December 18, 2014
Latest from Inside Mortgage Finance
Total bank and thrift buyback activity fell by 82.0% from the previous quarter according to estimates from Inside Mortgage Trends
Home-Equity Production Increased in 3Q14, But Not Enough to Offset Ongoing Decline in HEL Outstanding
Home-equity lending continued to grow during the third quarter of 2014 – in fact, it was the fastest-growing segment of the mortgage market – but depository institutions reported further declines in the unpaid balances of these assets on their balance sheets. Lenders funded an estimated $20 billion of new home-equity lines of credit during the third quarter, up 17.6 percent from the previous three-month period. That compared to a 9.8 percent increase in total mortgage originations during the period, and it was the best quarterly HEL production figure in five years, according to Inside Mortgage Finance estimates. Still, the supply of home-equity loans outstanding fell...[Includes three data charts]
The nation’s subservicers, as a whole, reported a modest decline in their business volume during the third quarter, though some firms experienced large declines compared to a year ago, according to exclusive survey figures from Inside Mortgage Finance. The biggest year-over-year decline came at Bank of America, which had just $5 billion in subservicing contracts at Sept. 30, a 78.3 percent drop compared to the same period last year. BofA’s decline in the subservicing sector is...[Includes one data chart]
Lenders are likely to shift some of their business away from the government-sponsored enterprises and into the non-agency market in the coming years, regardless of GSE reform efforts, according to a report released this week by the Congressional Budget Office. “With house prices expected to trend upward, the balance sheets of lenders and investors should improve, as should borrowers’ financial positions,” the nonpartisan provider of analysis for Congress said. “Consequently, CBO projects that private companies will become more willing to make new loans and demand lower fees to compensate for the credit risks they take, which will reduce Fannie Mae and Freddie Mac’s pricing advantage over their private competitors.” If the private sector bears more mortgage credit risk, the CBO said...
Latest Mortgage Data
FHA originations are expected to decline modestly in 2015 unless the agency gives in to industry pressure to lower mortgage insurance premiums and lenders ease up on their overlays, according to analysts. Analysts anticipate no meaningful decline in FHA market share next year but do expect some drop as private mortgage insurance become more competitive, especially among borrowers with 720+ FICO scores. Overall, analysts expect 2015 to be slightly better than 2014 because of increased purchase-mortgage lending, which is partly offset by lower refinance activity. Mortgage volumes should climb to $1.18 trillion in 2015, some say. At Keefe, Bruyette & Woods, analysts Bose George and Chas Tyson predict private MIs will take more market share from the FHA in 2015. They do not expect meaningful policy changes from the FHA this year. For example, FHA has given ...
The number of issuers offering jumbo mortgage-backed securities will increase in 2015, according to analysts at various rating services, but total issuance volume isn’t expected to grow by much compared with this year. Attracting investors willing to purchase AAA tranches of jumbo MBS remains a key obstacle. Some $5.4 billion in jumbo MBS were issued during the first three quarters in 2014, according to Inside Nonconforming Markets, including $3.1 billion in the third quarter ...
The outstanding supply of agency single-family MBS continued to grow at a subdued pace during the third quarter of 2014, and the biggest investor classes did most of the heavy lifting funding the market, according to a new Inside MBS & ABS analysis. On the supply side, there were $5.632 trillion of single-family MBS guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae outstanding at the end of September. That was up just 0.4 percent from the previous quarter but had enough growth rings to show a 1.2 percent gain from a year ago. As has been the case for the past few years, the Ginnie MBS market grew...[Includes two data chart]
Seasonal trends hit the GSE single-family mortgage-backed securities business in November, with new issuance of single-family MBS tumbling 15.1 percent from October. A new Inside the GSEs analysis of loan-level MBS disclosures reveals that a sharp 22.0 percent drop in securitization of purchase-money mortgages was the major factor in the November decline. Refinance loans delivered to Fannie Mae and Freddie Mac MBS pools were off a milder 6.8 percent from the previous month. In fact, more than half of Fannie’s MBS flow in November came from refinance loans, the first time since March that purchase mortgages accounted for less than half of the GSE’s business. One sign of the increased refinance share of GSE business ... [with two exclusive charts]
Commercial banks and thrifts reported a seventh consecutive quarterly decline in mortgage purchases and indemnifications during the third quarter but still hold hefty amounts in reserves against future buybacks, according to a new analysis by Inside Mortgage Trends. Banks and thrifts reported $998.8 million in mortgage repurchases and indemnifications during the third quarter, down 1.3 percent from the second. It was also the lowest quarterly repurchase figure reported since ...
Michael Levitis, principal of the Mission Settlement Agency (a debt-settlement company), was slapped with a nine-year prison sentence and ordered to pay $2.2 million in restitution and a fine of $15,000 after pleading guilty to several charges brought in response to the CFPB’s first publicly announced criminal referral to the U.S. Department of Justice last year. Levitis pled guilty to one count of conspiracy to commit mail fraud and wire fraud, and another count of conspiracy to commit wire fraud. He has been ordered to surrender for service of his sentence on Feb. 23, 2015, at an institution to be determined by the state Bureau of Prisons. Upon release from imprisonment, Levitis will be on supervised release for a term ...
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