January 17, 2019

Latest from Inside Mortgage Finance

ARM Share Drops in Third Quarter

Adjustable-rate mortgages accounted for a smaller share of originations in 3Q18, despite rising interest rates. The decline may reflect slower production in the ARM-heavy jumbo market.

Read more in Inside Nonconforming Markets.

Large Nonbanks Grow Agency Servicing Share

A handful of heavyweight nonbanks ended 2018 with significant increases in their portfolios of servicing rights tied to agency mortgage-backed securities, according to an exclusive ranking and analysis by Inside Mortgage Finance.

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Megabanks’ Originations Weak, MSR Values an Issue

The nation’s megabanks took it on the chin in the fourth quarter, reporting weak origination figures and non-cash writedowns on their servicing assets, according to a handful of earnings reports released this week.

Supreme Court Rejects CFPB Constitutionality Case

The U.S. Supreme Court Monday refused to hear a case challenging the constitutionality of the Consumer Financial Protection Bureau, turning away a legal challenge that could have led to more presidential power over the consumer watchdog.

Feature Stories

Inside FHA/VA Lending

FHA/VA Default Rates Edge Up, Nonbanks Stalk Wells

Delinquency rates for FHA and VA loans in Ginnie Mae mortgage-backed securities rose in the fourth quarter of 2018, but loan performance was generally stronger, according to a new Inside FHA/VA Lending analysis. As of December-end, 5.38 percent of FHA and VA loans were 30 to 90 days past due, up 27 basis points from the previous quarter, but lower than 5.98 percent a year ago. The serious delinquency rate was a different story. At the end of 2018, 1.09 percent of FHA and VA loans were over 90 days past due, up from 1.00 percent in September and 0.99 percent a year ago. Late payments remain a big issue for FHA loans. The number of loans over 90 days past due rose 10.5 percent in the fourth quarter, pushing the rate up to 1.16 percent of the total outstanding. In its analysis as of September, CoreLogic noted that the serious delinquency rate for FHA loans is three times higher than those ... [Charts]

Inside Nonconforming Markets

Loans with Higher LTV Ratios in 4Q18 Jumbo MBS

The average combined loan-to-value ratio on mortgages in jumbo mortgage-backed securities spiked towards the end of 2018, according to a new analysis by Inside Nonconforming Markets. In the first three quarters, the average combined LTV ratio for jumbo MBS issuance was around 70.0 percent. In the fourth quarter, it climbed to 76.2 percent. Several factors prompted the higher average, including the first post-crisis jumbo MBS stocked with ... [Includes two data charts]

Inside MBS & ABS

ABS Issuance Hit Post-Crisis High Despite Soft Landing

A total of $223.74 billion of new non-mortgage ABS came to market in 2018, the best annual showing since the financial crisis, according to a new ranking and analysis by Inside MBS & ABS.The market faltered in the fourth quarter, however, as ABS production slumped 14.9 percent to $45.05 billion. That was the lowest quarterly output since the end of 2016.

Inside the CFPB

CFPB Assesses ATR/QMs, ‘GSE Patch’ and Servicing

The CFPB, in an assessment report last week, underscored the need to resolve the status of the temporary government-sponsored enterprises “patch” under the ability-to-repay and qualified mortgage rule.

Inside Mortgage Trends

TPO Production Channels Grew in Agency Market

Retail mortgage lending continued to lose market share in the second half of 2018, mostly due to a surge in correspondent production. A new Inside Mortgage Trends analysis of mortgage-backed securities data shows that the retail share of loans sold to Fannie Mae, Freddie Mac and Ginnie Mae fell to 48.6 percent last year. During the fourth quarter, sales of retail-originated loans declined by 14.9 percent, the sharpest downturn among ... [Includes two data charts]

Inside The GSEs

GSE Market Shifts Toward Large Banks in Late 2018

Single-family mortgage business at Fannie Mae and Freddie Mac slumped in the fourth quarter of 2018 as purchase-mortgage activity faded, according to a new Inside The GSEs analysis of mortgage-backed securities disclosures. [Includes two data charts.]

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