A decline in refinance activity has prompted a number of lenders to turn to correspondent producers in an effort to boost originations. While correspondent lenders could anticipate better pricing due to the demand for their originations, firms buying the production concede that it’s not the most profitable origination channel, suggesting that pricing might not improve much. Big banks continue to dominate the correspondent channel while reducing ...

Mortgage servicing rights will never trade as freely as mortgage-backed securities, but agency officials say they are considering ways to facilitate the increasingly active MSR market. “The market is undergoing tremendous changes with great opportunities in mortgage servicing,” said Bob Ryan, a special advisor at the Federal Housing Finance Agency, during last week’s Secondary Market Conference sponsored by the Mortgage Bankers Association. “It has attracted ...

The mortgage market’s shift from a focus on refinances to purchase mortgages won’t be enough to prompt an increase in purchase-mortgage originations in 2014, according to industry economists. The Mortgage Bankers Association revised its origination projections last week, predicting that purchase-mortgage originations will decline by 4.0 percent in 2014 compared with the previous year. An estimated $680 billion in purchase mortgages ... [Includes one data chart]

Reset issues in the government’s Home Affordable Modification Program will begin to surface in 2016 and worsen in later years, but the impact will be less severe than predicted, according to a new commentary by the Urban Institute. Analysts with the institute’s Housing Finance Policy Center said HAMP resets will be a challenge for many borrowers, particularly those who received the steepest interest rate reduction. “However, we are likely years away from ...

Mortgage credit tightened slightly in April, according to the latest Mortgage Credit Availability Index from the Mortgage Bankers Association, a measure which analyzes underwriting trends in data from the AllRegs Market Clarity product. The index slipped from 114.0 in March to 113.8 in April, after increasing for each of the first three months of the year. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening ...

With housing finance reform legislation effectively stalled just short of a Senate floor vote, the industry is beginning to shift its expectant gaze to the Federal Housing Finance Agency to take the initiative as the debate moves toward GSE preservation. Although the reform bill, S. 1217, by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, cleared the Senate Banking, Housing and Urban Affairs Committee earlier this month, its less than impressive 13-9 vote margin all but ensures that Senate leadership will ignore the measure’s bid for a floor vote through the remainder of the 113th Congress.

Expect it to take years for the courts to resolve lawsuits filed by private investors in Fannie Mae and Freddie Mac stock, with the odds heavily stacked in the government’s favor, note industry observers. Speaking during a recent Bloomberg Industries webinar on Fannie Mae and Freddie Mac litigation, Brooklyn Law School Professor David Reiss noted it could take the courts up to a year simply to resolve the introductory motions.

Over roughly two years, Fannie Mae and Freddie Mac have spent about $65 million on the common securitization platform project, but without employing a timeline on the massive undertaking or a total cost estimate, according to a new report from the Inspector General of the Federal Housing Finance Agency. In its report, released last week, the IG notes that the regulator/conservator of the GSEs has yet to fully employ these “two basic project management tools,” which it deems critical to the project’s success.Although some progress has been made in developing the CSP, the project faces “considerable challenges that could undermine the project.”

Mortgage lenders will benefit from a reduced risk of loan repurchase owing to the easing of borrower performance standards mandated earlier this month by the Federal Housing Finance Agency, according to a report from Fitch Ratings. Fannie Mae and Freddie Mac, at the direction of their conservator, announced a narrow adjustment in how loans with minor payment problems can still qualify for buyback relief if they are current 36 months after origination. The new framework also provides buyback protection for mortgages that come clean in the GSEs’ quality control checks and an alternative to automatic repurchase of loans when private mortgage insurance is canceled.

Fannie Mae last week priced its second credit risk-sharing deal of 2014, the first to be backed by higher loan-to-value mortgages. The $1.6 billion note is the GSE’s third and largest transaction under its Connecticut Avenue Securities series since the Federal Housing Finance Agency ordered both Fannie and Freddie Mac to shrink the GSEs’ role in the U.S. housing market last year. In its latest offering – Series 2014-C02 – Fannie included reference loans with original LTV ratios of up to 97 percent. Previous C-deal offerings included reference loans with up to 80 percent original LTV ratios.