Despite the bad press and the elimination of the standard fixed-rate reverse mortgage product from the Home Equity Conversion Mortgage program, reverse mortgages will continue to thrive simply because people grow old, former Ginnie Mae chief Joe Murin told Inside FHA Lending.
Although mortgage profits reported for the fourth quarter, so far, have been strong, trouble may lie ahead for the sector with lower gain-on-sale margins and moderately contracting spreads, according to analysts at Keefe, Bruyette & Woods.
There is reason to believe the mortgage banking industry’s record level of profitability may have peaked, as gain-on-sale margins have already begun to slip and more dark clouds appear on the horizon. “Mortgage banks have enjoyed record high gain-on-sale margins over the past several quarters,” analysts at Compass Point Research and Trading noted in a recent market review. They attributed this trend mostly to two primary factors: limited capacity in the mortgage market to handle increased demand and ...
One after another, it appears that residential lenders are dipping their toes back into the correspondent lending channel, thanks in part to the fat profit margins tied to securitization and retaining the underlying servicing rights. Over the past few weeks, a handful of lenders announced their intention to either launch a correspondent lending division or jumbo conduit. Firms entering the correspondent space include Envoy Mortgage and Real Estate Mortgage Network. The conduit ... [Includes one data chart]
The government-sponsored enterprises’ share of purchase-mortgage originations has increased each of the last two years, according to a new analysis by Inside Mortgage Trends. The shift in market share includes decreased purchase-mortgage originations for the FHA and a lack of housing inventory, prompting increased home prices. Some $377.2 billion in agency purchase mortgages were originated in 2012, with a 66.5 percent share for Fannie Mae and Freddie Mac combined. In 2010, the GSEs ... [Includes one data chart]
The new ability-to-repay (ATR) rule and the “qualified mortgage” definition will result in more predictable, less costly servicing for prime QMs and increased complexity for subprime and non-QMs, according to an analysis by Deloitte Touche. The ATR rule defines an ability-to-repay standard for mortgages, including eight borrower characteristics to be considered in the lending decision. It also creates a QM definition that clarifies compliance with the ATR standard for loans with certain features and ...
The recent court ruling which called into question the legitimacy of certain recess appointments – including that of CFPB director Richard Cordray – also means the agency may not have any regulatory oversight over nonbanks.
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