Mortgage Banking Profitability

Browse articles from all of our Newsletters related to Mortgage Banking Profitability.

July 3, 2015 - Inside Mortgage Trends

Specialty Servicers Slowed by Fewer Delinquencies

Two weeks ago, specialty servicer Wingspan Portfolio Services shuttered its Melbourne, FL, office, leaving 150 servicing workers without a job. But more bad news may be on the way for the once fast-growing “contract” servicer. According to industry officials close to the company, the privately held Wingspan is in need of new contracts – badly. …

July 3, 2015 - Inside Mortgage Trends

Banks Report Record Low in Repurchases

Commercial banks and thrifts reported just $996.7 million in single-family mortgage repurchases and indemnifications during the first quarter of 2015, according to a new Inside Mortgage Trends analysis of call report data. It was, by a nose, the lowest quarter repurchase total reported by the banking industry since regulators began collecting this data back in early 2008. In the third quarter of last year, bank repurchases … [includes one data chart]

July 3, 2015 - Inside MBS & ABS

Mayors Call on HUD, GSEs to Stop NPL Sales to Wall Street

The U.S. Conference of Mayors has joined a growing number of entities urging the Department of Housing and Urban Development, Fannie Mae and Freddie Mac, and certain major banks to stop selling distressed and nonperforming mortgages to Wall Street investors. Rather than sell pools of NPLs to private-equity firms, hedge funds and other speculators, sell them to qualified nonprofits for the purpose of saving homes from foreclosure and creating affordable housing, the group stated in a resolution co-sponsored by 17 mayors. The mayors point to a joint study issued recently by the Center for Popular Democracy and the ACCE Institute. The study said most NPL pools are auctioned off at steep discounts to hedge funds and private-equity firms. “Although Fannie and Freddie have been unwilling to offer principal reduction to struggling homeowners, they often offer steep discounts when they ...

July 2, 2015 - Inside Mortgage Finance

Mortgage M&A Train Continues: Fast-Growing Pingora Being Sold to a REIT, Farmers Bank Sells Call Center

Earlier this year, Pingora Asset Management was out in the market trying to raise another $500 million to buy mortgage servicing rights, but wasn’t having much luck, according to industry sources. But in late June it found something a little more enticing: a buyer to acquire the entire company and its affiliate, Pingora Loan Servicing, without its existing book of receivables. As soon as Fannie Mae, Freddie Mac and other vested parties approve the purchase, the new owner will be ...

June 26, 2015 - Inside FHA/VA Lending

Around the Industry

GNMA to Modernize Management of Loan Docs that Serve as Pool Collateral. Ginnie Mae plans to reform its document custody policies to minimize agency risks. Michael Drayne, Ginnie’s senior vice president of issuer and portfolio management, said the changes will apply to documents for loans that serve as collateral for securitized pools of mortgages. Current policies will be reexamined to see whether they adequately reflect and mitigate actual risks. Existing technology will be reevaluated as well. Ginnie will also study how to integrate document-custody functions and information into the agency’s systems. In addition, Ginnie will look at whether information about the status of pool collateral should be managed at the loan level, not merely the pool level. Furthermore, the agency will reevaluate the need to reexamine its enforcement methods and whether they should be ...

June 26, 2015 - Inside FHA/VA Lending

RHS Raises Upfront Guaranty Fee For SF Mortgages Effective FY2016

Rural borrowers will be paying a higher upfront fee for mortgage loans with a Rural Housing Service guaranty, the U.S. Department of Agriculture has announced. In an advance notice, the USDA said it will raise the upfront guaranty fee for loans originated under the RHS’ Single Family Housing Guaranteed Loan Program in FY2016. For purchase and refinance loans, the upfront guaranty fee will change from 2.00 percent to 2.75 percent of the loan amount. The annual fee will remain at 0.50 percent. The fee increase will apply to guaranteed loans obligated on Oct. 1, 2015, through Sept. 30, 2016, the USDA said. A loan is obligated when the USDA has approved a complete loan-application package and issued a conditional commitment for a single-family housing loan guarantee to the USDA lender. The new fee will apply to loan guaranty requests submitted to the USDA prior to Sept. 30, 2015, without a ...

