Sounding like a candidate, the CFPB Director noted: “If we do not push back on the forces that press people down, we are allowing America’s promises to go unfulfilled.”
Delinquencies on non-qualified mortgages have been minimal and many borrowers with the loans seek to refinance relatively quickly, according to an analysis by Wells Fargo Securities. Among non-QMs with at least two years of seasoning that were included in nonprime mortgage-backed securities, more than 97 percent haven’t missed a payment, according to Wells. “Borrower credit performance has been robust so far, with delinquency rates and losses still subdued,” the analysts said. As of the end of July, only one non-QM in a nonprime MBS has gone...
The 30-year fixed-rate mortgage is due for an overhaul, according to a proposal published by the Federal Reserve. Members of the Fed’s research staff suggest that banks should offer a type of mortgage with no downpayment requirements that essentially automatically refinances. Wayne Passmore, senior adviser in the Fed’s division of research and statistics, and Alexander von Hafften, a senior research assistant in the division, authored a working paper published by the Fed last week. Passmore and von Hafften cited...
An affiliate of Bayview Asset Management issued a $230.0 million non-agency mortgage-backed security this week largely stocked with seasoned mortgages, including one non-qualified mortgage. DBRS and Fitch Ratings placed AAA ratings on Bayview Mortgage Fund IVc Trust 2017-RT3, without putting much emphasis on the non-QM. Non-QMs had accounted for 2.1 percent of a $125.82 million MBS from Bayview that priced in July and 1.0 percent of a $208.13 million deal it priced in April. The sponsor of the deal will retain...
Redwood Trust is preparing to issue its first non-agency mortgage-backed security backed by “expanded prime” mortgages. In the second quarter, Redwood acquired approximately $240.0 million of such mortgages, which have somewhat looser underwriting standards than what’s typically seen in the jumbo MBS market. Clayton Holdings reviewed 417 mortgages for the planned issuance, according to documents filed Aug. 30 with the Securities and Exchange Commission. The total unpaid principal balance of the loans wasn’t disclosed. The deal will include...
The Department of Housing and Urban Development this week announced changes to the FHA-insured reverse mortgage program, including a 200 basis point adjustment in the upfront mortgage insurance premium that may shut out some potential borrowers. HUD officials acknowledged during a press call that changes in both the upfront MIP and the HECM principal limit factors could reduce the number of borrowers initially by as much as 20 percent. Officials estimated that there are approximately 24 million seniors with untapped equity in their homes. “Overall, it is still a very large potential market,” said one official who spoke on background. “In the last few years, we did about 45,000 to 50,000 reverse mortgages annually. The net effect of all these changes is a better and safe HECM program for seniors. We’ll just have to wait and see how it plays out.” The revisions would help stabilize the ...
Working past age 62 is usually a less costly way to increase a senior’s Social Security benefit than borrowing a reverse mortgage, according to the Consumer Financial Protection Bureau. In a report published last week, the CFPB warned that a strategy touted by financial consultants to seniors – borrowing a reverse mortgage loan to get more SS benefits later – could result in significant costs that may erase gains from delaying SS benefits. The strategy would require older homeowners to borrow a reverse mortgage at age 62, the minimum age a person can begin collecting SS benefits, in order to delay claiming such benefits. This means retirees would use the proceeds from a reverse mortgage to replace the money they would otherwise receive from SS in the years between 62 up to their full benefit age of 66 (for those born before 1960) and 67 (for those born after 1960), or their maximum ...
The FHA this week extended temporary rules for approving condominium projects for FHA financing indefinitely. The extension will remain in place until the condominium rulemaking process is completed, the agency said in a mortgagee letter. Temporary approval requirements were first issued in 2012 and later modified in 2015. The current temporary provisions expired on Aug. 31, 2017. Under a proposed rule issued for comment on Sept. 27, 2016, elderly condominium owners would find it easier to obtain a Home Equity Conversion Mortgage. FHA proposes to reinstate “spot condo” approvals whereby individual units are approved by FHA rather than the entire condominium project as required under current rules. Spot-condo approvals would require property recertification every three years rather than the current two-year requirements. Processing recertifications would be streamlined under the ...
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