The decline in interest rates after the Brexit vote in late June has boosted mortgage originations in recent weeks and caused problems for holders of mortgage servicing rights, according to industry participants at the California Mortgage Bankers Association’s Western Secondary Market Conference in San Francisco this week. Mike Duncan, a hedge manager at Compass Analytics, said 25 percent of his firm’s clients were over capacity at the end of May and 40 percent were over capacity by the end of June. He predicted that over-capacity rates could go even higher if interest rates stay low, increasing demand for refinances. Compass provides pricing, valuation and interest rate risk-management services. Rob Branthover, a managing director at Mortgage Industry Advisory Corp., added...

In late January of this year, American International Group announced its intention to spin off 10 percent of its top-ranked mortgage insurance affiliate, United Guaranty Corp., but almost seven months later no deal has materialized. According to interviews conducted by Inside Mortgage Finance this week, it’s been “radio silent” regarding the initial public offering, but all that could change next week when AIG releases its second quarter results. A spokesman for UGC declined to comment on the matter. Most of the observers believe...

The Republican platform, released this week during the Republican National Convention, would scale back the government’s role in housing and make borrowers and lenders more responsible. But it offered a somewhat vague prescription for what to do with Fannie Mae and Freddie Mac. “Our goal is to advance responsible homeownership while guarding against the abuses that led to the housing collapse,” the platform states. The GOP said housing reform should include clear underwriting standards and guidelines on predatory and acceptable lending practices – standards that are arguably at the core of the Dodd-Frank Act that’s roundly criticized by the party. Republicans blamed...

Mortgages that allow buyers to make low downpayments are making a quiet comeback, according to a recent analysis from Deutsche Bank. But do they have the staying power? So far, seven lenders have partnered with Fannie Mae and Freddie Mac in special programs to offer loans requiring anywhere from no money down to 3 percent down. Although the government-sponsored enterprises cap their high loan-to-value product at 97 percent, some lenders step in and subsidize the extra funds needed to make up the difference. The GSEs began...

Stakeholders in the MBS market should pay attention to a recent U.S. 11th Circuit opinion concerning a jury verdict in which the court focused on the similarities and differences between two kinds of securities fraud, suggested attorneys in their analysis of the case. Although the opinion in SEC v. Radius Capital Corp. is unpublished and not a binding precedent, it gives further clarity to two of the most important rules used by the Securities and Exchange Commission in targeting securities fraud, according to attorneys with the law firm Carlton Fields. The SEC sued...

While some banks have reduced their FHA lending in recent years and alternatives from the government-sponsored enterprises are still gaining traction, homebuyers still have access to low-downpayment mortgage programs, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. “Most real estate agents say high loan-to-value ratio mortgages are readily available, especially for homebuyers with good credit,” said Tom Popik, research director for Campbell Surveys. The HousingPulse survey covering activity in June included...

The U.S. Senate last week passed legislation easing FHA rules on condominium financing even as condo reform rules are undergoing clearance at the Office of Management and Budget. H.R. 3700, the Housing Opportunity Through Modernization Act of 2016, was approved by unanimous consent. The bill passed in the House of Representatives by a vote of 427-0 back in February. Industry observers say the bill would essentially codify long-anticipated guidelines the Department of Housing and Urban Development has drafted. Among other things, the bill requires...

The FHA this week clarified its policy on insuring mortgages with PACE (Property Assessed Clean Energy) senior tax liens to make it easier for borrowers to obtain FHA financing for such mortgages, but the mortgage and real estate industries continue to have concerns. The new guidelines address state programs where the PACE obligation is treated like a property tax with priority over an FHA lien. The program provides financing for home-energy improvements and water conservation, and is repaid through an assessment added to the property’s tax bill. The guidelines are designed...

The average daily trading volume in agency MBS totaled $212.6 billion in June, a slight decline from the month prior, according to the Securities Industry and Financial Markets Association. Still, that’s a far cry better than the low established back in December of 2015 when the reading came in at $149.2 billion. June’s performance came...

Ginnie Mae issuers produced a hefty $125.42 billion of new single-family mortgage-backed securities during the second quarter of 2016, according to a new Inside FHA/VA Lending analysis of MBS data. The government-insured market continued to run hotter than the Fannie Mae and Freddie Mac sector. Ginnie MBS issuance – including FHA’s home-equity conversion mortgage program – was up 31.1 percent from the first quarter, while single-family MBS issuance by the two government-sponsored enterprises rose 26.2 percent over the same period. Excluding HECM, Ginnie issuance was up 31.5 percent in the second quarter. While FHA forward mortgages continued to be the biggest source of collateral, the VA program actually produced a bigger gain, 42.4 percent, from the first to the second quarter. VA production saw a major boost in refinance activity, up 58.4 ... [Includes four charts ]