Mortgage financing as it exists today might have to go through significant changes if the impact of climate change worsens, particularly in areas most exposed to the risk, according to new research from Freddie Mac. While flood insurance makes it possible for borrowers to obtain home loans in areas of high flood risk, other fallout from climate change – rising sea levels, changing weather patterns, increasing temperatures – may not be insurable. “As a result, some important features ...

Thanks to rising loan applications and a stronger-than-anticipated start to the second quarter, merger and acquisition activity in the mortgage industry is at muted levels these days, according to investment banking officials. In other words, lenders will continue to “make hay while the sun shines,” believing that current profit margins are just too good right now to consider selling out. It was originally thought...

The average daily trading volume in agency MBS fell to $189.4 billion in March, the lowest reading of the year, and a sign that liquidity may still be an issue, depending on which seat you’re in. According to figures compiled by the Securities Industry and Financial Markets Association, the trading numbers for 2016, so far, haven’t exactly lit the world on fire. In January and February, the readings were $195.1 billion and $201.4 billion, respectively. Last year, the best reading was...

Bank of America and JPMorgan Chase are using somewhat different strategies for conforming mortgages eligible for sale to the government-sponsored enterprises. Both banks are originating significant amounts of conforming mortgages and retaining some of the loans in portfolio instead of delivering them to the GSEs. BofA said its mortgage-banking income has declined due to holding mortgages in portfolio while Chase sold some of the credit risk on its conforming mortgage ...

When interest rates take an unexpected dive – as they did in the first quarter – it can wreak havoc on servicing assets as banks and nonbanks try to calculate a fair market value for their residential receivables. According to interviews conducted by Inside Mortgage Finance and based on a compilation of values by Piper Jaffray, certain megabanks assigned some of the lowest values in years to their portfolios during the first quarter of this year. Bank of America, for instance, which usually ranks third among all servicers, assigned...[Includes one data table]

More loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae are carrying mortgage insurance, either private MI or coverage through government-insured programs, according to a new Inside Mortgage Trends analysis of mortgage-backed securities data. The trend toward more insured loans has been gradual over the past two years. In 2014, purchase-money loans with no mortgage insurance accounted for 39.9 percent of new MBS issued by ... [Includes one data chart]

Three megabanks – Wells Fargo, JPMorgan Chase and Bank of America – posted modestly lower originations in the first quarter of 2016, thanks in part to seasonality as well as continuing their cautious behavior of sticking to bread-and-butter conventional lending. In their just-released earnings reports, there was no mention of production problems tied to the controversial integrated-disclosure rule known as TRID. Then again, given their size and the fact that they’re ...

New surveys of potential first-time homebuyers suggest that many are delaying purchasing a home due to affordability issues and the accrual of non-mortgage debt. “In many cases, we found today’s buyers are taking a long-term view of homeownership,” said D. Steve Boland, consumer lending executive for Bank of America. “They want to purchase a home that will meet their future needs and understand that, in some cases, that will require saving more, waiting longer and ...

Mortgages produced through lenders’ retail channels accounted for 60.2 percent of home loans securitized by Fannie Mae and Freddie Mac during the first quarter of this year, according to a new Inside Mortgage Trends analysis of mortgage-backed securities data. The retail share was up slightly from 59.9 percent for all of last year and 59.5 percent in the fourth quarter. Sales of retail-originated loans fell 3.9 percent from the previous period, the smallest ... [Includes one data chart]

Over the past two years, PHH Corp. has lost $64 million on its mortgage business and now that Merrill Lynch has given notice that it wants to end some of its private-label contracts with PHH Mortgage, the nonbank’s future is beginning to look cloudier. Moreover, analysts and investors who follow the company wonder whether PHH’s private-label model – the bread and butter of its origination business – is fixable in the modern era of mortgage banking. Meanwhile, all of this is happening at a time when management hopes to sell the company, or at least field offers for some of its key assets, including a $226 billion servicing portfolio. The bad news for PHH started...