Over the past five years, lender captives paid $706 million in losses. Most of these captives were domiciled in the U.S. and sponsored by mortgage lenders, receiving $2.92 billion in ceded premiums.
Primary market originators and due diligence providers say the elusive market in private placement MBS deals has been gaining strength this year. “We’re seeing three to five private deals a month,” said Jeff Taylor, managing partner of Digital Risk, a New York-based risk management and due diligence firm. As for the underlying product, it’s across the board, he added. “It can be jumbo, nonperforming, and re-performing.” But the deals are also much smaller than the rapidly growing public MBS deals. Digital Risk, which conducts due diligence reviews on the underlying collateral, said...
Closing issues are the most significant concern that makes real estate agents reluctant to recommend lenders to buyers, according to a new survey by Campbell Surveys and Inside Mortgage Finance Publications. Real estate agents control or influence 45 percent of homebuyer decisions on lender choice, according to the survey. Insight from real estate agents could be key as the mortgage market shifts from a focus on refinances to an emphasis on purchase mortgages. Real estate agents prefer...
Consumer advocates are calling on the Obama administration to extend the Home Affordable Modification Program beyond the end of this year. While HAMP is far from meeting performance goals set by the administration, consumer advocates claim the program is favorable to proprietary loan modifications completed by servicers. “Extending the HAMP program for several years – or, at a minimum, for one year – would greatly assist the housing market in general and neighborhoods most affected by high foreclosure rates in particular by helping more homeowners avoid foreclosure,” 36 consumer groups, including the Center for Responsible Lending and the National Consumer Law Center, said in a recent letter to Jacob Lew, secretary of the Treasury Department. In January 2012, the Obama administration announced...
Industry groups are urging Congress and the FHA to consider incorporating risk-sharing into the agency’s business model while appearing leery of other proposals, such as risk-based pricing and reduced FHA coverage. Testifying at a hearing before the House Financial Services Subcommittee on Housing and Insurance, the Mortgage Bankers Association and the National Association of Realtors said that while they do not support risk-sharing between FHA and private mortgage insurers, it is an option that is worth exploring in the context of FHA reform. There was...
Fannie Mae’s plan to unload potentially billions of dollars’ worth of non-performing loans has been delayed and may even be scuttled, according to industry officials tracking the project. Fannie has been working on an NPL sale for close to a year, and has even hired an investment banker, Milestone Advisors LLC, to guide it through the auction process. Initially, it had hoped to offer a package of $250 million of delinquent home mortgages for sale to the highest bidder. Although the government-sponsored enterprise would not comment...
The FHA may need to draw $943 million from the U.S. Treasury to reserve for further unexpected losses in the Mutual Mortgage Insurance Fund, according to estimates in the Obama administration’s fiscal 2014 budget proposal released this week. That is a bit of good news, despite Congress’ continuing concern about the FHA. Last year, an independent actuarial audit found a projected $16.3 billion shortfall in the MMIF as of the end of fiscal 2012. The audit also revealed that capital reserves for unexpected losses had fallen to negative 1.44 percent. Technically, the FHA has...
There’s a growing interest on the part of new investors in buying residential mortgage servicing rights, but observers say a major impediment for the market is a lack of confidence that Fannie Mae and Freddie Mac will acknowledge their ownership rights. “It’s a problem,” said Tom Piercy, managing member of Interactive Mortgage Advisors, a servicing brokerage and advisory firm. “Fannie and Freddie could learn a thing or two from Ginnie.” The phrase “new investors” generally applies...
The four surviving private MIs that are still writing new business after the wreckage of the hous-ing market collapse last week agreed to pay a relatively modest $15.40 million to settle a longstanding dispute over their arrangements with captive reinsurance entities sponsored by lenders. The Consumer Financial Protection Bureau alleged that Genworth Financial, United Guaranty, Radian Guaranty and Mortgage Guaranty Insurance Corp. violated the Real Estate Settlement Proce-dures Act by paying illegal kickbacks – in the form of reinsurance premiums – to get business from mortgage lenders. “The payments made as supposed ‘reinsurance’ premiums did not correspond to a proportionate transfer of insurance risk between the parties,” said CFPB Director Richard Cordray. An Inside Mortgage Finance analysis of MI regulatory filings suggests...
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