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November 26, 2014 - Inside The GSEs

FHLBank MBS Investments Drop During Third Quarter 2014

Fannie Mae and Freddie Mac mortgage-backed securities remained the preferred investment choice of the 12 Federal Home Loan Banks during the third quarter of 2014, with a very slight decline from the previous quarter, according to a new analysis and ranking by Inside The GSEs based on data from the Federal Housing Finance Agency. Meanwhile, Ginnie Mae securities posted effectively no movement within the FHLBank system during the three-month period ending Sept. 30, 2014.


November 26, 2014 - Inside The GSEs

Fannie, Freddie MBS Activity Drops Month-to-Month in October

Together, Fannie Mae and Freddie Mac in October posted a combined decline in the volume of single-family mortgages securitized, according to a new Inside The GSEs analysis. Fannie and Freddie issued $63.1 billion in single-family mortgage-backed securities in October, a 1.5 percent decrease from September. On a year-to-date basis, October’s MBS issuance dropped an even steeper 50.6 percent.


November 26, 2014 - Inside Mortgage Trends

Banks Report Drop in Mortgage-Banking Income

Commercial banks and thrifts reported a combined $4.67 billion in mortgage-banking income during the third quarter of 2014, according to a new Inside Mortgage Trends analysis of call-report data. Third-quarter results were down 4.9 percent from the second quarter, which is consistent with the figures reported by publicly held mortgage lenders. Year-to-date mortgage-banking income for the depository institutions was $12.96 billion, down 37.0 percent from the first nine months of last year. Wells Fargo and JPMorgan Chase continued to rank as the top two banks in mortgage-banking income, but both reported declines of more than 25 percent from the second quarter to the third. On a year-to-date basis, the two lenders accounted for 47.3 percent of total mortgage-banking income earned ...


November 26, 2014 - Inside Mortgage Trends

Originations Surge Fueled Income Gains In 3Q14, But Servicing Profits Slumped

A sharp drop in net income from servicing operations during the third quarter was the key factor in a decline in overall mortgage-banking profitability for a group of major lenders, according to a new analysis by Inside Mortgage Trends. The 11 publicly traded companies, which include most of the top originators and servicers in the industry, reported a combined $1.25 billion in net income from servicing, including the gains or losses from hedging their mortgage servicing rights. That was down 43.8 percent from the second quarter and was the lowest net income from servicing for the group since the third quarter of last year. Two of the companies reported increased servicing revenue. At Huntington Bank, net servicing income nearly tripled ...


November 26, 2014 - IMFnews

Subprime Mortgage Servicing Rights Draining Away

Although Bank of America has been dumping MSRs aggressively over the past two years, its subprime servicing portfolio has declined at a gradual pace.


November 25, 2014 - IMFnews

Short Takes: So, Where’s the Housing Bubble? / Altisource Buys Owners.com / A $1 Billion Quarter for FGMC / Delinquencies at Freddie Continue to Fall

What exactly is Owners.com? Launched in 1996, it’s supposedly the largest directory of homes for sale by owners. In other words, they don’t use traditional Realtors…


November 25, 2014 - IMFnews

Correspondent Channel Posted Biggest Origination Gain of the Quarter

Wells Fargo reported a 2.1 percent drop in its correspondent originations from the second quarter to the third, and its year-to-date volume was down 57.3 percent.


November 24, 2014 - IMFnews

FHA Production Strong in 3Q; Quicken #1 Again

The 57 percent reduction in endorsements takes FHA closer to the levels of activity seen before the housing crisis.


November 21, 2014 - Inside FHA Lending

GNMA Eyes Stronger Oversight of Nonbank Issuers

Ginnie Mae is seeking comment on several proposed data collections, including those that would strengthen the agency’s ability to monitor participants in its mortgage-backed securities programs. Due to its growing concern over the influx of non-depository issuers into the single-family MBS program, Ginnie has proposed to collect more loan-level data to supplement the information already being collected and reported on a monthly basis. The proposed data collection consists of bankruptcy-related information (action type, case identifier, chapter type, bar date) as well as borrower-related information (borrower bankruptcy indicator, classification type, total mortgaged properties, counseling initiated indicator and credit score date). Other proposed new data include document custodian ID, type of insurance claim coverage, investor unpaid principal balance (UPB), adjustment to ...


