Close observers of the politics of housing finance generally expect the next director of the Federal Housing Finance Agency to steer Fannie Mae and Freddie Mac toward a smaller market presence without creating a huge disruption in the industry.
With the origination market expected to suffer the next two quarters – at least – some lenders are battening down the hatches, watching expenses, while others are pondering a serious move into non-qualified mortgages, something that wasn’t even on their radar screens two years ago.
The sale of mortgage servicing rights in the secondary market stayed red hot in the third quarter with a whopping $138.9 billion of agency product changing hands, but deal makers believe the market is in for a bit of a breather, at least for a little while.
All three of the banks that rank among the top five servicers in the residential mortgage market reported declines in their portfolios during the third quarter, according to a new Inside Mortgage Finance ranking and analysis. [Includes one data chart.]
With refinance volume declining, interest rates rising and home price appreciation cooling off, lenders are loosening underwriting standards. The trends could lead to higher delinquency rates than the pristine performance seen after the recovery from the financial crisis, but there’s not much to worry about at the moment, according to Moody’s Investors Service.
The Mortgage Bankers Association is pressing the Consumer Financial Protection Bureau to make reform of the loan-originator compensation rule a top priority.
Borrowers with adjustable-rate and reverse mortgages may benefit significantly from the phase-out of the London Interbank Offered Rate (LIBOR), according to new research by the Urban Institute. But the news is not so good for investors.
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