Two nonbank mortgage lenders ran afoul of the CFPB in its enforcement of the loan originator compensation rule, and other lenders would do well to learn from their experiences. During a recent webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, former CFPB official Benjamin Olson, now a partner at the law firm of BuckleySandler, talked about two related enforcement actions the bureau brought against California-based nonbank mortgage lenders, Franklin Loan Corp. in November 2014 and RPM Mortgage, Inc., in June of this year. Both cases zeroed in on the lenders’ use of expense accounts to pay originators’ bonuses and commissions. The practice cost Franklin $730,000 and RPM $19 million. Olson noted the CFPB allegations were based on expense accounts ...
Multiple Issues With TRID Remain, Official Says. Mortgage Bankers Association Vice Chairman Rodrigo Lopez told attendees at the group’s Risk Management, Quality Assurance and Fraud Prevention Forum in Dallas recently that the MBA supports additional disclosures, but that “many issues remain to be resolved” when it comes to the TILA/RESPA Integrated Disclosure (TRID) rule. “So far, the CFPB has provided only limited guidance on the new rules,” he noted. “MBA is urging the CFPB to resolve a number of issues, including differences between state and federal laws, that threaten to add layers of complexity to the mortgage loan process.” Lopez went on to say that legislation in Congress that would provide mortgage lenders with a safe harbor for their good-faith ...
Despite strong earnings from the MI sector the past year, regulatory scrutiny remains, particularly in efforts by an NAIC working group to develop risk-based capital standards...
PHH Mortgage – which handles originations for a number of financial firms on a private-label basis – was the largest IO lender in the nation with $7.19 billion funded during the first half.
Meanwhile, there’s a school of thought that believes if and when the Fed hikes, mortgage rates will fall because it will show investors that the central bank is acting to curb inflation.
With a lack of consensus from industry participants, let alone members of Congress, regarding how to reform the government-sponsored enterprises, the risk-sharing transactions implemented by the GSEs in recent years are seen as one possible model for increasing private capital investment in the mortgage market. Stanford Kurland, chairman and CEO of PennyMac Financial Services, suggested that the predominant risk-sharing transactions used by Fannie Mae and Freddie Mac have significant limitations. In an opinion piece published last week in the American Banker, Kurland said front-end risk-sharing “should be a bridge to long-term reform.” The main risk-sharing efforts completed by the GSEs are...
Originations of interest-only mortgages increased at a number of lenders in the first half of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. The federal qualified mortgage standard does not allow interest-only terms, and IO production declined after the Consumer Financial Protection Bureau QM rule went into effect. Lately, however, many lenders seem to be getting more comfortable with the product. A group of 15 lenders had...[Includes one data table]
Ginnie Mae securitized $14.2 billion of VA jumbo loans in the first half of 2015, more than double the volume seen during the same period a year ago. VA securitization data for the first six months reflect an upward trend in VA loan originations, which lenders attribute to better outreach to veterans and servicemembers and aggressive marketing strategies. VA jumbo securitization in the first half of the year was up 120.7 percent from the same prior-year period. Volume also was up 13.9 percent in the second quarter from the previous quarter. All top-five VA jumbo securitizers reported large gains year over year, but four showed volume decreases quarter over quarter. Third-ranked PennyMac recorded a 3.4 percent gain in the second quarter from the prior quarter. The top five, in sequential order – Wells Fargo, Freedom Mortgage Corp., PennyMac Corp., U.S. Bank and Quicken Loans – accounted for ... [ chart ]
FHA jumbo securitization continued to rise over the first six months of 2015 on the back of soaring FHA jumbo production in the second quarter. FHA jumbo originations in the second quarter more than doubled to $6.8 billion, according to the Inside Mortgage Finance database. FHA data showed that the jumbo share of originations was highest in conventional-to-FHA refinance (14.9 percent) and streamlined FHA refis (13.3 percent,) but just 9.0 percent for purchase loans. Delivery of FHA jumbos, including modified loans, into Ginnie Mae jumbo mortgage-backed securities rose 131.9 percent in the second quarter from the prior quarter and was up 115.8 percent compared to the first six months of 2014. Wells Fargo led the market in the first half with $1.4 billion in jumbos contributed to MBS, up 123 percent quarter over quarter. That was good enough for a 12.7 percent market share. PennyMac Corp. accounted for ... [ chart ]
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