June 26, 2015 - Inside FHA/VA Lending

WA Regulators Accuse Quicken Loans of False VA Loan Advertising

Financial institution regulators in Washington state have charged Quicken Loans with using false, deceptive and misleading advertisements to target veterans and active military members with adjustable-rate refinance offers. According to a complaint filed by the Division of Consumer Services of the Washington State Department of Financial Institutions, Quicken Loans falsely implied in its direct mailings that it is associated with the Department of Veteran Affairs. The VA provides guarantees to fixed- and adjustable-rate mortgage loans to veterans and servicemembers through the agency’s Home Loan Guaranty program. Quicken Loans allegedly used graphics in its 5/1 ARM solicitations that resembled the seal of the VA, with the words “Governed By: United States Veterans Department.” In addition, the Michigan-based lender allegedly used an ...

June 26, 2015 - Inside FHA/VA Lending

VA Provides New Appraisal Review Tool to Enhance Risk Management

The Department of Veterans Affairs is providing VA lenders with LoanSafe Appraisal Manager, a new automated tool for appraisal review. The LSAM is designed to help VA lenders do a quick assessment of appraisal risk for VA policy compliance violations, over/under valuations and appraisal quality issues. The automated appraisal tool does not provide an estimate of value or make decisions for lenders. It does not accept or reject appraisals or characterize them as good or bad. Currently, every VA appraisal report must be reviewed either by a VA-designated fee appraiser or by a staff appraisal reviewer before the agency issues a notice of value. A notice of value is the reasonable value of the property for loan purposes. A staff appraisal reviewer (SAR) ensures that all VA loan requirements are satisfied. The reviewer might find some inconsistencies during the review and ...

June 26, 2015 - Inside FHA/VA Lending

Taxonomy Gives Lenders a Glimpse Of How FHA Will Handle Defects

Clearer FHA guidance on loan defects may help lenders avoid problems but they do not provide legal protection against costly government false-claim lawsuits, according to mortgage industry stakeholders. Long-anticipated rules issued recently by the FHA explain how the agency intends to categorize loan defects identified during an individual loan-level review of endorsed single-family mortgages. The loan-defect assessment methodology or “defect taxonomy” was first unveiled in September 2014 as part of the FHA’s Blueprint for Access, which outlined steps the agency is taking to expand lending to underserved and first-time homebuyers. Combined with the updated loan-certification language used by lenders to warrant compliance with FHA rules and the new Single Family Policy Handbook, FHA plans to use the taxonomy to create a stronger quality assurance program. With better quality ...

June 26, 2015 - Inside FHA/VA Lending

FHA Jumbo Originations Rise in 1Q, Purchase Loans Fuel Increase

FHA jumbo loan production rose nearly 36.9 percent in the first quarter, ending the period with $3.8 billion in new volume, according to an Inside FHA/VA Lending analysis of agency data. Volume includes all FHA loans exceeding $417,000. It was also up significantly, 59.6 percent, from the same period a year ago. Purchase loans accounted for 52.8 percent of FHA jumbos originated during the first three months of 2015, and 93 percent were fixed-rate purchase and refinance loans. The top five FHA jumbo lenders – Quicken Loans, Wells Fargo Bank, Prospect Mortgage, Pinnacle Capital Mortgage Corp., and LoanDepot – reported increases on a quarter-to-quarter basis. Together, the elite group accounted for 13.0 percent of the FHA jumbo market. The largest quarter-to-quarter increases were mostly mid-level FHA jumbo lenders. For example, 12th-ranked Freedom Mortgage, a top player in the ... [ 1 chart ]

June 26, 2015 - Inside FHA/VA Lending

VA Jumbo Securitization up in 1Q, 2 States Account for Over 55%

Ginnie Mae securitized $6.6 billion of VA jumbo loans in the first three months of 2015, up 15.9 percent from the prior quarter, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. Jumbo loans – single-family mortgages with loan amounts exceeding $417,000 – comprised 18.7 percent of total VA originations in the first quarter. VA jumbo originations outpaced FHA jumbo production, which totaled $2.8 billion in the first quarter, up 17.0 percent from the prior quarter, according to the Inside Mortgage Finance database. VA jumbos in Ginnie mortgage-backed securities issued in the first quarter included modified VA loans as well as those originated in Alaska, Guam, Hawaii and the U.S. Virgin Islands. Wells Fargo ranked first among securitizers of VA jumbos in the first quarter, with $1.3 billion in production. Second-ranked Freedom Mortgage conveyed $652.7 million in ... [ 1 chart ]

