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Volume 2016 - Number 47

December 8, 2016

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Agency Jumbo Production Outpaced Traditional Jumbo Originations in 3Q16, Higher Conforming Limits Ahead

The one weak spot in the mortgage market during the third quarter was in traditional jumbo originations, a trend that was reinforced by a significant increase in production of agency mortgages in high-cost markets that exceeded $417,000. An estimated $101.0 billion of non-agency jumbo home loans were originated during the third quarter, down 1.9 percent from the previous quarter. At the same time, production of conforming-jumbo mortgages – loans greater than $417,000 that were securitized by Fannie Mae, Freddie Mac and Ginnie Mae – jumped 27.7 percent from the second to the third quarter. Some of the disparity is...[Includes three data tables]

Mortgage Stocks Show Signs of a Recovery as the ‘Trump Rally’ Continues. But Some of These Names May Disappear

Despite higher interest rates, publicly traded mortgage stocks have been rising since the election, but market watchers are cautious that recent gains could evaporate quickly. “Two things are going on here,” said Henry Coffey, an equities analyst at Wedbush Securities. “We’ve had a massive market rally, especially in financial stocks. But the general consensus is that the new administration is going to be less punitive than the current one.” Coffey added...[Includes one data table]

Trump Has Vowed to Clamp Down on Regulations, But He Faces Limited Unilateral Powers, Long Odds

During his successful campaign for the White House, then-candidate Donald Trump won applause and support from the business community for his promise to substantially cut back on federal regulations. Many in the mortgage lending community had hopes the plan would include some relief from the mortgage regulations issued by the Consumer Financial Protection Bureau. Among other things, Trump said he would issue a temporary moratorium on “new agency regulations that are not compelled by Congress or public safety [and] cancel immediately all illegal and overreaching executive orders.” Richard Horn, who worked on the CFPB’s integrated-disclosure rulemaking known as TRID, said...

Fair Housing Advocates Sue Fannie Mae for Alleged Discrimination in Foreclosure Maintenance Practices

Fannie Mae has not treated its foreclosed properties in African-American and Latino communities the same as those in predominately white neighborhoods, according to a federal lawsuit filed this week by the National Fair Housing Alliance. The NFHA, along with 20 fair housing and civil rights groups, said its investigation found signs of racial discrimination when it comes to the upkeep and marketing of Fannie’s real estate-owned properties in 38 metropolitan areas across the country. These properties in minority neighborhoods were blighted...

PHH, U.S. Solicitor General Due to Respond to Appeals Ruling in Long-Running Case With CFPB

The DC Circuit Court of Appeals recently ordered PHH Corp. to respond to the Consumer Financial Protection Bureau’s petition for an en banc rehearing in the long-running dispute over alleged violations of the Real Estate Settlement Procedures Act. The lender’s response is due late this week. The court has also invited the U.S. solicitor general to weigh in on the constitutional and RESPA questions associated with the case. No timetable was suggested. However, industry legal observers expect the USSG to respond promptly, given the pending change of presidential administrations, and to support the bureau’s positions. Attorneys at the BuckleySandler law firm noted...

Washington State Close to Setting the First State- Specific Capital Standard for Nonbank Servicers

Washington state is on track to become the first state to set capital requirements for nonbank mortgage servicers. A proposed rule has been met with resistance from the Mortgage Bankers Association, with the trade group calling on the state to halt the process and wait for pending national standards from the Conference of State Bank Supervisors. In September, Washington’s Department of Financial Institutions proposed capital requirements for nonbank servicers licensed in the state. Under the proposal, servicers would have to meet capital requirements set by the government-sponsored enterprises or a government entity. For servicers that solely handle non-agency mortgages, the Washington DFI proposed...

Jury Finds Allied Home Mortgage and CEO Liable for FCA, FIRREA Violations, Awards $93 Million in Damages

A Texas jury awarded the federal government $93 million in damages after finding entities under the Allied Home Mortgage brand liable for running an illegal net branching scheme and falsely certifying thousands of FHA loans, eventually causing huge losses for the FHA. The case was the first False Claims Act award related to FHA activity made by a jury. Although nearly all lenders have ended up settling FCA cases, Quicken Loans is still actively fighting FCA charges in a jury proceeding. The Department of Housing and Urban Development claims...

When the Going Gets Tough, Some Lenders Start Cutting Fees – like the ‘Escrow Waiver’ Charge

Two weeks back, United Wholesale Mortgage removed a 25 basis point charge it levied on conventional conforming loans when the borrower opts to manage his or her own real estate taxes and homeowners insurance. (Those payment chores are usually handled by the servicer.) Since making the change, escrow waivers have jumped 12 percent at the nation’s largest wholesaler/broker lender. Company CEO Mat Ishbia declared that other lenders should follow suit if they haven’t already. “I think that overall this is good for the industry as a whole,” he said in an interview. For now, the reaction to UWM’s fee waiver has been...

Detractors Question Carson’s Qualification as HUD Secretary, But Industry Thinks Effectiveness Depends on Key Appointees

President-elect Donald Trump this week officially nominated former Republican primary rival Dr. Ben Carson to head the Department of Housing and Urban Development – a move that elicited mixed responses from industry and government quarters. Carson, a pediatric neurosurgeon, eclipsed possible contenders for the HUD job, including Scott Brown, former U.S. senator from Massachusetts; Ed DeMarco, former acting director of the Federal Housing Finance Agency; Rick Lazio, former Republican congressman from New York; Blaine Leutkemeyer, another Republican lawmaker from Missouri; Brian Montgomery, former FHA commissioner and HUD assistant secretary; and Pamela Patenaude, president of the Terwilliger Foundation for Housing America’s Families. Carson’s nomination is...

Mortgage Market at a Glance

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

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In 2016, what have you been paying your retail residential loan officers, on average, as a commission?

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