A growing number of market indicators suggest that the U.S. housing market has bottomed out and is on the way back and perhaps even beginning to drive economic activity. “Housing, once the Achilles’ heel of the U.S. economy, is starting to look like a source of strength in a recovery that has lost its vigor as well as still facing significant roadblocks,” said Celia Chen, senior director at Moody’s Analytics, in a new analysis. “That housing is now a bright spot speaks more about the weakness of the ...

The new representation and warranty framework for GSE loans announced last week by the Federal Housing Finance Agency will go far to providing a clearer picture of prospective putbacks on loans delivered to the GSEs starting next year but more is needed, analysts conclude. At the FHFA’s direction, Fannie Mae and Freddie Mac are implementing a new rep and warrant framework for all conventional loans funded, acquired, securitized or guaranteed on or after Jan. 1, 2013. The new framework places greater emphasis on quality control review processes to be applied when the loans are delivered to the GSEs earlier in the loan process and improves the clarity around repurchase requests, noted Fitch Ratings.

Homebuyers are increasingly using mortgages instead of cash to purchase homes, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The share of non-cash financing methods for home purchases has increased significantly in 2012 as borrowers take advantage of low interest rates. Overall, the share of non-cash financing for home purchases increased from 65.9 percent in January to 68.9 percent in August, based on the three-month moving average. The increased use of ...

Unreasonably tight mortgage lending standards, fueled by lenders’ and regulators’ extreme distaste for risk, are dampening home sales and some flexibility is needed to drive home sales and job creation, according to a new survey by the National Association of Realtors. The survey analyzed credit scores and loan performance for both conventional conforming and FHA-VA loans and suggested returning to reasonably safe and sound lending standards to give home sales a much-needed jolt. Existing home sales should ...

United Shore Financial Services in Birmingham, MI, is on course to a record-breaking $7 billion in residential mortgage originations in 2012, thanks to a robust wholesale lending operation and excellent relationships with mortgage brokers. Great customer service, a strong broker-support system, capable and efficient technology and strong management are the big factors for United Shore’s rapid growth, said Mat Ishbia, president of United Wholesale Mortgage, USFS’s wholesale arm. United Shore originates loans ...

Increasing regulatory pressures and ongoing buyback exposure and legal liability is prompting a number of warehouse banks and mortgage lenders to start using outside companies to vet some of their third-party service providers such as settlement agents. Sources say settlement agents are being charged fees to provide certain business information and undergo background checks and credential verifications to become approved; otherwise, they will not be able to close loans for these entities going forward ...

Servicers take lower losses and area home prices take less of a hit when real estate owned properties are quickly liquidated, according to new research by analysts at the Federal Reserve and Fannie Mae. “Our results suggest that the key to minimizing the costs of foreclosure is to minimize the time that properties spend in serious delinquency and in REO,” the authors said in “Foreclosure Externalities: Some New Evidence,” a working paper published this month by the National Bureau of Economic Research ...

Fannie Mae and Freddie Mac late last week announced another round of changes in the Home Affordable Refinance Program for underwater borrowers, including more liberal repurchase standards that some say may spur lenders to refinance other servicers’ loans. For HARP loans sold to the government-sponsored enterprises on or after Jan. 1, 2013, repurchase risk will be lowered if the borrower stays current in the loan for 12 months. Under a revised repurchase policy announced last week, representation and warranty risk will be eased for non-HARP loans that stay current for 36 months. Effectively immediately, the government-sponsored enterprises reduced...

Fannie Mae and Freddie Mac support the Consumer Financial Protection Bureau’s proposal to institute a higher “all in” annual percentage rate calculation that would incorporate additional fees and charges – one aspect of the larger proposed rule to combine and simplify the consumer mortgage disclosure under the Truth in Lending Act and the Real Estate Settlement Procedures Act. “Fannie Mae and Freddie Mac support the bureau’s proposal to expand the finance charge for several reasons,” the two government-sponsored enterprises said. “First, it will make comparison shopping easier for consumers by eliminating the lack of clarity that now leads creditors to treat identical fees differently.” Second, a more inclusive finance charge will eliminate...

Mortgage originations reported under the Home Mortgage Disclosure Act declined by 11.2 percent from 2010 to 2011, according to an Inside Mortgage Finance analysis of HMDA data released this week by federal regulators. A total of $1.399 trillion of purchase and refinance mortgage originations were reported under HMDA for last year, as well as $26.0 billion of home-improvement loans. The dollar volume of loan applications was down slightly more, falling 11.4 percent from 2010, and the loan denial rate drifted slightly lower, to 17.7 percent. African-Americans and Hispanic loan applicants continued to have higher loan rejection rates, although both groups followed the overall trend toward lower denial rates. The most common reason cited for rejecting a loan application was...[Includes one data chart]