Mortgage Lending & Servicing

Browse articles from all of our Newsletters related to Mortgage Lending & Servicing.

January 20, 2017 - Inside FHA/VA Lending

E-Submission Required for VA Prior-Approval Loan Documents

Effective Feb. 13, 2017, VA lenders will be required to submit prior-approval mortgage loans electronically through the WebLGY system to improve the prior-approval process. Currently, lenders mail their prior-loan approval packages to the regional loan center that has jurisdiction over loan underwriting – a tedious, time-consuming process. Electronic submission will help speed things up, the VA indicated. Lenders must follow the guidelines for prior approval and stacking order in the VA’s Lender Handbook. In addition, lenders must furnish a cover letter with the uploaded package stating the reasons for the prior approval and explaining any unique circumstances. The cover letter also must include the submitting underwriter’s name, phone number and email address as well as contact information for the underwriter’s manager. The lender must ensure that the file contains the correct and complete ...


January 20, 2017 - Inside FHA/VA Lending

FHA Codifies Key Changes to HECM Rules, Issues New Program Policies

The Department of Housing and Urban Development has codified significant changes to the Home Equity Conversion Mortgage program that have reduced risks to both FHA and reverse mortgage borrowers. Specifically, the rule codifies existing HECM policies implemented by mortgagee letters, implements statutory changes, issues new origination and servicing policies, and clarifies existing regulatory language. HUD said it has established an eight-month lead time between the publication of the final rule and the effective date, Sept. 19, 2017, to provide lenders enough time to understand the rule and plan for necessary changes. The grace period also allows time for FHA to issue guidance and make system changes. The National Reverse Mortgage Lenders Association expressed support for the final rule. “Personally, I am glad to see this final rule get out the door,” said NRMLA President and ...


January 20, 2017 - Inside FHA/VA Lending

Lenders Expect VA Refis to Drop in 2017, Rising Demand for Purchase

VA originations have been trending upward over several quarters, thanks to an unusually heavy share of refinance business, but all good things, at some point, must slow down, lenders say. The refinance business overall has fallen to 45 percent from 55 percent in the fourth quarter of 2016, and that will have an effect on VA originations in the first quarter of 2017, said Andy May, chief operating officer of the American Armed Forces Mutual Aid Association Mortgage Division. Going forward, May expects VA originations to fall by 10 percent in the first quarter due to rising interest rates. But even though rates have been trending up, May saw an uptick in VA loan applications in January as fence-sitters jumped into the market to take out a loan before rates went any higher. “The MBA estimates rates will rise above 5 percent in the next 24 months and then down to 4.8 percent by the end of 2018, and up to 5.3 percent at the ...


January 20, 2017 - Inside FHA/VA Lending

Trump Administration Scuttles 25 bps Annual Premium Reduction

The Trump administration has officially set aside the 25 basis point cut in FHA annual premiums in a new mortgagee letter issued by the Department of Housing and Urban Development hours after Donald Trump was sworn in as the 45th president of the United States. Mortgagee Letter 2017-07 said that the annual-premium reduction HUD announced on Jan. 9 “has been suspended indefinitely.” Stakeholders will be notified in the event of a policy change, the letter added. The letter confirms reports earlier in the week that the FHA pricing adjustment was about to be spiked. Ben Carson, who had his confirmation hearing before the Senate Banking Committee last week, told lawmakers that he planned to work with the FHA director and financial experts to review the cut. However, the HUD secretary-designate gave no indication as to whether he favored a premium reduction that would benefit thousands of ...


January 20, 2017 - Inside FHA/VA Lending

FHA/VA Default Rates Spike Up In 4Q16, Nonbanks Still Growing

Mortgage default rates appeared to spike higher in the fourth quarter of 2016, according to a new analysis and servicer ranking by Inside FHA/VA Lending. Some 5.51 percent of FHA loans in Ginnie Mae mortgage-backed securities pools were reported as 30- to 60-days past due at the end of December. That was up 80 basis points from the previous quarter and was easily the highest default rate in the past three years. FHA default rates were also up in more serious delinquency categories: loans 60- to 90-days past due and those over 90-days late. The figures are based on loan count and are not seasonally adjusted. Similar trends occurred in the VA home loan guaranty program. The 30-60 category was up 41 bps, while 90+ delinquencies jumped 19 bps. The supply of Ginnie single-family MBS outstanding continued to set new records. The total, not including multifamily and FHA home-equity conversion ... [4 charts]


January 20, 2017 - Inside Nonconforming Markets

Performing Subprime Mortgages Ripe for Refis

A significant number of borrowers with subprime mortgages originated in 2002 and beyond are prime targets for refinances, according to analysts at Black Knight Financial Services. More than 600,000 subprime mortgages are currently performing, according to Wesley Winter, a senior modeler at Black Knight. He said that while all of the borrowers aren’t necessarily attractive targets for refinances, there’s $10.0 billion to $25.0 billion in potential refi opportunities involving ...


