Thirty-year fixed-rate mortgages have served borrowers relatively well, but there are issues that could be addressed by an alternative product, according to new research from staff at the Federal Reserve Bank of New York. “Ideally, an alternate mortgage instrument would alleviate the downpayment constraint associated with the transition to homeownership, eliminate any scope for discrimination in mortgage qualification or pricing and allow ...
Production of mortgages with a VA guaranty grew a hefty 17.9 percent in the fourth quarter, providing an emphatic ending to a record year of VA purchase-loan originations, according to Inside FHA/VA Lending’s analysis of agency data. Total VA volume for the entire year was $112.0 billion in purchase and refinance loans. VA streamlined refinancings accounted for 22.4 percent of overall VA originations for 2014. Production for the full year, however, was down 13.8 percent compared to the same period in 2013. Lenders attributed the increased VA market share to the younger generation of soldiers and sailors engaged in foreign wars as well as veterans returning from the war front. Last year, 18 percent of VA loans were made to active-duty service members and 82 percent were loans to veterans, said Mike Frueh, director of the VA Home Loan guaranty program. “There is a lot more ... [1 chart]
Security issuances backed by FHA and VA loans totaled $267.6 billion in 2014, with several large states accounting for a significant share of FHA/VA originations. An estimated $158.1 billion of FHA-insured loans, including modified loans, were securitized last year, with purchase home loans comprising most of the transactions. Approximately $30.0 billion of FHA refinance loans were securitized as well. The FHA MBS had an average loan-to-value ratio of 92.3 percent and a debt-to-income ratio of 40.1 percent. The average FICO score was 672.3, which was indicative of first-time homebuyers and borrowers with slightly tainted credit. First-ranked California, Texas (#2) and Florida (#3) combined for a total of $48.0 billion, which represented 30.3 percent of FHA loans in Ginnie Mae mortgage-backed securities in 2014. Fourth-ranked New York reported a total of $6.7 billion while ... [ 2 charts]
The U.S. Department of Agriculture-Rural Housing Service has proposed to revise regulations for the single-family housing guaranteed loan program pertaining to qualified-mortgage (QM) requirements, refinancing, principal reduction and lender indemnification. The deadline for comments is May 4, 2015.The RHS is proposing to amend its regulations to indicate that a loan with an RHS guarantee is a qualified mortgage if it meets certain requirements set by the Consumer Financial Protection Bureau. The CFPB published a QM rule, which became effective on Jan. 10, 2014. Among other things, the rule requires creditors to make a reasonable, good faith determination of a borrower’s ability to repay the mortgage loan. In addition, the rule establishes a safe harbor from liability for transactions that meet the QM requirements or, in certain cases, a rebuttable presumption of ...
Consumer advocates and attorneys are urging the Department of Housing and Urban Development to delay the implementation of a new policy that purports to provide relief to surviving spouses of reverse-mortgage borrowers and to find solutions that are more effective. The group said the policy HUD announced in Mortgagee Letter 2015-03 on Jan. 29 is so restrictive that virtually all surviving non-borrowing spouses will get no relief. A letter to the agency, drafted by the National Consumer Law Center and signed by the Consumers Union, California Reinvestment Coalition, National Housing Law Project, Housing and Economic Rights Advocates and Institute on Aging denounced the new policy. They said most surviving spouses of deceased borrowers of Home Equity Conversion Mortgage loans will not be able to meet the policy’s stringent guidelines and will ...
The volume of mortgage-servicing right transfers is expected to continue growing in 2015, perhaps hitting as high as $500 billion, according to experts attending the MSR conference sponsored by Information Management Network this week in New York. Although the focus in recent years has been on the advance of nonbank servicers, observers agree that banks will remain a major force in the industry. The wild card in the MSR market is ... [Includes one data chart]
The supply of home mortgage debt outstanding grew for the second consecutive quarter during the final three months of 2014, eking out a slim 0.1 percent gain from the end of September. The Federal Reserve late last week reported that $9.862 trillion of 1-4 family mortgage debt was outstanding at the end of last year. It may not sound like much, but it marked the first time since ... [Includes one data chart]
In the wake of a recent Supreme Court of the United States decision allowing loan officers to receive overtime pay, mortgage company owners are already laying down the law: no OT for LOs unless management approves the extra time first. The freshly decided case is causing lenders to distinguish between “inside” and “outside” salesforces. According to early interpretations of the decision, loan officers who work in a branch more than half their time are ...
Real estate agents have a positive outlook for the spring homebuying season, especially first-time homebuyers, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Tom Popik, research director of Campbell Surveys, said homebuyer traffic was higher than expected during the winter and demand from first-time buyers is expected to be strong in the coming months. “Rising interest rates may stimulate the market as homebuyers ...
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