December 14, 2017

Latest from Inside Mortgage Finance

Fannie Mae issued 41% of the nation's $6.7 trillion outstanding MBS as of September 30, according to Inside MBS & ABS.

See related story.

CFPB’s English Files for Preliminary Injunction as Acting Head Mulvaney Pulls Back on Enforcement

There was plenty of activity at the Consumer Financial Protection Bureau over the last week, from continuing legal drama over the leadership of the agency to changes in enforcement activity and a possible regulatory roll-back.

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In 3Q17, Subservicing Gains Once Again – with Nice Increases For Nationstar and PHH; Trouble for Ocwen and Ditech?

The nation’s subservicing vendors grew their base of contracts by 6.2 percent from the second to third quarter and 20.1 percent year-over-year, according to data compiled by Inside Mortgage Finance.

Home-Equity Lending Declined Slightly in 3Q17, Credit Unions Still Gung-Ho About the Market

The amount of home-equity debt outstanding continued its years-long slide during the third quar-ter, and many top lenders reported slowing production of new loans, according to a new ranking and analysis by Inside Mortgage Finance.

Feature Stories

Inside MBS & ABS

Investors Seem Willing to Absorb Agency MBS When The Fed Finally Begins Paring its Massive Portfolio

The agency MBS market continued to grow at a measured pace during the third quarter of 2017, with several key investor groups showing interest in the market, according to a new Inside MBS & ABS analysis.

Inside FHA/VA Lending

Ginnie Mae Expands Seasoning Requirement for VA Refi Loans

Ginnie Mae has issued expanded guidelines to protect veterans and investors from harmful loan churning and rapid prepayments in mortgage-backed securities. The changes, along with additional measures under consideration by a joint Ginnie Mae/VA refinance task force, are aimed at ensuring continued strength and liquidity of the Ginnie Mae MBS program, said Michael Bright, the agency’s acting president. The latest guidelines expand on an initial measure Ginnie implemented requiring six-months of seasoning of VA loans before they can be refinanced and delivered into Ginnie MBS pools. However, some lenders have found ways around the measure and have continued their questionable lending practices, said Bright during recent testimony before a House Financial Services subcommittee. Churning is both illegal and unethical because it preys on unsuspecting borrowers, who are pressured by ...

Inside Nonconforming Markets

Jumbo Delinquency Rate Rose in 3Q17, But Sector in Line with Overall Market

After declining for two consecutive quarters, the delinquency rate on jumbo mortgages increased in the third quarter of 2017, according to Black Knight. Hurricanes contributed to the uptick in delinquencies, and performance in the jumbo market remains strong overall. The delinquency rate on non-agency jumbo mortgages was 1.60 percent as of the end of September, according to Black Knight. That was up from 1.49 percent in the previous quarter ... [Includes one data chart]

Inside the CFPB

Cordray is Gone, Mulvaney Sets a New Tone for Consumer Bureau

Office of Management and Budget Director Mick Mulvaney, President Trump’s choice to serve as acting director of the CFPB, assumed control of the agency Monday, Nov. 27, 2017, and quickly established a dramatically different direction for the agency, one far less hostile to the financial services industry. In his first press conference as acting director, one week ago, Mulvaney shook things up while trying to strike a more balanced approach, one far less hostile towards the financial services community. “This is an ordinary course of business in Washington, DC. What you’re witnessing today at the CFPB happens at every single agency every couple of years, which is a transition,” he said. [Includes a timeline chart.]

Inside Mortgage Trends

Mortgage Banking Earnings Declined For Banks and Thrifts in Third Quarter

The vast majority of commercial banks and savings institutions that do mortgage banking – either directly or through a subsidiary – generated a profit from the business during the third quarter, according to a new analysis by Inside Mortgage Trends of bank call reports.

Inside The GSEs

Buyback Activity Jumps Higher At Freddie, Slows at Fannie

A tiny portion of loans sold into Fannie Mae and Freddie Mac mortgage-backed securities trigger a buyback demand from either of the GSEs, and in most cases lenders are able to avoid an actual repurchase or indemnification. Lenders repurchased or provided other indemnification for $260.12 million of home loans during the third quarter of 2017, a 6.4 percent increase from the prior period, according to an Inside The GSEs analysis of quarterly disclosures made to the Securities and Exchange Commission. During the same period, Fannie and Freddie issued $223.6 billion of new single-family MBS. The third-quarter spike in buyback activity came all on the Freddie side of the market.

Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.

33%

No. It’s still difficult compliance/regulatory-wise.

20%

Maybe. It’s under consideration.

33%

Not now. But things could change as 2018 progresses.

13%