Aligning Fannie Mae’s and Freddie Mac’s underwriting standards and creating clear standards for representations and warranties is essential for a smooth transition to a sustainable secondary market operating with an explicit, limited government guaranty, according to the Mortgage Bankers Association. The MBA’s new concept paper – the fourth of a five-part plan – suggests the Federal Housing Finance Agency set parameters for acceptable underwriting criteria by both GSEs, then allow them to offer credit terms within a “clear outer boundary.” “If we are to have a fully functioning secondary market that provides sustainable access to credit for qualified borrowers, then the development of transparent and consistent credit underwriting standards are of the utmost importance,” said the MBA.

Banks and thrifts continued to push a high volume of home mortgages into the secondary market during the first three months of 2013, but the pace was slowing, according to a new Inside Mortgage Trends analysis of call report data. The industry reported $395.8 billion in single-family mortgage sales during the first quarter, down 5.1 percent from the previous period. It was a stronger sales volume than during the first quarter of 2012, however, and ranked as the fourth largest ... [Includes one data chart]

Although Freddie Mac and Fannie Mae are reviewing recently originated mortgages more closely than they have in the past, the bulk of the whopping $13.21 billion in mortgage repurchases reported by the two government-sponsored enterprises during the first quarter came from loans originated years ago. A new Inside Mortgage Trends analysis of repurchase activity reported by the two GSEs in Securities and Exchange Commission filings shows that 80.0 percent of the buybacks recorded in ... [Includes two data charts]

With the advent of the Consumer Financial Protection Bureau, consumer complaints have been elevated to an unprecedented level of prominence in the regulatory arena. “How many of you have had a regulatory exam that focused on complaints?” asked Lyn Farrell, managing director at Treliant Risk Advisors, at a discussion session during the recent American Bankers Association’s compliance conference in Chicago. Seeing a number of hands rise from the audience in response, she continued: “If not, you will.” ...

In late May, in the time span of about 10 days, Bexil American Mortgage of San Diego saw its founder and national sales manager depart – not a good sign for a relatively young company that has been originating loans for less than two years. About a week after the news broke about the two men, the parent company reported a $7.1 million loss for the year. John Robbins, the founder and CEO of Bexil American Mortgage, told Inside Mortgage Trends that, “When you have a major shareholder disagree with ...

Short sales have become one of the most widely used lender strategies to reduce losses from distressed residential properties. Ironically, they also have triggered a wave of fraudulent activity. DataQuick, a provider of property information, products and solutions to the mortgage industry, says there are automated strategies and solutions lenders, servicers and investors can use to thwart short-sale fraud. However, one needs to know where to start. Just how bad is short-sale fraud? According to the ...

Mortgage performance has been boosted in recent years by home price appreciation, even with a move toward less borrower-friendly loan modifications. Industry analysts expect that mortgage performance will continue to improve and loan modification activity will decline significantly. National average home prices in the first quarter of 2013 were up by 6.7 percent compared with the first quarter of 2012, according to the Federal Housing Finance Agency’s house price index. During that time ...

Things are looking up in the private mortgage insurance business as the market becomes more stable and the industry could turn a profit in the near future, according to a new analysis by Standard & Poor’s. Mortgage Guaranty Insurance Corp.’s and Radian Guaranty Inc.’s debt and equity increases in the first quarter, as well as the restructuring implemented by Genworth Mortgage Insurance Corp., have raised analysts’ hope and mitigated concerns about capital and the potential for any ...

The Supreme Court of the United States announced this week that it will hear a legal dispute that would determine whether the Fair Housing Act – and perhaps, by extension, the Equal Credit Opportunity Act – permit claims under the “disparate impact” theory of discrimination. “The threshold issue on appeal is whether plaintiffs may use disparate impact to allege a violation under the Fair Housing Act rather than proving liability by demonstrating an actual intent to discriminate,” explained attorneys with the Dykema Gossett law firm. In Township of Mount Holly, New Jersey v. Mt. Holly Gardens Citizens in Action, the plaintiff citizen group is challenging...

The amount of home mortgage debt outstanding continued its post-crisis downward spiral in the early months of 2013, although the agency servicing market grew slightly, according to a new analysis and ranking by Inside Mortgage Finance. The Federal Reserve reported total home mortgage debt outstanding of $9.868 trillion as of the end of March, down 0.6 percent from the previous quarter. Under pressure from falling house prices and the collapse of the non-agency market, the supply of MDO has been in steady decline since peaking at its all-time high of $11.195 trillion at the end of 2007. Single-family servicing associated...[Includes two data charts]