June 19, 2015 - Inside The GSEs

Fannie and Freddie Buybacks Down Sharply in 1Q15

Fannie Mae and Freddie Mac both reported sharp declines in mortgage repurchases during the first quarter of 2015, according to a new Inside The GSEs analysis of public disclosures by the two. There was, however, a sharp increase in the volume of unresolved buyback demands. The GSEs reported a combined $491.3 million in mortgage repurchases during the first three months of 2015, a 30.8 percent decline from the fourth quarter of last year. It was also the lowest quarterly buyback figure since Fannie and Freddie began filing repurchase activity reports with the Securities and Exchange Commission back in early 2012. Fannie’s repurchase volume fell 45.8 percent from the previous quarter while Freddie’s was...

June 19, 2015 - Inside MBS & ABS

Ruling in ACE Securities Case Confirms that Rep-and- Warrant Statute of Limitations Starts at Deal Closing

A ruling late last week by the New York Court of Appeals will likely help provide certainty to non-agency MBS issuers regarding liability from breaches of representations and warranties while limiting claims from investors. The appeals court confirmed a lower court’s ruling in ACE Securities v. DB Structured Products, determining that the statute of limitations for claims of breaches of representations and warranties starts when a deal is closed – not when a potential breach is discovered. “Representations and warranties concern...

June 19, 2015 - Inside MBS & ABS

Little Sign That GSE Sellers Are Expanding Credit Box in 2015. They May Be Tightening

There was widespread expectation that the latest round of seller-friendly changes to the government-sponsored enterprises’ representation-and-warranty framework would encourage lenders to liberalize their credit overlays. So far in 2015, the data aren’t showing it. In fact, the case could be made that credit trends are going the other way. The average credit score for purchase mortgages securitized by Fannie Mae and Freddie Mac was...[Includes one data table]

June 19, 2015 - Inside Mortgage Trends

Outsourcing Comes with Cost Benefits, Risks

Lenders are increasingly interested in outsourcing portions of the mortgage origination process, according to a new survey by the Stratmor Group. Industry analysts note that while outsourcing can help reduce costs, there are also risks, particularly for lenders considering outsourcing the entire origination process. Stratmor, a consulting firm that focuses on mortgage profitability, found that the majority of lenders are more interested in outsourcing loan production ...

June 19, 2015 - Inside Mortgage Trends

Refi Surge Lifts Mortgage Banking Profits in 1Q15

Mortgage bankers rode a wave of rising loan production to big increases in profitability during the first quarter of 2015, according to the Mortgage Bankers Association’s quarterly Mortgage Bankers Performance Report. Average pretax income for firms participating in the survey was $2.246 million, a whopping 149.3 percent increase from the fourth quarter. That was the highest pretax profit since the second quarter of 2013, when lenders earned ...

June 19, 2015 - Inside Mortgage Trends

Aggregators Push Buyback Risk to Originators

Acquiescing to Fannie Mae and Freddie Mac repurchase and make-whole demands, the big bank aggregators were more concerned about preserving their business relationship with the government-sponsored enterprises than questioning GSEs’ claims, according to compliance experts. “Indeed, it is often plainly apparent the aggregators have done nothing at all to investigate or research, much less defend against, the demands made on them by ...

June 19, 2015 - Inside Mortgage Trends

GSE Buybacks Slow Again in 1Q15 And Most Cases End in Seller’s Favor

A relatively small – even microscopic – percentage of loans securitized by Fannie Mae and Freddie Mac in the past three years have been subject to a repurchase demand, according to a new Inside Mortgage Trends analysis. As of the end of March, lenders had repurchased a total of $2.01 billion of loans that were pooled into mortgage-backed securities by the two government-sponsored enterprises during 2012, 2013 and 2014. That was just ... [Includes two data charts]

June 12, 2015 - Inside FHA/VA Lending

FHA to Propose New Condo Policy To Ensure Compliance with HERA

The FHA plans to issue a proposed rule in the fall that would allow it to insure single-family condominium units in multifamily projects, according to the agency’s regulatory agenda for the second half of 2015. The proposed rule would cover condo units that are attached, detached, semi-detached or manufactured. It would apply as well to undivided interests in the common areas and facilities that serve the project. The proposed change would clarify and ensure lender compliance with the Housing and Economic Recovery Act of 2008. HERA moved FHA’s authority to insure single-family condominiums from Section 234 to Section 203 of the National Housing Act. However, because Section 203 does not provide the same authority for FHA, rulemaking became necessary. HERA also granted FHA the authority to issue administrative notices to convey condominium policy guidance until a ...

