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Volume 2014 - Number 48

December 18, 2014

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Home-Equity Production Increased in 3Q14, But Not Enough to Offset Ongoing Decline in HEL Outstanding

Home-equity lending continued to grow during the third quarter of 2014 – in fact, it was the fastest-growing segment of the mortgage market – but depository institutions reported further declines in the unpaid balances of these assets on their balance sheets. Lenders funded an estimated $20 billion of new home-equity lines of credit during the third quarter, up 17.6 percent from the previous three-month period. That compared to a 9.8 percent increase in total mortgage originations during the period, and it was the best quarterly HEL production figure in five years, according to Inside Mortgage Finance estimates. Still, the supply of home-equity loans outstanding fell...[Includes three data charts]

Subservicing Volumes Stay Relatively Flat, But Big Drops for BofA, Nationstar, Ocwen

The nation’s subservicers, as a whole, reported a modest decline in their business volume during the third quarter, though some firms experienced large declines compared to a year ago, according to exclusive survey figures from Inside Mortgage Finance. The biggest year-over-year decline came at Bank of America, which had just $5 billion in subservicing contracts at Sept. 30, a 78.3 percent drop compared to the same period last year. BofA’s decline in the subservicing sector is...[Includes one data chart]

CBO Projects Lenders Will Shift Some of Their Business Away from the GSEs in Coming Years

Lenders are likely to shift some of their business away from the government-sponsored enterprises and into the non-agency market in the coming years, regardless of GSE reform efforts, according to a report released this week by the Congressional Budget Office. “With house prices expected to trend upward, the balance sheets of lenders and investors should improve, as should borrowers’ financial positions,” the nonpartisan provider of analysis for Congress said. “Consequently, CBO projects that private companies will become more willing to make new loans and demand lower fees to compensate for the credit risks they take, which will reduce Fannie Mae and Freddie Mac’s pricing advantage over their private competitors.” If the private sector bears more mortgage credit risk, the CBO said...

Transfers of Ginnie Mae Servicing Rights Fell Sharply in FY 2014; A Lack of Mega Deals?

Ginnie Mae approved the transfer of $66.06 billion in mortgage servicing rights during fiscal year 2014, a 56.5 percent tumble from the prior year as “mega” MSR transactions hit the skids. In fiscal 2012, just $25.39 billion in Ginnie product changed hands, but the market heated up significantly with $152.22 billion transferred in 2013. As always, transfers can be...[Includes one data chart]

Following CFPB Rulemakings Could Indirectly Raise a Lender’s Fair Lending Risk, Attorney Warns

Complying with all of the Consumer Financial Protection Bureau’s mortgage rules that took effect this year could actually boost a lender’s fair lending liability under certain circumstances, according to one top attorney. “There are several possibilities where a person could be in complete compliance or even engage in behaviors incentivized by these rules, while also possibly increasing fair lending risk,” said Colgate Selden, counsel at the Alston & Bird law firm, during a webinar last week sponsored by Inside Mortgage Finance. “The ability-to-repay, loan originator compensation, mortgage servicing, and Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rules all contain provisions where persons could indirectly increase their fair lending risk through compliance with those rules.” Among the ATR-related fair lending issues discussed by Selden, a former CFPB official, are...

Mortgage Financing for Home Purchases Gaining Share from Cash Financing on a Yearly Basis

As the share of investors purchasing homes declines, mortgage financing continues to take market share from cash financing for home purchases, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Non-cash financing was used on 72.4 percent of home purchases in November, based on a three-month moving average. That’s up from a 70.7 percent share in November 2013 and a share as low as 66.9 percent in March 2012. Prior to the housing crisis, the non-cash share of total home sales averaged...

President Obama Signs FY 2015 Omnibus Spending Bill, Some Rue Failure to Fund HAWK, FHA IT Upgrades

President Obama this week signed a comprehensive package of spending bills, providing funding to federal agencies through fiscal 2015 but missing two initiatives that would have toughened FHA enforcement and benefited new homeowners through enhanced housing counseling. The FY 2015 Consolidated and Further Continuing Appropriations Act is comprised of 11 funding bills for all federal agencies, including the Department of Housing and Urban Development. The bill provides...

Mortgage Market at a Glance

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

Poll

What will Fannie Mae’s and Freddie Mac’s new 97 LTV programs mean for your business?

It will give our business a big boost as there is a lot of pent up demand for the product.
It will have only a minor impact on our overall business as we already are doing high LTV business through FHA and some of our high LTV FHA business is likely to shift to Fannie and Freddie.
It won’t have any impact on our business as we plan to steer clear of all high LTV business – particularly in the GSE market.

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Housing Pulse