PHH Corp. this week scored a key legal victory in its battle with the Consumer Financial Protection Bureau over captive reinsurance and the Real Estate Settlement Procedures Act. But despite this good news, there are still clouds over the nonbank. The “worst” of the recent spate of bad news for the company surrounds the early October disclosure that Merrill Lynch is breaking all ties to PHH when it comes to private-label originations and servicing. The effective date for the end of the contract is...

Private mortgage insurers are quietly gaining ground on their government-insured rivals in the critical home-purchase market, according to a new Inside Mortgage Trends analysis of agency mortgage-backed securities data. Fannie Mae and Freddie Mac securitized $61.47 billion of purchase mortgages with private MI coverage during the third quarter, a gain of 33.4 percent from the previous period. At the same time, Ginnie Mae securitized $79.91 billion of FHA and VA purchase mortgages, up 19.3 percent from the second quarter. The private MI share of agency purchase loans rose...[Includes two data tables]

Bank pricing strategies are more about responding to new product regulations, fee income and capital and liquidity standards rather than to their consumers’ view of value, according to a new Deloitte report on retail-bank pricing. The report, which attempts to make the case for value-based pricing, contends that bank pricing tactics focus primarily on costs and risks rather than on how consumers perceive and receive value. It’s...

Trends in the agency mortgage-backed securities market suggest that private mortgage insurers may have gained some market share from government MI programs during the third quarter of 2016, according to a new Inside Mortgage Finance analysis. Fannie Mae and Freddie Mac securitized a total of $75.89 billion of insured single-family mortgages during the third quarter, an increase of 29.5 percent from the previous period. That was a tad below the 29.7 percent increase in overall MBS production by the two government-sponsored enterprises, but it kept the private MI share at 26.8 percent for the third quarter. Meanwhile, the booming Ginnie Mae market showed...[Includes two data tables]

The traditional interpretation of Section 8 of the Real Estate Settlement Procedures Act that the mortgage industry has relied on for decades was vindicated this week when a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit sided with most of the arguments advanced by PHH Mortgage in its dispute with the Consumer Financial Protection Bureau. The crux of the dispute has been the bureau’s assertion that PHH violated RESPA by steering business to private mortgage insurers that purchased reinsurance from a captive insurer owned by PHH. Most large lenders and all private MIs engaged in these arrangements prior to the housing market collapse. Early on in the case, an administrative judge agreed...

Not only are commercial banks continuing to lose residential production market share, but it appears they are paying their retail loan officers less than nonbanks – a lot less. According to more than a dozen interviews conducted with executives and LOs at originating firms with different charters, some nonbanks are allowing for compensation plans that pay the originator upwards of 200 basis points. At banks, the best LO comp plan is 100 bps, Inside Mortgage Finance found. One bank mortgage manager, who spoke under the condition his name not be used, said...

Trade groups representing the mortgage industry wrote to the Consumer Financial Protection Bureau late last month to express their opposition to the agency’s proposal to incorporate a short survey into its consumer complaint closing process, which would replace the current “dispute” function. Under the CFPB’s proposal, which was published in the Aug. 1, 2016, Federal Register as a notice and request for comment rather than a formal proposed rule, consumers would have the option to provide feedback on a company’s response to and handling of their complaints via all channels including online, phone, fax and mail. Consumers would be able...

Recent data on the state of the FHA’s Mutual Mortgage Insurance Fund and program financials suggest that the annual audit will show solid improvement in the government’s 2016 fiscal year, which ended Sept. 30. But there are some huge variables that could have a major impact on the final results that won’t be known until the annual audit is released late next month. The MMIF ended...

Fannie Mae has significantly ramped up its nonperforming loan sales in 2016, while Freddie Mac is running slightly behind the pace it set in 2015. Fannie offered $4.69 billion of NPLs through the first nine months of this year, compared to $2.78 billion for all of 2015. The government-sponsored enterprise announced five more pools totaling $1.39 billion up for sale this week, moving the year-to-date total to $6.08 billion. The latest sale is...

Two FHA lenders in Utah have agreed to pay the federal government a total of $9.25 million to resolve allegations they violated the False Claims Act in connection with badly underwritten FHA-insured loans that later resulted in losses to the FHA insurance fund. Primary Residential Mortgage Inc. (PRMI) and SecurityNational Mortgage Co. became the latest statistics in the government’s effort to prosecute lenders whose practices result in losses to the FHA insurance fund. The two lenders have agreed separately to $5.0 million and $4.25 million settlements, respectively, without admitting to any fault or liability for the failed loans. In separate complaints, the Department of Justice accused...