November 21, 2014 - Inside FHA Lending

Congress Urged to Extend Expiring VA Loan Limits

Thousands of military veterans in high-cost areas may be deprived of VA’s home-loan guarantee benefits unless Congress extends the current VA loan limits before the end of the year. Those loan limits expire on Dec. 31, 2014. The VA loan limits are based on median home values estimated by the FHA, providing loans up to 125 percent of local area median price. The program does not set a cap on how much a veteran can borrow to finance a home purchase but it does limit the maximum amount it can guarantee to 25 percent of the current loan limit. Veteran and industry groups are urging Congress to make the VA limits permanent. A VA spokesperson said the agency was not asked for a position on the issue since Congress did not put forward any bill in any of the hearings this year. “But as a general rule, VA wants to maximize the opportunities ...


November 21, 2014 - Inside FHA Lending

HECM Portfolio Down to Negative in FY 2014

The economic value of the FHA’s Home Equity Conversion Mortgage legacy portfolio fell to negative $0.9 billion in fiscal 2014 due mainly to volatility in long-term house prices and interest rates, according to the latest independent actuarial report on the health of the Mutual Mortgage Insurance Fund. The latest result was a significant improvement from FY 2012, when the fund stood at negative $2.8 billion. In fiscal 2013, the HECM portfolio’s economic value of positive $6.5 billion appeared to be a whopping change from the previous year but that amount reflected a $4.6 billion cash infusion from the forward program and from the $1.7 billion mandatory appropriation, the report clarified. The report also showed a corresponding decline in the HECM capital ratio to negative 1.20 percent. Actuarial projections for fiscal 2015 place the HECM portfolio’s economic value at negative $1.1 billion. The fund’s capital resources for ...


November 21, 2014 - Inside Nonconforming Markets

GSEs Unload Some Nonprime MBS Holdings

The nonprime mortgages held by the government-sponsored enterprises continue to run off, though the GSEs have sold some of their holdings of nonprime mortgage-backed securities in the past year, according to industry analysts. Fannie Mae and Freddie Mac held a combined $238.83 billion in nonprime mortgages as of the end of the third quarter of 2014, according to a new analysis by Inside Nonconforming Markets. Purchased/guaranteed mortgages ... [Includes one data chart]


November 21, 2014 - IMFnews

Banks Post Modest Gain in MBS Holdings, Non-Agency Growth Leads

The biggest gain in bank MBS investment during the third quarter was in non-agency securities.


November 20, 2014 - IMFnews

Urban Institute Launches ‘Credit Availability’ Index with Guns Blazing

Still, the new index from the Urban Institute is not perfect...


November 20, 2014 - IMFnews

3Q Product Mix Roundup: Home Equity Loans Had the Strongest Growth

Based on the run-rate of the first nine months, HEL production could top almost $67 billion in 2014, which would be the best year since 2009.


November 18, 2014 - IMFnews

Mortgage Banking Income Softened in 3Q Despite Origination Surge

For the first nine months of 2014, the group reported $10.94 billion in net mortgage-banking income, a stunning 43 percent decline from the same period in 2013


November 17, 2014 - IMFnews

Brokers and Correspondents Key Players in 3Q MBS Surge

Although Wells Fargo officially exited the broker market two years ago, it apparently still does a tiny amount of business through the channel.


November 14, 2014 - Inside The GSEs

GSEs Crank Out Profits in 3Q 2014, Freddie Warns of ‘Volatile’ Earnings

Fannie Mae and Freddie Mac reported a combined $6.0 billion in net income for the third quarter of 2014, up from $5.1 billion in the previous quarter. The two GSEs will send to the Treasury $6.8 billion as return on the government’s senior preferred stock. That will bring cumulative payments under the GSE conservatorships to $225.5 billion. Fannie and Freddie were given a total of $187.4 billion in government funds in order to stay in business.


