Trends & Profitability

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

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

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

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 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 - 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

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 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 13, 2017 - Inside Mortgage Trends

VA Continues Gaining Market Share

Mortgages guaranteed by the Department of Veterans Affairs accounted for 29.4 percent of insured home loans securitized in the agency mortgage-backed securities market in the fourth quarter of 2016, a new Inside Mortgage Trends analysis reveals. That was up from a 27.2 percent share for the VA during the third quarter. The home-loan guaranty program has become a refinance dynamo, accounting for a whopping 44.6 percent of insured refi loans ... [Includes one data chart]


January 13, 2017 - Inside Mortgage Trends

Black Knight Developing Mortgage Credit Score

Black Knight Financial Services is developing a mortgage-specific credit score that could be more useful for lenders than traditional credit scores. It’s not clear how much traction the score will gain, considering that Fair Isaac’s FICO score remains the dominant metric for assessing the creditworthiness of mortgage borrowers. Wesley Winter, a senior modeler at Black Knight, said a traditional credit score may not be the best predictor of mortgage default. “The FICO score is trying to ...


January 13, 2017 - Inside Mortgage Trends

Homebuyers Remain Optimistic

While mortgage interest rates remain at historic lows, an increase of even one percentage point is not going to have a dramatic effect on affordability and any negative homebuyer response to rising rates is likely to be short-lived, according to a new Redfin survey. Even if mortgage rates climb to 5 percent, homebuyers would lower their expectations and shop for less expensive homes, said 49 percent of the 827 Redfin real estate agents who responded to the survey. Redfin conducted ...


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

Prospective Homebuyers Sending Mixed Signals

The recent run-up in mortgage rates appears to have suppressed short-term home purchase expectations among prospective homebuyers, who nonetheless otherwise feel optimistic about the housing market over the longer term, according to new data from government-sponsored enterprise Fannie Mae. Fannie’s latest Home Purchase Sentiment Index (HPSI), released earlier this week, dipped 0.5 points to 80.7, the fifth consecutive monthly decline. The index is down ...


January 13, 2017 - Inside Mortgage Trends

Higher Rates May Mean Staff Cuts

With interest rates up 75 basis points since the election – and staying there, at least for now – residential production is likely to slip in the quarters ahead, leading to layoffs, especially at firms that focus on refinancings. “It’s coming,” said industry consultant Don Henig, a former top sales executive for loanDepot, a top-10 ranked originator. “Maybe we haven’t seen too many layoffs quite yet, but just look at volume numbers and do the math.” Henig added: “Right now, a lot of shops ...


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 - 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 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 - 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.


January 11, 2017 - IMFnews

Nationstar Hires Capital One Executive Patel as EVP and Chief Risk Officer

Patel also will serve as a member of the lender's executive management team.


January 11, 2017 - IMFnews

The Love Affair Continues: First-Lien Holdings at Banks and Thrifts Up Again in 3Q16

Third-ranked Bank of America had the slowest growth among the three banks, with a $189.1 billion portfolio as of the end of the third quarter…


January 10, 2017 - IMFnews

Short Takes: Gain-on-Sale Let-down? / About Those MSR ‘Marks’... / Ocwen Attorney Joins Philly Law Firm / Go with the ‘Waterfall’ / Vegas-Based Lender Hires Sales Chief

As gain-on-sale margins decline, MSR marks will rise...


January 10, 2017 - IMFnews

Mortgage Hiring Accelerates in November. Can it Last?

Some industry executives have been predicting a correction in mortgage hiring in the coming months, with large layoffs anticipated at shops that have focused too strongly on refinancings.


January 6, 2017 - Inside FHA/VA Lending

Around the Industry

VA Extends Making Home Affordable Program. The Department of Veterans Affairs has extended the Making Home Affordable program to Oct. 1, 2017. The program was set to expire on Jan. 1, 2017. USDA Approves NewFed Mortgage to originate Section 52 Guaranteed Rural Housing Loans. The U.S. Department of Agriculture has approved NewFed Mortgage Corp., a multi-state residential mortgage lender, to originate USDA loans. Based in Danvers, MA, retailer NewFed offers FHA, VA, USDA, conventional and jumbo mortgage products. Reviews Genworth Financial’s Proposed Sale to Chinese Conglomerate. Fannie Mae has approved Arch Capital’s acquisition of ...


