Quicken Loan attempt to have a governmen false-claim lawsuit against the lender moved from Washington, DC, to a federal court in Detroit will not necessarily secure a win, according to a mortgage industry attorney. “I think it was more the device Quicken needed in order to become the plaintiff instead of the defendant,” said one attorney who preferred to remain anonymous because his firm handles other legal matters for Quicken Loans. He said it does not matter whether the case is tried in Washington or Detroit but what matters is its actual substance. At the same time, there is no reason why those defenses could not be raised in a DC court, the attorney added. Last month, a federal judge in Detroit dismissed Quicken’s preemptive lawsuit against the Department of Housing and Urban Development and the Justice Department for failure to state a claim. Ultimately, the court ...

FHA lenders are uneasy over whether issues raised by the Consumer Financial Protection Bureau’s new integrated disclosure rules could affect FHA lending. Although the issues cited by lenders are not FHA issues per se, these lenders are concerned that such uncertainties may cause problems for their FHA business, according to mortgage industry consultant Brian Chappelle, a principal at Potomac Partners. For example if a lender cures a mistake and the cure results in a reimbursement of, say, $100 to the borrower at closing, would that be considered a violation of the Department of Housing and Urban Development’s minimum 3.5 percent cash-investment requirement for FHA loans. “I don’t think it is a violation, but lenders are worried about how HUD might interpret it,” said Chappelle. “It is well after closing and it is obviously not a gift given to the borrower. It is ...

Issuers of Ginnie Mae mortgage-backed securities pushed a record $435.80 billion of government-insured loans through the program during 2015, according to a new Inside FHA/VA Lending analysis and ranking. Last year’s total Ginnie MBS issuance topped the previous record of $429.50 billion issued during 2009. The $435.80 billion total for 2015 includes securitization of FHA home-equity conversion mortgages and other single-family loans guaranteed by FHA, the VA, and the Department of Agriculture rural housing program from Ginnie pool-level MBS data that are not truncated. Production in 2015 hit its high-water mark in the third quarter with $128.23 billion in issuance, and then fell 18.0 percent in the final three months of the year. Purchase mortgages continued to account for most Ginnie business in 2015, 58.0 percent of the agency’s forward-mortgage securitizations. But a huge factor in the ... [ Charts ]

The most active issuer of jumbo mortgage-backed securities in 2015, based on the number of deals sold, is set to issue the first jumbo MBS of the year. Two Harbors Investment is preparing a $304.75 million deal, according to presale reports. A presale report from Standard & Poor’s on the deal on Jan. 4 ended a span of 31 days without a presale report for a new jumbo MBS. Fitch Ratings published a presale report on the same deal the following day. The deal will mark the first ...

CORRECTION: A story in the Jan. 1, 2016, issue of Inside Nonconforming Markets regarding jumbo mortgage-backed security issuance as of the end of the fourth quarter of 2015 inadvertently omitted a $231.2 million jumbo MBS issued by Hatteras Financial in December. The online version of the story has been updated, including a revision to the companion data table. SoFi announced this week that it no longer considers credit scores ... [Includes four briefs]

Officials at the Federal Housing Finance Agency provided some advice to real estate investment trusts along with the announcement this week that REITs will lose their access to funding from Federal Home Loan Banks: ask Congress to make some changes. “Congress has amended the Federal Home Loan Bank Act in the past to allow additional entities to become members of a Federal Home Loan Bank and it can certainly do so again if it wants some of these entities to ...

Issuers of jumbo mortgage-backed securities stuck with plain vanilla mortgages in 2015, according to a new analysis by Inside Nonconforming Markets. Meanwhile, a wide variety of lenders contributed to jumbo MBS last year, with only one bank accounting for an outsized share of contributions. First Republic Bank was the top originator of jumbo mortgages that were securitized in 2015, accounting for nearly 20 percent of all jumbo MBS issuance ... [Includes two data charts]

The performance risks posed by a new breed of alternative-documentation mortgages are likely much lower than the mayhem caused by reduced-documentation mortgages originated before the financial crisis, according to Moody’s Investors Service. While most lenders verify the borrower’s income and assets used to qualify for mortgages, some non-agency lenders are willing to originate loans with less than full documentation. Lenders allowing for alt-doc underwriting typically ...

The Federal Housing Finance Agency published a final rule this week that will prevent real estate investment trusts from gaining access to financing from the Federal Home Loan Bank system via captive insurance companies. REITs are not allowed direct membership in an FHLBank. However, in recent years a number of REITs have formed captive insurance companies that were granted FHLBank membership because insurance companies were allowed to ...

The non-agency mortgage-backed security market could be revived this year by economic factors rather than efforts by Congress or industry participants, according to analysts. The non-agency share of mortgage originations has been relatively strong in recent years, but the loans were largely held in bank portfolios instead of included in non-agency MBS. Legislative reform of the government-sponsored enterprises and potential incentives for non-agency MBS issuance look ...