Bank mortgage repurchase activity rose again in the third quarter of 2016, although most of the increase is tied to Bank of America clearing up old buyback issues. Commercial banks and savings institutions reported $884.4 million in single-family mortgage repurchases and indemnifications during the third quarter. That was up 10.0 percent from the previous period and marked the third consecutive quarterly increase in repurchase activity ... [Includes one data chart]

A strong purchase market helped push FHA and VA originations in the third quarter of 2016, according to an Inside FHA/VA Lending analysis of agency data. FHA forward originations increased by 17.4 percent from the second quarter for a total of $72.3 billion. That brought total FHA-insured loans originated over the first nine months to $187.3 billion, up 3.9 percent from the same period last year. Purchase mortgages comprised 70.0 percent of FHA’s total origination over the last three quarters. Quicken Loans reported only a 3.3 percent increase in FHA originations in the third quarter but still managed to retain its top ranking with $10.8 billion in FHA originations in the first nine months of 2016. Freedom Mortgage worked extra hard, ending the nine-month period with $5.0 billion on the strength of refinances. Third-quarter originations were up 69.6 percent from the prior quarter, and up 51.4 percent for the ... [3 charts]

The FY 2016 Actuarial Review showed a stronger FHA mortgage insurance fund, thanks to a surging forward loan portfolio, but the prospect of a price adjustment remains unlikely. Review results were a mixture of good news and bad news. The good news is the Mutual Mortgage Insurance Fund’s economic net worth grew by $3.8 billion to $27.6 billion – $4.2 billion short of what last year’s actuarial report projected. The capital ratio rose to 2.32 percent, exceeding the 2.0 percent minimum established by Congress to cover future losses. Observers said the increases demonstrate steady but modest growth in the fund. The Department of Housing and Urban Development’s top officials credited the fund’s growth to a stronger forward-mortgage portfolio, which increased by $18 billion to $35.3 billion – $10.1 billion above projections – with a capital ratio of 3.28 percent. The report attributed the increase to a ...

The Department of Justice lost its bid to have an FHA lawsuit against Quicken Loans heard in the nation’s capital after a federal judge this week ordered the case transferred to federal district court in Michigan. Judge Reggie Walton of the U.S. District Court for the District of Columbia agreed with Quicken that the proper forum for adjudicating the government’s False Claims Act case is the Eastern District Court in downtown Detroit. While the court agreed that the case has national implications, it also noted the “strong local interest in this matter in the Eastern District of Michigan,” where “Quicken Loans underwrote the FHA loans at issue, endorsed those loans, and certified its compliance as to those loans.” While certain factors weighed against the transfer, the alleged unlawful activity occurred in or near Detroit, where the lender is headquartered and most of its employees are located. The case, U.S. v. Quicken Loans, ...

Aggressive refinance solicitation can be a double-edged sword for lenders: It could either result in increased VA refi business or, as the Consumer Financial Protection Bureau found out, consumer complaints. Since the CFPB began taking mortgage-related complaints in 2012, it has received more than 12,500 complaints from servicemembers, veterans, and their families. Of those complaints, 1,800 were related to VA refinancing. The VA offers two types of refinancing options to eligible borrowers – the VA cash-out refinance and the VA streamline refi, or Interest Rate Reduction Refinance Loan (IRRRL). In a cash-out refi, the veteran homeowner can refinance a VA or non-VA loan into a lower-rate VA loan and take cash out of home equity to pay off a debt, finance an educational pursuit or pay for a home improvement. The VA will guaranty up to the full value of the home. On the other hand, an IRRRL can only refinance a ...

FHA and VA loan performance improved in the third quarter of 2016 as the delinquency rate on government-backed loans declined on a seasonally adjusted basis, according to the Mortgage Bankers Association’s latest mortgage delinquency survey. The FHA delinquency rate fell by 16 basis points to 8.30 percent, its lowest level since 4Q97, with all categories – 30-days, 60-days and 90 days + past due – reflecting the decline. Over the quarter, the delinquency rate of FHA loans with payments 30 days past due dropped 4 bps from the previous quarter. Insured loans that were 60 days behind on their payments saw a 6 bps drop in their delinquency rate, while that for seriously delinquent loans fell 9 bps during the period. FHA mortgages showed some declines in performance on a non-seasonally adjusted basis. Approximately 8.70 percent of outstanding FHA loans were past due as of the end of the third quarter, up 25 bps from the ...

Industry Groups Urge Congressional Leaders to Pass ‘Tax Extenders’ Legislation. Three industry groups called upon House and Senate leaders to pass “tax extenders” legislation, including two critical tax provisions that are scheduled to expire at the end of 2016. In a joint letter this week, the Mortgage Bankers Association, National Association of Realtors and the National Association of Home Builders called for the “rapid enactment” of a broad “tax extenders” package, including mortgage-debt forgiveness and tax deduction for mortgage insurance premiums. Passing a legislative package of tax extenders that includes the two provisions would provide much-needed certainty to the residential real estate markets, the letter said. Federal Agencies Propose Rule to Expand Access to Private Flood Insurance. Federal banking and credit union regulators and the Farm Credit Administration have published a ...

The nine major publicly traded nonbanks active in mortgage banking saw a significant improvement in earnings during the third quarter, but two firms continued to book losses, according to a new Inside Mortgage Trends analysis of quarterly earnings reports. As a group, the nine nonbanks generated $129.7 billion in mortgage-banking income during the third quarter, a major improvement from their combined $339.5 million loss in the previous period ... [Includes one data chart]

PennyMac Financial Services continued to excel in terms of profitability in the third quarter, as officials cited a “distinctive” hedging strategy, among other efforts. PennyMac had $122.3 million in net income in the third quarter of 2016, up 64.6 percent from the previous period and nearly double the net income it reported a year ago. While interest-rate volatility tends to wreak havoc on earnings, Stanford Kurland, PennyMac’s chairman and CEO, said better-than-expected hedging ...

As yearend approaches, growth-minded nonbank mortgage firms continue to hire new workers while commercial banks are taking a cautious “wait-and-see” approach, according to interviews conducted by Inside Mortgage Trends over the past two weeks. “We continue to grow and are currently hiring across the board – technology, mortgage banking, underwriting, marketing and more,” said Jordan Fylonenko, a spokesman for nonbank Quicken Loans, the nation’s second ...