Fannie Mae and Freddie Mac guarantee fee pricing disparities were dramatically leveled out in 2013, according to data released by the Federal Housing Finance Agency. In 2010 and 2011, small lenders typically paid about 10 basis points more in g-fees to the government-sponsored enterprises than did the five largest lenders in the market, the report shows. In 2012, the disparity fell to about 6 bps. Last year, it was down to 2 bps. Small lenders – defined as those that ranked outside the top 100 GSE sellers – paid an average of 53 bps, while the top five sellers paid 51 bps. Three more lender groups based on size that fell between the two extremes paid average fees of 51 or 52 bps....

The majority of mortgage industry executives believe a proposal to raise Fannie Mae and Freddie Mac guaranty fees will hurt lenders, raise origination costs and lead to fewer loans being made, according to a survey by Genworth U.S. Mortgage Insurance. “The survey findings were in line with expectations and highlight the need for continued dialog on regulatory reform and credit access,” said Rohit Gupta, president/CEO of the company. An estimated 53 percent of executives believe raising the g-fees would result in fewer loans being closed. And 23 percent of executives said higher fees for the government-sponsored enterprises would increase demand for FHA loans. While 13 percent said an increase would limit industry competition, 11 percent said it would stoke competition. ...

Banks are lagging behind consumer expectations when it comes to digital technologies, especially as far as younger, more elusive borrowers are concerned. But for those institutions that get with the program, they can boost their market share and their bottom line, a new study from Cisco Consulting Services suggests. For mortgage lenders, making an obvious move in a digital direction, such as offering a remote “video mortgage,” could increase profits by as much as $134 million for a financial institution with $10 billion in annual revenue, according to the study. There appears to be strong market interest in such services. Fifty-four percent of U.S. respondents surveyed were interested in the mortgage advisor concept, and 42 percent would likely choose a ...

Fixed-rate mortgages with 15-year terms are good products for low- and middle-income borrowers or have limited appeal for such borrowers as well as for lenders, according to competing think tanks.Co-directors of the American Enterprise Institute’s International Center on Housing Risk developed the Wealth Building Home Loan that Bank of America started offering in September. Edward Pinto, one of the co-directors of the AEI’s center, said the 15-year fixed-rate WBHL requires little or no downpayment, due in part to BofA’s partnership with the Neighborhood Assistance Corp. BofA will also provide a subsidy to decrease the interest rate on the loans. Pinto said the loan has much less foreclosure risk than a 30-year fixed-rate FHA mortgage due to the equity building ...

A recent independent survey commissioned by Discover Home Loans found that most homebuyers believe online technology improves their search and purchasing ability. According to the results, 89 percent of homebuyers used some form of online technology to help them with the home purchase process. Almost half of all homebuyers, 47 percent, said technology saved them money while 92 percent said it saved them time. Specifically, 83 percent of the group looked at real estate listings or applications like Trulia or Zillow, while 72 percent used online maps or map apps to explore potential neighborhoods. Approximately 55 percent researched a neighborhood using local websites. The majority of respondents, 90 percent, said using technology was a “positive experience.” Two-thirds of this group ...

Understanding the ebb and flow of mortgage debt is hampered by a lack of data on mortgage flows, making it more difficult for policymakers and regulators to deal with fluctuations in overall credit growth. A working paper published recently by the Federal Reserve attempts to make sense of the factors driving the volatility in the stock debt by analyzing changes in aggregate mortgage debt into mortgage inflows and outflows. It attributes these inflows and outflows to more micro-components such as investor activity, first-time homebuying and borrower credit score. “Quantifying these various flows into and out of the pool of mortgage debt allows for a precise assessment of the relative importance over time,” the paper noted. “Creating such data on an ...

Commercial banks and thrifts reported a combined $4.67 billion in mortgage-banking income during the third quarter of 2014, according to a new Inside Mortgage Trends analysis of call-report data. Third-quarter results were down 4.9 percent from the second quarter, which is consistent with the figures reported by publicly held mortgage lenders. Year-to-date mortgage-banking income for the depository institutions was $12.96 billion, down 37.0 percent from the first nine months of last year. Wells Fargo and JPMorgan Chase continued to rank as the top two banks in mortgage-banking income, but both reported declines of more than 25 percent from the second quarter to the third. On a year-to-date basis, the two lenders accounted for 47.3 percent of total mortgage-banking income earned ...

Industry groups say they are generally pleased with last week’s more detailed update to Fannie Mae’s and Freddie Mac’s representation-and-warranty framework, but lenders remain expectant of additional details from the Federal Housing Finance Agency going forward. The new rules, retroactive to January 2013, provide that lenders might not be required to repurchase loans that contain data inaccuracies or misrepresentations of buyers’ qualifications, unless those inaccuracies and misrepresentations are “significant” or appear in multiple loans. The clarifications of life-of-loan exclusions announced by the government-sponsored enterprises are designed...

Financial services trade groups called upon federal banking regulators to reinstate the 100 percent risk-weighting for mortgage servicing rights and to implement other changes as they move forward with the new Basel III risk-based capital rules. In a recent joint letter to bank regulatory agencies, the Mortgage Bankers Association, the American Bankers Association and the Independent Community Bankers of America warned that inaction could seriously affect the availability and cost of mortgages to consumers. The trade groups believe...

The National Flood Insurance Program has been great in providing federal flood insurance coverage to homeowners in high flood-risk areas, but the huge losses incurred by the program during Hurricane Katrina and super-storm Sandy indicate it is time to shift the risk to the private sector, according to industry experts. During a hearing on flood insurance legislation by the House Financial Services Subcommittee on Housing and Insurance last week, experts urged lawmakers to stop funneling all flood risk through the NFIP and open the door to private flood insurance providers. The hearing focused...