Between now and yearend, it should be a seller’s market for mortgage servicing rights, as long as the seller isn’t trying to unload legacy or “high-touch” product. Legacy deals – at least large ones – continue to be a non-entity in the market as buyers are focusing on smaller MSR packages tied to relatively new originations. One recent legacy deal that was scuttled entailed the sale of roughly $800 million in Ginnie Mae MSRs by Ocwen Financial. Industry advisors familiar with the situation aren’t sure why ...

The labor participation rate in the United States continues to lag, especially for the youngest potential homebuyers. If it continues to drift downward, as a recent paper by the Federal Reserve Bank of Cleveland suggests, that could push the homeownership rate down to 62.5 percent, and result in an additional 20 percent to 25 percent decline in purchase-mortgage production, according to a recent review by analysts at Bank of America Merrill Lynch. “The conclusion we draw from the age breakouts of ...

Big banks have become much less reliant on principal-reduction loan modifications in the past year, according to an Inside Mortgage Trends analysis of data from the Office of the Comptroller of the Currency. The shift does not appear to be due to improvements in loan performance because delinquency rates were essentially unchanged. Some 5.0 percent of the nearly 70,000 loan modifications completed in the second quarter of 2014 by eight servicers tracked by the OCC included principal reduction ...

The mortgage industry is trying to make its way against demographic, economic and regulatory crosscurrents, with its future pretty much hanging in the balance, according to Mortgage Bankers Association Chairman-Elect Bill Cosgrove. Speaking to attendees of the MBA’s regulatory compliance conference in Washington, DC, early this week, Cosgrove raised some demographic issues that are troubling. “Today’s consumer is evolving in rapid fashion. The age of the first-time homebuyer ...

The performance of home-equity loans held by banks and thrifts remains strong but concerns have been raised about home-equity lines of credit originated before the financial crisis. Banks and thrifts reported $998.63 billion in total home-equity business at the end of the second quarter of 2014, including retained HELOCs and closed-end seconds, and unused HELOC commitments, according to the Inside Mortgage Finance Bank Mortgage Database. Total HEL business declined ... [Includes one data chart]

Ginnie Mae has unveiled new plans for issuer standards as well as steps to boost liquidity in the mortgage servicing rights (MSR) market. Agency officials at a summit hosted by Ginnie Mae this week in Washington, DC, said both actions are designed to avoid issuer failures and to preserve residential mortgage servicing as an economically viable activity and MSRs as an attractive asset class. The officials said changes will be made to Ginnie’s mortgage-backed securities program to support the agency’s transformation from a pre-crisis bank-driven government MBS program to a post-crisis program where non-depositories and smaller financial institutions play a much bigger role. By the middle of next year, approximately a third of Ginnie MSRs will have changed hands over the previous four years, agency officials said. Many of the new owners of the servicing rights are ...

Approved issuers must ensure that loans have the requisite federal insurance or guarantee before bundling them for securitization, cautioned Ginnie Mae. Loans that fail Ginnie’s “loan matching” review will be tagged as “uninsured” and will not be accepted for securitization, according to John Kozak, a Ginnie Mae account executive and a panelist at a conference sponsored by the agency this week. Ginnie Mae uses loan matching to screen for mortgages that may have been endorsed on paper but have not been actually insured or guaranteed by either the FHA, VA or the Department of Agriculture’s Rural Housing Development. Every month, Ginnie Mae takes a certain lender’s entire mortgage portfolio and throws it up against the agency’s insured/guaranteed database in search for loan mismatches. To do this, the agency uses “two-string match” criteria, which consist of a ...

Obama administration officials and federal regulators met recently with mortgage industry representatives to discuss lender overlays and other obstacles preventing borrowers with slightly tainted credit and first-time homebuyers from obtaining a mortgage. Neither administration officials nor industry participants, however, spoke on or off the record about the things that were discussed during the Sept. 17 meeting at the White House. It was also unclear whether both sides have agreed on any solutions to the issues that lenders say are preventing them from lending. Sources, however, said one major issue is lenders’ uncertainty about their legal responsibilities and liabilities, which already have cost the industry billions of dollars in massive legacy settlements. Lenders have complained that even the slightest loan paperwork error could force them out of the ...

Ginnie Mae securitized a relatively higher volume of loans for African-American borrowers than did Fannie Mae or Freddie Mac, according to a new Inside FHA Lending analysis of recently released Home Mortgage Disclosure Act data covering 2013 mortgage originations. Nearly a quarter, 24.7 percent, of mortgages made to black borrowers last year had FHA, VA or rural housing loans financed through Ginnie Mae, loan-level HMDA data show. Fannie Mae (19.2 percent) and Freddie Mac (9.9 percent) also accounted for large shares of mortgages for black borrowers. However, blacks accounted for just 4.2 percent of mortgages with the race of the primary borrower identified in HMDA reports. Fannie actually had a bigger share of the Hispanic market (24.7 percent), but Ginnie accounted for a substantial 17.3 percent of mortgages made to Hispanic borrowers last year. All three agencies saw ... [1 chart]

Issuers of securities backed by Home Equity Conversion Mortgages created $518 million in new HMBS pools during August, the third largest monthly HMBS issuance this year and the latest month for which HMBS issuance data was available. August’s new issuance total was up slightly from July’s $507 million, according to New View Advisors, which advises financial services clients on capital markets, product development and investment strategies. Ninety-one pools were issued, consisting of 46 original issuance and 45 tail pools. Original HMBS pools are created when a pool of FHA-insured reverse mortgages is securitized for the first time. Tail HMBS issuances are HMBS pools created from the uncertified portions of HECMs that have already had their original HMBS issuance. Tail issuances accounted for about $140 million. Beginning with FY 2014, HECM principal limits were ...