January 6, 2017 - Inside FHA/VA Lending

Michigan Lender Agrees to Pay $48 Million to Resolve FCA Claims

United Shore Financial Services of Troy, MI, has agreed to pay $48 million to resolve allegations of FHA-related fraud, adding to the more than $7 billion in settlements and judgments the Department of Justice has collected since 2009. United Shore, parent company of United Wholesale Mortgage and Shore Mortgage, was accused of improperly originating mortgages and falsely certifying compliance with FHA requirements. Originated between Jan. 1, 2006, and Dec. 31, 2011, the loans eventually turned bad, resulting in significant losses to the FHA insurance fund. The complaint did not specify the number and total amount of the bad loans United Shore originated or the size of FHA’s losses on those loans. United Shore was charged with violation of the False Claims Act, becoming the latest financial institution to join a growing list of FHA lenders that have opted to settle, rather than litigate, ...


January 6, 2017 - Inside FHA/VA Lending

FHA to Implement Methodology for Finding, Classifying Loan Defects

The FHA this year will focus mainly on the completion and implementation of the Defect Taxonomy to help lenders easily identify and categorize loan defects found in FHA-insured loans. At least that was the plan announced by the outgoing Obama administration. The agency urged lenders to be on the lookout for detailed information about Defect Taxonomy and other process improvements in the coming months. “As we begin to implement these changes and transition from current processes, some lenders may experience a temporary decrease in loans selected for review,” the FHA noted in Lender Insight, which updates lenders on the latest rulemakings and policy changes. Announced in June last year, Defect Taxonomy is part of the Blueprint for Access, which embodies three core concepts: identifying a defect, capturing the sources and causes of a defect, and assessing the ...


January 6, 2017 - Inside FHA/VA Lending

Ginnie MBS Program Set New Records in 2016, VA Soared

Ginnie Mae guaranteed a total of $507.46 billion of single-family mortgage-backed securities in 2016, its biggest annual volume ever, according to a new analysis and ranking by Inside FHA/VA Lending. That was up 16.4 percent from the agency’s previous record of $435.80 billion set in 2015. (Those figures include MBS backed by FHA home-equity conversion mortgages, which are not included in the table below or in the rankings on pages 3-5.) In 2016, Ginnie guaranteed $497.03 billion of MBS backed by traditional forward mortgages, also a record, which was up 16.9 percent from the previous year. The biggest factor in last year’s record-setting production was the boom in VA lending, particularly VA refinance loans. Issuers securitized a record $203.03 billion of VA loans last year, up 33.0 percent from the 2015 total. Some 54.3 percent of those loans were refinance transactions. Total VA refi loan ... [4 charts]


January 6, 2017 - IMFnews

The Big Boys of Servicing Suck Wind; Smaller Shops Shine

Growth was far from uniform among servicers, Inside Mortgage Finance found…


January 5, 2017 - IMFnews

First-Lien Mortgages Continued to Perform Better in 3Q16, OCC Finds

Residential servicers started 47,955 new foreclosures in the quarter, a 1.6 percent sequential decline, and a whopping 25.3 percent fall compared to a year ago.


January 3, 2017 - IMFnews

Short Takes: Mortgage M&A Bust? / Don’t Expect Sellers to Cave on Price / RPM Mortgage Hungry for Deals? / Bank M&A Quite Strong in a Post-Crisis Sort Of Way

With rates rising (and staying that way, for now) mortgage M&A is expected to pick up steam in the coming months...


January 3, 2017 - IMFnews

Floodwaters of Negative Equity Continue to Recede

When the housing recession was in its early years, negative equity was most pronounced in a handful of Southwestern and Southeastern markets...


January 3, 2017 - IMFnews

A Done Deal: Arch Completes Purchase of No. 1 Ranked MI, United Guaranty

With the purchase now complete, there are just six MI firms in the U.S.


January 3, 2017 - IMFnews

A Small Club: Nonbank Mortgage Firms (or Their Owners) That Have Purchased Depositories

Consultant Joe Garrett notes: “It’s a very small club of mortgage bankers who’ve bought banks…”


January 3, 2017 - IMFnews

ARM Originations – A Force to be Reckoned With? JPM the Market Leader

The nation’s top three ARM producers are: JPMorgan Chase, Wells Fargo and Bank of America…


December 30, 2016 - IMFnews

What We’re Hearing: 10 Mortgage Firms to Keep an Eye on in 2017 – and Why

But if you think that Wells Fargo will pull a “BofA” and quietly downshift its presence in mortgages, think again.


December 30, 2016 - IMFnews

ARMs a Higher Risk for Defects, Misrepresentation and Fraud

The index estimates the level of defects detected in loan applications processed by the First American FraudGuard system.


December 30, 2016 - IMFnews

Mortgage Insurance Stocks Have Been on a Tear of Late. Can it Last?

