Housing Policy Handbook2. Lender Performance Management3. Loan Quality Assessment4. Loan Sampling
FHA’s Office of Single Family Housing
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Quality Assurance Framework
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FHA wants to:• Provide clear rules of the road.
• Encourage responsible behavior.
So lenders can:• Originate loans with confidence.
• Focus on the quality of their processes and lend to all qualifiedborrowers.
FHA’s Office of Single Family Housing
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Single Family Housing Policy Handbook
Expanding Access to Credit
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FHA’s Office of Single Family Housing
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FHA’s Single Family Housing Policy Handbook (SF Handbook;HUD Handbook 4000.1) is a consolidated, consistent, andcomprehensive single source for FHA Single Family HousingPolicy:
• Consolidated: Eventually, all SF Mortgagee Letters, Housing Notices,Handbooks, and other policy documents will be consolidated into asingle source.
• Consistent: Consistent format and terms throughout the SF Handbooksupport easier use – a key to FHA’s Access to Credit strategy.
• Comprehensive: The SF Handbook will cover all Single Family Housingpolicy.
SF Handbook Overview
FHA’s Office of Single Family Housing
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• One piece of Blueprint for Access Quality AssuranceFramework.
• Mitigates defects and increases origination quality.
• Supports increased originations of FHA mortgages.
Supports Access to Credit
FHA’s Office of Single Family Housing
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• Consolidated over 450 existing Handbooks, MortgageeLetters and other policy documents into one source.
• SF Handbook Transmittals list all of the policy documents tobe superseded in whole or in part on the relevant effectivedate
Consolidated Source
FHA’s Office of Single Family Housing
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• Offers a single, comprehensive source.
• Eliminates a labor-intensive process to find precise policyinformation in multiple documents.
• Delivers easier access:― Online SF Handbook provides advanced search, compare, and
other features.
Comprehensive Content
FHA’s Office of Single Family Housing
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FHA Single Family Housing Policy Handbook Development Progress
FHA’s Office of Single Family Housing
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• Claims and Disposition;
• Title I;
• Home Equity Conversion Mortgages; and
• Condominium Project Approval.
SF Housing Policy Handbook: Sections Stillto Come
FHA’s Office of Single Family Housing
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Balancing our mission with sound lending practicesto ensure the health of the Mutual Mortgage
Insurance Fund.
Ensure Long-term Viabilityof MMIF
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FHA’s Office of Single Family Housing
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As a Result of the Crisis, FHA Premiums Needed to beRaised to Better Cover Losses and Build Capital
FHA’s Office of Single Family Housing
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Working with industry participants to enhancebusiness processes, communication, and policy
clarity.
Making it Easier to Do Business
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FHA’s Office of Single Family Housing
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Making it Easier to Do Business with FHA• FHA SF Handbook – create a single authoritative source
for FHA SF policy.
• Implement broader use of e-Signature policy.
• Business Transformation – implement new capabilitiesand moving some systems to a new HUD technologyplatform:– Electronic Appraisal Delivery Portal: improving access to data earlier
in the process to improve risk management and to minimize paper.– Lender Electronic Assessment Portal: enabling FHA to better identify,
mitigate, and manage counterparty risk; automate manual processes;and replace antiquated technology.
– Leverage industry data standards where possible.
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FHA’s Office of Single Family Housing
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Technology and Business TransformationStrategies and Goals
• FHA’s Business Transformation goals are to:− Increase operational efficiencies and replace legacy infrastructure;
− Enhance processes and tools throughout the organization and for stakeholders;
− Improve risk management capabilities; and
− Make it easier to do business with FHA.
FHA’s Office of Single Family Housing
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FHA Single Family Business TransformationOverview
TOTAL / MISMO
Origination through Endorsement
SF Housing PolicyHandbook
(HUD Handbook 4000.1)
Electronic AppraisalDelivery
eCase Binder
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FHA’s Office of Single Family Housing
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Electronic Appraisal Delivery (EAD) Electronic Appraisal Process
EAD and the Electronic Appraisal Process
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FHA’s Office of Single Family Housing
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Single Family credit policy initiatives on the horizon.
A Look Ahead
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FHA’s Office of Single Family Housing
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Future Polices
• Energy Efficiency
– PACE
– Home Energy Score
• Condominium Project Approval
• Alternative/Advanced Credit scoring models
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FHA’s Office of Single Family Housing
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• Phone: Monday-Friday, 8 a.m. to 8 p.m., ET.Toll Free: (800) CALL-FHA or (800) 225-5342.
• Email: answers@hud.gov .
• www.hud.gov/ answers : 1600+ Qs and As addressing 90% of ourphone calls and announcements of policy changes and trainingopportunities.
• FHA INFO emails: Frequent email notifications of new policies andtraining opportunities for anyone who signs up.
The FHA Resource Center
FHA’s Office of Single Family Housing
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Thank You
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Single Family HousingGuaranteed Loan Program
Michelle C. Corridon
Deputy Director
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Program Overview
Program Growth
Rural Development Portfolio
Program Performance
Automation Initiatives
Lender Monitoring
Training Opportunities
Presentation Agenda
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Guaranteed Loan ProgramOverview• No down-payment required
• 30 year fixed interest rates
• Automated Loan Closing System
• Customarily purchase transactions, few refinances
• 85% first time homebuyers
• 10% new construction
• Low and moderate income households
• Rural areas = up to 90% of the USA
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SFH Guaranteed Loan ProgramGrowth
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Rural Development Direct andGuaranteed Loan Portfolio
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SFH Guaranteed LoanPerformance
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Paperless environment
Payment of fee through pay.gov
99% of lenders participating
Loan Note Guarantee available on-line
Automated Loan Closing
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Automated Loan Closing
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Front end to Imaging System
Is the electronic file for the loan
Work flow enabled
Electronic Case File (ECF)
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Loss Mitigation Delegation
• Pilot began 2 years ago.
• Permanent program effective as of 8/1/2015.
• 5 servicers will participate by the end ofSeptember constituting 80% of the RHSportfolio.
• Quarterly and annual reviews of servicercompliance will be completed by Deloitte andthe CSC.
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EDI Updates
• Move from quarterly to monthly statusupdates for all loans.
• Allow for the use of greater range of codesand multiple codes in a reporting cycle,mirroring FHA.
• Beginning Q2 2016 with a 6 month adoptionperiod for servicers.
• Working with Black Knight
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Lender and Servicer Monitoring
• Contractor – Deloitte & Touche LLP completing a combination of:
• Site visits
• Desk reviews
• Unscheduled site visits
• 94 reviews scheduled for origination, servicing, and expanded
• Development of program risk management tool assess overallperformance in origination and servicing. Implementation Fall2015.
• Planning stage updating test questions and schedule for FY 2016.
• Stuart Walden – stuart.walden@wdc.usda.gov or 202-690-4507
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Training
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New service -https://public.govdelivery.com/accounts/USDARD/subscriber/new
Email Subscriptions
Michelle C. CorridonDeputy Director, USDA Rural Development
michelle.corridon@wdc.usda.gov
@usdard
/USDA
michelle-c-corridon-pmp
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