September 18, 2014
Latest from Inside Mortgage Finance
Bank and thrift ABS holdings fell by 0.8% from the previous quarter according to estimates from Inside MBS & ABS
Purchase-mortgage originations jumped 44.3 percent from the first quarter of 2014 to the second quarter, according to a new Inside Mortgage Finance analysis and ranking, with first-time homebuyers representing about 43.9 percent of agency activity in the sector. Purchase mortgages accounted for 64.1 percent of total mortgage production during the second quarter. That’s the highest purchase share since 1995, when financing for home purchases represented 67.2 percent of total originations. At the midway point of 2014, purchase-mortgage originations were up...[Includes four data charts]
The Federal Housing Finance Agency is pushing back against the findings of its Inspector General that the agency rushed a mandated new representation and warranty framework “despite significant and unresolved operational risks” to Fannie Mae and Freddie Mac. Announced in September 2012 and implemented Jan. 1, 2013, the framework relieved sellers from certain reps and warrants, including those relating to credit underwriting and eligibility of the borrower and the property that were formerly effective for the life of the loan. It allowed for repurchase relief to seller/servicers if mortgages acquired by the government-sponsored enterprises after the effective date had acceptable payment history for 36 months. And the GSEs apparently weren’t...
Among the many challenges associated with the Consumer Financial Protection Bureau’s pending integrated disclosure rule is expanded legal liability for lenders based on the more threatening Truth in Lending Act, as opposed to the more palatable liability framework of the Real Estate Settlement Procedures Act. During a webinar sponsored last week by Inside Mortgage Finance, Rich Horn, a partner with the Dentons law firm and one of the architects of the rule while a regulator at the CFPB, noted there is no private right of action for integrated disclosures under RESPA. On the other hand, with TILA liability, “there is...
Latest Mortgage Data
CFPB Deputy Director Steve Antonakes told attendees at the North Carolina Bankers Association’s mortgage conference last week that lenders need to start prepping for the bureau’s impending TILA/RESPA Integrated Disclosure rule, known in bureau-speak these days as the “TRID.” While the use of the TRID’s new Loan Estimate and Closing Disclosure forms is not required until August 2015, “mortgage lenders should already be working on the new rule and getting ready now,” Antonakes urged. “Significant changes to business operations and technology platforms will require close collaboration with third-party service providers. “While many mortgage institutions are already deep into implementing these changes, we want to make sure that everyone understands the need to be focusing on August 2015 now,” Antonakes emphasized...
Obama will meet with top banking executives and industry trade groups on Sept. 17 to explore potential solutions to lender overlays and other problems that hinder first-time homebuyers and other qualified borrowers from obtaining an FHA or conventional mortgage. The meeting is expected to touch on key lender issues, including credit overlays, government enforcement actions, regulatory burden and risk-based versus FHA pricing. Lenders say they are willing to originate single-family mortgages to qualified borrowers and first-time homebuyers but they feel the post-crisis environment has turned hostile against them. Repurchases and indemnifications have dampened their willingness to lend to moderate- and lower-income borrowers, they admit. Regardless of policy changes designed to increase lending in the lower credit score range (620 to 679), FHA enforcement actions to ...
Banks large and small continue to add mortgages to their portfolios, with new additions outpacing runoff from refinances and foreclosures. The new additions to bank portfolios are largely jumbo mortgages, though some lenders are retaining agency-eligible loans. Banks and thrifts held a total of $1.76 trillion of first-lien mortgages in portfolio as of the end of the second quarter of 2014, according to an Inside Nonconforming Markets analysis of call reports. The first-lien holdings were up 1.4 percent compared with the previous quarter and level compared with the second quarter of 2013. Among the four largest holders of first liens, only Bank of America decreased its portfolio in the second quarter. Compared with the second quarter of 2013, JPMorgan Chase was the only bank among the big four to increase its first-lien holdings.
The recent adoption by the Securities and Exchange Commission of its Regulation AB II disclosure rule is expected to be a “credit positive” for the auto loan and lease ABS sector, but it probably will also raise costs for market participants and, ultimately, consumers, according to an industry consensus of the new rule. The new regulatory regime mandates standardized loan-level disclosures for ABS backed by auto loans and leases, as well as other classes, as reported previously. The loan-level data have to be provided on the SEC’s free online database known as the EDGAR system. Although specific data requirements vary by asset class, the new asset-level disclosures generally will include...
Commercial banks and thrifts continued to reduce the amount of mortgage servicing they do on behalf of other investors during the second quarter of 2014, according to a new Inside Mortgage Trends analysis of bank call-report data. With declining interest rates during the period and the prospect of faster prepayments, most banks also wrote down the fair market value they placed on their mortgage servicing rights, the data show. Banks and thrifts serviced a total of ... [Includes one data chart]
When lawmakers return from their five-week August recess next week, House and Senate members will face a lengthy agenda with just a short period of time to get it done. Conspicuously absent from the Congressional to-do list is housing finance reform. With approximately 12 scheduled legislative days before the Nov. 4 midterm elections, industry observers note that lawmakers won’t get to some things until they return for the lame duck session, while other bills will fade away as the clock runs out.
- GSE Private Mortgage Insurance Profile 2Q14
- GSE Seller Profile: 2Q14
- Mortgage Profitability Report: 1Q14
- Top Mortgage Players: 1Q14
- Agency Condo Market: 2013
- GSE Repurchase Activity Full Year 2013
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