To implement sustainable cost reductions, lenders and servicers should address four critical elements, according to analysts at PricewaterhouseCoopers. PWC said executives addressing consumer lending costs should develop a strong foundation, create breathing space, look at the system as a whole and embed a cost-conscious culture. “To create sustainable reductions in cost requires a comprehensive review of the organization, its strategic positioning and the underlying ...

Although it appears that the rate on the benchmark 10-year Treasury has finally stabilized, most mortgage professionals are operating under the assumption that the days of ultra-low rates are over. That may be the “bad” news. But there is good news in rising rates in the form of higher values attached to mortgage servicing rights. As FBR Capital Markets points out in a recent note to investors: “MSR holders are the clear winners” when it comes to higher rates. In its report, FBR lays out the basic ...

Given that regulators are paying closer attention to fair lending these days than ever, as well as the growing use of social media by mortgage lenders, some top compliance sources have offered up a number of best practices and other recommendations to help firms reduce or eliminate their potential liability. “I’ve heard it said that some companies choose not to do social media or websites because of the risk. When I hear that, I’m perplexed because it is the main form of communication with the ...

Manufactured housing as a low-cost housing option is already in a serious slump, but regulations set to take effect early next year would push it to the brink of extinction unless offsetting legislation is passed, warned an industry trade group. Effective in January 2014, new regulations implementing provisions in the Dodd-Frank Act will significantly limit the ability of low-income borrowers to obtain mortgage financing needed to purchase a manufactured home, according to the Manufactured Housing Institute ...

Fannie Mae and Freddie Mac forked over a combined $66.4 billion in dividends to the U.S. Treasury at the end of June with more payments – though not as large – expected for quarters to come. Fannie paid the Treasury Department roughly $59.4 billion, while Freddie paid about $7.0 billion. A large chunk of Fannie's recent profits are tied to “deferred tax assets” which involve the recapture of money originally given to the GSE by Treasury to bolster its capital position.

The linchpin for a viable and comprehensive National Mortgage Database is to ensure that the identities of both mortgage borrowers and mortgage servicers from whom the statistical information is collected for analysis are protected behind a firm wall of security countermeasures, according to project architects. During a recent webinar sponsored by the Urban Institute, Federal Housing Finance Agency National Mortgage Database Project Director Robert Avery told attendees that privacy is a paramount concern in order to make the project work. “The challenge is to protect borrower/lender personally identifiable information and provide useful data,” said Avery.

An FHA proposal for new legislative authority to transfer servicing has raised concerns among industry participants, particularly in the Ginnie Mae market. Authorizing the FHA to shift mortgage-servicing rights from one servicer to another could have a ripple effect on Ginnie Mae servicing rights and also adversely impact state mortgage servicing and origination licenses, some say. The bottom line is that Congress should consider FHA’s request for new statutory authority with great care, said Larry Platt, a compliance attorney and a partner at the Washington law firm K&L Gates. “We would hope that ...

The FHA’s tiered system for assessing servicers’ use of loss mitigation tools should serve more as a red flag for increased supervision rather than as a basis for terminating servicing rights, said the Mortgage Bankers Association. Commenting on the FHA’s proposed enhancements to its servicer scorecard, the MBA acknowledged the agency’s responsibility to monitor and hold servicers accountable for poor performance. But while tiered ranking is a good enforcement tool, it can be misapplied, the group indicated. Any ranking system is a good first ...

FHA endorsements saw very little improvement in May as mortgage interest rates began to climb, according to Inside FHA Lending’s analysis of FHA data. Total FHA originations rose only 2.4 percent in May to $22.0 billion from $21.5 billion the previous month, and 8.9 percent on a year-over-year basis. Volume was split down the middle between purchase and refinancings, with rates rising from 3.35 percent during the first week of May to 3.81 percent at the end of May. Retail accounted for 81 percent of FHA endorsements, which were mostly 30-year, fixed-rate mortgages. The average interest rate for FHA-insured, 30-year FRMs was ... [1 chart]

Reverse mortgage lenders, consumer groups and certain advocates for the elderly are urging Congress to enact legislation passed recently by the House of Representatives granting the FHA additional authority to govern its reverse mortgage program. Testifying before the Senate Banking Subcommittee on Housing, Transportation and Community Development, the groups said the most productive action Congress can take is to pass H.R. 2167 to allow HUD to make expeditious changes to the Home Equity Conversion Mortgage program through mortgagee letters. The bill, which the House approved on June 12, would ...