Securitization experts are expecting a rerun of last year in 2012, as the U.S. economy slowly rights itself and most segments of the asset-backed securities market generate reasonable new issuance and stable performance. While observers suggest the housing market may make only modest improvement this year, no one expects much non-agency mortgage activity. Growth in issuance of non-agency mortgage-backed securities is going to be very slow, said Ron Mass, co-head of structured products at Western Asset Management Co. Because the market is underwriting the mortgage borrower, and no longer relying...

If there was any question about what was driving the housing market in 2011, some year-end housing numbers have provided two clear answers: investors and distressed properties. The combination of investors buying up large amounts of distressed properties not only put downward pressure on home prices, but also cut into the home-purchase mortgage business by generating a significant number of cash sales. These are some of the major conclusions that can be drawn from a look at 2011 results from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Last year’s housing...(Includes one data chart)

In what may be a harbinger for other nonbank mortgage lenders fighting to make their way in a tough and competitive market, Primary Residential Mortgage, Inc. has launched an enterprise risk management (ERM) group, a step taken to make sure the company has in place the risk-monitoring and evaluation policies to properly manage risk through the entire loan origination process. “Over the last couple years, the mortgage industry has been under intense scrutiny,” said Dave Zitting, president and CEO of PRMI, a nationwide mortgage banking company based in Salt Lake City. “While the larger banks all have...

Government oversight of mortgage lending has dramatically increased in the last two years, and the current trajectory established by the Dodd-Frank Act suggests things are going to get a lot worse before they’re going to get any better. The Dodd-Frank Act will generate a heavy load of new regulations for the industry to implement, and the process is not yet halfway done, said Rod Alba, senior regulatory counsel at the American Bankers Association, during an Inside Mortgage Finance Publications webinar this week. “We are in the midst of at least 24 months’ worth of overheated regulatory pronouncements,”...

Mortgage brokers have seen their role in the home loan market significantly diminished in recent years, but they staged a minor comeback in the fourth quarter, according to a new analysis of Fannie Mae and Freddie Mac data by Inside Mortgage Trends. Mortgage brokers originated 12.1 percent of the single-family loans securitized by the two government-sponsored enterprises during the fourth quarter. That was up from 9.8 percent during the previous quarter. It was the strongest broker share of GSE business over the past two years. The surge in broker share paralleled a...(Includes two data charts)

The fixed-rate mortgage accounts for nine of every 10 loans originated, and it’s easy to see why. Locking into historically low rates makes a lot of financial sense. So who is choosing to buy volatility instead? Who are the 10 percent who still borrow adjustable-rate mortgages? “For some consumers, it’s a better product,” said Frank Nothaft, chief economist at Freddie Mac. “If, for some reason, you know you’ll be leaving your home soon, a 5/1 hybrid ARM is a very fitting instrument. Choosing an ARM could be a matter of timing.” The hybrid ARM is the most common adjustable-rate product...

Radian Guaranty has integrated with LoanSifter, a mortgage technology provider, to bring its mortgage insurance products and pricing “in front of loan officers.” The partnership is the first of its kind for Radian, allowing the company to be competitive at the point of sale rather than wait for customers to come and access its website for product and pricing data. Used by many loan officers, LoanSifter is a loan eligibility and pricing engine and automated underwriting system that collects and maintains pricing and underwriting guidelines from hundreds of investors. Pricing data and guidelines may be from any...

More than 40 percent of mortgage industry quality control problems occur because of missing documentation and questionable data integrity. According to Interthinx, a risk mitigation solutions company, 40.9 percent of issues that plague quality control were related to missing docs and data integrity in 2011. This is a stark departure from years past. Missing documentation, for instance, accounted for only 7.1 percent of problems from 2006 to 2009. During those years, eligibility and credit issues were more of an industry scourge. In 2011, tougher underwriting standards have brought that...

Originations of 1-4 family residential mortgages rose by a substantial 19.4 percent at the end of last year, but 2011 still ranked as the worst year for new production activity since year 2000. Mortgage lenders produced an estimated $1.35 trillion of home loans last year, down 17.2 percent from the total in 2010, according to Inside Mortgage Finance. Production hit a low spot during the second quarter, when just $280.0 billion in new mortgages were originated – the weakest quarter since financial markets seized up at the end of 2008. New record lows in mortgage interest...(Includes two data charts)

President Obama used his State of the Union address this week to announce a new federal-state law enforcement project aimed at mortgage origination and securitization practices and to propose a broad federal refinance program for performing underwater non-agency mortgages that would be funded with fees imposed on banks. Most observers say the refi proposal stands little chance in Congress and is mostly a campaign tool aimed at banks and the track record of Republican lawmakers. “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a...