April 23, 2015

Latest from Inside Mortgage Finance

The volume of GSE loans with private mortgage insurance fell by 7.7 percentage points from the previous quarter according to estimates from Inside Mortgage Finance

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Modest Changes to GSE MBS Guaranty Pricing Likely To Have Little Impact on FHA, Jumbo Originations

The Federal Housing Finance Agency late last week directed Fannie Mae and Freddie Mac to stop charging the 25 basis point “adverse market” fee assessed on all loans since the financial crises, but most lower-risk loans won’t get any reduction in loan-level pricing adjustments. As expected, the FHFA did not make any changes to the “base” guaranty fees charged by the two government-sponsored enterprises. Current fees, on average, are at an “appropriate” level. “We are going to monitor this on an ongoing or quarterly basis and we’ll adjust based on market conditions,” said Sandra Thompson, FHFA’s deputy director. The regulator instructed...

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Man Bites Dog: Will Quicken’s Lawsuit Against the Feds Stem the Tide of FHA Charges Against Lenders?

Quicken Loans this week went where no lender in the mortgage industry has gone before: Suing the U.S. government for suggesting it’s been doing a crappy job of originating FHA loans. Its legal action not only caught most of the industry by surprise, but resulted in loud applause from the Mortgage Bankers Association and K&L Gates partner Larry Platt. A number of major lenders have paid...

Private MIs Say They’re (Mostly) Ready for New GSE Eligibility Rules, Or They Will Be

The Federal Housing Finance Agency late last week announced a few changes to new private mortgage insurer eligibility rules that were first proposed in July 2014, and the private MI industry appears mostly ready for them. “The new PMIERs are really designed to promote the counterparty strength of private mortgage insurers. We feel like this will strengthen the industry,” said Gina Haly, Freddie Mac’s vice president in the mortgage insurance and risk transfer counterparty credit division. During the financial crisis, some MIs couldn’t fully pay...

Feature Stories

Inside Mortgage Trends

Banks Report Solid Gains in Mortgage Banking Income, Uniform Profitability

Mortgage banking appeared to become somewhat more profitable during the first quarter of 2015, according to a new Inside Mortgage Trends analysis of earnings reports filed by a diverse group of 19 publicly-traded companies. The group – all but one of them banks – reported a total of $3.496 billion in mortgage banking income during the first quarter. That was up 10.2 percent from the end of last year. It also represented a 23.0 percent increase over the first quarter of 2014, one of the ...

Inside The GSEs

FHFA’s Modest Changes Have Little Effect on GSE Loans

The news that Fannie Mae and Freddie Mac won’t be changing their base guaranty fees and will no longer charge a 25 basis point “adverse market” fee hit late last week when the Federal Housing Finance Agency released its decision on the issue that many have speculated about for weeks.The adverse market fee was eliminated for all loans but loan-level pricing adjustments were raised for certain mortgages. The changes will become effective for all loans purchased by Fannie and Freddie beginning Sept. 1, 2015. The base guaranty fee announcement came as no surprise as most expected there wouldn’t be a change. “The FHFA finds no compelling economic reason to change the general level of fees,” the agency said.

Inside MBS & ABS

Non-Mortgage ABS Issuance Up Sharply in Early 2015 Thanks to Big Gains in Business, Vehicle Transactions

Non-mortgage ABS production jumped sharply higher in the first quarter of 2015, with $50.08 billion of new issuance, according to a new Inside MBS & ABS analysis and ranking. First-quarter issuance was up 38.1 percent from the previous three-month period, although early 2015 was down 6.3 percent from a year ago. The two strongest segments of the market were vehicle finance ABS, which accounted for 46.7 percent of issuance during the first quarter, and business loan ABS, which chipped in another 30.9 percent of new production. Ford Motor Credit had...[Includes three data charts]

Inside the CFPB

House Points-and-Fees Bill Faces Resistance in Senate

Days after the full House of Representatives passed legislation that would amend the points-and-fees calculation in the CFPB’s ability-to-repay rule, the bill ran into some sudden resistance on the other side of Capitol Hill. H.R. 685, the Mortgage Choice Act, is a bipartisan bill that would clarify that certain affiliated title costs do not count against the “qualified mortgage” 3 percent cap on points and fees under the bureau’s ATR rule. H.R. 685, introduced by Rep. Bill Huizenga, R-MI, with dozens of co-sponsors from both parties, would exclude from the definition of points and fees all title charges, regardless of whether they are charged by an affiliated company, provided they are bona fide and reasonable. Lawmakers in the House passed ...

Inside Nonconforming Markets

Deal Agent for Jumbo MBS Gaining Traction, But Plenty of Other Hurdles

Use of a deal agent in new non-agency mortgage-backed securities will help convince large investors to return to the market, according to industry participants. The benchmark non-agency MBS in the works with help from the Treasury Department will include a deal agent, according to Michael Stegman, counselor to the Treasury on housing finance policy. At a talk this week hosted by the Financial Services Roundtable and CoreLogic, Stegman noted that Treasury continues to ...

Inside FHA/VA Lending

VA Servicing Sector is Growing, While FHA Market Shrinks

The outstanding supply of VA home loans in Ginnie Mae pools continued to grow during the first quarter of 2015, climbing 2.9 percent from the end of last year, according to a new Inside FHA/VA Lending analysis of loan-level mortgage-backed securities disclosures. Meanwhile, the supply of FHA loans in Ginnie pools fell 0.5 percent during the first quarter. Similarly, FHA loans in Ginnie MBS declined by 2.2 percent from the first quarter of 2014 while VA loans ... [Includes three data charts]

Poll

The Supreme Court recently decided that mortgage loan officers are entitled to overtime pay. How has this affected your shop?

It's a very big deal, but our company will limit OT pay or pay very little.
It’s sort of a big deal, but we have no plans to pay overtime pay at all.
We have no problem paying our LOs OT.
We’re still studying the case and have not yet decided what to do.

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