Production of “agency jumbo” mortgages fell sharply in the first quarter of 2014 and is likely to drop even more as new FHA loan limits show up in endorsement data. According to a new Inside Mortgage Finance analysis, Fannie Mae, Freddie Mac and the FHA saw $10.5 billion in single-family business with loan amounts exceeding the traditional agency limit of $417,000 during the first quarter of 2014. That was down 30.6 percent from the fourth quarter. It was also the lowest three-month volume since the fourth quarter of 2008, not long after dramatically higher “emergency” loan limits were put in place by the agencies. In comparison, originations of non-agency jumbo loans fell...[Includes three data charts]
Maybe more Millennials are buying homes than people think: "A large portion of our applicants are in the Millennial generation. I am seeing them in our office every day," said Jim Picard of Denali Alaskan Federal Credit Union.
Six months into the new ability-to-repay rule, industry compliance professionals seem confident in the efforts they’ve made to get ready for the regulation and acknowledge that the sky hasn’t fallen – yet. But it’s far too early to draw definitive conclusions about the success of the rule itself and its overall effect upon the market, according to experts at the American Bankers Association’s 2014 regulatory compliance conference in New Orleans this week. “Clearly, the new rules have increased the bank’s risk profile and have put pressure on the decentralized operating market,” said Cheryl Snyder, head of retail banking for Park National Bank, the lead bank in a $6 billion bank holding company headquartered in Newark, OH, and an originator of qualified mortgages and non-QM loans. Citing the lending industry’s technology preparations in the much-hyped run-up to the year 2000, Snyder told...
Industry participants have raised a number of concerns about a proposed rule issued in April that would implement minimum requirements for appraisal management companies, which are intermediaries between appraisers and lenders. Federal regulators in April issued a proposed rule that would implement AMC provisions mandated by the Dodd-Frank Act, including a ban on AMCs providing appraisal management services for federally related transactions in states that haven’t established regulations for AMCs. The Consumer Mortgage Coalition said...
Industry groups are supportive of a proposal by the Consumer Financial Protection Bureau to provide a reasonable cure for inadvertent overages in points and fees on qualified mortgages, but they disagree over the appropriate length of the cure period and other issues. The proposed CFPB rule would amend certain mortgage rules issued last year under the Truth in Lending Act. It would provide a limited cure mechanism for QM loans that exceed the points-and-fees limit for such mortgages and provide an alternative “small servicer” definition for nonprofit groups that meet certain requirements. Also, the bureau has proposed to amend the current exemption from the ability-to-repay rule for qualified nonprofits. In addition to the specific proposals, the CFPB sought...
The Federal Housing Finance Agency is set to take a comprehensive view of the impact any changes to the government-sponsored enterprises’ guaranty fees would have on the MBS market. Late last week, the regulator issued a “request for input” on the g-fees charged by Fannie Mae and Freddie Mac, prompting speculation that any changes to the fees won’t be implemented until 2015. The FHFA noted that the GSEs’ g-fees have increased from an average of 22 basis points in 2009 to 55 bps in 2013. The increases have been prompted by the FHFA along with Congress and changes made by the GSEs. Because of loan-level pricing adjustments – which in nearly all cases are rolled into the mortgage coupon – g-fees vary...[Includes one data chart]
It looks like the Securities and Exchange Commission has yielded to the majority view of the other federal regulators and agreed to a simplified qualified residential mortgage definition that could make it easier for issuers of non-agency MBS. The SEC dropped its insistence on a downpayment requirement, according to an account this week in the Wall Street Journal. In exchange, the other federal agencies involved in the rulemaking agreed to revisit the QRM issue two years after the final risk-retention rule goes into effect. Deals backed...
The International Organization of Securities Commissions is working on a set of “good practices” to provide to the vast majority of the world’s securities regulators as part of an effort to prompt securities investors to reduce their reliance on credit ratings. While participants in the U.S. structured finance industry suggest that reliance on credit ratings diminished after the financial crisis, many funds continue to have guidelines that reference credit ratings. Some investors, for example, couldn’t buy into risk-sharing transactions from the government-sponsored enterprises unless the deals received investment-grade ratings. IOSCO recently issued...
Real estate investment trusts that specialize in the MBS market held $261.0 billion of mortgage securities in their portfolios at the end of March, according to a new Inside MBS & ABS analysis. That was down 1.4 percent from the end of the fourth quarter. REITs have been de-leveraging and scaling back their MBS holdings since the third quarter of 2012, when the Federal Reserve began its massive spending spree in the agency MBS market. A few REITs began rebuilding...[Includes one data chart]
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