Trends & Profitability

Browse articles from all of our Newsletters related to Trends & Profitability.

March 22, 2017 - IMFnews

Finance of America Commercial Makes Big Push Into Broker Market with ‘Fix & Flip’ Lending

CEO Mark Filler said FoAC is now offering fix-and-flip loans as cheaply as 6.99 percent…

March 22, 2017 - IMFnews

HECM Production Stumbles a Bit in 2016

Among the top 10 originators in 2016, Reverse Mortgage Solutions posted the largest annual decline at 64.5 percent. RMS is owned by Walter Investment…

March 22, 2017 - IMFnews

Bank Holdings of First Liens Increased in 4Q16 – Ever So Slightly

It appears that depositories are growing their portfolios by adding jumbo mortgages along with loans eligible for sale to Fannie Mae and Freddie Mac…

March 21, 2017 - IMFnews

IMF Poll: Lenders Will Liberalize Underwriting Standards – but Not by Much

Some 14 percent of respondents said they might begin making non-qualified mortgages over the coming months.

March 21, 2017 - IMFnews

MBA: Net Origination Profit Plunged 68 Percent in 4Q16

MBA noted that including all business lines, 73 percent of the mortgage companies posted pre-tax profits for the fourth quarter, down from 94 percent in 3Q16…

March 21, 2017 - IMFnews

Subservicing Sector Starting to Look Crowded As More Firms Choose ‘Capital Light’ Strategy

The nation’s three largest residential subservicing firms are: Cenlar, Dovenmuehle and Loan Care. All are nonbanks.

March 21, 2017 - IMFnews

Still Rising: Retail Channel Accounts for 81.6 Percent of Jumbo Originations

Roughly $72.09 billion of jumbo mortgages were originated in the fourth quarter, down 3.4 percent on a sequential basis.

March 17, 2017 - Inside FHA/VA Lending

Utah FHA Lender Pays $4.25 M to DOJ, HUD to Resolve Fraud Claims

Security National Mortgage Co. of Salt Lake City has paid $4.25 million to the Department of Housing and Urban Development to settle allegations of failing to comply with FHA loan requirements. Security National, a retail lender, has been an FHA-approved direct endorsement lender since October 1993, the year it was founded. The settlement resolves a joint civil investigation by the HUD Office of the Inspector General, Department of Justice and the U.S. Attorney’s Office for the District of New Jersey into Security National’s FHA origination and underwriting practices in connection with 100 FHA-insured loans. As part of the settlement, the lender “agreed it engaged in certain conduct in connection with its origination and underwriting of the loans.” The HUD OIG provided no details about the investigation. The OIG said the loans that were certified as compliant would not have been insured had ...

March 17, 2017 - Inside FHA/VA Lending

Trump Proposes Drastic Cuts to 2018 HUD Discretionary Spending

The Trump administration has proposed deep budget cuts in 2018 for the Department of Housing and Urban Development and the U.S. Department of Agriculture, but whether the agencies’ critical housing insurance programs would be affected is unclear. The cuts are part of the administration’s plan to reduce non-defense discretionary spending dramatically in order to fund increased defense spending and President Trump’s southern border wall, and to bring down a projected $9.4 trillion U.S. deficit over the next decade.Released this week, the preliminary 2018 budget seeks $40.7 billion in gross discretionary funding for HUD, $6.2 billion or 13.2 percent lower than the department’s approved spending in 2017. The $47.3 billion in discretionary budget authority enacted for fiscal 2017 does not include offsetting receipts from FHA and Ginnie Mae, which lowered the congressionally appropriated cost for ...

