Piggyback mortgage financing structures appear to be creeping back into the market, a trend that some observers say could destabilize the industry. Before the financial crisis, many borrowers combined a first-lien mortgage for 80 percent of home value with a second lien of 10 percent or more in order to avoid paying private mortgage insurance. While many first-lien mortgages are still originated with a simultaneous second in recent years, the combined loan-to-value ratio of the two has been capped at 80 percent or less. “From what we’ve seen from lenders who are interested in expanding their customer base, there appears...

The volume of new mortgage originations for condominiums and co-operatives was up nicely at Fannie Mae, Freddie Mac and FHA during the second quarter, with particular strength among first-time homebuyers and purchase mortgages, a new analysis by Inside Mortgage Finance has found. The two government-sponsored enterprises securitized $20.69 billion of condo loans during the second quarter, a 27.4 percent increase from the first three months of the year. There was a slightly bigger gain in condo purchase-money loans (up 30.9 percent) than condo refi loans (up 24.1 percent). It was...[Includes one data table]

Nonbank mortgage lenders are starting to complain more loudly about the length of time it takes to get their loan officers approved to do business in New York state, quoting approval times that can take anywhere from 90 to 120 days – and that’s for an application with no “red flags.” A mortgage consultant who works closely with nonbanks estimated that some of his LO clients have waited as long as six months, including both new LOs and bank loan officers who are transferring to a nondepository. Requesting anonymity, he said...

M&T Bank is attempting to reach a settlement with the Department of Justice to resolve an investigation into the bank’s origination of FHA loans and sales of conventional-conforming mortgages to Fannie Mae and Freddie Mac. The bank disclosed the investigation in its quarterly filings with the Securities and Exchange Commission, noting similar ongoing investigations at other financial institutions. A bank spokesman declined to comment beyond what was disclosed in the SEC filing but noted that the government agencies are conducting one investigation. On the FHA side, DOJ and the Department of Housing and Urban Development’s Office of the Inspector General are investigating...

The delinquency rate on mortgages rose in the second quarter of 2015, according to the Inside Mortgage Finance Large Servicer Delinquency Index. Overall, delinquencies remained below levels seen a year ago, though the Mortgage Bankers Association said FHA performance has declined. The delinquency rate on the IMF index was 5.85 percent at the end of the second quarter, up from 5.75 percent the previous quarter and down from 6.74 percent at the midway point in 2014. The share of mortgages severely delinquent as well as those in foreclosure declined compared with the first quarter of 2015, while the share of new delinquencies and loans 90-days past due increased. FHA mortgages accounted...[Includes one data table]

In the second quarter of 2015, 66.4 percent of loans sold to the GSEs had credit scores of 740 or higher.

Ocwen faces the potential loss of non-agency MBS servicing on two fronts but so far investors are not pulling the trigger...

About three years ago, some investors – private equity firms and hedge funds in particular – started purchasing NPLs as a cheaper alternative to buying foreclosed homes.

A spokeswoman for Wells noted that loan volumes for closed-end seconds “was a small percentage of our business.”

If rates continue to head south it could result in large hedging losses and markdowns on mortgage servicing rights.