Although linked to higher likelihood of defaults for first mortgages, piggyback second liens do not necessarily mean bad results for the associated primary loan. However, subsequent second liens have had mixed results over certain time periods. “The empirical results for subsequent second liens are much more nuanced and, in many ways, more interesting than the piggyback results,” concludes Andrew Leventis, principal economist at the Federal Housing Finance Agency ...
The labor participation rate in the United States continues to lag, especially for the youngest potential homebuyers. If it continues to drift downward, as a recent paper by the Federal Reserve Bank of Cleveland suggests, that could push the homeownership rate down to 62.5 percent, and result in an additional 20 percent to 25 percent decline in purchase-mortgage production, according to a recent review by analysts at Bank of America Merrill Lynch. “The conclusion we draw from the age breakouts of ...
Big banks have become much less reliant on principal-reduction loan modifications in the past year, according to an Inside Mortgage Trends analysis of data from the Office of the Comptroller of the Currency. The shift does not appear to be due to improvements in loan performance because delinquency rates were essentially unchanged. Some 5.0 percent of the nearly 70,000 loan modifications completed in the second quarter of 2014 by eight servicers tracked by the OCC included principal reduction ...
The mortgage industry is trying to make its way against demographic, economic and regulatory crosscurrents, with its future pretty much hanging in the balance, according to Mortgage Bankers Association Chairman-Elect Bill Cosgrove. Speaking to attendees of the MBA’s regulatory compliance conference in Washington, DC, early this week, Cosgrove raised some demographic issues that are troubling. “Today’s consumer is evolving in rapid fashion. The age of the first-time homebuyer ...
Fannie Mae and Freddie Mac securitized a total of $183.17 billion of single-family mortgages during the third quarter of 2014, continuing the improving momentum from the previous period, according to a new Inside The GSEs analysis. Combined mortgage-backed securities issuance for the two GSEs rose 29.1 percent from the second quarter, marking the second straight increase from the record-low levels set during the first three months of 2014. On a year-to-date basis, GSE volume was down 53.6 percent from the first nine months of 2013.
Mortgage lenders originated an estimated $17 billion in new home-equity loans during the second quarter of 2014, a 30.8 percent increase from the previous period, according to a new market analysis and ranking by Inside Mortgage Finance. But the volume of outstanding home-equity lines of credit and closed-end second mortgages held in portfolio by depository institutions – the biggest players in the HEL market – continued to dwindle. Banks, thrifts and credit unions reported a total of $540.4 billion of HELOCs on their books at the end of June, down 0.9 percent from March, along with a 1.5 percent drop in closed-end seconds. It continued...[Includes three data charts]
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