Mortgage originators reported a sharp increase in home-equity lending during the second quarter of 2016, although it wasn’t as robust a gain as the 34.2 percent surge in first-lien originations. Lenders generated an estimated $53.5 billion in home-equity business during the second quarter, an increase of 18.9 percent from the first three months of the year. It was the strongest quarterly production number for the HEL market since the financial crisis. Halfway through 2016, home-equity lending was up 15.9 percent from last year and tracking toward $200 billion in annual production. Although home-equity lending has strengthened over the past few years as house prices have recovered to pre-crisis levels, the outstanding supply of home-equity debt continues...[Includes three data tables]
Retail lending through brick-and-mortar branches and consumer-direct programs was the biggest production channel in conventional mortgage lending but had a somewhat smaller share in government-insured lending, according to an exclusive analysis by Inside Mortgage Finance. Retail production played a dominant role in the jumbo market, where it accounted for 79.3 percent of originations over the 18-month period ending in June 2016. Correspondent production played a meaningful role, accounting for 16.1 percent of jumbo originations, but brokers (4.6 percent) had a relatively thin share of the jumbo market. Brokers’ strength was...[Includes one data table]
An increase in interest rates will help boost originations of non-agency nonprime mortgages, according to panelists at a webinar hosted by Inside Mortgage Finance this week. Higher interest rates will make it less attractive for prime borrowers to refinance, which could force lenders to look for volume elsewhere, including the nonprime market. Purchase mortgages account for a large share of the nonprime loans originated in recent years and higher interest rates could also increase nonprime mortgages aimed at debt consolidation. Matthew Nichols, CEO of Deephaven Mortgage, said...
Candidate Clinton noted: “But when community banks and credit unions offer mortgages, they’re looking to invest in their neighborhoods and communities to help them grow and prosper…”
Lone Star Funds is preparing to issue a $216.97 million MBS backed by newly originated nonprime mortgages, according to presale reports published this week. The deal will help the market for new nonprime MBS outpace issuance of jumbo MBS, at least momentarily. Last month, Deephaven Mortgage issued a $154.33 million MBS backed by new nonprime mortgages and Angel Oak Capital Advisors issued a $132.65 million MBS, neither of which received credit ratings. Lone Star’s COLT 2016-2 is scheduled to close next week. Two jumbo MBS were issued...
Investor demand for nonprime whole loans is increasing – which is a good thing for primary market originators – but will it create problems for firms that want to issue securities? In some quarters, there’s a concern that if enough investors appear, it will increase whole-loan prices, making securitization less economical and therefore more difficult. “We’re definitely seeing...
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