January 20, 2017 - IMFnews

Residential Production at CitiMortgage Down 14 Percent in 4Q16

Citigroup’s showing in originations paled in comparison to some of its megabank competitors...


January 20, 2017 - IMFnews

The Final Tally: ABS Issuance Was Just About Flat in 2016

Santander Consumer USA was the most active issuer of vehicle ABS…


January 19, 2017 - Inside Mortgage Finance

Mortgage Market at a Glance

Weekly mortgage rates and application survey data as well as indexes for ARMs.


January 19, 2017 - Inside Mortgage Finance

Top Mortgage Originators - 9M2016 (100 Originators)


January 19, 2017 - Inside Mortgage Finance

Fannie and Freddie are About to Provide a Revenue Gift to the Trump Administration

Thanks to stellar fourth quarter MBS issuance – coupled with higher interest rates at Dec. 31 – Fannie Mae and Freddie Mac are likely to report their best quarterly earnings of 2016, money that will go directly into the U.S. Treasury. According to interviews conducted by Inside Mortgage Finance this week, the general consensus among observers is that the two government-sponsored enterprises will post a combined profit north of $5.5 billion. In 2016, the two guaranteed...


January 19, 2017 - Inside Mortgage Finance

First-Time Homebuyers in the Market Contributing to Growing Number of Terminated Closings, says Trulia

The number of “sold” homes failing to seal the deal come closing time is growing. A new report from Trulia shows that the “sales fail” rate has jumped from 2.1 percent in 2015 to 3.9 percent in 2016. Trulia noted that there was an even bigger jump in incomplete sales in the past two years. Of all listed properties in the fourth quarter of 2014, only 1.4 percent did not reach the closing table. But in the fourth quarter of 2016, the number of failed sales catapulted to 4.3 percent. The reasons those sales are falling through the cracks range...


January 19, 2017 - Inside Mortgage Finance

Trump’s Plans for Corporate Tax Reduction Could Prompt Treasury Draw by GSEs and Spur GSE Reform Activity

Legislative reform of the government-sponsored enterprises doesn’t appear to be a high priority for Republican lawmakers, but President-elect Donald Trump’s plans to reduce the corporate tax rate could inadvertently prompt some GSE reform activity, according to industry analysts. As of the end of the third quarter of 2016, Fannie Mae and Freddie Mac had a combined $53.80 billion in deferred tax assets. The DTAs result from differences between the carrying amounts of existing assets and liabilities under generally accepted accounting principles and their respective tax bases. The DTAs are...


January 19, 2017 - Inside Mortgage Finance

PHH Corp. Convinces Appeals Court to Let It Respond to Government’s Brief in CFPB Dispute

The U.S. Court of Appeals for the District of Columbia Circuit last week gave PHH Corp. the green light to weigh in on the legal arguments the Justice Department made late last year in support of the Consumer Financial Protection Bureau’s petition for an en banc rehearing of its dispute with the lender. The appeals court did so over the objections of the CFPB, and with 11 of the 12 judges in agreement and one not participating. PHH had argued that it ought to be able to respond to the second of two government arguments in favor of the review. Privately, some industry insiders thought...


January 19, 2017 - Inside Mortgage Finance

Trump Eyes Neugebauer to Replace CFPB’s Cordray, Legal Experts Divided as to Extent of His Authority

What once seemed like an idle speculation – the potential ouster of Richard Cordray as director of the Consumer Financial Protection Bureau – suddenly looks more likely. Last week, President-elect Donald Trump met with Randy Neugebauer, the former Texas Republican member of the House Financial Services Committee, who is under consideration as a replacement for Cordray, according to multiple press accounts. Neugebauer reportedly has not been offered the job, as of press time, nor have other candidates been considered for the position. “I heard...


January 19, 2017 - Inside Mortgage Finance

A Mixed Quarter for the Banks: Decent Production, Sweet MSR Marks but Unclear Road Ahead

The nation’s largest banks revealed better-than-expected residential origination figures (for some) and mouth-watering markups on the value of their servicing portfolios. That’s the good news. But it wasn’t all wines and roses. On the servicing front, BOK Financial revealed that fourth quarter income was reduced by $17.4 million because it left servicing-related hedges on the books for too long, betting that rates would stay low for an extended period of time. PNC Bank saw...[Includes one data table]


January 19, 2017 - Inside Mortgage Finance

Trump Administration Expected to Freeze Cut in FHA Mortgage Insurance Premiums

The Trump administration is expected to put a temporary freeze on the 25 basis point cut in FHA annual premiums that is scheduled to take effect Jan. 27. One industry source noted: “On Jan. 20, President Trump will be issuing an executive order that freezes all past actions over a certain period of time. The FHA premium reduction gets swept into this.” Sources told...


