The wholesale-broker channel was the only mortgage production arena to see increased volume in the fourth quarter of 2014, according to a new Inside Mortgage Finance analysis and ranking. Brokers originated an estimated $34 billion in new home loans during the final three months of 2014, a gain of 6.3 percent from the previous quarter. The wholesale-broker channel gradually recovered from a disastrous first quarter, when brokers saw their market share slide to just 9.0 percent. By the end of the year, it was up to 10.0 percent. The broker channel generated...[Includes four data charts]

VA loan volume continued to rise in the fourth quarter of 2014, driven by low interest rates and a strong demand for the lower downpayment loans, according to an Inside FHA Lending analysis of Ginnie Mae/VA data. The volume of VA loans securitized in Ginnie Mae mortgage-backed securities rose 4.0 percent in the fourth quarter to $107.8 billion from the previous quarter, with more than half of the loans coming through the retail channel. Retailers accounted for $51.5 billion in VA loans securitized during the quarter while correspondents and brokers accounted for $44.4 billion and $11.9 billion, respectively. The overall average FICO score for VA loans was 707, with average loan-to-value and debt-to-income ratios of 95.0 percent and 38.2 percent, respectively, during the quarter. Correspondents came up big with VA purchase loans, accounting for $31.7 billion of the $65.1 billion in total purchase loans produced during the fourth quarter. Retail loan officers accounted for $28.5 billion while brokers brought in ... [ 1 chart ]

The FHA has delayed the effective date of new guidance that will require reverse mortgage lenders to perform a financial assessment of applicants for a Home Equity Conversion Mortgage. The FHA indicated that the change was necessary to allow vendors and the Department of Housing and Urban Development to align their respective software before the new system can be operational. Those familiar with the technology said delivering the required system enhancements should not take long. The FHA said a new effective date should be expected within 30 to 60 days of the original March 2 effective date. It will be announced in a new mortgagee letter, the agency added. The new guidance requires lenders to evaluate HECM borrowers’ willingness and capacity to meet their obligations and to comply with program requirements. “Financial assessment” means doing a much more ...

FHA lenders should spend the next couple of months familiarizing their staff with the requirements in the FHA’s new Single Family Housing Policy Handbook to ensure proper implementation of the changes on June 15, 2015, according to compliance experts. The impending changes in the Single Family Handbook are complex and significant. Lenders will need proper legal guidance to navigate and understand hundreds of pages of consolidated housing policies and guidance, as well as substantive changes to FHA requirements, said K&L Gates experts in a recent analysis. The handbook is a consolidated, authoritative source of single-family housing policy and is meant as a one-stop resource for FHA lenders. It gathers and streamlines all FHA requirements, which are currently spread throughout various handbooks, mortgagee letters and other documents, making it easier for lenders to ...

The Consumer Financial Protection Bureau recently sued a reverse mortgage lender and issued consent decrees against two other mortgage companies for misleading consumers with false advertising about FHA-insured mortgage products. The CFPB filed suit against All Financial Services (AFS), a Maryland-based reverse mortgage lender, in the federal district court in Baltimore alleging that the lender disseminated misleading ads for Home Equity Conversion Mortgage loans between November 2011 and December 2012. In addition, AFS allegedly failed to maintain copies of the ads as required by the CFPB under its reverse mortgage regulations. According to court filings, the CFPB alleges that the lender/broker mailed out ads using materials and language that seemed to indicate that it was a federal entity or an affiliate of a government entity. All AFS ads appeared as if they were ...

The Department of Veterans Affairs expects to have a finalized Qualified Mortgage (QM) rule by May to help clear up some issues that have arisen since the agency issued an interim final rule last spring. The VA issued the interim QM rule for comment on May 9, 2014, to define which VA loans will have QM status under the ability-to-repay (ATR) rule. Issued by the Consumer Financial Protection Bureau, the ATR rule provided temporary QM status to loans eligible for FHA insurance and guaranties by the VA and the Department of Agriculture’s Rural Housing Service. Eligible government-backed loans must be 30-year fixed-rate with no interest-only, negative amortization or balloon features. Total points and fees must not exceed 3 percent of the total loan amount for loans of $100,000 or more. Loans that meet the definition of a temporary VA-eligible QM are considered as in compliance with the ATR rule. They are designated as “safe harbor QMs,” provided they are not ...

Ginnie Mae servicing volume gained a mere percentage point in the fourth quarter of 2014 from the previous quarter, capping a productive year for servicers of government-backed mortgages, according to Inside FHA Lending’s analysis of agency data. Servicing volume rose by only 1.0 percent to $1.5 trillion during the last three months of 2014 from $1.4 trillion in unpaid principal balance in the first quarter, and increased 4.0 percent year over year. Four out of the top five Ginnie Mae servicers were banks, of which three experienced declines in their servicing portfolios on quarterly and year-over-year bases. The leader of the pack, Wells Fargo, closed out the year with $416.0 billion in Ginnie Mae servicing and capturing 27.8 percent of the market. Its servicing portfolio fell ... [ 1 chart ]

Private mortgage insurers ended 2014 in better financial shape and with a stronger market position than a year earler, although new business volume fell sharply in the fourth quarter, according to a new Inside Mortgage Finance analysis and ranking. Private MIs reported $46.94 billion in new insurance written during the fourth quarter of 2014, a figure that could change slightly when National MI releases its earnings after Inside Mortgage Finance goes to press. Our estimate for the firm is based on volume trends reported by its competitors. While private MI business was down 12.5 percent in the fourth quarter, total mortgage originations fell...[Includes three data charts]

Production of loans with a Department of Veterans Affairs guaranty increased 44 percent in the fourth quarter of 2014 compared to the same period a year ago, thanks to strong refinance activity during the holidays, according to an agency spokesman. John Bell, assistant director for loan policy and valuation with the VA Home Loan Guaranty Service, said VA streamline refinance activity rose 18 percent year over year as more veterans took advantage of lower interest rates and lower downpayment in the fourth quarter. He said the VA is still in the process of collating data, declining to give further details. Nonetheless, VA production in the fourth quarter was fueled...

A push to seize a few thousand underwater mortgages in the San Francisco area by eminent domain has likely run into a dead end for now, after a report from the City and County of San Francisco Controller’s Office discouraged local officials from pursuing the idea any further. “Precluding any participation from Fannie Mae or Freddie Mac, the use of eminent domain would seem to be an inviable option,” the document concluded. On Oct. 28, 2014, the Board of Supervisors issued...