August 9, 2018

Latest from Inside Mortgage Finance

Secondary market activity by banks was down sharply in the first quarter.

Read more in Inside Mortgage Trends.

Private MIs Boost Market Share in 2Q18, Report Post-Crisis Record in Earnings

Private mortgage insurers had one of their strongest quarters in recent memory in the spring of 2018, thanks to a surge in new insurance written and a healthy upturn in profitability, according to a new Inside Mortgage Finance ranking and market analysis. [Includes two data charts]

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In a Tough Lending Market, Geneva is Attracting Loan Officers by Offering Comp Plans of 250 BPs

Geneva Financial, Tempe, AZ, is offering loan officer recruits a compensation package of 250 basis points or higher, attracting scores of resumes as well as the ire of some of its competitors.

Marketing Services Agreements Back Again After Court Ruling Reestablished RESPA Safe Harbor

After federal courts overturned the Consumer Financial Protection Bureau’s aggressive interpretation of the anti-kickback provisions in the Real Estate Settlement Procedures Act, lenders are more confident about forging marketing services agreements, industry experts said.

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Feature Stories

Inside FHA/VA Lending

Purchase Lending Powers VA 2Q Surge, Ends First Half on High Note

VA home-loan guarantee volume rose in the first half of 2018 thanks to a second-quarter surge in purchase business. New VA loan guarantees totaled $89.9 billion at midyear, a 7.5 percent improvement from the same point last year. VA production was even stronger quarter-over-quarter, with $50.9 billion in originations, up a whopping 30.2 percent from the first quarter. Purchase loans accounted for 68.1 percent of VA guarantees in the second quarter, up 23.1 percent from the prior quarter. Purchase for the first six months of 2018 was up 19.5 percent from a year ago. VA refi business struggled in the second quarter as production fell 7.0 percent from the previous period, dropping the overall refi share to 31.9 percent. Most of the damage in VA production in the second quarter was in the Interest Rate Reduction Refinance Loan program, where volume tumbled 42.8 percent from the previous ... [Chart]

Inside Nonconforming Markets

New Players Enter Non-QM Market by Aggregating Loans and Issuing MBS

More competition is coming into the nascent business of aggregating non-qualified mortgages and issuing mortgage-backed securities drawn by the market’s potential for profitable growth.

Inside MBS & ABS

Commercial MBS Issuance Rebounded from Slow Start in Early 2018, Led by Non-Agency Deals

A total of $57.38 billion of income-property mortgages was packaged into new securities during the second quarter of 2018, a solid 12.3 percent increase from the first three months of the year, according to a new Inside MBS & ABS analysis. [Includes two data charts.]

Inside the CFPB

CFPB Active Again in Enforcement Actions, But With New Tactics

The CFPB has been accelerating its enforcement actions in the past two months, and attorneys said Acting CFPB Director Mick Mulvaney is now defending the bureau’s enforcement power, with a new strategy and focus. “The enforcement actions are being announced more frequently now,” said Allen Denson, partner at Hudson Cook. “I expect the steady clip of settlements we’ve seen over the last two months to continue.” After Mulvaney took the reins at the ...

Inside Mortgage Trends

Secondary Market in Servicing Rights Gained Momentum in Second Quarter

Sales of agency mortgage servicing rights were up in the second quarter, mostly as a result of heavier coissuance volume, according to an exclusive new Inside Mortgage Trends analysis and ranking. Servicing rights on $129.57 billion of agency mortgages changed hands during the second quarter, up 6.4 percent from the first three months of the year. The data are culled on Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities ... [Includes three data charts]

Inside The GSEs

Fannie and Freddie Report $7.0 Billion in Combined Profits for 2Q

The GSEs posted a combined net profit of $6.96 billion for the second quarter, with Fannie accounting for the lion’s share having earned $4.46 billion. The combined number is down slightly from the $7.19 billion recorded for the first quarter. Fannie Mae’s chief financial officer, Dave Benson, attributed the 4.6 percent quarterly increase partly to higher credit-related income. [Includes one data chart.]

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Poll

With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.

17%

11% to 25%. It’s a challenging market.

48%

25% to 40%. It’s going to be very ugly.

24%

No opinion.

11%

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