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Volume 2016 - Number 24

June 23, 2016

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Jumbo Market Closely Tracked Overall Trends in 1Q16 Mortgage Originations, Non-Agency Fared Slightly Better

Jumbo mortgage originations declined by 2.0 percent during the first quarter of 2016, mirroring the modest downturn in overall mortgage lending from the previous quarter. Jumbo originations – including loans that were within the high-cost loan limits for Fannie Mae, Freddie Mac, FHA and VA – totaled $100.61 billion in the first quarter, according to a new analysis and ranking by Inside Mortgage Finance. The sector accounted for 26.5 percent of total originations during the first three months of the year, down slightly from a 26.7 percent share in the fourth quarter. The jumbo share of total originations has generally been...[Includes three data tables]

Is the TRID Good-Faith Compliance Phase Over? Industry, Regulator, Attorney Accounts Are Split

Late last week, news broke of a conversation from a closed session at the American Bankers Association conference in San Diego that the “sensitive” approach by regulators to respect lenders’ good-faith efforts to comply with the Consumer Financial Protection Bureau’s integrated disclosure rule may have come to an end. According to one well-placed source, the CFPB and the other regulators – the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency – have decided that they will start examining banks for technical compliance with TRID, begin requiring restitution to affected borrowers, and start citing banks that are in non-compliance. “Apparently, the message is...

Subservicing Keeps Growing as Regulatory Headaches Force MSR Owners to Cut Costs and Outsource

Subservicing vendors continued to increase their contract totals in the first quarter as owners of mortgage servicing rights moved more of their business to these specialists to counter regulatory burdens that show few signs of abating. According to exclusive survey figures compiled by Inside Mortgage Finance, $1.625 trillion of home mortgages were being handled by subservicers at March 31, a 5.5 percent sequential increase and a 19.5 percent gain year-over-year. Subservicing firms – a business mostly dominated by nonbanks with one key exception – now process...[Includes one data table]

First-Time Homebuyer Share of Home Purchases Increases, Origination Volume Up Sharply in 1Q16

First-time homebuyers account for a growing share of home purchases, and even though housing inventory is limited, originations of mortgages for first-time homebuyers are up sharply. First-time homebuyers accounted for 40.8 percent of home purchases in May, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The share for first-time homebuyers, based on a three-month moving average, was the highest level seen in more than five years. “Demand from first-time homebuyers is...

Sales of Ginnie Servicing Prove Difficult; Deals Are Getting Done, But Risk of FHA MIP Cut Overhangs the Market

The sale of residential mortgage servicing rights has been gaining steam the past few weeks – unless you happen to be in the market for Ginnie Mae product. In particular, there’s a growing concern about price discounts on Ginnie servicing rights, and a strong belief that the agency – including its president, Ted Tozer – is once again getting anxious about so many nonbanks being such large players in the market. Tozer is so concerned about the matter that the agency – with the help of the Mortgage Bankers Association – is hosting what’s been described as a “liquidity summit” in Washington, DC, with several stakeholders and regulators, including officials from the Federal Reserve and U.S. Treasury. The summit, closed to the media, is scheduled for June 24. Ginnie issued...

VA Program’s IRRRL Production on Upward Swing, FHA Streamlined Refinancing Activity Slowing Down

Streamlined mortgage refinancing with FHA and VA guarantees continued its strong growth in the first quarter of 2016, thanks mainly to low interest rates and program features, according to an analysis of agency quarterly and monthly reports. Agency-backed streamlined refinancing refers to the refinance of an existing FHA or VA loan requiring limited borrower credit documentation and underwriting and no appraisal. Streamlining applies only to the amount of documentation and underwriting the lender must perform and not to the costs in the transaction. VA IRRRL (interest rate reduction refinance loans) production rose...

Slow Judicial Foreclosure Process Seen as Helping To Prevent Housing-Price Bubbles in Certain States

The slow foreclosure timelines in states with a judicial foreclosure process appear to have a silver lining: home-price bubbles are more prevalent in other states, according to Fitch Ratings. In a report released this week, analysts at the rating service said home prices nationally appear to be on solid footing, although some regional pockets of price risk are growing, primarily in states in the West and Southwest. Fitch said...

Housing Outlook Remains Stable, But First- Timers Face Affordability, Credit Challenges

The housing market has been fairly stable in 2016, but industry insiders say decreased affordability and credit access could impede the multiyear housing recovery. With interest rates lower than expected, the Mortgage Bankers Association raised its 2016 origination forecast to $1.60 trillion in May from its January projection of $1.38 trillion. It expects purchase originations to increase in 2017 and 2018, thanks to economic growth and a strong job market. But many first-time homebuyers may be...

CFPB Seeks to Protect its Privileged Supervisory Records in Case Against Ocwen Loan Servicing

Earlier this month, the Consumer Financial Protection Bureau asked to intervene in a federal whistleblower case brought against Ocwen Loan Servicing in order to protect the confidentiality of its supervisory information. “The bureau seeks to intervene for the limited purpose of invoking the bank examination privilege and the bureau’s regulations to protect confidential and privileged bureau supervisory records and information related to the bureau’s supervision of Ocwen,” the CFPB said in its motion filed in U.S. District Court for the Eastern District of Texas, Sherman Division. Counsel for the relators in the case, Michael Fisher and Brian Bullock, and the defendants, Ocwen Loan Servicing and Ocwen Financial Corp., told...

Mortgage Market at a Glance

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

Poll

What is the very best source of new mortgage customers for your lending shop? (Choose one only.)

Leads provided to me by employer

13%

Paid internet/website leads

9%

Real estate agents/Realtors

31%

Homebuilders

6%

Our existing customer base/our servicing customers

19%

My own personal sales "leads" database

13%

Other

9%

Housing Pulse