Purchase-mortgage lending exceeded refinance production for the first time in five years during the fourth quarter of 2013, according to a new Inside Mortgage Finance ranking and analysis. The shift has been in the works for some time as the potential refinance market began to shrink when interest rates rose late in the second quarter of last year. Mortgage lenders originated an estimated $168 billion of purchase mortgages during the fourth quarter of 2013, accounting for 55.1 percent of total originations. The last time purchase mortgages comprised more than half of new production was back in the fourth quarter of 2008. But purchase-mortgage originations fell...[Includes three data charts]

The idea of expanding the Home Affordable Refinance Program may never die, but comments this week show the Obama administration has little interest in reviving it. During a question-and-answer event this week sponsored by Politico, Department of Housing and Urban Development Secretary Shaun Donovan made it clear that HUD will not push for an expansion of HARP. While more could be done for non-agency borrowers, he said that would require legislation. “I think we should continue to look at everything we are doing in marketing it … but I think this is something we ought to continue to look at on the legislative front,” said Donovan. An industry lobbyist said...

The whistleblower who gained fame and a lot of money from suing major banks for “robo-signing” and other improper mortgage servicing practices has filed an amended lawsuit accusing 22 companies of defrauding the Department of Housing and Urban Development of billions of dollars in false FHA claims. Lynn Szymoniak, whose 2011 interview on “60 Minutes” blew the lid off improper servicing practices at some major banks, filed a qui tam, or whistleblower, lawsuit in the U.S. District Court of South Carolina last week alleging violations of the federal False Claims Act and state false claims statutes. Defendants include CitiMortgage, Wells Fargo Bank, Bank of America, Deutsche Bank, HSBC USA, JPMorgan Chase and U.S. Bank, as well as servicers, trustees, custodians and title companies. The lawsuit seeks...

Although Flagstar led the pack, it was the only bank to rank among the top five sellers of brokered loans.

A nonbank wholesaler, Carrington is allowing credit scores as low as 580 for FHA and USDA mortgages, along with some VA loans.

Also, Morgan Stanley recently increased its stake in Arch Capital Group to 6.3 percent. Arch owns CMG Mortgage Insurance, which is being renamed Arch Mortgage Insurance Company.

The FHA allows low downpayments on loans that have credit scores as low as 580, but numerous lenders have established their own underwriting overlays to protect against poor performance.

January 2014 marked the fourth month in a row where combined agency securitization included more purchase-money mortgages than refinances, according to Inside MBS & ABS.

Average credit scores and debt-to-income ratios on FHA mortgages loosened as 2013 progressed, according to an analysis by Inside Mortgage Finance. Lenders have gotten particularly aggressive regarding credit score requirements, and recent changes to FHA guidelines could prompt further loosening on DTI ratios. According to an Inside Mortgage Finance analysis of Ginnie Mae loan-level mortgage-backed security data, the average credit score on FHA loans was 706.1 in January. However, as FHA originations declined during the year, average credit scores on FHA loans also fell, hitting 685.4 in December. Average credit scores on FHA originations could continue...[Includes one data chart]

The nation’s third largest FHA servicer also admitted that it failed to inform the government mortgage insurers when its own internal reviews discovered more than 500 defective loans that never should have been submitted for coverage.