It has been four years since fault lines in the subprime market sent tremors through the rest of the mortgage industry and three years since the global collapse of financial markets, but lender behavior today remains driven by fear. Originators ask themselves three questions in the current market, said William Rayburn, CEO at mortgage technology provider FNC, during a panel session at the ABS East conference sponsored last week by Information Management Network. Lenders want to know whether the application will close – it costs them money if it can’t – and whether they can sell the loan if it closes, he said. Just as important...

Consumers who shop for their mortgages online are increasingly of a higher overall credit quality, and their approach to shopping online is growing more sophisticated, according to a new benchmarking study by Mortgagebot LLC. And that raises the ante for mortgage lenders that want to compete in cyberspace, said officials at the Mequon, WI-based information technology provider. The three most significant take-aways for lenders from the new survey have to do with growing borrower sophistication (and the resultant increase in customer expectation), the lender rate of online technology adoption and what online mortgage lending experts call...

Overwhelmed by the tidal wave of foreclosures and under intense scrutiny by lawmakers and regulators, the mortgage industry and default servicers in particular are being challenged like never before to keep up with complex, ever-changing compliance rules and they are in dire need of a technology solution to keep up with the changes. Compliance technology vendors such as Irvine, CA-based DecisionReady are striving to keep up with the demands of their clients, who may not exactly know what they want but know they need a solution that keeps them connected and on top of the latest legal and procedural changes, according to...

Wells Fargo accounted for a whopping 26.1 percent of home mortgages originated during the third quarter, and when you throw in the production numbers for other kingpins in the industry it’s hard to see how small lenders survive. But beneath the gaudy market shares of the Wells Fargos and JPMorgan Chases of the world stand hundreds of small originators – mortgage brokers, community banks, credit unions and old-school independent mortgage bankers – that feed them a significant amount of business. The key to finding success under the shadow of the industry giants is developing a speciality, usually coupled with an obsession for...

A niche FHA mortgage insurance program could become a significant tool to help address the massive inventory of real estate owned, and soon-to-be REO, that continues to weigh on the housing market, some industry observers say. The FHA 203k program was designed to help borrowers who want to purchase a “fixer-upper” home. Started back in 1978, the program insures long-term loans that include both the purchase and rehabilitation of the property. But in 1996, the Department of Housing and Urban Development put a moratorium on issuing 203k loans to private investor-owners, citing instances of fraud and abuse and the inability to...

The Standard and Poor’s/Case-Shiller Home Price Indices for October saw “a modest glimmer of hope.” The indices, which track the price-path for single family homes in 20 national urban centers, saw a 0.2 percent increase from August for the 10- and 20-city composites. Home prices are still lower than they were at this time in 2010 in most cities, Detroit (2.7 percent) and Washington DC (0.3 percent) being the only two markets to post positive annual returns. However, according to David Blitzer, S&P’s chairman of the index committee, 16 of 20 cities and both composites saw their annual rates of change improve in...

Home mortgage production volume increased by 20.4 percent during the third quarter of 2011 as record-low mortgage interest rates sparked a new wave of refinancing activity. An estimated $325.0 billion in new residential mortgages were originated during the third quarter, according to a new Inside Mortgage Finance ranking and analysis. While that was up solidly from the previous three-month period, it still ranked as the second lowest quarter since the mortgage market collapsed at the end of 2008. Through the nine-month mark in 2011, total production for the year was still down 16.7 percent from...(Includes two data charts)

The Federal Housing Finance Agency this week announced a series of substantial and eagerly anticipated changes to the Home Affordable Refinance Program for borrowers with underwater Fannie Mae and Freddie Mac mortgages. Among the new HARP enhancements is the elimination of certain risk-based fees for borrowers who refinance into shorter-term mortgages and lower fees for other borrowers. Also removed is the current 125 percent loan-to-value ceiling for fixed rate mortgages backed by the government-sponsored enterprises. Furthermore, HARP 2.0 waives “certain” representation and warranties made by...

Although Obama administration officials said this week that principal reduction would play a large role in the multistate foreclosure settlement under negotiation, sources suggest that sorting out potential writedowns will be complex and that the settlement will focus on other issues. During a press conference on the revamped Home Affordable Refinance Program this week, Housing and Urban Development Secretary Shaun Donovan said principal reductions would be a big part of a settlement that was rumored to be close to completion. “The settlement negotiation is also going to be focused on significantly accelerating the...

U.S. Attorney General Eric Holder has been called upon to take the lead in investigating allegations that a number of the largest mortgage lenders in the country may have systematically charged illegal fees to military veterans who refinanced their homes. Sen. Jon Tester, D-MT, a member of the Senate Committee on Veterans’ Affairs, sent a letter to Holder recently requesting he get involved in a probe to determine the veracity of the accusations. Earlier this month, a complaint was unsealed in federal court in which two whistleblower types accused the lenders of charging refinance fees that are...