November 14, 2014 - IMFnews

The Nonbanks in 3Q: Ocwen, WAC, PHH in the Dog House

Some publicly traded nonbanks are facing possible class-action lawsuits from angry investors who’ve seen billions of dollars in stock equity evaporate over the past year.


November 14, 2014 - IMFnews

Fannie, Freddie Mortgage Holdings Down Almost 47 Percent Since 2008 Takeover

The biggest decline has been in non-agency MBS holdings, mostly Alt A and subprime MBS that have been subject to fast liquidation rates.


November 13, 2014 - IMFnews

LoanDepot Acquisition of Mortgage Master Will Make LD the Nation’s 11th Largest Originator

In the retail channel, LoanDepot ranks fifth among all nonbanks, a figure that excludes what Mortgage Master brings to the table.


November 13, 2014 - IMFnews

3Q Final: Private MIs Saw Huge Gain in Market Share as FHA Fell Behind

In fact, it was the highest quarterly volume in new flow business for the MI sector since the second quarter of 2008.


November 11, 2014 - IMFnews

JPMorgan Chase: The Non-Agency MBS King

Total non-agency MBS held by banks and thrifts in the second quarter of 2014 fell 9.5 percent compared to 2Q13, largely driven by runoff.


November 7, 2014 - Inside FHA Lending

Around the Industry

Radian Reports Strong 3Q14 Results. Radian Guaranty’s new mortgage insurance written increased to $11.2 billion in the third quarter compared to $9.3 billion in the previous quarter, and down from $13.7 billion from the same period last year, according to company financial results for 3Q14. Overall, the private mortgage insurer reported net income of $153.6 million for the quarter, which executives attributed to strong credit performance, a growing MI book of business and solid performance from Clayton Holdings. Radian recently acquired the due-diligence firm for $305 million. Total primary MI in force was $169.2 billion as of Sept. 30, 2014, up from $165.0 billion the prior quarter, while persistency was 83.5 percent at the end of the third quarter. The total number of primary delinquent loans was down 4 percent from the second quarter and down by ...


November 7, 2014 - Inside FHA Lending

GNMA Servicing Improves Slightly in 3Q14

Ginnie Mae servicing bumped up slightly in the third quarter after an uneventful prior quarter as FHA purchase activity continued to drag, according to Inside FHA Lending’s analysis of agency data. Servicing volume rose quarter over quarter by 1.4 percent. On an annual basis, volume increased 4.6 percent from the same period a year ago. Ginnie Mae servicers ended the quarter with a total of $1.48 trillion in unpaid principal balance, up from $1.46 trillion in the previous quarter. The top three servicers saw volume drop on both quarterly and year-over-year bases. Wells Fargo remained as top servicer of Ginnie Mae mortgage-backed securities, closing out the quarter with $422.4 million, down 0.8 percent from the previous quarter and down 0.6 percent from the prior year. The mega-servicer dominated the Ginnie market with a 28.6 percent market share. JPMorgan Chase carved out a 10.1 percent market share with ... [1 chart]


November 7, 2014 - IMFnews

Another Sign of Strength: Agency MBS Issuance Rose to a 12-Month High in October

The MBS gain was lopsided: Ginnie MBS issuance jumped 10.8 percent from September to October, while Fannie Mae and Freddie Mac suffered declines.


November 6, 2014 - IMFnews

Fannie/Freddie Account ‘Surplus’ With Treasury Will Hit $40.9 Billion

GSE executives, however, declined to specify when their new 97 percent LTV programs will be ready.


November 6, 2014 - IMFnews

Nonbanks Continue Their Market Share Gains in MSRs – but at a Slower Pace

The nonbank expansion has eased over the past few quarters because once-hungry buyers of receivables such as Ocwen, Nationstar and Walter Investment are no longer gobbling up huge portfolios.


November 5, 2014 - IMFnews

PHH Loses Money on Mortgage Business in 3Q14, Lower Gain-on-Sale Blamed

PHH's servicing portfolio continues to shrink thanks to MSR sales and payoffs.


November 4, 2014 - IMFnews

A Loosening of GSE Credit? Not in the Third Quarter of 2014

The biggest chunk of GSE business comes from mortgages with high credit scores and LTV ratios below 80 percent.


