When the going gets tough in the mortgage lending business, the tough starting laying off loan officers, underwriters, processors, and any others whose jobs are tied to the origination function. As Inside Mortgage Finance went to press this week, there were growing fears in the industry that declining applications – driven by a weakening market for refinancings – were finally taking their toll with several firms contemplating cutting production staff or already handing out pink slips. Industry executives said...
Freddie Mac’s recently announced low-activity fee for seller/servicers not meeting new quotas for loan deliveries and mortgage servicing would limit the ability of community banks to provide mortgages to their customers and should be repealed before the policy takes effect next year, according to two industry trade groups. Last week, the Independent Community Bankers of America dispatched a letter to the government-sponsored enterprise and its conservator, the Federal Housing Finance Agency, stating that Freddie’s assessment of a $7,500 annual fee to lenders who fail to deliver mortgage loans with an aggregate principal balance of more than $5 million or who service mortgages for the GSE with an aggregate balance of at least $25 million “goes too far.” The trade group complained...
The amount of home-equity loans held by depository institutions continued to decline in early 2013, with little sign that banks, thrifts and credit unions are likely to ramp up their lending in the near future, according to a new Inside Mortgage Finance analysis and ranking. Banks, thrifts and credit unions held some $706.95 billion of home-equity lines of credit and closed-end second mortgages on their books as of the end of March, down 2.8 percent from the previous quarter. Including their $474.09 billion in unused HELOC commitments, depository institutions reported a total home-equity business portfolio of $1.181 trillion, down 7.8 percent from the first quarter of 2012. The unpaid balance of closed-end seconds was...[Includes three data charts]
At least two mid-sized nonbanks on track to fund up to $10 billion in mortgages this year are on the auction block and could get sold in the months ahead. That is, if their owners don’t get too greedy. With interest rates continuing to head north and loan application volumes weakening, the dynamics in the mergers and acquisitions market may be shifting. Over the past two years, lenders have been posting the best profit margins ever, which in turn has caused them to increase their asking price, that is, should they entertain the thought of selling. In general, nonbank lenders that are...
The federal government seized control of Fannie Mae and Freddie Mac by extra-legal means during the 2008 financial crisis and then went out of its way to curtail the two government-sponsored enterprises’ profits while unjustly denying GSE shareholders just compensation for their deliberately devalued holdings, according to a lawsuit filed this week. The suit filed by GSE shareholders in the U.S. Court of Federal Claims in Washington, DC, asserts the takeover of Fannie and Freddie by the Federal Housing Finance Agency was “unlawful and unwarranted” and an unconstitutional violation of due process which cost investors billions of dollars. “Even if a statutory basis existed...
Mortgage lenders are increasingly anxious that they may be blindsided by fair lending claims based on the disparate impact theory as they try to keep their business within the safe harbor for qualified mortgages under the new ability-to-repay rule. “My concern is about who’s going to do a QM and who’s going to do [non-QM] ability-to-repay, and how can we somehow get a disparate impact out of this?” said Charles Lewis, vice president of compliance services at the Missouri Bankers Association. Speaking at the American Bankers Association’s regulatory compliance conference in Chicago early this week, Lewis urged...
CFPB officials claim that lenders will originate non-qualified mortgages, though industry participants have been skeptical due to the liability involved with such loans. Raj Date, the former deputy director of the CFPB, detailed how his new firm will originate non-QMs.
The Federal Housing Finance Agency is holding a two-day, closed-door working group Thursday and Friday with force-placed insurance stakeholders following the FHFA’s recent actions to shutter an insurance proposal by Fannie Mae and its policy proposal to develop a set of force-placed aligned standards.
Speaking at a trade show gathering, the ABA's Chris Lewis urged bankers to educate upper management as well as front-line loan officers about the finer nuances of the Consumer Financial Protection Bureau’s ATR rule.
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