April 28, 2016

Latest from Inside Mortgage Finance

Total agency MBS servicing rose 0.2 percent from the previous quarter according to estimates from Inside Mortgage Finance

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Mortgage Originations Hold Fairly Steady in Early 2016 But Results Vary Significantly Among Top Lenders

Mortgage lenders that have excelled at originating refinance loans posted steady and improving originations during the first quarter of 2016 while competitors that are more focused on the purchase-mortgage market generally saw declining production levels. A new Inside Mortgage Finance analysis and ranking shows that first-lien mortgage originations totaled an estimated $380.0 billion during the first three months of 2016, down slightly from the fourth quarter of last year. That estimate could change as more information becomes available, especially from major nonbank lenders that have not yet reported first-quarter originations data. Agency indicators were...[Includes two data tables]

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Thanks to Rising Loan Originations, Mortgage M&A Deals Hit the Skids; No More ‘Franchise’ Deals?

Thanks to rising loan applications and a stronger-than-anticipated start to the second quarter, merger and acquisition activity in the mortgage industry is at muted levels these days, according to investment banking officials. In other words, lenders will continue to “make hay while the sun shines,” believing that current profit margins are just too good right now to consider selling out. It was originally thought...

Struggling Homeowners Continue to Face Problems With Their Mortgage Servicers, CFPB Report Says

The Consumer Financial Protection Bureau’s latest monthly report on consumer complaints finds that borrowers who are having a hard time staying current on their mortgages are still having problems with their servicers. The bureau said 51 percent of gripes involved problems homeowners faced when they were unable to make their mortgage payments. Consumers continued...

Feature Stories

Inside The GSEs

Fannie Mae to Start Securitizing Re-Performing Loans

This week, Fannie Mae announced it will start to securitize re-performing loans held on its balance sheet during the second half of the year. Loans that have been modified and are now performing and loans that have become current without a modification program will be included. Securitizing the once delinquent loans will help manage Fannie’s risk while dwindling down its portfolio, according to Fannie’s Bob Ives, vice president of retained portfolio asset management. “Over the long run, these securitizations can benefit investors, Fannie Mae and taxpayers.” Just weeks earlier the Federal Housing Finance Agency revealed a principal reduction program for Fannie and Freddie Mac loans.

Inside MBS & ABS

Commercial Mortgage Securitization Down in Early 2016 as Both Non-Agency and Agency Sectors Slump

New MBS issuance backed by income-property mortgages fell in the first quarter of 2016 as all sectors of the market got off to a weak start in the new year, according to a new Inside MBS & ABS analysis. A total of $44.78 billion of commercial mortgages were securitized in the first three months of the year, down 11.8 percent from the fourth quarter. It marked the lowest three-month output since the second quarter of 2014, when $37.61 billion of commercial mortgages were securitized. Both sides of the industry saw...[Includes one data table]

Inside Mortgage Trends

Banks Report Modest Boost in Mortgage-Banking Income During Early 2016

Although many banks wrestled with hedges for their mortgage servicing rights and loan production was generally down, the industry posted a solid increase in mortgage-banking earnings in the first quarter. A new Inside Mortgage Trends analysis of earnings reports filed by 26 major banks showed a combined $3.450 billion in mortgage-banking income during the first quarter. That was up 12.3 percent from their fourth-quarter earnings of ... [Includes one data chart]

Inside Nonconforming Markets

TRID Issues Persist in Non-Agency Market; New MBS Avoids Liability Altogether

Relatively strong pricing for a jumbo mortgage-backed security issued at the end of March appears to have done little thus far to open the spigot for deals that include loans subject to the TRID mortgage disclosure rule. The $331.95 million Agate Bay Mortgage Trust 2016-2 was issued by Two Harbors Investment at the end of March. The deal included 43 mortgages subject to TRID, many of which had initial compliance exceptions. Analysts at Interactive Data said ...

Inside FHA/VA Lending

VA Paced Growth in Government- Insured Servicing During 1Q16

The Ginnie Mae servicing market continued to grow during the first three months of 2016, with most of the impetus coming from the VA home loan guaranty program. A new Inside FHA/VA Lending analysis of mortgage-backed securities data reveals that the amount of Ginnie servicing outstanding swelled to $1.544 trillion as of the end of March, a 1.65 percent gain from the previous quarter. Because issuer-servicers regularly repurchase seriously delinquent loans out of Ginnie MBS pools, the actual volume of government-insured loans outstanding was somewhat higher. The VA program saw the most growth, increasing by 3.25 percent in just three months, while FHA servicing in Ginnie MBS rose only 0.96 percent from December 2015. Servicing of rural housing loans guaranteed by the U.S. Department of Agriculture was up 1.34 percent, while the FHA insurance program for Native Americans ... {4 charts]

Inside the CFPB

Life Under TRID: Industry, Lawmakers Still Press for Guidance on TRID, to No Avail

The mortgage industry and supporters on Capitol Hill are keeping up the heat on the CFPB, urging the powerful consumer regulator to issue official guidance on TRID disclosure errors and assignee liability as problems continue to plague the non-agency secondary market. David Stevens, president and CEO of the Mortgage Bankers Association, said recently: “As one who believes that the bureau has done a lot of good work, it is a phenomenon to me that the simple request for clarity to specific questions we have submitted, amidst the clear and fact-based challenges facing responsible lending in its focus on efforts to be compliant, is being met with such resistance.” According to the MBA chief, this isn’t just lenders bellyaching. “This is ...

Poll

Does your lending shop have any plans to make non-jumbo, non-QM loans this year? These would be loans similar to "Alt A" and subprime products made BEFORE standards were loosened severely in the 2004 to 2007 era.

Yes.

33%

No.

33%

It’s under consideration, maybe by 3Q or 4Q.

26%

We were going to until the TRID "error" mess hit.

7%

Housing Pulse