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Inside Mortgage Finance

October 15, 2015

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Mortgage Lenders Deliver Hefty Volume of Loans With Private MI to Fannie and Freddie in 3Q15

Fannie Mae and Freddie Mac securitized $59.07 billion of single-family loans with private mortgage insurance coverage during the third quarter of 2015, reflecting the increase in purchase-mortgage production, according to a new analysis and ranking by Inside Mortgage Finance. The flow of PMI-insured loans to the government-sponsored enterprises’ mortgage-backed securities program was up 12.3 percent from the second quarter, and it was likely the biggest such volume since the housing market collapsed in 2008. The data come from loan-level MBS disclosures, which Fannie started providing in 2013. The increased volume of privately-insured mortgages came...[Includes two data tables] Read More

Is loanDepot’s IPO an Aberration? There Doesn’t Seem to be Many Other Candidates on the Horizon

loanDepot’s initial public offering of stock – $100 million is the target capital raise – is viewed as a bullish sign for the mortgage industry, especially nonbanks, but don’t expect a long line of imitators, at least not yet. Advisor Joe Garrett, who runs Garrett, McAuley & Co., isn’t quite sure what to make of the recent IPO news, stating bluntly: “I’m sure it will get a lot of ‘wannabes’ hot and bothered.” Garrett noted... Read More

CFPB Guidance on MSAs Seen as Strong Warning To Reconsider or Reject Such Arrangements

The Consumer Financial Protection Bureau’s new guidance on mortgage services agreements has given the industry little confidence about such arrangements and likely helped push another major lender, Bank of America, to shutter its MSA ventures. BofA decided to the pull the plug on all marketing services agreements it has with realty firms, including RE/MAX. The bank told IMFnews, an affiliated daily service, that it will discontinue all “space rental agreement programs due to recent regulatory developments.” Its MSA agreements will end... Read More

Consumer Mortgage Coalition Calls for Reversal of CFPB’s Decision, Disgorgement Order in RESPA Case

The Consumer Financial Protection Bureau’s decision to ignore more than 40 years of established interpretation of the Real Estate Settlement Procedures Act’s anti-kickback provision would deprive consumers of the benefits of risk retention and do them further harm, warned an industry trade group in an amicus brief. The brief in support of the petitioner in PHH Corporation, et al., v. Consumer Financial Protection Bureau said allowing CFPB Director Richard Cordray’s decision to stand would increase closing costs, make an already lengthy closing period longer, and make the mortgage origination process more confusing for borrowers and lenders. Currently on appeal in federal appeals court in the District of Columbia, the decision issued by Cordray on June 4, 2015, relates... Read More

Mortgage-Banking Income Weakens for Major Banks in 3Q15, Mixed Bag on Originations

Five large commercial banks reported a combined 7.1 percent decline in mortgage originations during the third quarter of 2015, accompanied by an even bigger drop in mortgage-banking income, according to an Inside Mortgage Finance analysis of earnings releases. Two of the five – JPMorgan Chase and U.S. Bank – reported slight increases in mortgage production from the second quarter. Given the fairly wide range in origination volume trends among the group, it’s difficult to forecast how the overall market fared based on their activity. At the midway point in 2015, these five banks accounted for 26.8 percent of total first-lien mortgage originations. Wells Fargo remained...[Includes one data table] Read More

Banks’ Retention of Conforming Mortgages Likely Driven by High G-Fees, Shift in Lenders

In the past year and a half, banks have started holding an increasing share of conventional conforming mortgages in portfolio instead of securitizing them through the government-sponsored enterprises. Industry analysts suggest GSE guaranty fees are the reason. In the first half of 2015, 91.6 percent of the estimated $442 billion in originations of conventional conforming mortgages were included in mortgage-backed securities. In 2013, 97.0 percent of the estimated $1.17 trillion in conventional conforming originations were securitized, according to an Inside Mortgage Finance analysis. “Securitizing conforming mortgages in agency MBS has become... Read More

Stonegate Mortgage May Be in Play; Blackstone And Caliber Mentioned as Possible Suitors

Stonegate Mortgage, Indianapolis, a publicly traded nonbank that recently underwent a management change, is considering takeover offers, according to industry advisors familiar with the situation. Although the company declined to comment, it appears that at the very least it’s considering selling some of its branches. At the same time, sources contend that certain branch managers are trying to cut separate deals with competitors. Firms looking to take over those branches include... Read More

Moody’s: GSEs, Lenders Poised to Benefit From Post-Crisis Private MI Changes

In the wake of large losses and insurance claim discrepancies stemming from the financial crisis, the government-sponsored enterprises and mortgage lenders are set to reap the benefits of new private mortgage insurer standards that formally take effect Jan. 1, 2016. Much tighter MI underwriting, coupled with improved insurer due diligence and stringent capital requirements, will improve claim payouts on defaulted loans, according to a recent report by Moody’s Investors Service, adding that policies written under updated GSE requirements will result in lower losses on the GSEs’ risk-sharing transactions and master insurance policies. The updated requirements for master policies give... Read More

Shareholder Group Says Risk-Sharing Puts Fannie, Freddie at a Disadvantage

Private investors in Fannie Mae and Freddie Mac stock are raising concerns about the expansion of risk-transfer activity at the two government-sponsored enterprises, warning that it should not be viewed as the answer to housing reform. The credit-risk transfer programs are often cited as a path to housing finance reform because they bring new private capital to the mortgage business, laying off some of the risk held by the GSEs and, ultimately, by taxpayers. “Some have suggested... Read More

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