Lenders are likely to shift some of their business away from the government-sponsored enterprises and into the non-agency market in the coming years, regardless of GSE reform efforts, according to a report released this week by the Congressional Budget Office. “With house prices expected to trend upward, the balance sheets of lenders and investors should improve, as should borrowers’ financial positions,” the nonpartisan provider of analysis for Congress said. “Consequently, CBO projects that private companies will become more willing to make new loans and demand lower fees to compensate for the credit risks they take, which will reduce Fannie Mae and Freddie Mac’s pricing advantage over their private competitors.” If the private sector bears more mortgage credit risk, the CBO said...
The nation’s subservicers, as a whole, reported a modest decline in their business volume during the third quarter, though some firms experienced large declines compared to a year ago, according to exclusive survey figures from Inside Mortgage Finance. The biggest year-over-year decline came at Bank of America, which had just $5 billion in subservicing contracts at Sept. 30, a 78.3 percent drop compared to the same period last year. BofA’s decline in the subservicing sector is...[Includes one data chart]
Home-equity lending continued to grow during the third quarter of 2014 – in fact, it was the fastest-growing segment of the mortgage market – but depository institutions reported further declines in the unpaid balances of these assets on their balance sheets. Lenders funded an estimated $20 billion of new home-equity lines of credit during the third quarter, up 17.6 percent from the previous three-month period. That compared to a 9.8 percent increase in total mortgage originations during the period, and it was the best quarterly HEL production figure in five years, according to Inside Mortgage Finance estimates. Still, the supply of home-equity loans outstanding fell...[Includes three data charts]
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