January 27, 2012
Latest from Inside Mortgage Finance
Fourth-Quarter Rally Still Leaves 2011 Originations at Lowest Level in 11 Years
Originations of 1-4 family residential mortgages rose by a substantial 19.4 percent at the end of last year, but 2011 still ranked as the worst year for new production activity since year 2000. Mortgage lenders produced an estimated $1.35 trillion of home loans last year, down 17.2 percent from the total in 2010, according to Inside Mortgage Finance. Production hit a low spot during the second quarter, when just $280.0 billion in new mortgages were originated the weakest quarter since financial markets seized up at the end of 2008. New record lows in mortgage interest...(Includes two data charts)
Obama Proposes Bank Fees to Pay For Non-Agency Refinancing, New Mortgage Investigation Effort
President Obama used his State of the Union address this week to announce a new federal-state law enforcement project aimed at mortgage origination and securitization practices and to propose a broad federal refinance program for performing underwater non-agency mortgages that would be funded with fees imposed on banks. Most observers say the refi proposal stands little chance in Congress and is mostly a campaign tool aimed at banks and the track record of Republican lawmakers. Im sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a...
Report Puts Price Tag for AG Settlement at $25 Billion, Foreclosed Borrowers Would Pass Go, Collect $1,800
The never-ending board game over mortgage foreclosure processing errors flailed through another week of meetings between state attorneys general, top lenders and federal officials that were so informal many didnt confirm that they were in attendance. A leaked copy of a new draft settlement indicates that the latest offer on the table includes $17 billion in principal reductions and a $5 billion reserve account for state and federal programs. According to the Associated Press, some of that account would pay for $1,800 checks to homeowners affected by banks deceptive practices. Another $3...
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Inside Mortgage Trends
Housing Market May Finally Touch Bottom, But Agencies Still Dominate
Securitization experts are expecting a rerun of last year in 2012, as the U.S. economy slowly rights itself and most segments of the asset-backed securities market generate reasonable new issuance and stable performance. While observers suggest the housing market may make only modest improvement this year, no one expects much non-agency mortgage activity. Growth in issuance of non-agency mortgage-backed securities is going to be very slow, said Ron Mass, co-head of structured products at Western Asset Management Co. Because the market is underwriting the mortgage borrower, and no longer relying...
Inside The GSEs
Experts: Elections to Paralyze GSE Reform
Expect the run up to the fall elections to curb any meaningful results in terms of a legislative overhaul of Fannie Mae and Freddie Mac. However, industry insiders say its quite likely that lawmakers will work through the year to tweak various GSE reform proposals for the next Congress to take up in 2013.
As Congress resumed this week following the holiday break, members returned to some 14 bills in the House advancing their way through committee though only a couple are considered comprehensive reform legislation. Meanwhile, two bills filed at the end of last year in the Senate got the other chamber of Congress into the GSE reform debate after a long dormancy.
Inside MBS & ABS
ASF Looks Beyond U.S. Borders as Markets Converge, Regulatory Issues Become Global
MBS and ABS markets in the U.S. are increasingly being shaped by global forces, from the impact of the European debt crisis to the worldwide adoption of new international regulatory standards and the surge in Euro securitizations thats taking up some of the slack from the depressed U.S. non-agency MBS sector. There was an unmistakable international flavor to the ASF 2012 conference sponsored by the American Securitization Forum in Las Vegas this week. A significant number of the more than 5,000 attendees an ASF record came from outside the U.S., and numerous panels were devoted to global issues...
Inside Regulatory Strategies
Do Exam Procedures Tilt Against Nonbanks?
The newly empowered Consumer Financial Protection Bureau is wasting no time jumping into its oversight of mortgage origination practices and procedures at banks and nonbanks alike, issuing a set of M.O. examination procedures that will be used to put mortgage lenders and brokers under a compliance magnifying lens. But one industry attorney warns that in doing so, the CFPB has tilted the playing field against nonbank mortgage originators. CFPB Director Richard Cordray said the CFP s supervision of nonbank mortgage originators will illuminate the entire marketplace by making nonbanks play by ...
Inside Nonconforming Markets
Redwood to Issue Non-Agency Jumbo MBS With Little Criticism from Rating Services
Redwood Trust is set to issue a $415.73 million non-agency jumbo mortgage-backed security by the end of this month, continuing its run as the only issuer of new non-agency MBS. Unlike its three previous securities issued in 2010 and 2011, the real estate investment trust has faced little criticism from rating services regarding the characteristics of the new MBS. Fitch Ratings and, in a first, Kroll Bond Rating Agency are set to place AAA ratings on Sequoia Mortgage Trust 2012-1, which includes a pool of 30-year fixed-rate mortgages, ARMs and 15-year fixed-rate mortgages, 446 loans in all. Standard & Poors and Moodys Investors Service were critical of Redwoods previous deals and will not place ratings on the new issuance ...
Inside FHA Lending
FHA Volume Drops, Delinquency Rate Climbs
Total FHA forward mortgage originations fell to $190.3 million in 2011, a 32.8 percent decline from 2010 even as mounting FHA delinquencies continue to raise concerns of a costly taxpayer bailout. Five lenders accounted for a fourth of total production with a combined $48.2 billion and an aggregate market share of 25.3 percent, according to Inside FHA Lendings 2011 ranking and analysis of top FHA lenders. The data do not include FHA reverse mortgages. However, the total output of the top five declined on a quarterly and yearly basis by 15.6 percent and a hefty 39.0 percent, respectively. Those five elite lenders included ... (includes one chart)
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- Democratic and Republican State AGs Meeting Separately to Discuss Robo-signing Settlement Terms
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- Do Exam Procedures Tilt Against Nonbanks?
- FHA Volume Drops, Delinquency Rate Climbs






