The inclusion of a deal agent or transaction manager in new non-agency mortgage-backed securities would significantly increase investors’ confidence in the sector, according to industry participants. Alessandro Pagani, a portfolio manager and head of securitized assets at Loomis Sayles, said a large number of institutional investors have pushed for a deal agent and the hope is that if non-agency MBS includes the feature, investors will buy into the deals ...

Add loan-originator compensation rules to the list of things hindering the origination of loans that fall outside the qualified-mortgage standard. Bob Magee, chief investment officer at Shellpoint Partners, said many loan officers and brokers are reluctant to work on non-QMs because the loans take more time to originate, often get rejected and yet tend to offer the same compensation as an agency mortgage. “If I have loan officers who are paid on a commission for ...

A quirk in the way the Consumer Financial Protection Bureau drafted standards for qualified mortgages has put non-agency lenders at a disadvantage, according to a former CFPB official that was heavily involved in drafting the ability-to-repay rule. At the recent ABS East conference, Peter Carroll, an executive vice president at Quicken Loans, reiterated calls for the CFPB to make adjustments to Appendix Q of the ATR rule. Appendix Q details documentation requirements ...

Sales of higher-priced mortgages – a proxy for nonprime loans – increased in 2014 compared with the previous year, according to an analysis by Inside Nonconforming Markets of data from the Home Mortgage Disclosure Act. Some $52.28 billion in higher-priced mortgages were sold in 2014, up 48.6 percent from the previous year. Sales to Ginnie Mae accounted for a large portion of the increase along with sales to other purchasers, including ... [Includes one data chart]

The planned $150 million non-agency mortgage-backed security from Angel Oak Mortgage Solutions and Nomura Securities might have been delayed due to issues involving representations and warranties, according to people familiar with the deal. The MBS was to be backed by nonprime non-qualified-mortgages and might be scrapped. Hudson City Savings Bank was hit with a consent order last week from the Consumer Financial Protection ... [Includes eight briefs]

Riding a wave of heavy purchase-mortgage activity, Ginnie Mae issuers produced a record $128.23 billion of single-family mortgage-backed securities during the third quarter of 2015, according to a new Inside FHA/VA Lending ranking and analysis. The third-quarter figure, which includes FHA home-equity conversion mortgage MBS, was up 6.5 percent from the second quarter of this year. The previous record was $125.68 billion, set back in the third quarter of 2009. Loan-level MBS data, which do not include HECMs and have truncated loan amounts, show hefty gains in purchase-mortgage activity that more than offset sharp declines in refinance business. The flow of FHA purchase mortgages jumped 37.7 percent from the second to the third quarter, and VA purchase mortgages were up 37.9 percent over the same period. Meanwhile, refinance volume fell ... [ 2 charts ]

Certain unidentified independent mortgage bankers are in talks with the Department of Housing and Urban Development over alleged False Claims Act violations, according to a top mortgage industry executive. Speaking recently on the Internet radio program “Lykken on Lending,” Dave Stevens, president of the Mortgage Bankers Association and a former FHA commissioner, said the lenders are quietly negotiating and have avoided media attention, so far. On air, Stevens said he and a “certain group of individuals had met with HUD Secretary Julian Castro” to discuss the FCA complaints. The MBA official said the use of the FCA – which allows for treble damages – represents an “extraordinary overreach” by the government that is threatening the overall FHA program. Stevens did not name the lenders are or say how many there are, but he did mention an ...

The Inspector General of the Department of Housing and Urban Development called for civil and administrative actions against loanDepot for allowing ineligible “gifts” on FHA-insured loans.Acting on a referral from HUD’s Quality Assurance Division, the IG focused on FHA loans originated by loanDepot that included downpayment assistance from the Golden State Finance Authority. A review of 75 loans endorsed from Oct. 1, 2013, to Jan. 31, 2015, determined that 62 loans involved gift funds that did not comply with FHA requirements. In addition, the privately held nonbank lender “inappropriately charged borrowers $25,700 in fees that were not customary or reasonable, as well as $46,510 in discount fees that did not represent the purpose of the fee,” the IG said. The IG blamed loanDepot’s overreliance on Golden State’s Platinum Downpayment Assistance Program as well as ...

The majority of higher-priced first-lien loans in 2014 were FHA-insured, according to the latest Home Mortgage Disclosure Act data. Approximately 45 percent of FHA-insured, first-lien purchase mortgages had annual percentage rates in excess of the reporting threshold, similar to the percentage in the latter half of 2013, the Federal Financial Institutions Examination Council noted. Higher-priced loans are those with APRs that exceed the average prime offer rate by at least 1.5 percentage points for first-lien loans and at least 3.5 percentage points for subordinate-lien loans. The data on the incidence of higher-priced lending show that about 8 percent of first-lien purchase loans originated in 2014 have APRs that exceed the loan-price reporting thresholds, up from about 5 percent in 2013, the FFIEC said. The higher APRs for FHA loans were due to a slight increase in ... [ 1 chart ]

VA loan servicers have until Nov. 1, 2015, to review and comment on the new VA Servicer Handbook and ensure compliance with the established policy and guidelines. The servicer handbook combines guidance issued via circulars and news flashes over the years. In addition, the agency has started hosting biweekly servicer calls to update VA servicers on policy changes and new developments, according to Andrew Trevayne, assistant director of loan management with the VA Home Loan Guaranty Program. VA-guaranteed loans are serviced through the VA Loan Electronic Reporting Interface (VALERI) system. The handbook also discusses roles and responsibilities for VA loan-administration staff and servicers. It does not change or supersede any regulation or law affecting the loan program. Servicers may submit comments on the updated handbook to ...