A new study published by the National Bureau of Economic Research suggests that strategic defaults on mortgages are much less common than previously believed. The researchers with the Federal Reserve and two universities suggest that their findings have significant implications for servicers’ loss-mitigation techniques. The researchers used expansive data from the University of Michigan’s Panel Study of Income Dynamics survey from 2009 through 2011 ...
New research from FICO suggests that broader economic conditions have helped limit losses on home-equity lines of credit originated before the financial crisis. For years, analysts have warned about the risks posed by HELOCs after the loans hit 10-year reset periods, prompting payment shock for some borrowers as principal and interest is due as opposed to the interest-only payments that were initially allowed. The risk to banks is seen as particularly harsh because ...
Ongoing economic conditions and increasing regulatory scrutiny are creating challenges and opportunities for different players and segments, industry observers say, with the most successful opportunists likely able to snag greater market share while others get gobbled up by larger or stronger rivals. The current market environment of increased regulation is putting significant pressure on the largest banks and has created a growing opportunity for mainstream mortgage bankers ...
The start of fall marked a reversal of trends in the housing market, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In September, investors gained market share from current homeowners and first-time homebuyers, and the distressed property share of home sales increased. The gains in market share were part of a seasonal pattern. And while the trends aren’t necessarily positive for mortgage-industry participants ...
Purchase mortgages accounted for 60.2 percent of originations in 2014, but California remained a hotbed of refinance activity, according to a new Inside Mortgage Trends analysis of Home Mortgage Disclosure Act data for last year. Some 52.8 percent of mortgage originations in the Golden State last year were refi loans, the highest such concentration anywhere in the U.S. House prices and loan amounts are significantly higher in many California markets ... [Includes one data chart]
New Actual-Loss Risk Transfers for Fannie, Freddie. This week, Fannie Mae announced that it priced its latest credit risk-sharing transaction under its Connecticut Avenue Securities series. While this is Fannie’s 9th CAS deal, this is its first CAS transaction structured using an actual-loss framework, which will be the standard for the CAS program going forward. The $1.45 billion note offering is scheduled to settle on Oct. 27. Meanwhile, Freddie Mac also announced its intention to sell its seventh Structured Agency Credit Risk debt notes offering this year for more than $1 billion. This STACR Series 2015-DNA3 offering is the company’s fourth transaction where losses will be allocated based on the actual losses. FHFA, GSE Departures. The most recent Fannie Mae executive...
Mortgage bankers have been obsessed with regulation for the past five years, with good reason. Yet there was a sense at this week’s annual convention of the Mortgage Bankers Association that the industry is ready to move on. The natural turning point is that the Consumer Financial Protection Bureau has wrapped up the major pieces of its rulemaking mandates from the Dodd-Frank Act. The new final rule on Home Mortgage Disclosure Act reporting was released late last week, and the widely-dreaded integrated-disclosure requirements went into effect early this month. The so-called TRID still doesn’t sit...
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