Rising interest rates are good for MI stocks because it translates into greater “persistency…”


December 30, 2016 - IMFnews

When it Comes to Jumbo Lending, Retail Channel Dominates, By Far

Wells Fargo, for example, reported that 90.7 percent of its third-quarter jumbo originations came through the retail channel…


December 28, 2016 - IMFnews

2019: A $3 Trillion Year for Originations?

This year, fundings could reach upwards of $2.00 trillion based on activity through the first nine months of the year.


December 28, 2016 - IMFnews

Both Sides of Mortgage Banking Posted Significant Profit Gains in 3Q16

JPMorgan Chase was the only firm that saw a decline in production-related revenue during the third quarter…


December 27, 2016 - IMFnews

Short Takes: Gone for Now: Really Low Rates and No Points / Tracking the Yield on the 10-Year / Why Home Price Gains May Taper Off / Nonbanks Get FHFA’s Approval

“Home prices cannot rise faster than incomes and inflation indefinitely.” – David Blitzer, managing director of the index committee at S&P Dow Jones.


December 27, 2016 - IMFnews

Share of Loans that Close on Time Increasing

Other loan types also generally showed improved closing times.


December 27, 2016 - IMFnews

Is it the End of an Era for GSE Loan Buybacks?

Excluding legacy-related buybacks, total GSE seller repurchases would have been down 9.9 percent…


December 22, 2016 - IMFnews

PHH Says Panel Got it Right, No Need to Rehear 'En Banc' in Controversial CFPB Case

The U.S. Solicitor General is also expected to submit a filing to the court...


December 23, 2016 - Inside Mortgage Trends

SFIG, MISMO Work to Standardize Data

Lenders that deliver loans to agency buyers and non-agency buyers could benefit from standards developed by the Structured Finance Industry Group and the Mortgage Industry Standards Maintenance Organization. SFIG detailed the data standardization effort in a green paper released last week. The Wall Street group noted that a lack of accepted standards can lead to confusion and disagreement between counterparties and service providers, particularly when data are calculated or ...


December 23, 2016 - Inside Mortgage Trends

Floodwaters of Negative Equity Continue to Recede

The share of all homeowners underwater on their mortgage dropped in the third quarter of 2016 and is now at a fraction of what it was at its high-water mark, according to the latest data from Zillow. The firm found that negative equity dropped to 10.9 percent in the third quarter, down from 12.1 percent in the second and 13.4 percent a year ago. Nationally, there were fewer than 5.3 million homeowners underwater on their mortgage during the third quarter, a level far removed from the peak ...


December 23, 2016 - Inside Mortgage Trends

Profit Margin Expectations Tumble Post-Election

The rise in mortgage rates after the November election gave many lenders the blues, triggering a plunge in near-term expectations for loan demand as well as a big drop in anticipated profit margins over the next three months, according to the latest lender survey from Fannie Mae. Forty six percent of respondents expect profits to decrease. Lenders’ profit margin outlook now is the worst in three years, according to the government-sponsored enterprise. “Lenders reported a significant net negative ...


December 23, 2016 - Inside Mortgage Trends

Prospects, Higher Rates Boost Private MI Stocks

Mortgage insurance stocks have been rallying the past month, climbing to 52-week highs, thanks in part to the “Trump rally” and the belief that Fannie Mae and Freddie Mac have a future after all. Six short months ago, the sector was in the tank with investors fearing that another cut in FHA premiums would erode their market share. The premium cut didn’t happen, and there’s a growing belief that the incoming Trump administration will favor the private sector – and not the FHA – taking on more risk ...


December 23, 2016 - Inside Mortgage Trends

Share of Loans that Close on Time Increasing

The share of purchase mortgages that closed on time increased in recent months, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The improved closing performance occurred as home sales declined and interest rates on mortgages started to rise. Some 68.4 percent of Fannie Mae/Freddie Mac purchase mortgages with private mortgage insurance tied to home sales in November closed on time, based on a three-month moving average ...


December 23, 2016 - Inside Mortgage Trends

Ginnie Updates MSR Acknowledgement Agreement

Ginnie Mae late this month released an improved acknowledgement agreement that aims to bolster the liquidity of nonbanks seeking to borrow against the asset value of their mortgage servicing rights. In an interview with Inside Mortgage Trends, Ginnie President Ted Tozer noted that one of the chief aims of the exercise was to offer clarifications to financiers that they, as lenders, would have no legal liability should the servicer of record default on their Ginnie bond payments. “There is no liability for ...


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