California is a jumbo mortgage gold mine that’s dominated by banks, giving Banc of California an enviable starting point. BoC is also differentiating itself by focusing on non-qualified mortgages and avoiding the retail channel. BoC contributed $122.9 million of jumbo loans to a new mortgage-backed security from JPMorgan Chase. Selling loans into the securitization market is a significant shift for BoC, which had previously only contributed eight mortgages to a jumbo MBS issued in 2014 ...
FHA single-family endorsements rose 2.0 percent in the third quarter from the prior quarter as more borrowers took out purchase loans and nonbanks remained in control of the market during the period. The FHA endorsed $62.1 billion of forward mortgages during the third quarter, which brought total production over the first nine months of 2017 to $182.7 billion (excluding reverse mortgages), a 2.5 percent decline from 2016. Fixed-rate loans continued to comprise nearly all of FHA’s business. Adjustable-rate endorsements totaled $935.3 million for the first nine months of 2017, up from $701.7 million a year ago. FHA purchase activity was up 4.4 percent to $48.5 billion in the third quarter while annual volume increased 2.6 percent from 2016. Purchase loans accounted for 73.6 percent of total FHA endorsements for the nine-month period. Of the $182.7 billion of FHA loans endorsed during the ... [Charts]
Any chance of a mortgage-insurance premium reduction in the near future has dimmed in the wake of an actuarial report placing the FHA insurance fund on shakier ground at the end of FY 2017. One clear thing from the report released on Nov. 15 was that FHA’s flagship single-family home mortgage program continued to grow stronger with an economic net worth of $38.4 billion in fiscal 2017. In contrast, problems persisted in the Home Equity Conversion Mortgage portfolio, driving the program’s economic value down by another $6 billion to negative $14.5 billion. The drag HECM losses inflicted on the MMIF has renewed calls to separate the ailing portfolio from the fund, which can only be accomplished by legislation. Right now, the reverse mortgage issue is not even on Congress’ legislative agenda. HECM losses also caused the fund’s economic net worth and capital reserve ratio to decline in fiscal year ...
The Department of Veterans Affairs and the Consumer Financial Protection Bureau have issued a joint warning to servicemembers and veterans about VA refinancing offers that sound too good to be true. There is a good chance that borrowers with a VA loan have already received unsolicited offers to refinance their mortgages even just months after closing, the agencies said in their first “warning order” (WARNO). Many of these refi solicitations promise extremely low rates, thousands of dollars in cash back, skipped mortgage payments, no out-of-pocket costs and no waiting period, the agencies noted. The VA and the CFPB said lenders offering VA refinances may use aggressive and potentially misleading advertising and sales tactics. “Lenders may advertise a rate just to get you to respond or you may receive a VA mortgage refi offer that provides limited benefit to you while adding thousands of dollars to your loan balance,” the agencies warned. Even though the VA prohibits a lender from advertising skip payments on ...
A former FHA commissioner has recommended raising the agency’s capital reserve ratio to 3 percent, to make FHA stronger and more resilient. Carol Galante, who served two years as FHA commissioner and assistant secretary for housing in the second term of the Obama administration, laid out her proposal along with other recommendations in a paper that she co-authored. Housing-finance reform without a retooled FHA could threaten families’ access to homeownership and increase risk to taxpayers, contrary to the goals of reform, said Galante, currently the faculty director of the Terner Center for Housing Innovation at University of California Berkeley. In her paper, Mission Critical: Retooling FHA to Meet America’s Housing Needs, Galante spelled out the changes necessary to help FHA perform its complementary and countercyclical role in the nation’s housing markets. Galante called for ...
A newly released study by the Department of Veterans Affairs showed a 4.0 increase in the number of veterans who have used a VA mortgage in FY 2016 compared to the previous fiscal year. Also, a recent survey conducted by loanDepot found that 56 percent of veterans who participated did not take advantage of their VA loan benefits. Respondents included 400 targeted active servicemembers, veterans and surviving spouses. Conducted by the National Center for Veterans Analysis and Statics, the VA study focused on veterans who have used at least one of 22 benefits or services provided by the VA during fiscal years 2007 through 2016. The study found that loan guarantee was the third most used benefit by veterans behind health care and pensions. Of the 7.1 million vets who used at least one VA benefit, 2.6 million (36.6 percent) took advantage of the zero-downpayment, low-interest ...
Walter Investment Management Corp.’s planned Chapter 11 reorganization is not likely to affect the credit ratings of MBS backed by loans serviced by its subsidiary Ditech Financial, according to an analysis by Fitch Ratings.
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