The Federal Reserve’s Open Market Committee this week fulfilled the expectations of roughly half the Wall Street participants and economists surveyed by financial news organizations and opted to hold the line on interest rates, and to maintain the status quo when it comes to the Fed’s massive balance sheet holdings of agency residential MBS and debt. “We recognize that there has been a great deal of focus on today’s policy decision,” Fed Chair Janet Yellen said in her press conference after the FOMC’s two-day meeting concluded Thursday afternoon. “The recovery from the Great Recession has advanced sufficiently far, and domestic spending appears sufficiently robust, that an argument can be made for a rise in interest rates at this time. We discussed this possibility at our meeting. “However, in light of the heightened uncertainties abroad, and a slightly softer expected path for inflation, the committee judged...
Meanwhile, there’s a school of thought that believes if and when the Fed hikes, mortgage rates will fall because it will show investors that the central bank is acting to curb inflation.
Nearly a year has passed since the Structured Finance Industry Group released documents relating to the RMBS 3.0 project and the leader of the Treasury Department’s non-agency reform efforts left the Treasury in May. However, at the ABS East conference sponsored by Information Management Network this week in Miami, industry participants noted that progress is being made on both initiatives. Panel sessions on reforming the non-agency mortgage-backed securities markets have been a staple at industry conferences since 2008, and some observers question whether much progress has been made. “I think...
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 ...
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