Stan Kurland: “We expect to see consolidation in the mortgage market, and successful firms will be the ones that have the size, scale and technological capabilities to compete."
A test of the jumbo mortgage-backed security market by Wells Fargo went well enough that the bank plans to regularly issue deals after avoiding the market for years. “Based on the positive response from investors to Wells Fargo’s recent private residential MBS transaction and given acceptable market conditions, we expect to do periodic offerings of private residential MBS going forward,” said Tom Goyda, a spokesman for the bank. The $441.3 million issuance from Wells that closed ...
Wholesale-broker production of FHA loans was up 8.1 percent from the second to the third quarter of 2018, making it the fastest-growing channel in the program, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. However, the volume of brokered VA loans securitized during the third quarter fell 4.0 percent from the previous period, the only channel to show a loss over that period. Correspondent production remained king in the FHA segment, with volume rising 7.4 percent from the second quarter. Correspondents generated 48.9 percent of FHA loans delivered into Ginnie MBS pools over the first nine months of the year. PennyMac Financial and Amerihome Mortgage duked it out as the top correspondent platforms in the third-quarter FHA market. Retail was runner-up with a 35.6 percent share of FHA year-to-date business, with wholesale-broker accounting for just ... [Charts]
Ginnie Mae officials would welcome a return of commercial banks to the program, but they are not planning on it. Instead, the agency is looking the other way: at expanding financing options for nonbank portfolios of mortgage servicing rights. The current version of Ginnie’s acknowledgement agreement has been successful, enabling nonbank servicers to arrange MSR financing for virtually their entire portfolios, said Michael Drayne, a senior vice president at Ginnie, during the Residential Mortgage Finance Symposium sponsored by the Structured Finance Industry Group this week in New York. Although a number of banks are financing nonbank servicing portfolios, many are still not participating, he said. Karen Gelernt, a partner at Alston & Bird, noted that many banks continue to have anxiety about what will happen if a servicer defaults on its Ginnie requirements. Speaking as moderator on a panel with ...
Two FHA lenders entered into settlement agreements with the Department of Justice and the Department of Housing and Urban Development last week to resolve allegations they violated the False Claims Act in connection with FHA-insured mortgages. PrimeLending of Dallas and Universal American Mortgage Co. (UAMC) of Miami have agreed to pay a total of $26.7 million without admitting to any liability or wrongdoing. As part of an industry-wide inquiry, PrimeLending received a subpoena from the HUD inspector general for documents and other information related to its mortgage practices, including origination of FHA loans. On Aug. 20, 2014, the DOJ issued a civil investigative demand announcing an investigation of PrimeLending for potential FCA violations in connection with the origination and underwriting of FHA single-family loans. On Oct. 23, 2018, PrimeLending entered into a settlement and ...
The Department of Housing and Urban Development’s inspector general recommended that HUD pursue the collection of $5.7 million in surplus proceeds it is entitled to reclaim from 2017 loan terminations. The IG found $6.8 million in uncollected surplus proceeds from non-conveyance foreclosures in the possession of custodians. The IG said it initiated a review when it discovered while doing an unrelated audit that a trustee attorney held surplus proceeds from two non-conveyance foreclosures and HUD had not claimed these funds to offset earlier partial claims it had paid for the properties. The latest audit found that HUD did not always do its job. Of the 81 foreclosures reviewed, 32 had nearly As a result, an estimated $6.8 million in surplus proceeds never made it into the FHA insurance fund. Various third parties benefited at HUD’s expense, and the unclaimed funds sat dormant with custodians. The IG recommended ...
FHA-approved servicers will now find it easier to file a Home Equity Conversion Mortgage claim under revised HECM rules announced by the Department of Housing and Urban Development last week. The new requirements apply to HECM loans that have reached 98 percent of their maximum claim amount, according to Mortgagee Letter 2018-08. The revised rules took effect on Oct. 22, but HUD will accept public comments for a period of 30 calendar days. Compliance experts say the change is good news for a program that has been experiencing substantial losses and lower volumes. Significant revisions were made last year to cut losses and make the product more efficient, but they have not been enough, said FHA Commissioner Brian Montgomery. Under the revised rules, HECM servicers can use alternative supporting documentation in lieu of previously required materials that ...
Certain potential changes could materially affect origination volume and determine the government-sponsored enterprises’ direction going forward, according to analysts. One of those changes could have a significant impact on the FHA market. Wells Fargo Securities analysts recently looked at three potential developments in the Fannie Mae/Freddie Mac sphere and evaluated their effects on the broader mortgage market. Two of those potential changes – loan limits and guarantee fees – are controlled directly by the Federal Housing Finance Agency, while the third relates to the temporary GSE qualified-mortgage exemption, or “QM patch,” which could affect the FHA market. All three factors loom over the mortgage landscape as the FHFA expects a new director in January 2019, who is likely to be more right leaning and could shift the focus back to shrinking the ...
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