Using “probability of default” values instead of credit scores to measure risk in a mortgage securitization can provide far more insight and dramatically cut loss exposure, according to a new white paper from VantageScore Solutions, a joint initiative created by the three major credit bureaus, Equifax, Experian and TransUnion. “Loan securitization has become an essential source of capital for consumer lenders of all sizes, playing a significant role in ...
Lawmakers and regulators alike cited the recent move by the Consumer Financial Protection Bureau to liberalize its ability-to-repay rule somewhat as an example of the kind of adjustments that can be made to help ease the regulatory burden for smaller financial institutions, especially those operating in underserved markets. “A few weeks ago, the CFPB announced changes to its mortgage rules – a win for small lenders, particularly those in underserved rural areas,” said Sen. Sherrod Brown, D-OH, ranking member of the Senate Banking, Housing and Urban Affairs Committee, during a hearing early this week. “There is...
Overall, 2014 was not a good year for FHA originations as tight underwriting and high loan costs narrowed the band of borrowers able to qualify for an FHA-insured residential loan, according to an Inside FHA Lending analysis of agency data. FHA total endorsements dropped to $35.2 billion, an 8.1 percent drop in the fourth quarter from the previous quarter, with fixed-rate and adjustable-rate mortgages declining by 7.9 percent and 12.7 percent, respectively. FHA purchase originations suffered a decline of 11.3 percent. There was one bright spot: FHA refinances rose a meager 2.2 percent while the percentage of conventional loans that refinanced into FHA saw a more substantial lift of 13.0 percent quarter to quarter. FHA baseline lending (below $417,000) saw volume drop 8.4 percent in the fourth quarter. FHA jumbo loan amounts up to the statutory high-cost loan limit and ... [ 2 charts ]
The Department of Housing and Urban Development is once again asking for authority to charge lenders an administrative support fee to fund information technology upgrades and administrative functions at the FHA, a bid that was shot down by Congress last year. As part of the Obama administration’s fiscal 2016 budget proposal, HUD wants to charge lenders up to $30 million in fees, which would be credited as offsetting collections to the FHA’s Mutual Mortgage Insurance program account. The mortgage industry cautioned...
Mortgage vendors usually see their fortunes rise and fall based on loan origination volume, but don’t tell that to DocMagic, which is consolidating its hold in the document preparation business. In a year in which residential production fell 34 percent, the Torrance, CA-based DocMagic grew its client base to 7,500, a gain of 1,000 in just over 12 months. The privately held doc prep/software company doesn’t generally disclose revenue figures, but according to ...
Is the mortgage industry nearing a tipping point in terms of homebuyers using online capabilities predominantly to secure financing for the biggest purchase of their lives? That increasingly appears to be the case, a recent survey suggests. Nine out of 10 respondents to a survey commissioned by Discover Home Loans said they used online technology of one form or another in the home financing process. One of the benefits of technology is that it ...
Electronic signatures and records have become such crucial components of mortgage lending that lenders need to understand the process and the risks to avoid potential liability, according to panelists at a recent webinar. Several significant regulatory actions in 2014 opened the door to the increased adoption and use of electronic records and signatures. However, lenders face growing pressure from regulators to maintain appropriate measures when ...
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