February 21, 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.

Mortgage Brokers Continued Building Market Share in ’18

Mortgage brokers aren’t taking over the world, but the industry’s share of new production reached a nine-year high in 2018, according to a new analysis and ranking by Inside Mortgage Finance.

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Pershing Square’s GSE ‘Lottery Ticket’ Riding High

Pershing Square Holdings — the high-profile hedge fund managed by mega investor Bill Ackman — is sitting on a paper gain of 140.6% year-to-date on its investment in Fannie Mae common. Its holdings in Freddie Mac aren’t too far behind at 130.2%.

Alter the Fannie, Freddie Dividend Payment: Yes/No?

Now that the smoke has cleared from Mark Calabria’s confirmation hearing to head the Federal Housing Finance Agency, industry stakeholders are pondering the first step in administrative reform of Fannie Mae and Freddie Mac: eliminating the quarterly payments the two mortgage giants make to the Treasury Department.

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Inside FHA/VA Lending

Weak 4Q Purchase Lending Shrinks FHA/VA Output

Government-backed originations fell significantly in the fourth quarter of 2018 due to a decline in purchase lending even as year-over-year results reflected the uncertainty in last year’s government-backed mortgage market.

Inside Nonconforming Markets

Jumbo Lending Falls in 4Q On Weaker Demand

Originations of non-agency jumbo mortgages declined in the fourth quarter as well as full year 2018, according to an Inside Nonconforming Markets analysis. The sector also lost market share with lenders noting weak demand. Some $65.0 billion of jumbos were originated in the fourth quarter, down 14.5% on a sequential basis. Full-year jumbo production declined 12.2% to $281.0 billion. Jumbos accounted for 17.2% of total first-lien originations ... [Includes one data chart]

Inside MBS & ABS

Despite 4Q Slump, GSE 2018 Earnings Hit Six-Year High

Fannie Mae and Freddie Mac racked up $25.19 billion in combined net income in 2018, their most profitable year since 2013, when earnings were inflated by accounting rules for deferred tax assets.

Inside the CFPB

Payday Proposal Gets Rid of Underwriting Requirement

The CFPB may scrap the underwriting requirements of its 2017 payday lending rule, according to a proposal released last week. In the meantime, the rule’s compliance date has been pushed back to Nov. 19, 2020, from Aug. 19, 2019.

Inside Mortgage Trends

GSE Credit Profile Turned Riskier for Purchase Loans

Lenders that sell single-family mortgages to Fannie Mae and Freddie Mac became slightly more daring in the fourth quarter of 2018, according to an exclusive new analysis by Inside Mortgage Trends. [Includes two data charts.]

Inside The GSEs

GSE Single-Family MBS Issuance Off to a Slow Start

Fannie Mae and Freddie Mac issued a combined total of just $51.86 billion of single-family mortgage-backed securities in January, their lowest monthly production since February 2016.

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Poll

Do mortgage lenders really need a new credit-scoring model or is the current FICO system adequate?

It’s fine. Stick with what works.

53%

Time for a change. Borrowers are different today.

35%

Undecided, still assessing the situation.

12%

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