The housing market has been fairly stable in 2016, but industry insiders say decreased affordability and credit access could impede the multiyear housing recovery. With interest rates lower than expected, the Mortgage Bankers Association raised its 2016 origination forecast to $1.60 trillion in May from its January projection of $1.38 trillion. It expects purchase originations to increase in 2017 and 2018, thanks to economic growth and a strong job market. But many first-time homebuyers may be...

Earlier this month, the Consumer Financial Protection Bureau asked to intervene in a federal whistleblower case brought against Ocwen Loan Servicing in order to protect the confidentiality of its supervisory information. “The bureau seeks to intervene for the limited purpose of invoking the bank examination privilege and the bureau’s regulations to protect confidential and privileged bureau supervisory records and information related to the bureau’s supervision of Ocwen,” the CFPB said in its motion filed in U.S. District Court for the Eastern District of Texas, Sherman Division. Counsel for the relators in the case, Michael Fisher and Brian Bullock, and the defendants, Ocwen Loan Servicing and Ocwen Financial Corp., told...

Originations of interest-only mortgages increased sharply in the first quarter of 2016, according to a new analysis by Inside Nonconforming Markets. A group of 12 lenders originated $8.72 billion in IOs in the first quarter, up 26.9 percent from the previous quarter and a 29.8 percent increase from same period in 2015. IO originations in the first three months of 2016 even topped the $8.61 billion in IO originations by the lenders in the second quarter of 2015. [Includes one data chart] ...

The outstanding supply of single-family MBS in the market fell slightly in the first quarter, but you have to go two paces to the right of the decimal point to see it. A new Inside MBS & ABS analysis indicates that outstanding MBS totaled $6.407 trillion as of the end of March. That was down 0.01 percent from the previous quarter, stalling a steady expansion of the market that took place in 2015. And with a modest 0.2 percent increase in total single-family mortgage debt outstanding, the modest contraction in MBS nudged...[Includes two data tables]

A $1.98 billion non-agency MBS issued by JPMorgan Chase Bank in April prompted interest from a wide variety of industry participants, but other big banks appear unlikely to issue similar deals, according to analysts at Moody’s Investors Service. Moody’s was one of the firms to place AAA ratings on Chase Mortgage Trust 2016-1. The deal was unique in that 74.0 percent of the 5,353 mortgages in the MBS were eligible for sale to the government-sponsored enterprises. And it was...

The long-awaited correction in MBS prices was put on hold this week with the news that the Federal Reserve isn’t ready to hike interest rates anytime soon. Moreover, now there’s a growing belief among some economists and mortgage market watchers that the central bank may not raise interest rates at all this year. And there’s even a school of thought that suggests the yield on the benchmark 10-year Treasury bond might hit 1.0 percent before it reaches 2.0 percent. As Inside MBS & ABS went to press this week, the 10-year was...

A proposed rule issued by the Federal Reserve in March could increase costs and reduce securitization activities, according to industry participants. The Fed’s proposed single-counterparty credit limits for large banking organizations were required by the Dodd-Frank Act. The Fed proposed single-counterparty credit limits for domestic and foreign bank holding companies with $50.0 billion or more in total consolidated assets. The Fed first issued...

The mortgage industry and secondary-market investors continue to struggle with uncertainty over the degree of liability for errors in complying with the Consumer Financial Protection Bureau’s integrated-disclosure rule, commonly known as TRID. Many hope the pending TRID 2.0 rulemaking expected from the CFPB this July will clarify and resolve the exasperating ambiguity and at least let industry participants and investors know exactly where they stand and what risks they are taking on. One of the most important areas for investors is contractual liability. “Under most mortgage loan purchase agreements, there is a representation and warranty for absolute compliance [or] a signed agreement saying that you’re only liable for material violations,” said Richard Horn, a Washington, DC, attorney. Speaking at this week’s American Bankers Association conference, the former CFPB official said, “But whatever the agreement, you still have contractual liability for the loans that you sell, so keep that in mind.” Civil liability is...

FHA lenders will face stiffer maximum monetary penalties later this year for various violations of agency rules and regulations. The higher monetary penalties are the result of legislation signed into law late last year requiring federal agencies to adjust the current maximum penalty amounts for inflation in order to maintain their deterrent effect. Specifically, the Federal Civil Penalties Inflation Adjustment Act of 2015 (2015 Act) requires federal agencies to adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rule and subsequent annual adjustments for inflation. The interim final rules with the initial penalty adjustments must be published by July 1, 2016. The new penalty levels must take effect no later than Aug. 1, 2016. Additionally, agencies are required to make annual inflation adjustments, starting Jan. 15, 2017, and for each year going forward. The adjustments will ...

FHA Revises TOTAL Mortgage Scorecard. Effective on June 11, 2016, the FHA’s TOTAL Mortgage Scorecard no longer returns either upfront or annual mortgage insurance premium factors to an automated underwriting system. The FHA directs lenders to consult Appendix I of its Single Family Housing Policy handbook for applicable MIP factors. AUS vendors have been notified of the change and have adjusted their systems accordingly. HUD, First Citizens Bank Settle Fair Lending Complaint. A South Carolina bank has agreed to correct its lending practices and allocate funding to resolve allegations that it denied more loans to minorities compared to similarly-situated white loan applicants. The settlement agreement stemmed from a complaint filed by the Department of Housing and Urban Development against First Citizens Bank and Trust Co. in 2011 after an analysis of ...