March 26, 2015

Latest from Inside Mortgage Finance

Total servicing outstanding rose by 0.1% from the previous quarter according to estimates from Inside Mortgage Finance

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Home-Equity Market Continued to Warm Up In Late 2014 Despite Handful of Warning Flares

Home-equity lending gained modest momentum during the fourth quarter of 2014, although the outstanding supply of second-lien mortgage debt continued its seven-year decline. Mortgage lenders originated an estimated $21 billion of home-equity loans, including home-equity lines of credit and closed-end second mortgages, during the fourth quarter. That was up 5.0 percent from the third quarter and brought full-year production ... [Includes one data chart]

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Call-Center Lending Getting Begrudging Acceptance by Some Real Estate Agents

Real estate agents prefer to work with lenders that have a local presence, but call-center operations have improved their reputations among agents, according to new research by Campbell Surveys, based on a national survey sponsored by Inside Mortgage Finance Publications. “Survey results show that Quicken Loans’ call-center model can be an accepted alternative to the local branch/local loan officer model, at least for some homebuyers and real estate agents ...

RoundPoint Mortgage Sale Hits a Snag; Ocwen Not Likely to be Sold as a Going Concern

With the first quarter coming to a close, the mortgage mergers and acquisitions market shifted into high gear this week as Ocwen Financial stepped up its auction of agency servicing rights and new revelations surfaced that RoundPoint Mortgage was almost sold, but the deal hit a snag over pricing. According to investment banking officials familiar with the RoundPoint situation, a buyer backed away from the transaction because the servicer’s owner, Tavistock Group ...

Feature Stories

Inside Mortgage Trends

Servicing Helped Offset Share Drop In Production Income During 2014

Mortgage-banking profits fell sharply in 2014, but the servicing side of the business held its own and helped cushion the fall in production-related income, according to a new Inside Mortgage Trends analysis of earnings reports. A diverse group of 11 mortgage lenders, including most of the giants of the industry, reported a combined $5.229 billion in production-related income for 2014. That was down 56.0 percent from the previous year ... [Includes one data chart]

Inside The GSEs

GSE Buyback Activity Focused On Newer, Performing Loans

Fannie Mae and Freddie Mac continue to turn their focus in loan-quality reviews to more freshly originated mortgages, the vast majority of which are current. A new Inside The GSEs analysis of disclosures made by the GSEs to the Securities and Exchange Commission shows that most of the lender repurchases made in 2014 continued to be associated with older, pre-crisis loans. But the biggest volume of pending and unresolved buyback demands were tied to loans securitized in 2013 and 2014. Sellers repurchased or provided indemnification on some $4.046 billion of mortgages during 2014, the disclosures reveal. They were split roughly evenly between Freddie ($2.031 billion) and Fannie ($2.014 billion)...[includes exclusive chart]

Inside MBS & ABS

Non-Agency Investors See Better Value In Securities Outside of Jumbo MBS

It’s not just structural issues that are keeping investors away from jumbo MBS; they are finding better value in other non-traditional mortgage securities products, including Fannie Mae and Freddie Mac risk-share transactions and deals backed by seasoned loans. During the fourth quarter of 2014, Javelin Mortgage Investment sold all of its holdings of prime, fixed, senior bonds from new-issue jumbo MBS. The real estate investment trust sold a total of ...

Inside the CFPB

Industry Asks CFPB for ‘Soft’ Enforcement Period for TRID

More than a dozen industry organizations asked the CFPB last week to implement a “restrained enforcement and liability” or “grace period” through the end of 2015 for those seeking to comply in good faith with its integrated disclosure rule after its August 1, 2015, effective date. “There are ... situations – such as what will occur if a closing cannot go forward on schedule because of occurrences outside the control of the parties – that are not addressed by the regulation which still require additional guidance,” the collection of 16 trade groups said in a joint letter to CFPB Director Richard Cordray. “We would like to use this grace period to identify pain points with stakeholders and then meet with bureau staff ...

Inside Nonconforming Markets

Non-Agency Lending – Beyond Jumbos For Affluent Borrowers – A Difficult Goal

The non-agency mortgage business looks attractive to many companies, but it is a difficult market to get into, according to experts speaking at a mortgage servicing conference sponsored by Information Management Network this week in New York. Non-agency originations outside of portfolio jumbos have been limited due to certain allowances for the government-sponsored enterprises and the lack of demand for mortgage-backed securities, among other issues ...

Inside FHA/VA Lending

VA Originations Increase in 4Q14, 2014 a Record Year for Purchases

Production of mortgages with a VA guaranty grew a hefty 17.9 percent in the fourth quarter, providing an emphatic ending to a record year of VA purchase-loan originations, according to Inside FHA/VA Lending’s analysis of agency data. Total VA volume for the entire year was $112.0 billion in purchase and refinance loans. VA streamlined refinancings accounted for 22.4 percent of overall VA originations for 2014. Production for the full year, however, was down 13.8 percent compared to the same period in 2013. Lenders attributed the increased VA market share to the younger generation of soldiers and sailors engaged in foreign wars as well as veterans returning from the war front. Last year, 18 percent of VA loans were made to active-duty service members and 82 percent were loans to veterans, said Mike Frueh, director of the VA Home Loan guaranty program. “There is a lot more ... [1 chart]

Poll

With the recent dip in interest rates, how do you feel about loan volumes this year?

We see loan production ending 2015 flat compared to 2014.

36%

We’re optimistic that our originations will rise by 10 to 20 percent year over year.

44%

We’re really optimistic: We expect production to increase by 20 percent or better from last year.

12%

We’re not so bullish. Originations for us may actually fall.

8%

Housing Pulse