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Volume 2016 - Number 33

August 25, 2016

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Retail Channel Sees a Slight Uptick in Market Share In Second Quarter, Correspondents Lose Some Ground

All three major mortgage-production channels posted significant gains in volume from the first quarter of 2016 to the second, but retail posted the biggest increase. According to a new Inside Mortgage Finance ranking and analysis, an estimated $300 billion in first-lien mortgages were originated through retail platforms during the second quarter, including traditional brick-and-mortar offices and consumer-direct efforts. That was up 36.4 percent from the first three months of the year, and a scant 1.4 percent higher on a year-to-date basis. The retail share edged up to 58.8 percent, the highest it’s been in two years. Wells Fargo remained...[Includes four data tables]

Steady as She Goes in Subservicing Market but Sector Could be Poised for Growth as Firms Go ‘Capital Lite’

The nation’s subservicers increased their base of contracts to $1.615 trillion in the second quarter, a modest 1.6 percent gain from the prior period, but a handsome 17.0 percent improvement from the same period a year earlier, according to survey figures compiled by Inside Mortgage Finance. Overall, these third-party processing vendors – who split the monthly fee with the actual owner of the servicing strip – control 15.9 percent of all residential mortgage debt in the nation. A year ago the reading was 14.0 percent. And it’s...[Includes one data table]

Subservicer Rushmore Loan Management Ready to Launch Consumer-Direct Channel

Rushmore Loan Management Services, Irvine, CA – a subservicing specialist – plans to enter the origination market early next month, a rarity for firms whose forte is processing loans for others. Company CEO Terry Smith told Inside Mortgage Finance that the nonbank’s direct-to-consumer arm is scheduled to begin funding loans on Sept. 1. “Our focus will be on originating loans – and servicing those loans,” Smith said. He also noted...

GSEs Introduce a New Loan Dispute Appeal Process Prior to Third-Party Arbitrator

Fannie Mae and Freddie Mac introduced a new impasse and management escalation process this week as a middleman between the normal loan dispute appeal process and the final independent dispute resolution (IDR) process for seller/servicers. The government-sponsored enterprises said they hope to resolve as many disputes as possible before any IDR process begins. The GSEs introduced...

FCC Declines to Exclude Servicer Calls to Delinquent Borrowers from TCPA’s ‘Prior Consent’ Requirement

The Federal Communications Commission has refused an industry request to exempt mortgage servicing calls from prohibitions against the use of “robocalls,” or automated dialing and calling systems, to contact delinquent borrowers on their cell phones. In a long-awaited final rule limiting the way servicers can collect on student loans, mortgages and other debts owed to the federal government, the FCC said it would not make a decision on whether the statutory exemption from the Telephone Consumer Protection Act’s “prior express consent” requirements applies to Fannie Mae and Freddie Mac loans or their servicers. The TCPA and FCC regulations require...

Appraisal Issues Increasingly Causing Delays of Purchase Mortgages in Busy Home-Buying Season

A shortage of appraisers and rising mortgage activity has prompted appraisal issues to account for more delayed closings, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. For home sales closed in July after experiencing a delay, appraisal-related issues accounted for the delay 14.1 percent of the time, based on a three-month moving average. That was up from a 12.4 percent share the previous month and nearly double the 7.2 percent share in January. “Closing times are...

Panelists say Mortgage Servicing Is Evolving, But Costs Are Still Stuck in the 1980s

Rising costs for mortgage servicing and more frequent transfers have become key issues for the industry, according to panelists at a seminar hosted by the Urban Institute and CoreLogic last week. Ed DeMarco, former acting director of the Federal Housing Finance Agency and now a senior fellow at the Milken Institute, said that mortgage servicing compensation has not changed in decades as the servicing industry itself has undergone what he called “profound changes.” He noted...

Freddie’s AVM Seen as Providing Home-Price Valuations Slightly Higher than Prices in Case-Shiller Index

New disclosures on risk-sharing transactions from Freddie Mac provide some details on the automated valuation model used by the government-sponsored enterprise to determine home prices and loan-to-value ratios. Freddie’s AVM – Home Value Explorer – provides home price valuations that are a little higher than the S&P CoreLogic Case-Shiller Home Price Indices, according to analysts at Bank of America Merrill Lynch. The analysts based their findings on estimates of current LTV ratios that Freddie recently added to monthly loan-level disclosures on Structured Agency Credit Risk transactions. LTV ratios based on Freddie’s AVM were...

Mortgage Market at a Glance

Weekly mortgage rates and application survey data as well as indexes for ARMs.

Poll

The yield on the benchmark 10-year Treasury fell to all-time low of 1.34% recently. How much better will originations be at your shop in the second half compared to 1H, if at all?

Better by 1% to 10%.

30%

Better by 11% to 25%.

39%

Off the charts better. Applications are great now.

22%

Worse than 1H, but not by much.

4%

A lot worse. But not sure on the damage.

4%

Housing Pulse