New research from FICO suggests that broader economic conditions have helped limit losses on home-equity lines of credit originated before the financial crisis. For years, analysts have warned about the risks posed by HELOCs after the loans hit 10-year reset periods, prompting payment shock for some borrowers as principal and interest is due as opposed to the interest-only payments that were initially allowed. The risk to banks is seen as particularly harsh because ...

Ongoing economic conditions and increasing regulatory scrutiny are creating challenges and opportunities for different players and segments, industry observers say, with the most successful opportunists likely able to snag greater market share while others get gobbled up by larger or stronger rivals. The current market environment of increased regulation is putting significant pressure on the largest banks and has created a growing opportunity for mainstream mortgage bankers ...

The start of fall marked a reversal of trends in the housing market, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In September, investors gained market share from current homeowners and first-time homebuyers, and the distressed property share of home sales increased. The gains in market share were part of a seasonal pattern. And while the trends aren’t necessarily positive for mortgage-industry participants ...

Purchase mortgages accounted for 60.2 percent of originations in 2014, but California remained a hotbed of refinance activity, according to a new Inside Mortgage Trends analysis of Home Mortgage Disclosure Act data for last year. Some 52.8 percent of mortgage originations in the Golden State last year were refi loans, the highest such concentration anywhere in the U.S. House prices and loan amounts are significantly higher in many California markets ... [Includes one data chart]

If the current pace of multifamily business continues, the GSEs will likely exceed their regulator-mandated cap on multifamily support in the aggregate, with Fannie Mae already topping its cap and Freddie Mac lagging a bit.Fannie already exceeded its scorecard cap for 2015, with three months of the year yet to go. For the first three months of 2015, Fannie issued $32.2 billion in multifamily mortgage-backed securities.In the third quarter, Fannie issued $7.3 billion of multifamily MBS backed by new acquisitions, mostly through its Delegated Underwriting and Servicing program. The GSE also resecuritized $1.9 billion of DUS MBS through its Guaranteed Multifamily Structures program during the period ending Sept. 30, 2015. This issuance volume included two Fannie...

As anticipated, the Federal Housing Finance Agency announced that it decided to finalize plans to use its existing “expanded data” House Price Index for tracking home prices for setting Fannie Mae’s and Freddie Mac’s maximum conforming loan limits. During the comment period, industry participants largely supported the plan but questioned the extent to which conforming loan limits should be adjusted. The FHFA said it will release the maximum conforming loan limits for 2016 using the expanded-data HPI at the end of November. The most recent FHFA House Price Index was released late this week and reported a 0.3 percent increase in U.S. house prices in August from July. Year-over-year, house prices were up 5.5 percent.

Mario Ugoletti, economist and senior advisor at the Federal Housing Finance Agency, and the subject of the ongoing Fairholme Funds v. The United States case, retired from the agency effective Sept. 30.Ugoletti was a senior official with the Department of Treasury during the government bailout of the GSEs and was special advisor to FHFA Director Mel Watt. Among other things, he helped draft the now-controversial “Senior Preferred Stock Purchase Agreement” whereby Treasury is allowed to “sweep” almost all of the quarterly profits of Fannie Mae and Freddie Mac. The PSPA has been challenged in court by investors that are speculating in the common and preferred stock of the two GSEs. In a sworn statement filed in DC federal court last

New Actual-Loss Risk Transfers for Fannie, Freddie. This week, Fannie Mae announced that it priced its latest credit risk-sharing transaction under its Connecticut Avenue Securities series. While this is Fannie’s 9th CAS deal, this is its first CAS transaction structured using an actual-loss framework, which will be the standard for the CAS program going forward. The $1.45 billion note offering is scheduled to settle on Oct. 27. Meanwhile, Freddie Mac also announced its intention to sell its seventh Structured Agency Credit Risk debt notes offering this year for more than $1 billion. This STACR Series 2015-DNA3 offering is the company’s fourth transaction where losses will be allocated based on the actual losses. FHFA, GSE Departures. The most recent Fannie Mae executive...

Finally, the jumbo MBS drought is over, or will be by the end of next week.