March 17, 2017 - Inside FHA/VA Lending

Georgia Appeals Court Finds for Wells Fargo in Provisional Win

A Georgia appellate court recently handed Wells Fargo Bank a provisional win in a lawsuit in which a VA borrower alleged breach of contract and wrongful foreclosure. In Wells Fargo Bank, N.A., d/b/a Wells Fargo Home Mortgage v. LaTouche, the court ruled that Wells did not breach its duty to the borrower to comply with VA foreclosure regulations. The court concluded that the trial court had erred in denying Wells Fargo’s motion for summary judgment as to the defendant’s claims for wrongful foreclosure that hinged upon the same VA regulations. The reversal stemmed from Wells Fargo’s request for an interlocutory review of the trial court’s denial of its motion for summary judgment on defendant Michael LaTouche’s claims for breach of contract, wrongful foreclosure and “surprise. An interlocutory review is undertaken when a question of law must be answered by an appellate court before ...

March 17, 2017 - Inside FHA/VA Lending

Quicken Loans Notches First Win After Court Narrows Scope of Case

A favorable court ruling on the statute of limitations for filing claims under the False Claims Act gave Quicken Loans its first win in a closely watched government case involving allegedly fraudulent FHA loans. Judge Mark Goldsmith of the U.S. District Court for the Eastern District of Michigan dismissed portions of the Department of Justice’s lawsuit against Quicken in a March 9 decision, narrowing the lender’s potential liability for FHA losses. The losses were blamed on sloppy underwriting, fraudulent certification and loan performance. The DOJ said the FHA would not have knowingly insured the loans had it known they were defective. The DOJ and the Department of Housing and Urban Development’s inspector general began an investigation of Quicken’s FHA lending activities in April 2012. The investigation encompassed some 246,000 FHA loans, which Quicken originated from ...

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 17, 2017 - IMFnews

Top Cities for Millennial Homebuyers Include Pittsburgh, DC

A new study by LendingTree said that Pittsburgh tops the list of cities for millennial homebuyers with 48.4 percent of all purchase mortgage requests coming from that demographic.

March 16, 2017 - IMFnews

Short Takes: Deputy Treasury Secretary Role to Be Filled / Fannie Prices Second CRT of 2017 / Housing Inventory Continues Downward Spiral / FHFA Shows Refi Volume Down in Jan.

Former Goldman Sach executive, James Donovan, is the latest Goldman hire for a senior government position in the Trump Administration.

March 14, 2017 - IMFnews

Short Takes: Purchase-Mortgage Apps Increase / Hearing on National Flood Insurance Program / More 'Daily Simple Interest' MBS / Foreclosure Inventory Normalizes

Applications for mortgages related to purchases of new homes in February increased by 16.0 percent from the previous month.

March 14, 2017 - IMFnews

Walter Takes $22.2 Million Loss in Fourth Quarter, $529.2 Million Loss for the Full Year

Walter also stopped originating reverse mortgages in January.

March 14, 2017 - IMFnews

Large Gains in Correspondent Lending for Conventional-Conforming and Jumbo Sectors

Correspondent production of conventional-conforming mortgages increased by 51.9 percent from 2015 to 2016.

March 13, 2017 - IMFnews

Lenders Cite Cost, Implementation as Barriers to Use of New Technology

About one-third of the lenders surveyed by Fannie currently use technology service providers and another third are investigating next-generation technology service providers.

March 13, 2017 - IMFnews

Volume of Mortgages Serviced by Banks for Others Declines in 2016, Driven by Big Banks

Virtually all the shrinkage in 2016 took place among the four megabanks with over $1 trillion in assets: Wells Fargo, JPMorgan Chase, Bank of America and Citibank.

March 10, 2017 - Inside Mortgage Trends

Older Homeowners Not Tapping Home Equity

Homeowners over the age of 65 rarely use their mortgages to access their home equity, according to a new study by the Urban Institute and Fannie Mae. Even as a large number of seniors reported concerns about finances during retirement, Fannie noted that just 6 percent of older adult homeowners are interested in tapping their home equity. Relatively few seniors use FHA reverse mortgages, closed-end seconds, home-equity lines of credit and cash-out refinances to tap built-up home equity. One reason seniors hesitate...

