July 24, 2014

Latest from Inside Mortgage Finance

Mortgage originations rose by 25.5% from the previous quarter according to estimates from Inside Mortgage Finance

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Most Lenders Rode Surge in Mortgage Production In 2Q14, But Pace Was Well Below Recent Past

A healthy housing recovery boosted mortgage origination volume during the second quarter of 2014, but production remains at relatively sluggish levels, according to a new market analysis and ranking by Inside Mortgage Finance. Single-family mortgage originations totaled an estimated $295 billion during the second quarter, up 25.5 percent from the first three months of the year. The first quarter of 2014 was the worst production environment for the mortgage industry since the end of 2000, even falling below the mark set at the depth of the financial crises in the fourth quarter of 2008. In fact, the most recent April-to-June cycle brought...[Includes three data charts]

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First-Time Homebuyer Share of Purchase Market At High Levels, GSEs Account for Growing Share

The first-time homebuyer share of home purchases has increased for four consecutive months, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. First-time homebuyer activity tends to increase through the spring homebuying season, but the first-time homebuyer share is at particularly high levels this year. First-time homebuyers accounted for 37.2 percent of home purchases in June, based on a three-month moving average. That was up from a 34.2 percent share in March, and the last time the first-time homebuyer share of home purchases was at 37.2 percent was September 2010. According to real estate agents, first-time buyers appear...

Consumer Narratives Would be Added to Complaint Database Under CFPB Proposal as Industry Frets

Mortgage lenders and other financial services providers are up in arms about a new Consumer Financial Protection Bureau proposal to allow consumers to post narrative complaints about companies in the agency’s online complaint database. The bureau wants to expand the current database to include “unstructured consumer complaint narrative data.” A consumer who submits a complaint will be given the opportunity to check a consent box giving the bureau permission to publish his or her narrative. Where the consumer provides consent to publish the narrative, the related company will be given...

Feature Stories

Inside Mortgage Trends

Banks Report Substantial Increase In 2Q14 Mortgage Banking Income

Second-quarter bank earnings reports show a strong increase in overall mortgage banking profitability as new origination volume rebounded from historic lows set in the first three months of 2014. A new Inside Mortgage Trends review of earnings reports from 21 banks, including eight of the 10 largest banks in mortgage lending, reveals that the group generated $3.81 billion in second-quarter mortgage banking income. That was up 31.5 percent from ...

Inside The GSEs

Sources: White House Still Working On Advancing GSE Reform This Year

The White House isn’t quite ready to pack it in on housing finance reform legislation this year, at least in the Senate, even as policymakers look ahead to take up the issue anew next year, say industry observers. The industry at large has all but written off the prospects of advancing a GSE reform bill in the 113th Congress following the bare minimum passage out of the Senate Banking, Housing and Urban Affairs Committee of S. 1217 by the committee’s chairman and ranking member Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID.

Inside MBS & ABS

Non-Mortgage ABS Market Slowed Modestly in 2Q14 But Stayed on Track for Best Year Since 2008 Crash

New issuance of non-mortgage ABS dropped slightly during the second quarter of 2014 from the robust levels recorded in the first quarter of 2014, according to a new analysis and ranking by Inside MBS & ABS. A total of $49.14 billion of non-mortgage ABS were issued during the April-to-June cycle, an 8.0 percent decline from the first quarter of 2014. But new issuance remained...[Includes three data charts]

Inside the CFPB

At Three-Year Mark, Supporters See CFPB as a Brave, Noble Defender…

Few federal regulatory agencies are the objects of such scorn – and simultaneously such devotion – as the CFPB, reflecting the bitter partisan environment in which the bureau was created in the wake of the financial crisis. To its opponents, July 21, 2011, may as well be another “date which will live in infamy,” whereas to its supporters, the modern financial era might as well be divided into pre-CFPB time and post-CFPB time. Sen. Elizabeth Warren, D-MA, the author of the concept that evolved into what is now the CFPB and the person tasked with getting the agency up and running, urged supporters of the bureau to keep up the fight. “It feels like yesterday that we were fighting for a strong ...

Inside Nonconforming Markets

Loan Quality Remains Pristine in Jumbo MBS, But It’s Still Hard to Get Deals Done

The characteristics of mortgages included in jumbo mortgage-backed securities remained strong in the second quarter of 2014, according to a new analysis by Inside Nonconforming Markets. However, the high quality of jumbo MBS has not attracted enough investors to make issuance more appealing for banks than retaining the loans in portfolio. Debt-to-income ratios on loans included in the $1.03 billion in jumbo MBS issued in the second quarter averaged ... [Includes one data chart]

Inside FHA Lending

Endorsements Up for 620-679 Credit Scores

Mortgages with 620-679 credit scores accounted for more than half of FHA’s mortgage insurance business in the first quarter of 2014, up from 42.0 percent a year ago, according to the Department of Housing and Urban Development’s latest quarterly report to Congress on the state of the FHA Mutual Mortgage Insurance Fund. Data showed FHA-insured mortgages in the 620-679 credit score range, a band typically identified with borrowers with slightly tainted credit, comprised 51.1 percent of new endorsements in the first quarter. This was up from 50.1 percent in the fourth quarter of 2013. FHA endorsements in the 620-plus category started trending upward in the first quarter of 2011, while endorsements in the 720-850 credit score range began a slow decline during the same period. The distribution of borrower credit scores continued the migration seen in previous quarters, though at a ...

Poll

Home-equity lending is beginning to show new life. My company (pick one):

Plans to enter this market over the next 12 months.
Is already making home equity loans and hopes to increase the offerings.
Is in the market but don’t expect much growth.
Is not making second liens and has no plans to do so.

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Housing Pulse