After more than five years of operation, Home Affordable Refinance Program activity is expected to decline. However, industry analysts suggest that if the Federal Housing Finance Agency continues to implement changes requested by lenders, HARP activity could remain strong through 2014. “This deep cooperation and aggressive policy action are key reasons why HARP burnout has been elusive so far and suggests HARP risk is likely to remain elevated despite the interest rate sell-off, in our view,” analysts at Barclays Capital said late last week. Analysts at Bank of America Merrill Lynch project...

Even with the incentive fees offered by the HAMP program, residential servicers favor proprietary mods.

As refinancings continue to fall, lenders that specialize in such loans will see their franchise values drop dramatically.

PennyMac Mortgage Investment Trust plans to issue its first non-agency jumbo mortgage-backed security in the third quarter of 2013 by combining $393.0 million of non-agency jumbos it recently acquired in a bulk transaction with mortgages from its correspondent lenders. The real estate investment trust said it acquired $107.0 million in non-agency jumbos via its conduit in the second quarter, along with $8.0 million in the first three months of 2013. “Jumbo originations have been affected by the ...

The question of whether the FHA should allow the refinancing of underwater mortgages seized through eminent domain has reemerged as a key issue following a recent decision by the city of Richmond, CA, to use its authority to take over distressed mortgages for restructuring. There is a new twist to the question, however. Could FHA’s refusal to refinance such mortgages be deemed discriminatory against cities and homeowners if eminent domain programs meet the requirements of the FHA Short Refinance program? Is that tantamount to redlining? A top executive of Mortgage Resolution Partners, which developed the eminent domain strategy to help underwater homeowners at risk of foreclosure, said ...

The mortgage banking industry has commended the Senate Committee on Banking, Housing and Urban Affairs on passing the FHA Solvency Act earlier this month but raised concerns about the bill’s indemnification provision. In a letter to Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, David Stevens, president of the Mortgage Bankers Association, said some deserving borrowers are being shut out of FHA because of strict credit overlays that lenders add to avoid indemnification risks. Stevens said when the Department of Housing and Urban Development is able to require ...

The VA home loan program was up 23.5 percent in the first six months of 2013, although activity slowed by 1.5 percent from the first quarter, according to Inside FHA Lending’s analysis of VA data. The VA reported $74.4 billion in purchase and refinanced loans during the first six months, with refis accounting for 52.9 percent of total volume. The program’s share of the overall mortgage insurance market fell to 22.2 percent in the second quarter from 24.3 percent in the previous quarter. Combining their year-to-date results, the FHA and VA reported a combined ... [1 chart]

Ginnie Mae has changed certain office names to reflect the activities and responsibilities of the office more accurately. For example, the Office of Mortgage-Backed Securities is now known as the Office of Issuer and Portfolio Management. The Office of Program Operations name also has been discarded in favor of the Office of Securities Operations. The MBS Guide, including the summary of addresses and all forms and appendices, has been updated to reflect the office name changes. In addition, the address for overnight delivery of new MBS issuer applications ...

After the dust-up in the capital markets from the last meeting of the Federal Reserve’s Open Market Committee over when the central bank will begin to “taper” its huge asset purchase program, this week’s meeting of the FOMC provided no new clues about the timing of the Fed’s exit strategy. “To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the committee decided to continue purchasing additional agency MBS at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month,” the FOMC said, reiterating previous announcements. Also, the FOMC is...[Includes one data chart]

Industry analysts predict that Freddie Mac’s recently announced deal to shed some of the credit risk of the mortgages it guarantees to the private sector could provide the template for a broader risk-sharing program for both GSEs and opens the door for potentially promising policy implications. The $500 million offering of Structured Agency Credit Risk securities, which Freddie priced last week, aims to diminish taxpayer risk while introducing more private capital into the market. Due to investor demand, the size of the offering was increased from $400 million to $500 million, and about 50 broadly-diversified investors participated in the offering, including mutual funds, hedge funds, REITs, pension funds, banks, insurance companies and credit unions, according to Freddie CEO Donald Layton.