Mortgage Insurance Profitability

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

March 27, 2017 - Inside the CFPB

More Uniformity Needed Between QM Standards from CFPB, HUD

With the topic of regulatory reform experiencing a resurgence of attention since the Trump administration moved into the White House, the U.S. mortgage insurance industry is calling for greater uniformity when it comes to the nitty gritty details of the ability-to-repay rule and its qualified-mortgage standard. One area of particular concern for mortgage insurers is the differences between the CFPB’s QM rule for conventional mortgages and the Department of Housing and Urban Development’s QM rule for FHA-insured mortgages. These differences include different debt-to-income caps, different formulae to calculate points and fees, and different standards for higher-cost mortgages. According to U.S. Mortgage Insurers, these differences incentivize greater reliance on programs of the U.S. government, increasing risk to taxpayers. “While consistency and ...


March 23, 2017 - Inside Mortgage Finance

Private MI Companies Push for Change to QM Points- And-Fees Calculation, Aligning GSE and FHA Standards

Congress should pass legislation setting uniform standards for qualified mortgages, according to the U.S. Mortgage Insurers trade group. USMI raised particular concerns about differences in the points-and-fees calculation for FHA mortgages compared with the standard for mortgages delivered to the government-sponsored enterprises. As required by the Dodd-Frank Act, the Consumer Financial Protection Bureau established standards for QMs. Certain federal regulators, including the Department of Housing and Urban Development, were allowed to implement QM standards that differed from the CFPB standards. USMI noted...


March 17, 2017 - Inside FHA/VA Lending

Around the Industry

HUD Secretary Ben Carson Launches National Listening Tour in Detroit. Housing and Urban Development Secretary Ben Carson began a national listening tour March 15 at Benjamin Carson High School in Detroit. Carson’s three-day visit to his hometown gives him an opportunity to hear directly from HUD field personnel and stakeholders who rely upon and support public housing. This week, President Trump released his proposed preliminary FY 2018 budget, which showed among other things a drastic $6.2 billion reduction in funding for public housing assistance and affordable housing. HUD did not release an itinerary of Carson’s listening tour. IG Seeks Changes to Ginnie Mae’s Management Hierarchy, Staffing. Ginnie Mae’s outdated organizational structure and staff levels have made it difficult for the agency to properly monitor and mitigate the risk posed by the increasing number of nonbanks participating in ...


March 17, 2017 - Inside FHA/VA Lending

Serial Rapid Refinancing Continues As VA, MBA Explore Potential Cures

Solicitation of VA purchase loans for streamline refinancing within weeks of closing is apparently continuing despite Ginnie Mae’s efforts to stop the harmful practice. The Mortgage Bankers Association has expressed concern that guidance on pooling eligibility for streamlined refinance loans, which Ginnie issued in October last year, was far less effective than expected. Although the aggressive refinancing trend has slowed due to Ginnie’s action, there are still “pockets of that activity” being reported, said Pete Mills, MBA senior vice president. Refinancing a veteran’s purchase mortgage less than six months after its origination is not in the vet’s best interest because it strips equity from the house and results in higher financing costs, said Mills. While the rapid refi trend involves only a small number of loans in Ginnie mortgage-backed securities pools, investors do not get the full benefit of their investment because of early prepayment. Mills said there are a handful of lenders and brokers that ...


March 16, 2017 - Inside Mortgage Finance

Court Rules Against Lender in MI Cancellation Dispute, Says Federal Law Overrides GSE Servicing Guidelines

A borrower seeking cancellation of private mortgage insurance prevailed last week in a lawsuit against JPMorgan Chase. The appeals court noted that federal law regarding standards for MI cancellation overrides Fannie Mae’s servicing guidelines. The case of Ginnine Fried v. JPMorgan Chase centers on how to calculate a borrower’s loan-to-value ratio when allowing for MI cancellation after the LTV ratio falls below 80.0 percent. The borrower filed...


March 10, 2017 - Inside The GSEs

Corporate Tax Reform’s Potential Impact on Fannie and Freddie

Fannie Mae and Freddie Mac could have a harder time recapitalizing if their deferred tax assets are negatively impacted by corporate tax reform, according to one GSE spectator. The Trump administration said it plans to restructure taxes before housing reform. Industry observers, like former Fannie Mae CFO Tim Howard, speculate on what impact that would have on Fannie and Freddie. Howard said that putting housing reform behind tax reform adds a “complication to the task of ultimately recapitalizing the companies, should that be what [Treasury Secretary Steven] Mnuchin chooses to do.” Mnuchin recently made public comments on network news stating that while housing reform is one of his priorities, it’s going to take more time.