March 10, 2017 - Inside Mortgage Trends

Pushy Sales Tactics Could Backfire

Retail banks and mortgage lenders have enjoyed a pretty good run of consistently improving customer satisfaction and loyalty over the last five years, but they could blow it if they’re not careful by exerting excessive sales pressure on borrowers, a new report by market research company J.D. Power suggests. In response to the recent fraudulent account creation scandal at Wells Fargo, J.D. Power decided to take a closer look at how this development affected retail bank customers across the U.S. and to get a better sense of the phenomenon of cross-selling. The survey found...

March 10, 2017 - Inside Mortgage Trends

Firm Targets Borrowers Who Need Cash-Out Refis

A data management and analytics firm is offering a service that can identify a lender’s existing borrowers who “need” an offer for a cash-out refinance. Altair Customer Intelligence said it offers lenders a number of ways to retain existing borrowers. While cash-out refinance activity is well below the levels seen before the financial crisis, many borrowers have built up equity in their homes in recent years, making cash-outs an option. Steve Ferrell, ?inbound marketing manager at Altair, said...

March 10, 2017 - Inside Mortgage Trends

It’s a Sellers’ Market for Independent Retail Shops

There are currently more buyers for retail origination platforms than there are entities available for sale, according to Strategic Mortgage Finance Group. Stratmor helped advise First Priority Financial last year as the lender was being acquired by Caliber Home Loans. First Priority had more than 370 employees with branches in California, Oregon, Washington, Idaho and Iowa. Terms of the transaction weren’t disclosed. “This deal, along with several other transactions in the Stratmor pipeline, now enable...

March 10, 2017 - Inside Mortgage Trends

Drought of Mortgage IPOs Continues

It’s been roughly 42 months since the last nonbank mortgage lender went public. And it could be another 42 months before the next one comes along the way things stand today, which is kind of odd given that the industry is coming off its second-best production year of the decade. But most publicly traded nonbanks, with a few exceptions, haven’t exactly lit the world on fire the past two years. Two of the nation’s largest nonbank servicers – Walter/Ditech and Ocwen Financial – continue to trade near their 52-week lows and at a steep discount to their all-time highs. In the case of Ocwen, the fall has been...

March 10, 2017 - Inside Mortgage Trends

Correspondent Big Winner in Some Segments

The correspondent lending channel was the big winner last year in terms of increased production and market share – at least in the conventional-conforming and jumbo sectors, according to a new analysis by Inside Mortgage Trends. Competition among the three main production channels evened out in the government-insured market. Correspondent production of conventional-conforming mortgages increased...

March 10, 2017 - Inside Mortgage Trends

Despite Hefty Markup in MSR Values, Banks Continue to Dump Servicing

The banking industry continued to backpedal away from the business of servicing home mortgages for other investors during 2016, according to an exclusive new Inside Mortgage Trends analysis of call-report data. Commercial banks and savings institutions serviced $3.808 trillion of home mortgages for other investors at the end of 2016, most of which are connected to loans in mortgage-backed securities trusts. That was down $71.6 billion from the end of the third quarter, or 1.8 percent. Over the past two years, banks reduced...[Includes one data table]

March 9, 2017 - IMFnews

Top Mortgage Compliance Attorneys Say Realtors are Now on the CFPB’s RESPA Radar Screen

One loan officer told IMFnews: “Frankly, if you violate a provision of RESPA, you should be fined.”

March 7, 2017 - IMFnews

Rating Services Getting (Slightly) More Comfortable with TRID Compliance Issues on Jumbo MBS

Four mortgages from First Republic Bank were subject to limited reviews that didn’t include checks for compliance with TRID.