January 19, 2017 - Inside Mortgage Finance

The Beat Goes On. Banks Backpedal from Agency Servicing Market in 4Q16, Especially Ginnie Sector

The evolution of the agency mortgage-servicing market isn’t over, though it appears to have settled into a long-term transition by attrition. At the end of 2016, depository institutions serviced some $3.584 trillion of single-family home loans committed to mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. That was down 1.0 percent from September, a period during which the supply of agency MBS debt outstanding was growing. The depository share of agency MBS servicing fell...[Includes two data tables]


January 19, 2017 - IMFnews

Short Takes: The No. 2 at HUD Will Be… / Carson’s Advisors / Mnuchin Says His Goal was to Modify Mortgages / The Roots of OneWest: Countrywide / Flagstar Names Whip to its Board

Early in its existence, IndyMac was a nonbank and had been grub-staked by Countrywide Financial...


January 19, 2017 - IMFnews

Residential Lending Tumbles at BB&T; Mortgage Earnings Drop as Well

BB&T saw residential loan production decline in the fourth quarter while its servicing portfolio fell by less than 1 percent.


January 19, 2017 - IMFnews

Incenter Selling $4 Billion Freddie Mac Servicing Portfolio

The delinquency rate on the package is just 0.65 percent, based on number of loans…


January 19, 2017 - IMFnews

RPM Mortgage Hits the M&A Trail Once Again

Late last year, RPM made what it called an “investment” in American Eagle Mortgage of Ohio…


January 19, 2017 - IMFnews

Nonbanks Increased Agency Servicing by Almost 22 Percent in 2016

Nonbank servicers have a particularly big footprint in the Ginnie market, accounting for 53.6 percent of servicing outstanding at Dec. 31…


January 19, 2017 - IMFnews

If Trump Cuts Corporate Taxes, Fannie and Freddie Might Need a Treasury Draw

Antonio Weiss, counselor to the secretary of the Treasury Department, cautioned that any reduction to the corporate tax rate could prompt a draw from Treasury funds by the GSEs.


January 18, 2017 - IMFnews

Short Takes: Time to Worry About ‘Deferred Tax Assets’? / Good News or Bad News? / A ‘Conceptual Exercise’ / Sen. Elizabeth Warren Won’t be in Attendance / New PAC Chief for MBA

One mortgage insurance lobbyist, when informed of the possibility, called it “great news” while two lenders we interviewed said it was an awful development…


January 18, 2017 - IMFnews

Trump May Ice the FHA MIP Cut, At Least for Now

One industry source noted: “On January 20, President Trump will be issuing an executive order that freezes all past actions over a certain period of time. The FHA premium reduction gets swept into this.”


January 18, 2017 - IMFnews

U.S. Bancorp Reports Lower Home Originations and Applications for 4Q

USB blamed the weaker mortgage performance on “lower origination and sales volume.”


January 17, 2017 - IMFnews

Short Takes: PE Firm Eyes Three Mortgage Acquisitions / One Lender That’s Definitely Looking… / LOS Vendor Hires New President / Another Court Victory for PHH

Some M&A advisors believe 2017 could be a banner year for mortgage company sales. Then again, that’s what they predicted early last year...


January 17, 2017 - IMFnews

Black Knight Developing Mortgage 'Specific' Credit Score

Wesley Winter, a senior modeler at Black Knight, said a traditional credit score may not be the best predictor of mortgage default.


January 17, 2017 - IMFnews

Servicing Auctions Begin to Heat Up; New Packages from IMA, Phoenix

The lenders selling the MSRs are both nonbanks…


January 17, 2017 - IMFnews

Correspondent Share of GSE Business Edged Higher in 4Q16; Brokers Slumped

United Shore Financial Services was the top seller of broker loans by a wide margin, with $5.83 billion in fourth-quarter activity, more than twice its nearest competitor…


January 13, 2017 - Inside Mortgage Trends

NYDFS Gives Ground on Cybersecurity Proposal

The New York Department of Financial Services made some concessions to industry participants by revising proposed cybersecurity standards. Some mortgage-industry officials were happy with the revisions while reiterating concerns about the proposed standards. The NYDFS first proposed cybersecurity standards in September. The proposal was the first of its kind from a state regulator and more prescriptive than guidance from the Federal Financial Institutions Examination ...