November 3, 2014 - IMFnews

2015 Origination Forecast: Cloudy with a Hint of Optimism

If housing markets are stronger than expected and rates stay low enough, originations could hit $1.421 trillion next year.


November 3, 2014 - IMFnews

3Q Mortgage Income Rises at Regional Banks

BB&T posted $80 million of mortgage banking net income in the third quarter, up sharply from a negative $21 million suffered in the previous quarter.


October 31, 2014 - Inside Mortgage Trends

Credit Boxes Changing Very Little

Top mortgage sellers to Fannie Mae and Freddie Mac appear to be focusing even more on lower-risk mortgages, according to a new Inside Mortgage Trends analysis of loan-level mortgage-backed securities data. Some 62.9 percent of loans delivered in the third quarter had credit scores of 740 or above, up from 61.9 percent in the second quarter and 60.5 percent in the first three months of the year. The data exclude mortgages with loan-to-value ratios exceeding ... [Includes one data chart]


October 31, 2014 - Inside The GSEs

OCC: Freddie Re-Default Mods Perform Ahead of Fannie in 2Q14

Modified Freddie Mac mortgages performed better than Fannie Mae loans more than two years after modification as the performance gap between the two GSE closed slowly, according to the Office of the Comptroller of the Currency. The OCC’s latest Mortgage Metrics Report noted that Freddie loans had a 15.5 percent re-default rate six months after modification, while Fannie mods saw a 16.2 percent rate. At the 12-month mark, Freddie stood at 21.9 percent compared to Fannie’s 23.2 percent.


October 31, 2014 - IMFnews

What We’re Hearing: 40 Percent of Lenders May Disappear Via M&A? / Less Competition? / They’ll be Back / Benjamin Lawsky, a Nice Guy, Really / Provident Exiting Certain States?

One veteran mortgage trade group official, a staunch Republican no less, told us that Lawsky is an “honest and bright guy,” adding that he understands the issues.


October 31, 2014 - IMFnews

Commercial MBS Market on Fire: Deal Volume Jumps 38 Percent

Non-agency issuers produced $32.16 billion of new commercial MBS, a 40 percent increase from the second quarter.


October 30, 2014 - IMFnews

Citadel’s Monthly Production of ‘Subprime’ Loans at $20 Million; $400 Million Next Year?

In three-plus years of originating subprime mortgages, Citadel has suffered two foreclosures and a handful of delinquencies, but no losses.


October 30, 2014 - IMFnews

It’s Official: Residential Production Up Again in 3Q14 to $335 Billion

Wells Fargo's origination market share keeps dropping, but is still more than double that of its closest competitor, JPMorgan Chase.


October 28, 2014 - IMFnews

What’s Going On? Consumers Are Complaining a Lot Less About Mortgages

Total mortgage complaints have been trending downward since they peaked at 15,239 in the first quarter of 2013.


October 28, 2014 - IMFnews

MBS Investments by Credit Unions on the Wane

With certain exceptions, credit unions invest almost exclusively in agency product, avoiding jumbo securities.


October 27, 2014 - IMFnews

California Continues to Dominate the Jumbo Market – By Far

Jumbo lending increased 14.2 percent in 2013 compared with the previous year. California posted a growth rate slightly above that level...


October 24, 2014 - Inside FHA Lending

State FHA Originations Up, Golden State Leads

Total originations of FHA forward and home-equity conversion mortgages across the U.S. and in the territories increased from the first to the second quarter, with California accounting for the lion’s share of all FHA loans produced by state. Production of FHA-insured forwards, including jumbo loans, and HECM loans during the first half of 2014 totaled $68.3 billion, a whopping 49.0 percent drop from volume reported over the same period last year. On the other hand, total originations in the 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands rose 11.5 percent quarter-over-quarter. Originations totaled $36.1 billion in the second quarter. Forward mortgages accounted for $61.1 billion of new FHA-insured loans originated during the first six months while HECMs comprised $7.2 billion of loans produced over ... [ 1 Chart ]