March 9, 2017 - Inside Mortgage Finance

HFSC’s Budget Views Lay Groundwork for Carson’s HUD Agenda as Secretary Prepares for ‘Listening’ Tour

Secretary Ben Carson may not yet have a clear agenda and a set of priorities for the Department of Housing and Urban Development over the next four years, but the House Financial Services Committee appears to have identified changes that Republican lawmakers want to see at the agency. A HUD spokesman said Carson will embark next week on a nationwide “listening” tour of certain communities and HUD field offices to learn more about the agency he leads, FHA programs and the mortgage insurance fund he oversees. On March 2, Vice President Mike Pence swore...


March 3, 2017 - Inside FHA/VA Lending

FHA Primes Lenders for LRS, Defect Taxonomy; System to Go Live in 2Q

The FHA is nearing full implementation of a new loan review system (LRS) for managing FHA’s Title II single-family quality-control processes. No specific implementation date has been set but it could be sometime in the second quarter, the agency said. The LRS builds on FHA’s efforts to align the documentation of loan-review results. In addition, it incorporates the Single-Family Housing Loan Quality Assessment Methodology or defect taxonomy. The FHA said the new system would not be used to manage any aspect of the agency’s standard loan origination or endorsement processes. Rather, it would be used to review of test cases submitted by lenders seeking unconditional direct-endorsement authority. It would be used as well for various post-endorsement reviews of forward single-family loans. After the ...


March 3, 2017 - Inside MBS & ABS

Fannie’s Second Front-End Credit Risk-Sharing Deal Much Larger than First, GSEs Mull Other Forms

Fannie Mae announced its second deal using credit insurance risk transfer on the front end of the transaction. Most of the government-sponsored enerprise’s CIRT transactions have involved insurance contracts on pools of loans that have already been securitized. The new front-end CIRT deal will shift a portion of the credit risk on about $15 billion worth of single-family loans, significantly larger than Fannie’s first test of the structure back in October, which involved about $3.7 billion of single-family loans. This CIRT, like the first one, will be...


March 3, 2017 - Inside MBS & ABS

How Much Longer Can Hedge Funds Hold on to Their GSE Stock Wagers?

Late last month, Fairholme Capital chief Bruce Berkowitz sent out a press release reassuring his shareholders that the hedge fund’s bet on owning the junior preferred stock of Fannie Mae and Freddie Mac will prevail, eventually. Among other things, the veteran equity-fund manager extolled the government-sponsored enterprises’ massive fourth quarter profits of almost $10 billion, called them “indispensable” to the mortgage insurance industry and reminded readers they continue to fulfill “their historic role of insuring adequate levels of liquidity to lenders of all sizes.” He also mentioned...


February 23, 2017 - Inside Mortgage Finance

Private Mortgage Insurers Raise Concerns About Differences in QM Standards for GSEs and FHA

The U.S. Mortgage Insurers trade group is seeking to eliminate differences in standards for qualified mortgages. USMI detailed its policy priorities for 2017 late last week. While the priorities largely rehash previous points of emphasis that could increase business for private mortgage insurance companies, USMI said it has particular concerns about how some QM standards vary on mortgages delivered to the government-sponsored enterprises compared with FHA mortgages. As required by the Dodd-Frank Act, the Consumer Financial Protection Bureau established...


February 16, 2017 - Inside Mortgage Finance

Private MIs Expanded Market Share in 2016 Despite Fourth-Quarter Surge by VA Guaranty Program

Private mortgage insurers grew their share of the primary mortgage insurance market during 2016 even though they lost some ground during the second half of the year, according to a new Inside Mortgage Finance ranking and analysis. Private MIs wrote an estimated $270.30 billion of new mortgage insurance last year, a robust 23.1 percent increase from 2015. The main engine was a 24.2 percent increase in traditional, or flow, MI business, coupled with a jump in bulk primary coverage – though such activity totaled just $860.0 million in 2016. Private MIs covered...[Includes three data tables]


February 13, 2017 - Inside the CFPB

Consumers Still Complaining About Mortgage Servicing Practices

Mortgage borrowers still have plenty to complain to the CFPB about, especially on the mortgage servicing front, the latest monthly consumer complaint report from the bureau suggests. “The most common issues identified by consumers are problems when they are unable to pay (loan modification, collection, foreclosure),” which were cited by 49 percent, according to the CFPB, followed by issues making payments (loan servicing, payments, escrow accounts), identified by 33 percent. Other homeowners brought up problems having to do with applying for a loan (application, originator, mortgage broker), which was noted by 9 percent, followed by signing the agreement (settlement process and costs), which was highlighted by 5 percent, and receiving a credit offer (credit decision, underwriting [With Two Data Charts]....


Poll

With the spring homebuying season in full swing, what percentage of your March 2017 application volume has been for “purchase” loans?

75% or higher
50% to 74%
30% to 49%
Under 30%

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