Originations of jumbo mortgages increased significantly in the second quarter of 2014 compared with the previous quarter, according to a new ranking and analysis by affiliated publication Inside Mortgage Finance. An estimated $59.0 billion in non-agency jumbos were originated in the second quarter, up 34.1 percent from the previous quarter and reversing two consecutive quarters of declining originations for the jumbo sector. Halfway through the year, jumbo production ... [Includes one data chart]
A number of real estate investment trusts are increasing their presence in the jumbo mortgage-backed security market with conduit programs as well as purchases of subordinate tranches from new MBS. Two Harbors Investment said its jumbo conduit had a pipeline with an unpaid principal balance of $650 million at the end of the second quarter of 2014, more than four times the REIT’s pipeline at March 31. Two Harbors recently issued a $267.67 million jumbo MBS, the first from the REIT this year ...
Lowering the government-sponsored enterprises’ loan limits is one of the main goals for firms involved in the non-agency market but the effort lacks broad support in the mortgage industry, let alone in Congress. Among those submitting comments to the Treasury Department this month regarding how to increase non-agency activity, the American Bankers Association was one of the biggest supporters of decreased loan limits for the GSEs. The conforming loan limit is at $417,000 and ...
Bank of America last week agreed to a record settlement with the Department of Justice and others, largely involving non-agency mortgage-backed securities issued from 2003 through 2008. Officials at the DOJ said the settlement focused on disclosures provided by BofA and its affiliates, including Countrywide Financial, First Franklin and Merrill Lynch, to investors in the bonds. “It’s kind of like going to your neighborhood grocery store to buy milk advertised as fresh, only to discover that ...
Chuck Klein, managing partner of Mortgage Banking Solutions, is engaged in roughly 12 transactions. “I think at least six of those will close,” he said.
The FHA has issued two final rules enhancing consumer protections – one prohibiting lenders from charging additional interest on FHA-insured mortgages that are paid in full and another ensuring that borrowers of adjustable-rate mortgages receive earlier notice of rate changes. Both rules were published in the Aug. 26 Federal Register. The first rule eliminates the practice of charging the borrower a full-month’s interest even if the mortgage is prepaid in full before the end of the month. It adopted the proposed rule, which was issued for comment on March 13, 2014, without change. Effective Jan. 21, 2015, charging borrowers post-settlement interest, which is broadly defined by the Consumer Financial Protection Bureau as a “prepayment penalty,” will be prohibited for all FHA single-family mortgage products and programs. In the rule’s preamble, HUD said it expects lenders to ...
FHA loan volume continued to decline in the first half of 2014 despite continuing improvement in the quality of new originations and a high demand for purchase mortgage loans, according to Inside FHA Lending’s analysis of agency data. Overall, FHA production for the first six months of the year, excluding reverse mortgages, totaled $61.1 billion. While originations were up 16.0 percent in the second quarter, it was down a hefty 51.8 percent on a year-over-year basis. Purchase loans accounted for $47.3 billion of new FHA-insured loans made over the six-month period while an estimated $58.4 billion of loans had fixed interest rates. For FY 2014, volume was down 19.0 percent. “In FY 2013, approximately 702,000 FHA-insured loans were originated and this year we’re running at 560,000 loans, which is roughly 20 percent of last fiscal year’s total,” said an FHA analyst. “In the first quarter, approximately ... [1 chart]
FHA lenders have been lending more aggressively to borrowers with FICO scores below 679 than to more affluent borrowers, according to recent research by an independent housing and consulting firm. Using data from the Department of Housing and Urban Development and interviews with mortgage industry executives, researchers at John Burns Real Estate Consulting found that homebuyers with less-than-stellar credit are finding it easier to buy a home below the FHA loan limit. In contrast, the study also found that automated underwriting prevents many highly qualified borrowers from obtaining a home loan because their “income situation does not fit squarely in the credit box.” This segment includes affluent retirees, self-employed, or commissioned salespeople. “In the aftermath of the housing crisis, the reality is that we are lending aggressively to the poor and conservatively to the rich,” said Lisa Marquis Jackson, senior vice president at John Burns. The study’s findings challenge ...
An estimated $65.5 billion of FHA-insured mortgages, excluding reverse and modified loans, were included in Ginnie Mae mortgage-backed securities issued during the first six months of 2014, according to an Inside FHA Lending analysis of agency securitization data. Ginnie Mae FHA MBS issued during the first half of the year nearly matches the total number of new FHA loans originated over the same period (see related chart, p. 4-5). FHA purchase home mortgages served as collateral on 76.3 percent of Ginnie Mae MBS issued over the six-month period, while loans to first-time homebuyers accounted for 63.0 percent of Ginnie MBS issued during the period. The FHA loans in Ginnie pools over the last two quarters showed an average FICO score of 681, a loan-to-value ratio of 92.5 percent and an average loan amount of $169,093. Except for fifth-ranked Freedom Mortgage, the rest of the top five ... [1 chart]
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