June 12, 2015 - Inside FHA/VA Lending

HECM Production Rises in 1Q15, HMBS Issuance Going Strong

Total originations of reverse mortgages with FHA insurance increased in the first three months of 2015, according to an Inside FHA/VA Lending analysis of agency data. Home Equity Conversion Mortgage production, overall, rose 3.0 percent to $3.9 billion from the fourth quarter of 2014 and was down 2.0 percent on a year-over-year basis. HECM purchase loans far outpaced refinances, which accounted for only 14.5 percent of total HECM volume in the first quarter. Lenders reported a total of $2.3 billion in initial HECM principal amount at loan origination. Meanwhile, there is continued investor interest in HECM mortgage-backed securities (HMBS), according to Ginnie Mae. The unpaid principal balance of HMBS climbed to $48.9 billion in FY 2014 and the number of participations (the funded portions of HECM loans that have been securitized) has increased to 6,585, 856. HMBS issuance was ... [1 chart]

June 12, 2015 - Inside FHA/VA Lending

VA to Propose New Requirements For Appraisers, Finalize QM Rule

The Department of Veterans Affairs expects to issue a final rule establishing ability-to-repay (ATR) standards and defining a “qualified mortgage” in October, according to the agency’s regulatory agenda for the second half of 2015. Proposed in May 2014, the rule would implement provisions of the Dodd-Frank Act, which, among other things, would require the VA to define the types of loans that are QMs under the new ATR provisions of the Truth in Lending Act. VA loans that are designated as QM would have either safe-harbor protections or the presumption that the borrower is able to repay the mortgage loan, in accordance with the new ATR provisions. The final rule would not change VA’s regulations or policies regarding mortgage originations, except when lenders want to originate QMs, the VA said. A VA spokesman clarified that action dates on any particular rulemaking are not ...

June 12, 2015 - Inside FHA/VA Lending

First Tennessee’s FCA Settlement, Another Notch on FHA/DOJ Belt

First Tennessee Bank’s agreement with federal agencies to pay $212.5 million to resolve allegations of violation of the False Claims Act is the latest proof of the government’s unrelenting pursuit of FHA lenders over underwriting and quality control issues. The settlement once again demonstrates the federal government’s commitment to combat FHA fraud using the FCA to recover taxpayer losses, according to an analysis by Boston law firm Greene LLP. “[The Department of Housing and Urban Development] made a point of saying that this behavior is exactly what led to the financial crisis and housing market downturn,” Greene’s compliance attorneys said. HUD and the Department of Justice have vowed to continue to pursue and hold accountable lenders who put profits ahead of their customers and legal obligations, the attorneys added. According to the DOJ, First Tennessee, a regional bank, admitted ...

June 12, 2015 - Inside FHA/VA Lending

VA Leads FHA, Private MIs in Refis, PMIs Over Agencies in Purchases

The VA maintained a sizeable lead in first-lien mortgage refinancing over FHA and private mortgage insurers in the first quarter of 2015 but yielded to both in purchase originations during the same period. According to the Inside Mortgage Finance database, mortgage lenders originated approximately $221.0 billion of refi loans in the first quarter, a 51.4 percent increase from a revised fourth-quarter production estimate of $146.0 billion. Of first-quarter mortgages securitized by Fannie Mae, Freddie Mac and Ginnie Mae, refi loans comprised 61.4 percent, up sharply from 37.6 percent for all of 2014. VA streamline refis accounted for $20.4 billion while FHA refis made up $12.2 billion of refis pooled in agency mortgage-backed securities. FHA’s refi production jumped 57.8 percent in the first quarter. On the other hand, refi loans with private MI accounted for $14.2 billion produced during the ...

June 12, 2015 - Inside MBS & ABS

Can MBS Prices Get Much Lower? The ‘Illiquidity Issue’ Is Raised Again

The average bid on the benchmark Fannie Mae 30-year 3.50 percent MBS fell to 102.2 this week compared to 104.5 earlier in the month, leaving some market watchers feeling sick to their stomachs. The general fear is that MBS prices may fall further over the short term as interest rates rise. The question for many boils down to the basics: Where will mortgages settle? As Inside MBS & ABS went to press this week, the yield on the 10-year Treasury reached...