January 13, 2017 - Inside Mortgage Trends

Correspondent Share of GSE Business Edged Higher in 4Q16, Brokers Slumped

Correspondent-originated mortgages accounted for 30.7 percent of home loans delivered into Fannie Mae and Freddie Mac mortgage-backed securities during the fourth quarter of 2016, according to a new analysis from Inside Mortgage Trends. Lenders sold $90.96 billion of correspondent-originated loans to the two government-sponsored enterprises, an 11.6 percent increase over the third quarter. The volume of retail originations rose 3.6 percent in the fourth quarter ... [Includes two data charts]


January 13, 2017 - Inside The GSEs

Fannie Gained Share in Surging GSE 1-Family Business of 2016

Heavy refinance activity at the end of the year lifted single-family business at Fannie Mae and Freddie Mac to a three-year high in 2016, according to a new Inside The GSEs analysis and ranking. The two firms guaranteed $973.72 billion of single-family mortgage-backed securities during 2016, up 18.1 percent from the previous year. That included a 5.7 percent increase from the third to the fourth quarter that was fueled by a 24.5 percent jump in refi loans delivered into new GSE MBS. While both companies saw solid gains from 2015 activity, Fannie’s 23.3 percent increase was more than double the 11.0 percent rise in Freddie volume. [includes two charts]


January 13, 2017 - IMFnews

Wells Fargo, JPM and BofA All Managed to Increase Production in 4Q16. The Last Squeezing of the Mortgage Grapes?

In general, nonbanks have been gaining origination market share from depositories over the past few years, a trend that shows no sign of abating.


January 13, 2017 - IMFnews

What We’re Hearing: Reading the Wells Fargo (Origination) Tea Leaves / Nonbanks Rule? / MSR Mark-up Mania / CA-Based Nonbank Plans to Hire 1,000 LOs? / The First To Go: Operations Staff / Cordray is Going to be Fired. No Duh

It’s been no secret in Washington financial circles that shortly after Donald Trump was elected president, the decision was made by his “team” to fire CFPB director Richard Cordray...


January 13, 2017 - IMFnews

A Different Type of Mortgage Fraud: ‘Reverse-Occupancy’ Scams Involving FTHBs

Borrowers completing reverse-occupancy fraud aim to qualify for a mortgage with help from the theoretical rental income from the so-called investment property…


January 13, 2017 - IMFnews

What Does the Future Hold for PHH?

Bose George, who follows PHH for Keefe, Bruyette & Woods, also used the phrase “liquidation” to describe the company’s sale of assets.


January 12, 2017 - Inside Mortgage Finance

Mortgage Market at a Glance

Weekly mortgage rates and application survey data as well as indexes for ARMs.


January 12, 2017 - IMFnews

Short Takes: HUD Nominee Carson Says he will ‘Review ‘the MIP Cut / Why Banks Avoid the FHA Program / HUD’s Budget: $45 Billion / Investor Cuts Stake in Annaly / CPR&T Downgrades Ocwen

CPR&T predicted that the asset value of Ocwen’s mortgage servicing portfolio likely won’t benefit much from the recent spike in interest rates…


January 12, 2017 - Inside Mortgage Finance

FHFA to Step Up Pressure on Fannie and Freddie to Manage Nonbank Servicer Risks

The Federal Housing Finance Agency says it will finalize new plans for examining how well Fannie Mae and Freddie Mac manage the risks of mortgage servicing transfers this month. The agency has been under scrutiny by its Inspector General for failing to push the two government-sponsored enterprises to manage risks posed by nonbank servicers. In a new report, the IG said the FHFA has not fully made sure that both GSEs are following the three advisory bulletins it has issued that address nonbank servicer risks, among other things. The report is heavily redacted, making it difficult to determine where FHFA examiners have failed, but it appears that there have been shortcomings for one of the GSEs. The three advisory bulletins address...


January 12, 2017 - Inside Mortgage Finance

‘Reverse-Occupancy Fraud’ a Concern, Particularly Among First-Time Homebuyers

Some borrowers are obtaining mortgages for investment properties and occupying the home as a primary residence instead of renting out the home, according to industry analysts. Such “reverse-occupancy fraud” is especially prevalent among first-time homebuyers who might not otherwise qualify for a mortgage. Borrowers completing reverse-occupancy fraud aim to qualify for a mortgage with help from the theoretical rental income from the so-called investment property. Mortgages for a business purpose – typically including mortgages for investment properties – aren’t subject to the Consumer Financial Protection Bureau’s ability-to-repay rule, allowing lenders to use looser underwriting standards. Fannie Mae issued...


