After years of servicing loans for distressed subprime borrowers but avoiding mortgage originations, Ocwen Financial is planning to offer nonprime mortgages. “Nonprime lending is sort of like crabgrass,” William Erbey, Ocwen’s executive chairman, said last week at an investor conference hosted by the firm. “I’ve been around long enough to see it get hit by Roundup and come back through the cracks.” Ocwen jumped into the agency origination market last year with its acquisition of Homeward Residential ...

The rating services are slowly rolling out their criteria for non-agency mortgage-backed securities issued after the Consumer Financial Protection Bureau’s qualified-mortgage requirements take effect. The consensus among the rating services appears to be that jumbo issuers will initially stick to QMs that receive safe-harbor protections. To meet QM requirements, lenders must document eight underwriting characteristics, including income, employment and debt-to-income ratio. QMs also cannot include ...

“There has been significant industry confusion concerning the extent to which affiliate fees are included in the points-and-fees calculation, particularly when only a portion of a fee is retained by an affiliate,” the Mortgage Bankers Association said.

According to an analysis by Inside Nonconforming Markets, Fannie Mae’s portfolio of guaranteed subprime mortgages is declining much more rapidly than Freddie’s.

From what we understand, some GSE employees with MBS backgrounds are eagerly volunteering their services to the CSS project, believing that the “end product,” the MBS, is where the future lies.

New residential MBS production represented 78.4 percent of primary-market mortgage originations during the first nine months of 2013, according to a new Inside MBS & ABS analysis. A total of $1.243 trillion of residential MBS were issued during the first three quarters of this year, with only $12.2 billion coming from the non-agency MBS market. At the same time, an estimated $1.585 trillion of new home loans were made by lenders, yielding a 78.4 percent securitization rate. The securitization rate was...[Includes one data chart]

Lenders generated an estimated $218 billion in purchase mortgages during the third quarter, the highest three-month volume since the third quarter of 2007.

During the first half of 2013, only about $2.05 billion of FHA loans exceeded $625,500, or about 1.5 percent of FHA business, according to Inside Mortgage Finance.

The Consumer Financial Protection Bureau may formally address the treatment of affiliate fees in the points-and-fees calculation for qualified mortgages under the agency’s ability-to-repay rule, which takes effect in just a few weeks. Until such a decision is made, industry representatives have put together some guidance on how to exclude such fees from that 3 percent cap. “There has been significant industry confusion concerning the extent to which affiliate fees are included in the points-and-fees calculation, particularly when only a portion of a fee is retained by an affiliate,” the Mortgage Bankers Association said early this week. The trade group has put together a document outlining its understanding of the CFPB’s definitive guidance, based on discussions with bureau staff, on the treatment of affiliate fees in both the qualified mortgage and the Home Ownership and Equity Protection Act points-and-fees calculations. “Please keep in mind...

Warehouse commitments extended to nonbanks fell 16 percent on a sequential basis in the third quarter to roughly $20.5 billion, according to new figures compiled by Inside Mortgage Finance. Compared to the same period a year earlier, commitments tumbled even more: 20 percent. The drop in commitments mirrored, somewhat, the fall-off in residential originations, which declined almost 19 percent in the third quarter. However, commitments measure how much credit a warehouse lender is willing to provide – not how much it actually provides. Wells Fargo, the nation’s largest warehouse lender, had...[Includes one data chart]