June 5, 2015 - Inside The GSEs

Redwood Loan Limits Raised for FHLB Jumbo Loan Program

After a pilot jumbo mortgage loan program between the Federal Home Loan Bank of Chicago and Redwood Trust kicked off this quarter and expanded into a full roll-out beginning June 1, it was announced this week that the loan limit will just about double. The new single-family loan limit for the Mortgage Partnership Finance Direct program will increase from the current $729,750 to $1.5 million in the third quarter. The MPF Direct loan limit was raised primarily to help members that operate in urban or other areas where home prices are higher than the national average, said John Stocchetti, an executive vice president at the FHLB Chicago and group head of the MPF program.

June 5, 2015 - Inside Mortgage Trends

Income Not Keeping Pace with Household Debt

Household debt has increased since mid-2013 at a faster rate than income, prompting concerns among some industry analysts. DBRS noted that while job market trends are likely to remain favorable, borrowers’ performance across many asset classes is expected to weaken in the next 12 months. According to the Federal Reserve Bank of New York, household debt peaked in the fourth quarter of 2008 at $12.67 trillion. The debt measurement, which includes mortgages, student loans, auto loans, credit cards and other borrowing, fell to $11.15 trillion in the second quarter of 2013.

June 5, 2015 - Inside Mortgage Trends

Back from Edge, Impac Mortgage is on a Roll

For a company that was on the brink of death seven years ago, Impac Mortgage Holdings is back and ready to take market share. In the first quarter of 2015, the California-based company reported a profit of $34.0 million, reversing a 4Q14 loss of $2.2 million and a $3.0 million loss from a year ago. Impac attributed the improved earnings to higher mortgage origination volume and the recognition of $24.4 million of deferred tax assets offset by losses on ...

June 5, 2015 - Inside Mortgage Trends

Warehouse Lending Market Tilts to Borrowers

The supply of mortgage warehouse credit available in the market has grown as new players entered a field with subdued production through most of 2014, but usage rates have begun to climb. The amount of outstanding borrowing by mortgage lenders has increased by 150 percent over the past year, said Stanley Street, president of Street Resource Group, in a recent interview with Inside Mortgage Trends. His firm provides a software platform for warehouse lenders ...

June 5, 2015 - Inside Mortgage Trends

Can Nationstar Rev Up Production Fast Enough?

The past few weeks haven’t been particularly good for Nationstar Mortgage: Two top executives – including President and Chief Operating Officer Harold Lewis – announced their sudden retirements, and a handful of law firms accused the nonbank of making false statements about its financial condition. Achieving class action status on shareholder lawsuits can be a long and difficult road, but in general, investors in the nation’s largest nonbank servicer aren’t ...

June 5, 2015 - Inside Mortgage Trends

Growing Pains for Mortgage Companies

Small and mid-sized independent mortgage bankers have key decisions to make about secondary market strategies and what to do with the mortgage servicing rights they create through originations, and experts say there isn’t a one-size-fits-all strategy. In secondary marketing, lenders that have become Fannie Mae or Freddie Mac approved sellers typically start out at the cash window, said Philip Rasori, chief operations officer at Mortgage Capital Trading ...

June 5, 2015 - Inside Mortgage Trends

Banks Continue Retreat From MSR

Commercial banks and thrifts – most of them – continued their years-long retreat from the mortgage servicing rights market during the first quarter of 2015, according to a new Inside Mortgage Trends analysis of call reports. Banks serviced a total of $4.282 trillion of home mortgages for other investors as of the end of March. That was down $134.2 billion, or 3.0 percent, from the fourth quarter. Compared to a year ago, bank mortgage servicing ... [Includes one data chart]

June 5, 2015 - Inside Mortgage Trends

Loan Production Earnings Rose Enough In 1Q15 to Offset Downturn in Servicing

An increase in mortgage origination volume helped lenders increase earnings from loan production and secondary market activities during the first quarter of 2015, according to a new analysis by Inside Mortgage Trends. A diverse group of large and mid-sized companies reported a total of $1.910 billion in net earnings from their loan origination and marketing activities during the first three months of the year. That was up 20.1 percent from the ... [Includes two data charts]

June 5, 2015 - Inside MBS & ABS

MBS Investing REITS May Go ‘Sideways’ For a While and Maybe That’s Not So Bad

With interest rates rising again, the future looks somewhat cloudy for real estate investment trusts that invest in MBS, a situation that investors have grown accustomed to the past few years. According to figures compiled by Keefe, Bruyette & Woods, the 28 mortgage investing REITs tracked by the firm had a combined market capitalization rate of $47.8 billion at the end of May, a slight drop from a year ago when the tally was $49.0 billion. Then again, not all of the 28 are...

