New originations of both refinance loans and purchase mortgages fell sharply from the fourth quarter, with the biggest slump in the refi market, according to a new Inside Mortgage Finance ranking and analysis. An estimated $104 billion of refinance loans were originated in the first quarter, down 45.6 percent from the end of 2013. Compared to a year ago, refi production was down 76.2 percent. Refinance originations hit a cyclical high at the end of 2012 and early 2013, averaging nearly $440 billion per quarter, and it’s been going down steadily since then. With interest rates dropping in recent weeks, some mortgage observers say...[Includes one data chart]

Unlike a lot of other housing-market data, the MBS figures are not seasonally adjusted, though they are seasonally affected.

Mortgage servicing rights will never trade as freely as mortgage-backed securities, but agency officials say they are considering ways to facilitate the increasingly active MSR market. “The market is undergoing tremendous changes with great opportunities in mortgage servicing,” said Bob Ryan, a special advisor at the Federal Housing Finance Agency, during last week’s Secondary Market Conference sponsored by the Mortgage Bankers Association. “It has attracted ...

It’s a buyer’s market for mortgage firms these days, and former Cole Taylor Mortgage Chief Executive Willie Newman couldn’t be in a better place: He’s teamed up with Stone Point Capital, a hedge fund that has committed several hundred million dollars to the purchase of residential lenders. “We have a lot of plans,” Newman told Inside Mortgage Finance. “We plan to be in originations, servicing, capital markets and multi-channel production.” It was...

Two trade groups expressed their support for the nomination of Department of Housing and Urban Development Secretary Shaun Donovan to be the director of the Office of Management and Budget and Julian Castro as his successor at HUD. The Mortgage Bankers Association praised Donovan for his work on critical initiatives, such as housing revitalization, recovery efforts related to Hurricane Sandy, borrower assistance programs and the HUD/FHA budget. Donovan would replace Sylvia Mathews Burwell, currently the director of OMB, who was chosen to replace Health and Human Services Secretary Kathleen Sebelius. Both the MBA and the National Association of Realtors praised...

Lack of Congressional funding, however, has put a damper on the initiative. And lenders generally oppose proposals where they would be charged a subsidy fee.

The high cost of FHA loans, due mainly to higher MI premiums and a requirement to maintain mortgage insurance for the life of the loan, has made it difficult for borrowers to obtain credit.

Here’s what the current state of mortgage banking boils down to: Can the industry survive on $1 trillion to $1.2 trillion in production a year through 2015?

Mortgage industry stakeholders are wary of a new FHA proposal to offer mortgage insurance premium reductions to borrowers who agree to complete housing counseling before and after they obtain an FHA-insured mortgage loan. The FHA is seeking comment on a proposed four-year, two-phase housing counseling pilot, “HAWK for New Homebuyers.” HAWK is an acronym for Homeowners Armed With Knowledge, and includes several initiatives aimed at broadening the use of counseling in FHA origination and servicing. HAWK is a component of the “Blueprint for Access,” which FHA announced on May 13 as part of the agency’s efforts to expand access to credit for underserved borrowers. The HAWK pilot would provide FHA pricing incentives to first-time homebuyers who participate in ...

Total FHA originations dropped significantly in the first quarter of 2014 as borrower access to credit remained a big problem for the agency, according to Inside FHA Lending’s analysis of agency data. FHA lenders ended the first quarter with a combined $28.3 billion in new originations, down 21.0 percent from the fourth quarter of 2013. Production also fell a whopping 55.6 percent from the same period a year ago. Purchase transactions comprised the bulk of new FHA loans but, so far, the much-anticipated boom in new purchase lending has yet to materialize. The high cost of FHA loans, due mainly to higher mortgage insurance premiums and a requirement to maintain mortgage insurance for the life of the loan, has made it difficult for borrowers to obtain an FHA-insured loan. Lender overlays also have restricted access to FHA credit. The FHA has raised premiums five times since 2009 to ... [1 chart]