California, Arizona, Nevada and Florida – the so-called Sand States that have seen the most severe declines in house prices – were at the head of the line as Fannie Mae and Freddie Mac removed loan-to-value limits under the Home Affordable Refinance Program earlier this year. Refinance mortgages with loan-to-value ratios exceeding 125 percent accounted for just 2.5 percent of HARP business in the first quarter, as the government-sponsored enterprises just got started buying such loans for cash. A securitization option for these loans only became available in June. But 13.1 percent of HARP loans in Nevada were...[Includes one data chart]

Are tough appraisal standards putting the brakes on rebounding home prices in many parts of the country? Yes, but in areas where cash transactions account for close to half of all residential purchases home prices are climbing at an alarming rate that indicates the potential for regional housing bubbles. These are some of the major findings contained in the June results of the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The big news in the housing market these days is the rebound...

In the aftermath of the collapse of the financial markets and the resulting recession, there has been a good deal of anxiety and concern that large, critical components of the U.S. and global finance markets may be vulnerable to exploitation by so-called shadow banking institutions and other entities that may be less regulated than major retail and investment banks. But such fears may be overblown, new research from the Federal Reserve Bank of New York suggests. “Financial intermediation has evolved over the last few decades toward shadow banking. With that evolution, the traditional roles of banks as intermediaries between savers and borrowers are increasingly performed by more specialized entities involved in asset securitization,” said Nicola Cetorelli and Stavros Peristiani, two researchers at the New York Fed. However, their research, drawn upon data from 1983 to 2008, has shown...

The vast majority of repurchase requests on mortgages in non-agency mortgage-backed securities were in dispute in the first quarter of 2012, according to an Inside Nonconforming Markets analysis of Securities and Exchange Commission 15Ga disclosures. However, industry analysts expect settlements to increase during the second half of this year. Securitizers reported $29.03 billion in mortgages in non-agency MBS with repurchase demands in the first quarter of 2012, with 98.6 percent of the volume classified as in dispute ... [Includes one chart]

Principal reduction loan modifications completed by five major banks as part of the national servicing settlement have not been applied disproportionately to mortgages in non-agency mortgage-backed securities, according to Fitch Ratings. Non-agency MBS investors have raised concerns that servicers that agreed to the recent $25.0 billion settlement will complete their mandated principal reduction mods on non-agency MBS instead of on portfolio loans. “Although still early, there has been no evidence of ...

Fannie Mae executives and staffers were at the front of the line of Countrywide Home Loan’s sophisticated influence peddling operation that showered not just GSE employees but Washington insiders with deeply discounted mortgage loans in order to curry favor, according to a newly released House committee report. The 136-page report completes a three-year investigation by the House Oversight and Government Reform Committee of Countrywide’s so-called Friends of Angelo program, named after CEO Angelo Mozillo, which ran for a dozen years until the lender was acquired by Bank of America in 2008.

Former Freddie Mac executive David Stevens had a change of heart and will not step down as the head of the Mortgage Bankers Association in order to take the number two job at SunTrust Mortgage as initially planned, much to the relief of industry observers. Stevens’ resignation as MBA president and CEO was to have taken effect June 30. However, the association declared on July 2 that Stevens would not relocate to SunTrust’s Richmond, VA, headquarters but rather remain ensconced in the MBA’s downtown DC corner office. On May 30, Stevens, 55, announced his resignation as the MBA’s head barely a year after he was recruited as a marquee player to revive the downsized and demoralized trade group.

A surge in securitization of home purchase-money mortgages during the second quarter was not enough to offset a sizable drop in refinance activity during the first three months of the year, according to a new Inside MBS & ABS analysis and ranking. A total of $372.85 billion of agency single-family MBS was issued during the second quarter, down 3.1 percent from the first three months of 2012. Although securitization of purchase mortgages rose 22.4 percent, partly from seasonal factors as well as firming in the housing market, the volume of refinance loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae declined 10.6 percent.Includes two data charts.

Early indicators suggest that mortgage production volume was up slightly in the second quarter of 2012, and lenders continued to book strong net profits as a result of healthy gain-on-sale margins.Industry economists had generally expected a slowdown in loan production levels during the second quarter. The consensus forecast from economists at Fannie Mae, Freddie Mac and the Mortgage Bankers Association pointed to a 4.6 percent decline in new originations during the second quarter.Despite the fact that mortgage interest rates continued to ...

There isn’t a lot of doubt about the increasingly top-heavy nature of the mortgage business, but industry experts are divided over the role government policy has played and its impact down the road as Dodd-Frank Act reforms take root. A decade ago, in 2001, the top five lenders in the market accounted for 37.6 percent of total originations and 36.6 percent of mortgage servicing. By the end of last year, the top five lenders had a combined market share of 59.1 percent in originations and 55.2 percent in mortgage servicing.That trend could be exacerbated by the increased compliance ...