May 29, 2015 - Inside FHA/VA Lending

VA Loan Servicers Told to Use Only VRM Quotes to Avoid Confusion

VA loan servicers are now required to request a redemption quote from the agency’s property management contractor, Vendor Resource Management (VRM), to avoid any confusion in the future about such quotes. In recently issued guidance, the VA established standard procedures for redeeming VA property, after foreclosure, in states that allow “statutory redemption.” Statutory redemption refers to a borrower’s right to regain ownership of his or her home that has been foreclosed. Statutory redemption laws allow the borrower a limited amount of time to redeem their property if they are able to buy it back at the price for which it was sold at foreclosure. The redemption window varies by state and ranges from 30 days to 2 years. At the time of redemption, the entire underlying mortgage debt plus interest, foreclosure fees and other costs are due. In most cases, the servicer has ...

May 29, 2015 - Inside FHA/VA Lending

VA Clarifies Treatment of Same- Sex Home-Loan Applications

The Department of Veterans Affairs has issued a policy clarifying that VA lenders must treat veterans in same-sex or opposite-sex marriages equally and fairly when processing and underwriting their home-loan applications. The policy is effective immediately. Under the new policy announced on May 19, the VA will process all claims and applications involving same-sex marriages in the same manner as claims and applications based on opposite-sex marriages, “without any additional scrutiny or development.” Language on VA forms, web pages and other VA communication materials will be revised to ensure that all veterans, VA program administrators and personnel are aware of the equal-treatment policy. The new instructions require VA lenders to accept a claimant’s or an applicant’s assertion of ...

May 29, 2015 - Inside FHA/VA Lending

Court Denies Relator Standing in Whistleblower Suit Against Bank

Whistleblowers that bring a False Claim Act claim against an FHA lender based on previous publicly disclosed information have no standing, according to a recent federal district court ruling. Judge Jack Zouhary of the U.S. District Court for the Northern District of Ohio dismissed an FCA lawsuit against U.S. Bank because the whistleblower had neither direct nor independent knowledge of the bank’s alleged false claims – two basic requirements for standing in a whistleblower suit. The Advocates for Basic Legal Equality (ABLE), an Ohio-based legal aid group, filed an FCA lawsuit against U.S. Bank for allegedly disregarding and violating FHA regulations. The group accused the bank of filing false claims and collecting payments without evaluating loss mitigation alternatives before foreclosing on properties. According to ABLE, it had consulted with “many people,” whose mortgage loans were ...

May 29, 2015 - Inside FHA/VA Lending

Lenders Face Indemnification for Potential FHA Losses, Says IG

NTFN Inc., a direct-endorsement lender in the Dallas-Ft.Worth area, may have to indemnify FHA for losses incurred allegedly due to sloppy underwriting. Results of an audit performed by the Department of Housing and Urban Development inspector general found that 23 loans out of the 3,046 FHA loans originated by NTFN from July 2012 through June 2014 were seriously delinquent in the first year. FHA is considering whether to require indemnification. Despite its low FHA origination volume, NTFN was targeted for a compliance audit because its loan default rate was the second highest in its principal area of business during the audit period. HUD auditors attributed the subpar underwriting to the lender’s poor due diligence, failure to perform early payment default and quality control reviews and to not having an adequate quality control system. The unpaid principal balance of the ...

