Originations of adjustable-rate mortgages increased by 25.0 percent on a quarterly basis in the second quarter of 2018, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $55.0 billion of ARMs were originated in the second quarter. The increase looks to be tied to seasonal factors and trends in interest rates. Through the first half of 2018, an estimated $99.0 billion of ARMs were originated, down 2.0 percent from ... [Includes one data chart]
New Penn Financial launched a non-agency product for condominiums last week. The SmartCondo offering allows for two non-warrantable features, which are characteristics that exclude the loans from being delivered to Fannie Mae or Freddie Mac. For example, New Penn will allow a higher portion of commercial space, reduced pre-sale requirements and increased flexibility for single-entity ownership, among other features. The mortgages are available for ... [Includes one brief]
Correspondent lenders and mortgage brokers continue to account for an unusually large share of FHA and VA lending, according to a new analysis by Inside FHA/VA Lending. During the first six months of 2018, correspondent-lending programs accounted for 53.3 percent of government-insured mortgage production, according to survey data reported by a broad cross-section of the market. At the same time, correspondent production accounted for 46.4 percent of conventional-conforming lending and a mere 16.1 percent of the non-agency jumbo market. The heavy reliance on agency securitization in both the conventional and government-insured sectors helps explain the higher levels of correspondent production. For many smaller shops, it is more economical to sell production to aggregators than pay the overhead costs of dealing directly with the agencies. In the government-insured sector, some banks are ... [Chart]
Originations of government-insured mortgages rose 11.2 percent from the first to the second quarter of 2018, according to Inside Mortgage Finance estimates. That increase was slightly lower than the 17.1 percent gain in total first-lien originations over that period. The big winner for the second quarter was the jumbo sector, where loan volume surged 33.5 percent from the first three months of the year. On a year-to-date basis, government lending was down 12.6 percent from the first half of 2017. This reflects the steep decline in refinance lending in general, which affected FHA/VA production significantly. Jumbo lending was also down, by 6.6 percent, from the first six months of last year, but the conventional-conforming market saw a 4.2 percent gain at the midway point in 2018. FHA/VA loans accounted for 22.8 percent of first-lien originations in the first half of 2018. The government share for all of last year was ... [Chart]
It looks like the Department of Housing and Urban Development will not be able meet its September target date for rolling out its long-awaited FHA condominium reform rule. Such is the consensus among stakeholders whose hopes were raised when HUD Secretary Ben Carson told the House Financial Services Committee in June that he would be issuing the rule this month. “HUD and the Office of Information and Regulatory Affairs (within the Office of Management and Budget) want to release the rules with the updated Single Family Handbook and they are still working on that,” said a real estate industry executive. He added that despite what Carson said at the committee hearing, “September is not likely for a release.” As of press time, the final condo reform rule had not yet been delivered for OMB review, a process that in the past has taken months to complete. In contrast, it took about a ...
The delinquency rates on the approximately 7.9 million FHA loans outstanding fell by 20.7 basis points in August from the previous month, according to an Inside FHA/VA Lending analysis of FHA data. About 11.24 percent of FHA loans were in various stages of delinquency at the end of August. An estimated 4.73 percent of active FHA loans were 30-60 days past due while 3.90 percent were 90-plus days seriously delinquent at midpoint of the third quarter. FHA loans that were 60 to 90 days delinquent accounted for 1.56 percent of FHA loans outstanding while 1.05 percent of loans were in foreclosure. Texas, which accounted for 805,535 of total FHA loans being serviced, reported 11.4 percent of the loans as delinquent or in foreclosure. Second-place California showed a 7.39 percent delinquency/foreclosure rate overall. The state’s foreclosure rate was at a very low 0.53 percent. New Jersey and Louisiana ... [Chart]
The Mortgage Bankers Association expressed support for a proposed collection of a system user fee in the U.S. Department of Agriculture’s single-family housing guaranteed loan program while underscoring the need for transparency and accountability regarding the use of the funds. “The [USDA] should be clear that it is limited in the scope of acceptable uses for the funds and that these funds will not be used for unspecified or unrelated activities,” the trade group said in its comment letter. The call for closer oversight of the proposed user-fees was among several recommendations the MBA made regarding the USDA proposal. Published in the July 13 Federal Register, the proposal would authorize the USDA to assess and collect a $25 fee from lenders for information technology upgrades. The fee will be collected through the USDA’s Lender Loan Closing (LLC) system when a loan goes to ...
The U.S. Department of Agriculture’s Rural Housing Service is considering extending two manufactured-housing pilot programs implemented in a number of states under the USDA Section 502 single-family housing guaranteed loan program. The planned expansion would provide a more balanced regional representation that would help RHS measure the pilots’ impact. Launched in August 2016, the first pilot involves financing of existing manufactured homes. The second pilot involves ownership requirements for new energy-efficient manufactured and modular houses in land-lease communities operating on a nonprofit basis. State requests to join one or both pilots are submitted to the USDA state director of rural development. The deputy administrator of single-family housing decides on the request. Decisions would be based on the date the request was received and whether the ...
HUD Nails Florida Company with Discrimination Charge. The Department of Housing and Urban Development charged a Florida company and its owners with housing discrimination for intentionally targeting Hispanic homeowners in a predatory mortgage modification scheme that increased, rather than decreased, their risk of foreclosure. HUD filed charges of discrimination under the Fair Housing Act against Advocate Law Groups of Florida and owners Jon B. Lindeman, Jr., and Ephigenia Lindeman. The defendants allegedly ran a deceptive advertising campaign for loan modification that aired on Spanish-language radio and television throughout Florida. Homeowners were offered $500 gift cards as an enticement to sign for a loan modification. Ginnie Mae MBS Outstanding Increases. Ginnie Mae mortgage-backed securities issuance totaled $38.9 billion in August, raising its ...
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