Correspondent production programs continued to gain ground in 2017 in all three major mortgage product categories, according to a new Inside Mortgage Trends analysis. Acquiring government-insured loans from correspondent lenders has been a huge part of the Ginnie Mae market in recent years, but it’s also picking up market share in conventional-conforming lending and, to a lesser extent, the jumbo arena. Government-insured lending declined by ... [Includes two data charts]

Banks and savings institutions reported $2.98 billion of mortgage repurchases or other indemnifications in 2017, a 6.6 percent decline from the previous year, according to a new Inside Mortgage Trends analysis of bank call reports. 2017 represented a new low in annual mortgage repurchase volume since banks and thrifts began reporting this data back in 2008. Most of the heavy damage occurred in the 2009-2011 period, when the banking industry ... [Includes one data chart]

The first quarter of 2018 comes to a close on Sunday, with many conventional lenders happy to see it end, but that doesn’t mean the origination downturn – courtesy of higher rates – was a horror show by any means. Certain shops posted modest production declines compared to the fourth quarter of 2017 and several increased lending compared to 1Q17, according to interviews conducted by Inside Mortgage Trends. But perhaps the biggest shot in the arm came from ...

Lenders and potential borrowers are reporting relatively weak demand for purchase mortgages heading into the spring homebuying season. While consumers are seeing economic gains, rising home prices and higher interest rates have constrained expectations for home sales. Doug Duncan, senior vice president and chief economist at Fannie Mae, said lenders surveyed in the first quarter by the GSE reported “the most anemic” purchase-mortgage demand outlook for any first quarter since ...

The Department of Housing and Urban Development may need a huge cash infusion to modernize its antiquated information technology system, but Congress does not appear eager to provide the funding. Testifying before the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, HUD Secretary Ben Carson told lawmakers it would cost approximately $500 million to shift the agency’s archaic information technology system to the cloud. Carson said it is costing the department about $250 million annually to repair and maintain the legacy IT system, which is more than 40 years old. “We can keep patching and throwing away money or we can do what needs to be done and fix it for good,” he said. Subcommittee Chairman Mario Diaz-Balart, R-FL, appeared unfazed by Carson’s cost estimate but made no commitment during the ...

Legislation that would protect veterans from predatory lending that was passed by the Senate recently could have lasting impacts on the VA home-loan guaranty program, according to legal experts. S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, passed on March 14 by a vote of 67-31. Sixteen Democrats and one Independent joined all 50 Republicans in passing the bill. Primarily, the bill would loosen stringent rules in the 2010 Dodd-Frank Act designed to prevent the bad business practices that led to the 2008 financial crisis. A stand-alone bipartisan bill introduced by Sens. Thom Tillis, R-NC, and Elizabeth Warren, D-MA, in January was added to S. 2155 shortly before the Senate vote. The Tillis-Warren bill, Protecting Veterans from Predatory Lending Act of 2018, addresses the issue of serial refinancing, or loan churning, in which the victims are veterans. Churning refers to the ...

Ginnie Mae has passed the $1 billion mark for mortgage-backed securities issued through the Federal Home Loan Banks’ Mortgage Partnership Finance program. The MPF government MBS product was available initially to eligible participating members of the Federal Home Loan Bank of Chicago. The Chicago FHLB launched the MPF program in 1997 to give approved participating members access to the secondary mortgage market. Specifically, the program provided an outlet other than Fannie Mae and Freddie Mac for member institutions to sell fixed-rate mortgage loans (conventional, government, or jumbo). Most of the institutions participating in the MPF are small banks, thrifts and credit unions with assets of less than $400 million. The MPF government MBS product arose from a 2015 partnership between Ginnie Mae and the Chicago FHLB to issue Ginnie MBS backed by ...

The Department of Veterans Affairs recently clarified policy regarding lender use of credits or interest rates to pay veterans’ costs in VA home loans. Under VA regulations, lenders may charge and a veteran may pay a flat fee not exceeding 1 percent of the loan amount. The VA allows the charge provided it is in lieu of all other charges related to the costs of origination not expressly specified and allowed in the regulations. However, the agency has learned that some lenders are charging veterans interest-rate premiums in exchange for temporarily subsidizing the borrower’s monthly payments. “More precisely, an interest-rate premium is imposed as a charge for a cash advance on a loan principal,” the VA explained. While the agency allows lenders to charge borrowers for allowable costs, which may be made through an interest-rate adjustment, it clearly prohibits charges for impermissible costs, like ...

The Senate last week approved a regulatory relief bill that would grant qualified mortgage status to certain loans held in portfolio by smaller banks even if the mortgages would otherwise be non-QMs. The portfolio QM provision also has support in the House, but it has prompted concerns from some industry analysts. Moody’s Investors Service noted that if the provision becomes law, small banks won’t have to meet certain documentation requirements included in the Consumer ...

Overall production of government-insured loans fell in all three origination channels in the fourth quarter as refinancing continued to decline in 2017. A survey of FHA, VA and rural housing lenders showed originations in retail, correspondent and broker conduits totaled $248.9 billion, down 11.8 percent from 2016. Correspondent production suffered the biggest quarterly decline, 14.9 percent from the third to the fourth quarter. Production in this channel also declined 4.8 percent for the full year. Approximately $139.3 billion of FHA and VA loans came through this channel last year. Notwithstanding the decline, the correspondent share of government-insured lending grew to 56.0 percent in 2017, up from 51.9 percent in 2016. Brokers saw their share of the government-insured market rise to 10.0 percent, even as quarterly and year-over-year originations declined by 2.0 percent and 10.7 percent ,,, [ Charts ]