A big part of Freddie’s sharp increase in issuance came from the $8.00 billion of seasoned loans the company securitized in July.

A new research paper analyzing the risks and opportunities for disruption in the housing finance system notes that new business models and services make the entire mortgage industry ripe for change. Although the paper by the Collingwood Group notes that disruption is inevitable in any industry, it said it is most predictable in an industry faced with conditions where the current model is too challenging, inefficient, costly and unresponsive to customer and business needs. “With no fundamental changes to origination processes in decades, lost efficiency, growing regulatory hurdles, high costs and low profits, there is...

Nonbanks couldn’t keep pace with prominent banks in terms of mortgage earnings in the second quarter of 2015, according to a new analysis by Inside Mortgage Trends. A group of eight nonbanks had lower mortgage-related income in the second quarter of 2015 compared with the previous quarter, with large losses tied to servicing operations. PHH Mortgage was the main restraint on the group of nonbanks as the firm reported a $43.0 million loss from mortgage services in the second quarter of 2015 after $38.0 million in income the previous quarter. The loss for PHH included a $66.0 million loss in the servicing segment. The nonbank increased...[Includes one data table]

loanDepot, LLC, made a big splash in the market this week, becoming the first nonbank lender to begin making ‘A’ paper second liens since the housing bust. The Irvine, CA-based lender fully expects it may soon have competition, but believes by being the first in, it will have a leg up on whichever players enter the fold. However, a quick call to a handful of nonbanks turned up...

Mortgage bankers saw improved profitability in both servicing and loan production during the second quarter of 2015, according to a new Inside Mortgage Trends analysis of earnings reports from major lenders. A group of 13 publicly traded companies reported a combined $2.10 billion of production-related income during the second quarter. That was up 9.9 percent from the previous period, and raised their combined production earnings for the first half of the year to $4.01 billion, a 54.7 percent increase over the same period in 2014. Although all 13 reported positive earnings on their origination and sales activity, many noted...[Includes one data table]

When a nonbank unveils a nonconforming product that can’t be securitized the first question we ask is this: where will the loans ultimately reside?

MGIC recently pointed to lenders using piggyback structures to avoid PMI as a potential headwind to future earnings...

Nonbank mortgage lenders are starting to complain more loudly about the length of time it takes to get their loan officers approved to do business in New York state, quoting approval times that can take anywhere from 90 to 120 days – and that’s for an application with no “red flags.” A mortgage consultant who works closely with nonbanks estimated that some of his LO clients have waited as long as six months, including both new LOs and bank loan officers who are transferring to a nondepository. Requesting anonymity, he said...

Piggyback mortgage financing structures appear to be creeping back into the market, a trend that some observers say could destabilize the industry. Before the financial crisis, many borrowers combined a first-lien mortgage for 80 percent of home value with a second lien of 10 percent or more in order to avoid paying private mortgage insurance. While many first-lien mortgages are still originated with a simultaneous second in recent years, the combined loan-to-value ratio of the two has been capped at 80 percent or less. “From what we’ve seen from lenders who are interested in expanding their customer base, there appears...

Processing times for income verification provided by the Internal Revenue Service have slowed in recent months, causing problems for lenders. The IRS pinned the delays on budget cuts, prompting the Mortgage Bankers Association to call for an evaluation of the “true cause” of the delays. The IRS charges $2 per request to provide a taxpayer’s tax transcript to lenders via a third-party vendor. Stephen O’Connor, a senior vice president of public policy and industry relations at the MBA, said historically, the turn time for the Income Verification Express Service program has been around two business days or less. “In recent months, however, lenders have reported...