Senate Bill Calls for Hike in FHA Premiums

Mortgage & Real Estate

The Senate over the weekend added an increase in FHA premiums to the payroll tax bill, passing the measure by an overwhelming margin of 89-10.  

The language was added to the bill after heavy lobbying from the mortgage insurance industry which feared that a 10 basis point g-fee hike for Fannie Mae and Freddie Mac MBS would tilt the market toward FHA loans.

The final bill now includes g-fee hikes for Fannie and Freddie, and a premium increase for FHA.

The MIs pushed for the FHA premium hike, claiming the agency would have a competitive advantage and field more business if the g-fees for Fannie and Freddie MBS are raised without a corresponding increase in FHA premiums.  

Ginnie also provides a securitization outlet for Department of Veteran Affairs, and Rural Housing Service guaranteed loans. Meanwhile, House Republicans are balking at approving the Senate bill because it only extends the payroll tax holiday for two-months.

House Speaker John Boehner, R-Ohio, said his members want a full-year extension, which means the bill might have to be rewritten and passed before the current payroll tax holiday expires at the end of this month.

The move by the House leader has clouded the outlook for passage of the payroll tax cut.

Daily Briefing | Monday, December 19, 2011

  • While MSRs Fall Overall, Subservicers Thrive

    A funny thing happened on the way to the mortgage correction: while residential debt outstanding has been declining steadily for well over a year, subservicing contracts have increased – handsomely.

  • RE/MAX: Homes Sales Fell in November, But Prices Were Up

    Home sales fell 5.7% in November but prices were up month over month, according to new figures released by RE/MAX.

  • Fannie Economist Airs Double-Dip Fears for 2012

    Fannie Mae’s chief economist is warning that the United States has a 40% chance of slipping into a double-dip recession in 2012.

  • MetLife Correspondent Executive Departs

    Tom Palmer, a senior executive in the correspondent lending division of MetLife Home Loans, recently left the company, accepting a position with the privately held Freedom Mortgage Corp., Fishers, Ind., according to industry officials familiar with the matter.

  • Collateral Damage: Ranking Banks by Foreclosed Assets

    The storm surge of foreclosed properties on bank books shows little indication of ebbing, and institutions continue to be drowned by it.

  • JPM Facing Massive PLS Buyback Claims

    JPMorgan Chase Co.’s chief executive, Jamie Dimon, told investors at the beginning of 2011 that potential repurchases of private-label mortgage securities are “not that material” for his bank – an assertion that increasingly appears to be in doubt.

  • Ginnie Mae Issuance on the Rise

    Residential lenders issued $28.4 billion of Government National Mortgage Association-backed MBS in November, a 7% gain from the previous month, according to new figures issued by the agency.

  • Redwood Expects Robust CMBS Pipeline

    Redwood Trust said it is currently seeing a very robust pipeline of potential CMBS transactions.

  • LPS: Late Payments Rise, but Year-Over-Year Number Improves

    Residential delinquencies rose to 8.15% at the end of November, an almost 3% increase from the prior month, according to new figures compiled by Lender Processing Services, Jacksonville, Fla.

  • CFPB Plans Financial Boot Camp for Military

    Despite a concerted effort from the Defense Department to help members of the military achieve greater financial stability, there is still an enormous financial education gap.

  • REIT Buys Large Stake in NYC Office Property

    Commercial REIT Vornado Realty Trust has acquired a 49.5% stake in 666 Fifth Ave., a 39-story office building in Manhattan, from the Kushner Cos.

Leave a Reply