The biggest growth in the mortgage market during the fourth quarter was in home equity loans. Ginnie Mae continued as drum major in the MBS market. (Includes three data tables.)
Housing Secretary Fudge resigns; IRS postpones controversial changes to IVES; regulators to alter Basel capital proposal; banking regulators waive appraisal requirements in Maui; feedback sought on bank call-report proposal.
Questions posed by Supreme Court justices during oral arguments suggest the court could rule in favor of banks seeking preemption from state laws requiring interest payments on mortgage escrow accounts.
Nonbanks are under increased pressure as borrowers face skyrocketing obligations on taxes and insurance. Concurrently, there’s a risk that interest rates will decline, cutting into MSR values.
If regulators take an aggressive stance, the final capital rule could be out by May. The other option would be to re-propose the rule, which could leave the rulemaking unfinished if there’s a change in administration.
The new Payment Supplement program will allow servicers to temporarily reduce a borrower’s monthly payment by up to 25% without modifying the mortgage’s current interest rate.
MSR buyers? The field is getting crowded and PE-backed investors continue to be aggressive. Even Guild Mortgage is open to the idea of buying, but only if the situation meets its parameters.
Buying 5% to 6% bulk MSRs in the secondary market might seem like a crazy idea given the prepayment risks involved. But the longer mortgage rates stay higher, the more it looks like a smart move.
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