January 12, 2017 - Inside Mortgage Finance

As Trump Administration Prepares to Take Reins, New Lineups on Capitol Hill Begin to Take Shape

With the formal transition of presidential power now a mere week away, Congressional Republicans and Democrats alike were busy this week reordering the teams that will take the field for the 115th Congress. Mortgage lenders are hopeful for at least some degree of regulatory relief from the Republican-controlled Congress and White House, but Democrats are vowing to defend the Dodd-Frank Act, one of the signature achievements of the outgoing Obama administration. Republicans in the House of Representatives got...


January 12, 2017 - Inside Mortgage Finance

With PHH Case Pending, Industry Officials Still Believe CFPB Should Give More RESPA Guidance

Mortgage compliance experts say there’s still a strong need for the Consumer Financial Protection Bureau to provide more guidance about acceptable business relations under Section 8 of the Real Estate Settlement Procedures Act. One of the issues that came to the fore in the bureau’s enforcement action against PHH Mortgage was lenders’ relationships under marketing services agreements. Even though banks these days may be using MSAs to a lesser extent than nonbanks, there is still a need for the CFPB to more clearly delineate do’s and don’ts. “On the lender side of the mortgage industry, there is...


January 12, 2017 - Inside Mortgage Finance

RPM Mortgage Hits the M&A Trail. Goal is To be a $14 Billion a Year Originator, At Least

RPM Mortgage, Alamo, CA, is in serious negotiations to buy at least two other mortgage banking firms – or their assets – and has its eye on at least one other shop, according to investment banking officials who claim to have knowledge of the situation. If the acquisitions come to fruition, they could put the privately held nonbank on track to be a $14 billion a year originator, said a source who advises the company. One of the target acquisitions is a $4 billion a year lender, the other a $650 million funder. A spokesman for RPM declined to comment. A few weeks back, RPM made...


January 12, 2017 - Inside Mortgage Finance

Banks and Nonbanks Expected to Make Handsome MSR Mark-ups for 4Q16. But What Does it Mean for Sales?

Banks and nonbanks alike are expected to unveil sizable mark-ups on the asset value of their mortgage servicing rights for the fourth quarter, with the general consensus being that increases will range from 20 to 25 basis points. One servicing advisor, requesting his name not be used, said he has some clients that will book gains of 30 to 35 bps, though he indicated this won’t be the norm. “In general, it’s going to be a huge move,” he said. This source made...


January 12, 2017 - Inside Mortgage Finance

HUD Cuts FHA Mortgage Insurance Premium by 25 bps, Hensarling Slams ‘Parting Gift,’ but Reversal Is Uncertain

Any pushback against the FHA’s 25 basis-point cut in the annual mortgage insurance premium remains to be seen despite grumblings from Capitol Hill, said stakeholders and industry analysts. Earlier this week, the outgoing leadership of the Department of Housing and Urban Development surprised the industry by reducing the annual MIP for 30-year FHA mortgages by 25 bps, and eliminated the higher MIP for loans exceeding $625,500. There are...[Includes one data table]


January 12, 2017 - Inside Mortgage Finance

Securitization of Private MI Loans Declined In 4Q16 Despite Jump in Insured Refi Loans

Lenders delivered $68.26 billion of single-family loans with private mortgage insurance coverage, including modified loans, into Fannie Mae and Freddie Mac mortgage-backed securities during the fourth quarter of 2016, according to a new Inside Mortgage Finance analysis and ranking. Fourth-quarter private MI activity for the two government-sponsored enterprises was down 10.1 percent from the previous quarter. Overall, Fannie/Freddie single-family MBS production was up 5.7 percent in the fourth quarter. The drop in MI-insured business at the two GSEs tracked...[Includes two data tables]


January 12, 2017 - IMFnews

FHFA to Step Up Pressure on Fannie and Freddie to Manage Nonbank Servicer Risks

The new FHFA IG report is heavily redacted…


January 12, 2017 - IMFnews

Banks and Nonbanks Expected to Take Handsome MSR Mark-ups for 4Q16

“No matter what, it’s an enormous move,” said Mark Garland, president of MountainView Servicing Group, Denver.


Poll

HUD has announced a 25 basis point cut in FHA premiums, which is slated to take effect in late January. Is your lending shop for or against a cut in FHA premiums?

For. It should help lending volumes.
Against. The private MI sector should take on this risk, not the government.
Too early to say.
I believe the new White House may scuttle the idea so it doesn’t matter.

vote to see results