October 24, 2014 - Inside FHA Lending

FHA Notifying Lenders of Possible MRB Action

The FHA warned it would soon be sending notices to lenders who are overdue in completing their annual recertification packages, a rule violation that could land them before the Mortgagee Review Board for disciplinary action. Lenders who were unable to submit their recertification packages containing the required financial reports, annual recertification statements and the renewal fee payment will be receiving notices of deficiency from the FHA. FHA extended the filing deadline to June 27, 30 days after the deployment of the new Lender Electronic Assessment Portal (LEAP) system used in the lender recertification process. Traditionally, lenders were required to access both FHA Connection and Lender Assessment Sub-System (LASS) to complete the annual recertification process. LEAP will now enable lenders to complete all ...


October 24, 2014 - Inside FHA Lending

VA, Rural Housing Guarantees Surge in 2014

While the FHA’s share of the primary insurance market has dropped significantly since premiums were hiked in early 2013, the VA program and the rural housing loan program run by the Department of Agriculture are going strong, according to agency officials. During a panel discussion at the Mortgage Bankers Association annual convention this week, VA and Rural Development executives said that both agencies have been quietly building mortgage market share. Jeffrey London, deputy director of the VA’s loan guaranty service, reported that purchase-mortgage VA loan originations were up 11 percent in fiscal 2014, with 40 percent of the business being first-time homebuyers. Of that group, 80 percent took no-downpayment VA loans, the biggest selling point in the program, along with its relatively low costs. In earlier remarks, Housing and Urban Development Secretary Julian Castro revealed that ...


October 24, 2014 - Inside FHA Lending

GNMA Raises Net Worth, Liquidity Tests

Ginnie Mae this week provided new details to the long-anticipated plan for increased issuer net worth and liquidity and a new performance scoring method for issuer activity – changes that could adversely affect small issuers and portfolio servicers. In remarks at the Mortgage Bankers Association’s annual convention in Las Vegas, Ginnie Mae President Ted Tozer said the changes are part of a larger effort to ensure the continuing flexibility and availability of the agency’s mortgage-backed securities program to as many entities as possible. New types of issuers and counterparties have entered the agency-backed MBS market in the wake of the financial crisis, which called for adjustments and tailored approaches to the evolving housing finance market, Tozer noted. Tozer said both policy changes and staff expertise will ensure the success of ...


October 23, 2014 - IMFnews

High Premiums Come Back to Haunt FHA: Purchase-Market Share Falls to Five-Year Low

The chickens come home to roost: from 2008 through 2013, HUD increased the FHA’s annual mortgage insurance premium five times.


October 20, 2014 - IMFnews

An Origination Surprise: 3Q Production Better Than Expected, So Far

It’s not clear whether the rest of the industry will push the third-quarter origination results higher.


October 17, 2014 - Inside The GSEs

Bank, Thrift FHLBank Advances Increase in Second Quarter 2014

The use of Federal Home Loan Bank advances among bank and thrift members rose overall during the second quarter of 2014, according to the Inside Mortgage Finance Bank Mortgage Database. All of the nation’s banks and thrifts used a combined $437.7 billion in advances as of June 30, 2014, up 11.6 percent from the first quarter of 2014 and an 18.8 percent increase from the same period a year earlier.


October 17, 2014 - IMFnews

What We’re Hearing: MBA Turns a ‘Profit’ Again / About that MBA Office Building / The State of the Mortgage Union / The Era of Non-QM Starts Right Now / No Clarity From Wingspan / Ellie Mae’s Sky High P/E Ratio / Yet Another Departure From Nationstar Mortgage

Bill Dallas, who runs Skyline Lending, told us he believes the “new” non-agency movement is beginning right now. “Today, we‘re doing 90 percent agency,” he said. “In 2017 the ratio will be 60 percent agency.”


October 16, 2014 - IMFnews

Zombie Woof: Thanks to Lingering ‘Legacy’ Issues, GSE Buybacks Spiked in 2Q

In fact, nearly a fifth of the repurchases involved loans sold to the GSEs by Lehman Brothers or its related mortgage businesses.


Poll

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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