May 29, 2015 - Inside FHA/VA Lending

Streamline Refis Power VA-Backed MBS, FHA Up in Most States

Security issuances backed by VA loans totaled $35.5 billion in the first quarter of 2015, with VA streamline refinance loans accounting for 57.7 percent, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. Approximately $20.5 billion in VA interest rate reduction refinancing loans were securitized during the first three months as borrowers took advantage of lower interest rates. “For the last three to four months, rates have been bottoming out again, and if rates are lower it makes sense to refinance,” said Jon Shrum, vice president of Commerce Home Mortgage, a VA-certified lender in Huntington Beach, CA. An estimated $14.5 billion in VA purchase mortgages also were securitized during period. VA loans comprised 13.1 percent of all loans in Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities. California, Virginia, Texas, Florida and Washington, ... [2 charts]

May 29, 2015 - Inside FHA/VA Lending

FHA Proposes Clarification of DE Rules but Industry Seeks More

An FHA proposal aimed at clarifying loan-certification rules is a step in the right direction but it needs more work, according to industry observers. Lenders declined to comment on the proposed form changes but they all agree that the proposal does not go far enough. The revisions aim to make the language in Form 92900-A (HUD Addendum to Uniform Residential Loan Application) clearer for both borrower and lender. Applicants for an FHA or a VA loan sign the addendum to certify to the government that the information provided by the borrower on the mortgage loan application is correct. By signing the addendum, the borrower certifies that he or she will make payments on the home loan or become indebted to the federal government upon failure to repay the loan. For lenders, signing the form certifies that the loan application meets all of FHA’s insurance requirements. This is where lenders often ...

May 29, 2015 - Inside Nonconforming Markets

Bank Mortgage Operations Holding Up in ATR Era

Since the Consumer Financial Protection Bureau’s ability-to-repay rule was implemented in January 2014, bank mortgage operations have grown as a whole, according to a new analysis of call-report data by Inside Nonconforming Markets. Retail originations, mortgage banking income and portfolio holdings at banks and thrifts have all increased since the first quarter of 2014, suggesting the ATR rule has done little to crimp mortgage activity by banks. Banks had $93.06 billion in retail originations ...

May 29, 2015 - Inside MBS & ABS

Courts Order New HSBC Trial and Dismiss BofA, U.S. Bank Suits; Lehman Wants Claims Dismissed

A federal appeals court in Chicago has set aside a $2.46 billion judgment against HSBC’s Household International unit and three of its top executives and ordered a new trial. Investors won the judgment in 2009 based on charges that the bank and its top executives misled them about its mortgage lending practices. The price of the stocks subsequently collapsed as the subprime mortgage market unraveled, causing huge investor losses. The class-action lawsuit alleged...

May 28, 2015 - Inside Mortgage Finance

Banks Coming Back to MSR Market, Some of Them, As Profitable Means to Acquire Clients

Nonbanks have indisputably bought a bigger share of the mortgage servicing market in recent years, but that doesn’t mean some banks haven’t been buyers during the migration. The servicing asset was a pariah not long ago, said Mark Garland, president of MountainView Capital Holdings, during a panel session at the recent secondary market conference sponsored by the Mortgage Bankers Association. “It was stepping into a buyback obligation. Suddenly, two years ago, it became the greatest asset ever,” he said. And although Bank of America, JPMorgan Chase, Wells Fargo and Citibank have pruned...

May 28, 2015 - Inside Mortgage Finance

Lenders Showing ‘Restrained Enthusiasm’ for Latest Rep-and-Warrant Policy, Dispute Resolution Ahead

Six months into the latest representations-and-warranties framework from Fannie Mae and Freddie Mac, lenders said they appreciate the added clarity but are approaching the changes with caution as more transparency is still needed. The new rules, announced by the government-sponsored enterprises in November 2014, were made to ease lenders’ concerns about repurchase requests for loans that contain data inaccuracies or misrepresentations. During last week’s secondary market conference sponsored by the Mortgage Bankers Association, Jeremy Potter, general counsel and chief compliance officer at Norcom Mortgage, said...

May 22, 2015 - Inside Mortgage Trends

Banks Report Solid Increase in Mortgage Banking Income in First Quarter 2015

Commercial banks and thrifts earned $3.99 billion from their mortgage-banking operations during the first quarter of 2015, according to a new ranking and analysis by Inside Mortgage Trends. Mortgage-banking income was up 12.7 percent from the previous quarter and 19.0 percent ahead of the pace set in the first three months of 2014. Early 2015 was no record-setter, by any means, but profits were well below the levels reached in the middle of last year. The call-report data do not separate...[Includes one data table]


A lot has been written about the ‘Millennial Generation’ being key to the future of the housing/mortgage market, but how much of your mortgage workforce includes Millennials – those born roughly between the years 1980 to 1999?

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