Fannie Mae and Freddie Mac are watching with some concern the growing role of nonbank servicers, and their regulator is drafting new standards for these counterparties. “The shift from depository to non-depository servicers poses additional risks to us,” Fannie said in its third-quarter 10-Q filing. “Non-depository servicers may have a greater reliance on third-party sources of liquidity and may, in the event of significant increases in delinquent loan volumes, have less financial capacity to advance funds on our behalf or satisfy repurchase requests or compensatory fee obligations.” The fast growth of many of these nonbank servicers poses “increased operational risk, which could negatively impact their ability to effectively manage their servicing portfolios,” Fannie said. Nonbank servicers – especially “specialty” companies – are ...

The public comment period closed this week on a Federal Housing Finance Agency proposed rule that updates and clarifies the requirements for Federal Home Loan Bank capital stock and capital plans. The proposal is mostly a housekeeping change, shifting regulations from the old Federal Housing Finance Board rulebook to the FHFA. “The proposed rule would not make any substantive changes to these requirements, but would delete certain provisions that applied only to the one-time conversion of bank stock to the new capital structure,” the agency said. None of the FHLBanks commented on the proposal, which would align the rules better with long-standing practices for transactions in FHLBank stock. Most significantly, the proposed rule would add appropriate references to “former members” ...

SEL 2014-15. Dec. 8. Fannie announced expanded loan-to-value ratios for purchase and limited cash-out refinances. The GSE also updated its loan-level price adjustment matrix. The program requires use of Fannie’s Desktop Underwriter version 9.2, which will be implemented over the Dec. 13 weekend. It is available for both MyCommunityMortgage and standard business. For MCM, Fannie now allows borrower reserves to come from gifts. Bulletin 2014-22. Dec. 8. Freddie introduced the Home Possible Advantage product, which allows loan-to-value ratios up to 97 percent under the Home Possible program.The loans can be manually underwritten or processed through Freddie’s Loan Prospector. At least one borrower must get homeownership counseling. The program effective date is March 23, 2015. DU Spring 2015 Update. Dec. 5. ...

Commercial banks and thrifts reported a seventh consecutive quarterly decline in mortgage purchases and indemnifications during the third quarter but still hold hefty amounts in reserves against future buybacks, according to a new analysis by Inside Mortgage Trends. Banks and thrifts reported $998.8 million in mortgage repurchases and indemnifications during the third quarter, down 1.3 percent from the second. It was also the lowest quarterly repurchase figure reported since ...

Mortgage banking profitability declined in the third quarter despite an uptick in net income on servicing, according to the Mortgage Bankers Association’s latest performance report. Average firm pretax income declined by 9.6 percent, from $1.58 million in the second quarter to $1.43 million in the third, the MBA reported. The group’s quarterly report includes lenders of all types and sizes but has a significant number of smaller independent mortgage companies. Some 82.9 percent of lenders turned a profit ...

Executives at mortgage lending operations and other financial services providers are increasingly relying on the latest technology to get a better handle on consumer complaints filed with the Consumer Financial Protection Bureau, according to a recent survey by Aptean, an enterprise application software vendor based in Atlanta. “To minimize both costs and consumer friction, savvy financial institutions are leveraging technology to identify and manage the root cause of consumer complaints ...

Mortgage production likely will be flat in 2015, a prognosis that usually doesn’t warm the hearts of vendors that make their living off of originators. But don’t tell that to Ellie Mae, the publicly traded mortgage software provider whose Encompass platform has been growing steadily in recent years. In an interview with Inside Mortgage Trends, company President and Chief Operating Officer Jonathan Corr predicted that Ellie Mae’s revenues will grow by 25 percent next year, the same growth rate as ...

Commercial banks and thrifts reported slightly higher valuations on their mortgage servicing rights during the third quarter of 2014, but they continued to shed MSR, according to a new Inside Mortgage Trends analysis of call-report data. Banks serviced a total of $4.412 trillion of home mortgages for other investors, typically loans that have been pooled in mortgage-backed securities. That was down 1.0 percent from the second quarter and off 7.5 percent from the third quarter of 2013 ...

Private mortgage insurers ended the third quarter of 2014 on a strong note, increasing their combined volume of net premiums written to $1.05 billion, up 9.8 percent from the prior quarter and 2.8 percent over the first nine months compared to the same period a year ago, according to an Inside Mortgage Trends analysis of industry data. Based on the upward production trend over the last three quarters, it appears the private MIs are on their way to a strong close at year end ...

Downpayment requirements play a larger role than interest rates in whether a potential borrower can afford a mortgage, according to new research from staff at the Federal Reserve Bank of New York. Potential borrowers who are less wealthy are particularly sensitive to downpayment requirements. Andreas Fuster and Basit Zafar, senior economists at the NY Fed, designed a survey in which respondents are asked for their maximum willingness to pay for a home comparable to their current home ...