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Inside Mortgage Finance

October 6, 2016

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GSE Purchase-Mortgage Business Hits Post-Crash High in 3Q16, While Refi Sector Keeps Percolating

Fannie Mae and Freddie Mac securitized $135.69 billion of single-family purchase mortgages during the third quarter, according to a new Inside Mortgage Finance analysis of mortgage-backed securities disclosures by the two government-sponsored enterprises. That was up a hefty 26.2 percent from the previous quarter, and it represented the biggest quarterly flow of purchase mortgages to the GSEs since the housing market collapse. Although the loans were pooled in MBS issued during the third quarter, a significant number of them were actually originated during the April-June cycle. The third quarter typically has...[Includes three data tables] Read More

With TRID’s First Year in the Rear View Mirror, Industry Hopeful Compliance Continues to Improve

The Consumer Financial Protection Bureau’s integrated disclosure rule has now been in effect for a full year, and industry officials hope the potholes and speedbumps in the TRID road will continue to smooth out. Former CFPB official Benjamin Olson, now a partner with the BuckleySandler law firm in Washington, DC, noted that the first year of the TRID rule has been eventful. “In its early stages, the TRID rule proved to be far more disruptive than many envisioned, largely because of extraordinarily high rates of real and perceived errors and pervasive uncertainty over the liability associated with those errors,” he told Inside Mortgage Finance. Over time, the mortgage industry has been... Read More

‘High Pressure’ Wells Fargo Put on Retail Bankers Wasn’t Exactly Evident in the Mortgage Unit

Wells Fargo – no doubt – is taking it on the chin for its “account fabrication” scandal tied to credit cards and deposits, but so far the damage has yet to seep into its mortgage business in a major way, but reports suggest certain correspondents are balking at doing business with the megabank. Dave Akre, managing director of Five Oaks Investment Corp., said he knows some loan officers working for Wells correspondents who are no longer offering the megabank’s jumbo products “due to recent issues.” Those “issues,” he pointed out in an interview with Inside Mortgage Finance, involve... Read More

Former OCC Chief Ludwig Agrees to Sell Promontory To IBM, but Keeps Mortgage Business and Another Unit

In its thirst to expand further into financial services, IBM recently agreed to buy blue-chip advisory firm Promontory Financial Group, but there are two units that “Big Blue” won’t be getting: Promontory MortgagePath LLC and Promontory Interfinancial. According to industry officials, both units will continue to be owned (at least in part) by PFG founder Eugene Ludwig, the former Comptroller of the Currency who started the firm in 2001. Promontory Interfinancial is considered... Read More

Refi Borrowers Increasingly Taking Cash Out, Equity Extraction in Second Quarter at Highest Level Since 2009

Continued increases to home prices along with low interest rates have prompted a number of borrowers to take cash out when completing a refinance. Some 41.0 percent of refinances completed in the second quarter of 2016 resulted in a loan amount at least 5.0 percent higher than the unpaid principal balance of the original loan, according to Freddie Mac. In the second quarter of 2015, the share was 33.0 percent and between 2010 and 2013 it typically ranged from 15.0 percent to 20.0 percent, according to Freddie. The total amount of home equity cashed out has also increased... Read More

Modifying TRID to Facilitate Additional Cure Provisions Could Require Congressional Action

Many participants in the mortgage industry remain concerned that the Consumer Financial Protection Bureau did not address additional cure provisions in its proposed rulemaking to clarify the integrated consumer disclosure known as TRID. Lenders would love to see the bureau respond to these concerns when it finalizes its so-called TRID 2.0 rule. But that might not happen without Congress getting involved. During a webinar last week sponsored by Inside Mortgage Finance, some attendees inquired... Read More

HMDA Report Shows Huge Jump in Refi Business in 2015, Growing Government Role in Purchase Market

Home Mortgage Disclosure Act data released last week show a somewhat more efficient mortgage market in 2015 as fewer loan applications were declined and more turned into originated loans. Lenders processed $2.576 trillion in mortgage applications filed in 2015, converting them into $1.651 trillion in purchase and refinance originations, a 32.9 percent increase from the previous year. Some 56.5 percent of loan apps turned into closed loans, up from 53.8 percent in 2014, and the overall denial rate fell 2.9 points to 20.1 percent. Most of last year’s origination surge came...[Includes one data table] Read More

NY Clergy Express Concern About GSE Reform that Would Favor Big Banks, Shortchange Minority Communities

A group of New York Baptist clergy, mostly in Harlem and the Bronx, has joined the chorus of those raising concerns about potential Fannie Mae and Freddie Mac reform efforts that would compromise affordable housing goals. In a letter to Sen. Charles Schumer, D-NY, the 38 religious leaders echoed fears raised by other groups that Congress might hand the government-sponsored enterprises’ business over to big banks. They contend that the biggest banks have “consistently displayed a disinterest” in lending to minority-based communities and lack a “duty to serve” commitment comparable to the one the GSEs have. “Efforts to transfer the mortgage securitization platforms of Fannie Mae and Freddie Mac into the hands of the big banks create... Read More

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