March 6, 2017 - IMFnews

Redwood Trust Prepares its Third Jumbo MBS of the Year. Execution Stronger than Whole Loan Sales

Redwood officials note that in recent months pricing for jumbo MBS has been stronger than the bid for whole loan sales…

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 FHA/VA Lending

GNMA Issuance Tumbles in 1Q17 Following 2016’s Stellar Volume

Ginnie Mae production fell substantially in February from January as the government-insured lending market continued to lose steam in the first quarter of 2017. Ginnie mortgage-backed securities issuance fell 24.0 percent from January as fewer purchase and refinance loans were pooled for securitization, bringing February’s total issuance to just $32.2 billion. Year-over-year Ginnie MBS issuance, on the other hand, increased by 6.2 percent. The government-insured market set an all-time record of $545.0 billion in originations during 2016, a whopping 31.0 percent jump from the previous year. That total eclipsed previous records for originations of FHA, VA and rural housing loans guaranteed by the U.S. Department of Agriculture, according to data compiled by affiliate Inside Mortgage Finance. In addition, government-insured lending accounted for a record ... [ 3 charts ]

March 3, 2017 - IMFnews

Mortgage M&A Continues to Hum Along; 20 Percent of Nonbanks Could Disappear?

Earlier this week, Flagstar closed on its purchase of the correspondent lending platform of Stearns Lending – a rare transaction where a depository was buying a key mortgage asset from a nonbank.

March 2, 2017 - IMFnews

The Final Tally: Purchase-Mortgage Market Has its Best Year Since 2006

Wells Fargo once again dominated the purchase business with $135.5 billion funded in 2016, more than double its closest competitor, JPMorgan Chase…

March 1, 2017 - IMFnews

Altisource Residential Posts $228 Million Loss for 2016; CEO Calls It a ‘Strong’ Year

Altisource Residential said its goal is to build a large portfolio of SFRs “targeted to operate at a best-in-class yield.”

February 28, 2017 - IMFnews

Mortgage REIT Holdings of Residential MBS Fell Slightly in 4Q16

Annaly padded its lead as the top REIT MBS investor, thanks, in part, to its acquisition of Hatteras Financial in the third quarter of 2016…

February 28, 2017 - IMFnews

Will Dwindling Refinances Lead to Layoffs?

As one executive put it: “January was slow, February was lower, and I can’t tell how March will be yet.”

February 28, 2017 - IMFnews

CFPB Exams of Nonbank Mortgage Lenders Spiked by 69 Percent Last Year

The number of mortgage-related examinations by the CFPB declined in most areas with one glaring exception: nonbank residential originators…

February 27, 2017 - IMFnews

Trouble Ahead: Gain-on-Sale Margins Slipping

Piper analyst Kevin Barker and his team estimate that so far in 1Q17, the average refi volume is down 26 percent from fourth quarter levels.

February 27, 2017 - IMFnews

GSE Seller Buybacks Tumbled to Record Low in 4Q16

For the full year, GSE seller repurchases totaled just $1.101 billion, a record annual low…

February 24, 2017 - Inside The GSEs

GSE Earnings Nearly $10B for the Fourth Quarter of 2016

Fannie Mae and Freddie Mac ended 2016 with a bang when fourth quarter combined earnings totaled stellar results, nearly $9.9 billion, representing the best quarter of the year. Fourth-quarter earnings were largely driven by high gains in the fair market value of the GSEs’ hedges, which gained $10.2 billion on a combined basis. “Interest rates went up in the fourth quarter, therefore you saw an unusually large gain in the accounting,” Freddie CEO Donald Layton told Inside The GSEs. Both GSEs had quarterly earnings increases throughout the year. Fannie reported $5.0 billion in the fourth quarter, up from the $3.2 billion in the third quarter, and Freddie more than...

February 24, 2017 - Inside Mortgage Trends

New Mortgages Boost Household Debt in 2016

Mortgage balances, the largest component of household debt, rose during the fourth quarter of 2016 as more households took on new mortgage debt during the period, according to the Federal Reserve Bank of New York. The NY Fed’s latest quarterly report on household debt and credit said balances on basic household debt rose in the fourth quarter due partly to stronger, new extensions of mortgage credit. Specifically, mortgage balances shown on consumer credit ...

