The Milken Institute said the GSEs’ duty-to-serve policy is more complicated than other affordable housing reform issues because it forces the secondary market to boost lending in the primary market and assumes those private firms are underperforming. The conservative think tank published a paper this week authored by Michael Stegman and Phillip Swagel on the role of duty-to-serve in which it examined the policy and its potential impact on the mortgage market. While DTS currently encompasses manufactured housing, rural housing and affordable housing preservation, Milken said housing finance reform debates have centered on creating a DTS that includes areas beyond those three targets.

There was some discussion as to whether credit scores serve as a good mechanism to achieve cross subsidization as well as a need for better data to manage risks, during an Urban Institute panel discussion last week focused on subsidies and GSE pricing. Credit scores aren’t a good tool to achieve cross-subsidization, according to Andrew Rippert, CEO of Global Mortgage Group at Arch Capital. He said the goal should be to serve low- and moderate-income borrowers, not necessarily to subsidize people who make a lot of money but have bad credit scores and don’t manage their credit. “Our belief is that we can do a lot better if we were very explicit about the risk in the system with regards to FICO scores,” Rippert said.

Slightly over half were deals backed by newly originated mortgages…

Don Brown of Optimal Blue: The industry is “at or near a high-water mark” in terms of the number of mortgage investors.

While the GSEs have been engaging in risk-based pricing for mortgage guarantees since the crisis, very large cross subsidies remain, according to one panelist from the Federal Reserve…

Rick Sharga of Carrington: “Refi volumes will continue to contract, and lenders will have to accelerate their shift towards more purchase business in order to maintain volume.”

The MBA wants the FHFA to allow the industry to have a say in all new enterprise pilots, programs and products.

Fannie Mae, Freddie Mac and Ginnie Mae saw a somewhat sedated increase in single-family mortgage-backed security issuance during the second quarter. The trends closely tracked forecasts. Agency purchase-mortgage business was up a solid 24.5 percent from the first quarter, boosting the 2018 market slightly ahead of where it was at the midway point last year. And refinance activity continued to tumble, dropping 21.3 percent from the first quarter to just ... [Includes two data charts]

With mortgage production costs exceptionally high, a number of lenders are outsourcing certain functions. Christopher George, president and CEO of CMG Financial, said the lender moved some operations offshore via outsourcing. “There are some areas where we can do business substantially cheaper and not compromise quality,” he said this week at the California Mortgage Bankers Association’s secondary market conference. George said two years ago, CMG had 161 ...

The reasons that the homeownership rate among millennials hasn’t been as high as it was for previous generations continues to captivate industry analysts. The latest research suggests that those born in the early 1980s through the early 2000s have delayed homeownership due to personal decisions and because home prices are rising faster than income. Nearly 60.0 percent of renters are looking to buy in the next five years and 70.0 percent of those renters are millennials ...