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Volume 2014 - Number 29

July 24, 2014

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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]

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...

Correspondent Lending Boosts Freedom Mortgage Originations, Nonbank Bulks Up on Servicing

Freedom Mortgage reported continued growth in originations in the second quarter of 2014, largely driven by correspondent production. The nonbank has focused on agency mortgages with strong underwriting, retaining servicing on the loans. Freedom had $5.72 billion in originations in the second quarter of 2014, a big 48.7 percent increase from the previous quarter and up 31.1 percent compared with the second quarter of 2013. Officials at the nonbank touted Freedom’s strength while originations have declined overall. “While the mortgage industry is experiencing a downturn, Freedom Mortgage has increased...

2014 Loan Limit Decreases Slowed FHA Lending, But Impact Muted in Purchase-Mortgage Sector

FHA single-family endorsements fell 55.6 percent in the first four months of 2014, compared to the same period last year, but the impact was far from uniform across the country. A new analysis by Inside FHA Lending, an affiliated newsletter, shows that housing markets where FHA loan limits were reduced this year have seen a bigger drop in FHA business than elsewhere in the country. In counties with lower FHA loan limits, production in the first four months of 2014 was down 57.7 percent from a year ago, while production in markets where there was no change fell 51.3 percent. FHA lending declined...

Federal Judge Grants Limited Discovery in GSE ‘Taking’ Case Against Government, But Public Access Limited

A federal judge last week granted limited discovery to a hedge fund representing a group of Fannie Mae and Freddie Mac shareholders as they challenge the government’s “net worth sweep” of their profits. But the court will keep a tight lid on public access to the documents in a nod to the government’s claim that a leak could have dire economic consequences on the mortgage market. Fairholme Capital Management has been pushing hard for discovery and access to internal government documents since the shareholder filed suit last summer demanding that the Treasury Department void its August 2012 Third Amendment to its preferred stock purchase agreement with Fannie and Freddie. In her ruling, Judge Margaret Sweeney of the U.S. Court of Federal Claims was...

FHFA IG Report on Nonbanks Ticks Off Industry; But More ‘Operational Reviews’ Are on the Way

As a way to keep a tight grip on counterparty risk, Freddie Mac will start conducting bimonthly “operational reviews of certain specialty servicers” later this year. Not to be outdone, Fannie Mae will also perform such reviews, but only when a seller/servicer reaches a “certain mortgage loan delivery threshold.” The news – contained in a recent report from the Inspector General of the Federal Housing Finance Agency – isn’t likely to warm the hearts of fast growing nonbanks. Both Nationstar Mortgage and Walter Investment Management are mentioned by name in the report, which voices concerns thatsome nonbanks pose a risk to the government-sponsored enterprises because they have “limited financial capacity” to make good on representation and warranty contracts. Nationstar and Walter are...

HUD: Other Lenders Will Fill in If Chase Bolts FHA; But Agency Working on Ways to Mitigate Lender Concerns

If JPMorgan Chase were to exit the FHA program, plenty of other residential lenders would pick up the slack, according to officials at the Department of Housing and Urban Development, who in a press briefing this week indicated the agency is hardly worried about such a development. “There are plenty of other lenders,” said one senior HUD official. “Their [JPM’s] volume has dropped. Quicken is now number one.” During an earnings call last week, JPMorgan CEO Jamie Dimon questioned...

Top Direct Originators: 1Q14 Data

Mortgage Market at a Glance

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


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