February 24, 2017 - Inside Mortgage Trends

Banks’ Mortgage-Banking Income Rose in 4Q16

Commercial banks and savings institutions reported a combined $5.479 billion in net income from mortgage-banking activity during the fourth quarter of 2016, according to a new Inside Mortgage Trends analysis of call-report data. The industry’s mortgage-banking income was up 5.8 percent from the third quarter, lifting the total for the year to $17.544 billion. That was down 4.6 percent from 2015. Bank of America ranked as the top earner in ... [Includes one data chart]

February 24, 2017 - Inside Mortgage Trends

Housing Crisis Boxed in Some Job Seekers

Distress in the housing market has an impact on the location and types of jobs individuals are willing to take, according to research by the National Bureau of Economic Research. During the most recent recession, distressed borrowers tended to apply for fewer jobs that required relocation and looked for lower-level positions, according to an NBER working paper by Jennifer Brown of the Sauder School of Business at the University of British Columbia and David Matsa of ...

February 24, 2017 - Inside Mortgage Trends

Homeownership Rates Keep Sinking

The homeownership rate fell for the 12th consecutive year in 2016, hitting levels last seen 50 years ago. While industry analysts expect that the homeownership rate will stop declining in the coming years, growth will likely be constrained. The annual homeownership rate in 2016 was 63.4 percent, according to the U.S. Census Bureau. That was down from a rate of 63.7 percent the previous year and from a peak of 69.0 percent in 2004. Frank Nothaft, chief economist at CoreLogic ...

February 24, 2017 - Inside Mortgage Trends

Will Dwindling Refinances Lead to Layoffs?

As interest rates continue to inch upward and refinance activity drops, it stands to reason that more residential lenders will move to cut staff, if they haven’t already. But so far, there have be no major layoffs – at least none that have been registered. But that doesn’t mean industry executives aren’t thinking about it. According to interviews conducted by Inside Mortgage Trends over the past month, it’s a mixed bag when it comes to hiring. Non-agency/nonprime lenders such as ...

February 24, 2017 - Inside Mortgage Trends

GSE Seller Buybacks Tumble to Record Low in 4Q16, More Unresolved Cases

Fannie Mae and Freddie Mac reported record lows in the volume of mortgages that sellers repurchased during the fourth quarter of 2016 because of manufacturing defects, an exclusive new Inside Mortgage Trends analysis reveals. Mortgage seller repurchases or other indemnification to the two government-sponsored enterprises totaled $207.31 million in the final three months of 2016. That was down 37.0 percent from the previous quarter and ... [Includes two data charts]

February 24, 2017 - IMFnews

Growing Mortgage Indebtedness Helps Drive Household Debt Near Crisis Peak

“Since reaching a trough in mid-2013, the rebound in household debt has been led by student debt and auto debt, with only sluggish growth in mortgage debt,” said one New York Fed official.

February 24, 2017 - IMFnews

Looser Underwriting on Jumbos Backing Galton’s New MBS

Moody’s said many of the contributors to the MBS are small, regional entities that lack the sophistication of larger, more established originators.

February 24, 2017 - IMFnews

The Time is Right for a Boom in Servicing Sales. However…

Meanwhile, selling Ginnie Mae receivables is still a difficult task…

February 24, 2017 - IMFnews

Redwood Earned $25 Million in 4Q, Sees Strong Jumbo MBS Pricing, Will Expand ‘Choice’

Redwood CEO Marty Hughes said pricing for jumbo MBS is currently strong, with execution on issuance better than execution for whole loan sales.


With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

Do you think your shop will loosen standards over the coming three months?

Yes, but not by much.


Yes, by a lot.


Yes and, heck, we may even do non-QM lending.


No, not at all.


No and we may even tighten credit.