Since the November election, mortgage rates have spiked roughly 75 basis points, promising to snuff out the refinancing market and possibly leading to a spate of industry layoffs. But so far, it appears that many firms are keeping their cost-cutting powder dry. “Application volume has been pretty much the same,” said Paul Rozo, CEO of nonbank originator Paramount Residential Mortgage Group, Corona, CA. “I think it’s too early in the game to be thinking about layoffs.” Marc Savitt, a principal in The Mortgage Center, a small West Virginia-based brokerage firm, said...

Mortgage lenders saw a significant jump in refinance activity during the third quarter of 2016, although purchase-mortgage lending continued to account for over half of new originations, according to a new analysis and ranking by Inside Mortgage Finance. Refi production increased by 20.4 percent from the second to the third quarter, according to revised estimates by Inside Mortgage Finance. A total of $277.0 billion of refi loans were originated during the period, the strongest quarterly volume since the second quarter of 2013, when an estimated $351.0 billion of refinance mortgages were originated. One change in the market over the past three years has been...[Includes three data tables]

Roughly 14 percent of the 12,500 mortgage complaints the CFPB has received to date from U.S. military personnel, veterans and their dependents involve problems with refinancing, and the issues they face have been changing over time, according to a new report from the bureau. “As the housing market has rebounded, we hear less about veterans struggling to refinance their loans when facing a financial hardship or imminent default and more about the problems associated with refinancing when they are using it as a tool to get potentially more favorable loan terms,” the CFPB document stated. The agency then delved into some of the specific gripes being lodged against mortgage companies. “We receive many complaints from veterans who believe they are ...

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 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, ...

A new report from the Government Accountability Office urged the FHA and the Rural Housing Service to consider consolidating both their similar, often overlapping single-family home loan guarantee programs. Both FHA and RHS, an agency under the U.S. Department of Agriculture, help borrowers finance homes by providing guarantees on their single-family mortgage loans. The latest GAO report expands on the analysis in a 2012 report, which found overlaps in the loan products offered by the two agencies, borrower income levels, and geographic areas served by the FHA single-family mortgage insurance program and the RHS’ Single-Family Housing Loan Guarantee Program. The report compared single-family home purchase loans backed by FHA and RHS in fiscal years 2010-2014. Auditors found significant overlap and some differences in the borrowers the agencies serve. According to the ...

Most of the lift in third-quarter mortgage originations came from the tail end of the refinance boom, especially in the agency market, according to a new Inside Mortgage Finance analysis. The government-insured market saw a hefty 21.4 percent jump in mortgage originations from the second to the third quarter as the sector reached an estimated $159.0 billion and accounted for 27.4 percent of total first-lien production. It was the second consecutive record quarter for FHA, VA and Department of Agriculture rural-housing production. The conventional-conforming segment was not far behind...[Includes two data tables]

Since the historic election of last week, interest rates have been steadily rising, turning the tables on what increasingly looked like a moribund market for servicing sales. But not anymore. Since the Nov. 8 election, the yield on the benchmark 10-year Treasury has spiked 50 basis points to 2.24 percent with mortgage rates following in the wake. And while this spells bad news for originators – especially refinance specialists – it’s manna from heaven for holders of mortgage servicing rights. As Inside Mortgage Finance went to press this week, market makers were...

Fannie Mae and SoFi introduced a new loan option last week that lets homeowners take advantage of low rates and use the equity in their home to pay down college loans. Under the Student Loan Payoff ReFi, homeowners can refinance mortgages and cash out while paying down an existing loan balance. Fannie estimates that just 1.8 percent of the cash-out mortgages it finances today are being used to pay off student loans. With cash-out refinances growing, Deutsche Bank said it expects to see refinance activity and mortgage-backed security issuance tick up. The new product is driven by cutting guaranty fees that usually accompany Fannie cash-out mortgages. GSE officials said they received approval...

Ginnie Mae’s decision to change the pooling requirements for streamline refinance loans should boost investor confidence and slow new production of GNMA IIs, Deutsche Bank analysts said. The change could be seen as mildly more restrictive than current pooling standards, particularly having more impact on VA loans, which unlike FHA, have no seasoning requirement to qualify for streamline refinancing, said Jeana Curro, bank research analyst. Under new guidance issued last month, in order to be pooled into standard Ginnie I or Ginnie II multi-issuer pools, streamline refi loans must show...