The volume of cash-out refinance in the second quarter reached its highest level in five years as more borrowers take advantage of rising home values, according to Black Knight Financial Services. Cash-out refinance volumes in the second quarter of 2015 rose close to 70 percent from the same period last year, said Ben Graboske, a Black Knight senior vice president. Today’s levels are comparable to those in 2006, with borrowers now taking out an average of ...

As the Federal Housing Finance Agency continues to take issue with Property Assessed Clean Energy loans, the program is growing and rating service DBRS said many of FHFA’s concerns about risks can be addressed with proper program design. Earlier this year, FHFA Director Mel Watt said that although the agency is not opposed to energy retrofit programs, they must be structured to ensure protection of the core financing for the home. The issue at stake is that residential PACE assessments threaten to move existing Fannie Mae and Freddie Mac mortgages to a second -lien position, said the FHFA. In the event of a default, PACE assessments would be repaid before...

The Inspector General of the Federal Housing Finance Agency has accused the FHFA of being too lax when it comes to overseeing the budget of Fannie Mae and Freddie Mac and in many instances waiting until the start of the GSEs’ fiscal year to even approve the budget. Inundated with cursory-level analysis and inadequate resources, the IG noted that the FHFA’s budget review and approval process for Fannie and Freddie is seriously flawed. The recently released review was completed in June 2015 and the FHFA for the most part agreed with the IG report and revamped its budget-review process a month later in July 2015. The IG noted that the GSEs often submitted proposed annual operating budgets after...

In the years after the financial crisis, returns on mortgage-banking activities have been more profitable for smaller banks than for large banks, according to researchers at the Federal Reserve. In an analysis of about 1,000 banks, William Bassett, a deputy associate director, and John Driscoll, a senior economist, found that returns on mortgage sales and securitization have been higher for community banks than for larger banks. Community banks also had higher returns on ...

A slightly larger percentage of mortgage loan applications were turned down by lenders in 2014 than in 2013, according to Home Mortgage Disclosure Act data. The reason may be linked to the early 2014 effective date for the ability-to-repay rule and the qualified mortgage standard. The two most common reasons for loan denial have historically been poor credit history and excessive debt-to-income ratio. Both became more prevalent in 2014 ... [Includes one data chart]

As Fannie Mae and Freddie Mac continue to unload distressed home loans, Sen. Elizabeth Warren, D-MA, along with Rep. Michael Capuano, D-MA, led a protest last week urging the GSEs and the Department of Housing and Urban Development to not keep selling the loans primarily to private-equity firms and hedge funds. They want to level the playing field so that nonprofit groups have a chance at the loans. Inside Mortgage Finance reported in 2013 that its sources noted that some buyers are turning to the nonperforming loan market as a “back door” way to buy homes. Capuano cited a recent New York Times article about private-equity firms buying troubled home mortgages and said the piece “highlights the troubling approach being taken by...

Freddie Prices Two Multifamily MBS. This week Freddie Mac priced an offering of Structured Pass-Through Certificates backed exclusively by fixed-rate multifamily mortgages with seven- and 10-year terms on seniors housing properties. The company offered approximately $841 million in K Certificates. This is Freddie Mac's third K Certificate offering backed exclusively by seniors housing collateral. Also, this week Freddie announced the pricing of the SB4 offering, a multifamily mortgage-backed securitization backed by small-balance loans underwritten by the GSE and issued by a third-party trust. The company expects to guarantee more than $172 million in SB4 Certificates. Former Fannie Attorney Joins Law Firm. Christopher Bell, a real estate attorney whose experience includes more than...

Although overall MBS volume was down, lenders delivered a healthy $115.16 billion of purchase-money mortgages to the GSEs during the third quarter.

Although the TRID bill passed by a huge margin and with bi-partisan support, President Obama is threatening a veto.

“The issues that have impeded the regulators’ ability to conduct electronic examinations must be rectified, and when resolved, will enable a more efficient and timely regulatory process,” said Karyn Tierney, chair of the MMC.