September 20, 2018

Latest from Inside Mortgage Finance

Jumbo Correspondent Share Rising

The correspondent channel accounted for 17.3 percent of jumbo production in the second quarter of 2018.

Read more in Inside Nonconforming Markets.

Non-Agency Option Dings GSE Conforming-Jumbo Business in 2018, Volume Up in FHA/VA Sector

Improved loan-sale execution in the non-agency market has taken a bite out of the conforming-jumbo business at Fannie Mae and Freddie Mac, a new Inside Mortgage Finance analysis reveals. [Includes three data charts.]

More

MBA Raises Concerns as Freddie Launches Second Phase of Controversial MSR-Financing Pilot

Freddie Mac’s pilot program to extend lines of credit collateralized by mortgage servicing rights kicked into its second phase this month with the mortgage giant finding itself playing defense as the cries of “charter creep” continued to grow louder.

It’s Been Five Years Since a Nonbank Lender Pulled Off an Initial Public Offering of Stock

Private equity firms hoping to cash out their ownership stakes in nonbank lenders via an initial public offering of stock will have to wait a little longer, thanks to a tough origination market and institutional investor interest that lies elsewhere.

Feature Stories

Inside FHA/VA Lending

Third-Party Originators Account for Out-sized Share of FHA/VA Market

Correspondent lenders and mortgage brokers continue to account for an unusually large share of FHA and VA lending, according to a new analysis by Inside FHA/VA Lending. During the first six months of 2018, correspondent-lending programs accounted for 53.3 percent of government-insured mortgage production, according to survey data reported by a broad cross-section of the market. At the same time, correspondent production accounted for 46.4 percent of conventional-conforming lending and a mere 16.1 percent of the non-agency jumbo market. The heavy reliance on agency securitization in both the conventional and government-insured sectors helps explain the higher levels of correspondent production. For many smaller shops, it is more economical to sell production to aggregators than pay the overhead costs of dealing directly with the agencies. In the government-insured sector, some banks are ... [Chart]

Inside Nonconforming Markets

Wells on Track to Test Issuance of Jumbo MBS; Assets Are a Good Bank Investment

Wells Fargo is getting closer to returning to the jumbo mortgage-backed security market, according to John Shrewsberry, a senior executive vice president and chief financial officer at the bank. “We will be securitizing some of our jumbo loans, which has been a dormant market for a long time, but just as a method of demonstrating liquidity and getting market pricing,” he said last week at a conference hosted by Barclays. Wells has been plotting a return to the non-agency MBS market for ...

Inside MBS & ABS

Plenty of Investors Look Willing to Pick Up the Slack as the Fed Continues to Slowly Unwind Its Massive Holdings

Most of the major MBS investor groups added to their holdings during the second quarter of 2018, according to a new Inside MBS & ABS analysis. [Includes two data charts.]

Inside the CFPB

CFPB Proposes Disclosure Sandbox, and More Could Come

The CFPB is creating a “disclosure sandbox” as its most recent step to encourage fintech innovation. Many are expecting the bureau to tackle the flawed no-action letter policy next. The CFPB recently published a revised policy for its trial disclosure program in the Federal Register. The new policy would streamline the application process, establish procedures for extending successful trial disclosure programs, and allow the CFPB to coordinate with sandbox ...

Inside Mortgage Trends

Correspondents Rebounded Slightly in Jumbo Production During 2Q18

Correspondent-based mortgage production operations lost some ground in the conventional-conforming market during the second quarter of 2018 but made up some of it in an unlikely sector: jumbo originations. Jumbo production by correspondent lenders increased by a huge 63.7 percent from the first to the second quarter of 2018, according to a new Inside Mortgage Trends analysis. The data come from Inside Mortgage Finance surveys from lenders ... [Includes two data charts]

Inside The GSEs

Purchase-Mortgage Business Up Again, Plus Unlikely Refi Jump

Single-family mortgage business at Fannie Mae and Freddie Mac grew substantially from July to August, according to an Inside The GSEs analysis of mortgage-backed securities data. The two firms issued $79.34 billion of single-family MBS last month, a 20.5 percent increase from July’s volume. That brought year-to-date volume to $523.40 billion, down 6.1 percent from the first eight months of 2017. [Includes two data charts.]

Poll

Who "owns" the mortgage customer that’s brought to a wholesale lender through a loan broker?

The broker. It’s his/her client.
The wholesale/table funder. They’re taking the financial risk.
The broker, but only for the first year. After that, the borrower is fair game.
Hard to answer. It’s a complicated issue.

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