Originations of interest-only mortgages increased at a number of lenders in the first half of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. The federal qualified mortgage standard does not allow interest-only terms, and IO production declined after the Consumer Financial Protection Bureau QM rule went into effect. Lately, however, many lenders seem to be getting more comfortable with the product. A group of 15 lenders had...[Includes one data table]
The recent dismissal of class-action shareholder lawsuits against Ocwen Financial suggests that it takes more than a sharp decline in a company’s stock for investors to prevail in court. In early September, a federal judge dismissed class-action lawsuits that were filed against Ocwen Financial, Altisource Portfolio Solutions and certain officials at the firms. United Union of Roofers v. Ocwen and West Palm Beach Firefighters Pension Fund v. Altisource were filed on behalf of investors that purchased stock in the companies between early 2013 and December 2014. In that span, the companies’ stock prices declined...
Ginnie Mae securitized $14.2 billion of VA jumbo loans in the first half of 2015, more than double the volume seen during the same period a year ago. VA securitization data for the first six months reflect an upward trend in VA loan originations, which lenders attribute to better outreach to veterans and servicemembers and aggressive marketing strategies. VA jumbo securitization in the first half of the year was up 120.7 percent from the same prior-year period. Volume also was up 13.9 percent in the second quarter from the previous quarter. All top-five VA jumbo securitizers reported large gains year over year, but four showed volume decreases quarter over quarter. Third-ranked PennyMac recorded a 3.4 percent gain in the second quarter from the prior quarter. The top five, in sequential order – Wells Fargo, Freedom Mortgage Corp., PennyMac Corp., U.S. Bank and Quicken Loans – accounted for ... [ chart ]
FHA jumbo securitization continued to rise over the first six months of 2015 on the back of soaring FHA jumbo production in the second quarter. FHA jumbo originations in the second quarter more than doubled to $6.8 billion, according to the Inside Mortgage Finance database. FHA data showed that the jumbo share of originations was highest in conventional-to-FHA refinance (14.9 percent) and streamlined FHA refis (13.3 percent,) but just 9.0 percent for purchase loans. Delivery of FHA jumbos, including modified loans, into Ginnie Mae jumbo mortgage-backed securities rose 131.9 percent in the second quarter from the prior quarter and was up 115.8 percent compared to the first six months of 2014. Wells Fargo led the market in the first half with $1.4 billion in jumbos contributed to MBS, up 123 percent quarter over quarter. That was good enough for a 12.7 percent market share. PennyMac Corp. accounted for ... [ chart ]
The financial services industry is calling on the FHA to either make drastic changes to proposed timelines for filing insurance claims or kill the entire proposal. Banks, nonbanks, credit unions and industry trade groups pushed back against the controversial proposal, warning it would do more harm than good to the FHA single-family program, lenders and consumers. Concerned with worsening late-claim filing, the FHA proposed to establish a timeframe for filing insurance claims and to penalize lenders with complete termination of insurance if they fail to meet the deadlines. In addition, the agency proposed to prohibit reimbursement of certain expenses if a mortgagee fails to complete certain actions within prescribed periods. Finally, the FHA proposed to establish a new method by which interest-rate curtailments and expense curtailments are pro-rated. Mortgage lenders have ...
Wells Fargo this week reinstated the 640 minimum credit score requirement, following through on its threat to re-impose credit overlays due to its frustration with FHA’s republished loan-level certification proposal. Officials said the re-proposed version of the proposal, which was initially issued for comment in May, still disappoints in spite of industry input to put concerned FHA lenders at ease (See next story for background). In 2014, Wells dropped the minimum credit-score requirement to 600 for FHA borrowers after talks with the Department of Housing and Urban Development and policymakers. The FICO readjustment applies to Wells’ FHA retail purchase loans, aligning it with the 640 minimum credit score requirement for the bank’s correspondent business. In a previous statement, Wells reiterated the need for clearer rules in order to ...
FHA lenders funded $7.8 billion in new Home Equity Conversion Mortgage loans during the first half of 2015, up 8.2 percent from the same period a year ago. HECM loan production was slower in the second quarter with originations down 1.1 percent from the prior quarter. Purchase loans accounted for 86.1 percent of all HECM transactions during the first six months. Interestingly, borrower bias against adjustable-rate loans appeared to have eased. Fixed-rate HECMs accounted for only 15.4 percent of originations during the first half of the year. Initial principal amount at loan origination totaled $4.6 billion over the same period. On a fiscal year-to-date basis, the FHA reported a total of 53,372 HECM endorsements, up from 47,662 HECM endorsements in fiscal YTD 2014. Meanwhile, HECM endorsed cases increased to 5,750 in August compared to ... [ chart ]
The Department of Housing and Urban Development recently saw its long-running attempt to recover $179 million from a bankrupt FHA lender come to a disappointing close, receiving only a little over half-a-million dollars after liquidation. HUD’s Inspector General gave the agency the green light to book its share of funds available to pay an $89.9 million HUD claim against the now-defunct lender Taylor, Bean & Whitaker, ending further action against the company. In 2006, whistleblowers filed a “qui tam” lawsuit in federal district court in Georgia alleging that TBW and Home America Mortgage had falsely certified and approved poorly underwritten loans for FHA insurance. In 2009, the two mortgage lenders filed for bankruptcy separately but were later consolidated by the court into one bankruptcy case. In May 2010, the Department of Justice, on behalf of HUD, filed a ...
Officials from the Consumer Financial Protection Bureau, Wells Fargo and other industry players are set to provide an update on qualified mortgages and other CFPB initiatives...
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