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Volume 2014 - Number 45

November 26, 2014

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Correspondent Channel Saw Biggest Origination Volume Gains During Third Quarter of 2014

All three mortgage-production channels generated solid increases in new origination volume during the third quarter of 2014, but the correspondent market had a measurably bigger gain, according to a new Inside Mortgage Finance ranking and analysis. An estimated $105 billion of home loans were produced by correspondent originators during the third quarter, up 14.1 percent from the previous quarter. That lifted the correspondent share of new originations to 30.4 percent for the, and 30.3 percent on a year-to-date basis. Correspondents are...[Includes four data charts]

Mortgage Industry Braces for Nonbank Capital ‘Standards’ From State Regulators; How Binding Will They Be?

Nonbank mortgage servicers are bracing for an onslaught of new capital recommendations from the Conference of State Bank Supervisors, which could see the light of day in early 2015. But the industry did receive one piece of good news: although the CSBS is working on what it calls “options for prudential standards,” the organization will not be addressing capital for nonbank originators, a CSBS official told Inside Mortgage Finance. The group is...

Lenders Satisfied So Far With Fannie, Freddie Reps- And-Warrant Relief But More Clarifications Expected

Industry groups say they are generally pleased with last week’s more detailed update to Fannie Mae’s and Freddie Mac’s representation-and-warranty framework, but lenders remain expectant of additional details from the Federal Housing Finance Agency going forward. The new rules, retroactive to January 2013, provide that lenders might not be required to repurchase loans that contain data inaccuracies or misrepresentations of buyers’ qualifications, unless those inaccuracies and misrepresentations are “significant” or appear in multiple loans. The clarifications of life-of-loan exclusions announced by the government-sponsored enterprises are designed...

Proposed Changes to CFPB Servicing Rules Address Loss Mitigation, Force-Placed Insurance, Bankruptcy

Mortgage servicing compliance is about to get even more complicated as the Consumer Financial Protection Bureau late last week proposed changes to its mortgage-servicing regulations on loss mitigation, force-placed insurance disclosures, borrowers in bankruptcy and a host of other matters. On loss mitigation, the bureau is proposing that servicers would have to meet its requirements “more than once in the life of a loan” for borrowers who become current after a delinquency. However, the rule is not clear how many times this could occur over the life of the mortgage. Next, the bureau wants...

Large Servicers Oppose Latest Proposal to Draft Overlay of State Laws for Foreclosures

The Uniform Law Commission’s latest proposal for a model state act that would regulate foreclosure practices as part of an overlay on current state laws is deeply flawed, according to large servicers represented by the Consumer Mortgage Coalition. In a comment letter submitted to the ULC’s Home Foreclosure Procedures Act Committee last week, Anne Canfield, executive director of the CMC, said the draft HFPA could prompt foreclosure delays and would create new assignee liability. The ULC’s committee on the proposed foreclosure law has been working...

Lenders Urge Federal Banking Regulators to Restore 100% Risk-Weighting for MSR, Call for Other Changes

Financial services trade groups called upon federal banking regulators to reinstate the 100 percent risk-weighting for mortgage servicing rights and to implement other changes as they move forward with the new Basel III risk-based capital rules. In a recent joint letter to bank regulatory agencies, the Mortgage Bankers Association, the American Bankers Association and the Independent Community Bankers of America warned that inaction could seriously affect the availability and cost of mortgages to consumers. The trade groups believe...

GSE Loan Limits Mostly Unchanged for 2015

The Federal Housing Finance Agency this week said that conforming loan limits for Fannie Mae and Freddie Mac in 2015 would remain at current levels in most markets. Some 46 counties will get...

Witnesses at House Subcommittee Hearing Favor Bill to Open Flood Insurance Market to Private Carriers, Brokers

The National Flood Insurance Program has been great in providing federal flood insurance coverage to homeowners in high flood-risk areas, but the huge losses incurred by the program during Hurricane Katrina and super-storm Sandy indicate it is time to shift the risk to the private sector, according to industry experts. During a hearing on flood insurance legislation by the House Financial Services Subcommittee on Housing and Insurance last week, experts urged lawmakers to stop funneling all flood risk through the NFIP and open the door to private flood insurance providers. The hearing focused...

Mortgage Market at a Glance

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


What is it going to take to convince lenders to loosen the credit box (i.e., remove underwriting overlays)?

The recent rep and warranty changes announced by the Federal Housing Finance Agency should go a long way in protecting lenders from future buybacks and help expand mortgage credit.
There won’t be any significant elimination of underwriting overlays until the government stops seeking huge mortgage-related penalties and settlements from lenders.
There shouldn’t be any expansion of the mortgage credit box since looser underwriting is what caused the recent mortgage crisis.

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