Last week, the CFPB issued a proposal to temporarily ease reporting requirements under the Home Mortgage Disclosure Act for small banks and credit unions that issue home-equity lines of credit – but based on the number of such loans, not asset size of the institution. Under the CFPB’s HMDA rules scheduled to take effect in January 2018, financial institutions are generally required to report HELOCs if they made 100 such loans in each of the past two years. Under the proposal released last week, the bureau would increase that threshold to 500 loans through calendar years 2018 and 2019 in order to give the consumer regulator the time to consider whether to make a permanent adjustment. “Home-equity lines of credit worsened ...

The non-agency MBS market is off to what looks like one of its best years in terms of new issuance since the financial crisis, according to a new analysis by Inside MBS & ABS. A total of $15.30 billion of non-agency MBS were issued in the second quarter, representing a gain of 13.4 percent from the first three months of 2017. That brought year-to-date production to $28.80 billion, a 32.0 percent increase over the first half of 2016. As has been the case since 2009, most of the new production has been...[Includes three data tables]

Mortgage compliance experts are cautioning FHA servicers to tread carefully around loss mitigation, annual certifications and reverse mortgages, which could be a potential minefield for False Claims Act lawsuits. While FHA lenders’ exposure to FCA risk remains, the Department of Justice and the Department of Housing and Urban Development have increased their scrutiny of FHA servicing practices for potential violations, according to Phil Schulman and Krista Cooley, both partners in Mayer Brown’s Washington office. In a recent podcast, Schulman warned of increasing DOJ and HUD scrutiny of FHA servicing practices in the last 18 months, a worrisome shift from the origination side, which has seen an estimated $5 billion in settlements and penalties since 2011 for violations of the FCA and the Financial Institutions Reform, Recovery and Enforcement Act. Since 2008, mortgagees participating in ...

The prepayment rate on vintage jumbo mortgages serviced by Wells Fargo is outpacing the industry average by a wide margin, according to an analysis by Bank of America Merrill Lynch. A lower level of loan modifications by Wells appears to be driving the trend. BAML noted that prepayment rates on jumbo mortgages in vintage non-agency mortgage-backed securities have followed a stable trend in the last three years. However, since 2013, Wells-serviced jumbo fixed-rate ...

Moody’s Investors Service increased its assessment of Wells Fargo’s jumbo-mortgage property valuation practices from above average to strong. The rating service said the improvement was due to Wells no longer having an ownership interest in one of the appraisal management companies used by the bank. “During the prior review, Wells had an equity interest in an AMC which received approximately 90 percent of the appraisal orders,” Moody’s said ... [Includes two briefs]

Ginnie Mae issuers were moderately busier in the second quarter of 2017 than during the first three months of the year, according to a new analysis and ranking by Inside FHA/VA Lending. Issuers produced $112.71 billion of single-family mortgage-backed securities during the second quarter, including MBS backed by FHA home-equity conversion mortgages. It was a 5.5 percent increase from the previous period and brought year-to-date issuance to $219.51 billion, down 0.7 percent from the first half of 2016. The quarterly uptick in total issuance may not sound like much, but contrasts sharply with production at Fannie Mae and Freddie Mac, which dropped 13.1 percent from the first to the second quarter. Ginnie volume was up because it had a deeper vein of purchase-money mortgages than there was in the government-sponsored enterprise market. Purchase loans accounted for 63.4 percent of ... [Charts]

The latest issue of FHA’s Lender Insight provides additional information to lenders regarding the new Loan Review System that was launched on May 15, 2017. FHA urged lenders to keep their contact information current in FHA Connection and in the Lender Electronic Appraisal Portal so that they receive automated system notifications on time. Also, lenders should review current FHAC user access for appropriate roles, the agency added. Lenders’ in-house FHAC application coordinators are authorized to grant access to, and assign roles within, the LRS. Having the correct roles should enable users to access the system from the FHAC menu, the FHA said. In addition, the lender must take a photo of any error messages that might appear on screen before contacting the FHA Resource Center, the agency advised. Be prepared to provide the date and time of the attempted login, user ID, lender user ID and the ...

The MBS and ABS market was a mixed bag in terms of new issuance during the second quarter, as overall production was down slightly from the beginning of the year, according to a new analysis by Inside MBS & ABS. A total of $430.98 billion of single-family MBS, non-mortgage ABS and commercial-property securitizations was issued in the second quarter, down 2.6 percent from the first three months of the year. That pushed year-to-date issuance to $873.47 billion, up 8.1 percent from the first six months of 2016. Single-family MBS accounted for a hefty 75.1 percent of total issuance so far in 2017, with non-mortgage ABS (13.2 percent) and commercial MBS (11.7 percent) making up the rest. But single-family turned...[Includes three data tables]

Near the end of the second quarter, Credit Suisse resumed its activity in the non-agency MBS market after a lengthy pause. In May, the investment bank unveiled a $91.18 million deal backed by seasoned FHA loans. That was followed by a $393.97 million issuance backed by seasoned mortgages at the end of June. Credit Suisse marked its return to the jumbo MBS market in June – not as an issuer but as a depositor – lending its shelf registration to American International Group for a $511.98 million MBS. The bank faced...

Issuance of nonprime mortgage-backed securities skyrocketed in the second quarter, and analysts anticipate that the market is set for more growth. A total of $1.08 billion of MBS backed by newly originated nonprime mortgages was issued in the second quarter of 2017, according to Inside Nonconforming Markets. It was the strongest post-crisis quarter for the sector, which has been percolating since the second half of 2015. Issuance in the April-June cycle ... [Includes one data chart]