Primary market originators and due diligence providers say the elusive market in private placement MBS deals has been gaining strength this year. “We’re seeing three to five private deals a month,” said Jeff Taylor, managing partner of Digital Risk, a New York-based risk management and due diligence firm. As for the underlying product, it’s across the board, he added. “It can be jumbo, nonperforming, and re-performing.” But the deals are also much smaller than the rapidly growing public MBS deals. Digital Risk, which conducts due diligence reviews on the underlying collateral, said...

The four surviving private MIs that are still writing new business after the wreckage of the hous-ing market collapse last week agreed to pay a relatively modest $15.40 million to settle a longstanding dispute over their arrangements with captive reinsurance entities sponsored by lenders. The Consumer Financial Protection Bureau alleged that Genworth Financial, United Guaranty, Radian Guaranty and Mortgage Guaranty Insurance Corp. violated the Real Estate Settlement Proce-dures Act by paying illegal kickbacks – in the form of reinsurance premiums – to get business from mortgage lenders. “The payments made as supposed ‘reinsurance’ premiums did not correspond to a proportionate transfer of insurance risk between the parties,” said CFPB Director Richard Cordray. An Inside Mortgage Finance analysis of MI regulatory filings suggests...

The FHA may need to draw $943 million from the U.S. Treasury to reserve for further unexpected losses in the Mutual Mortgage Insurance Fund, according to estimates in the Obama administration’s fiscal 2014 budget proposal released this week. That is a bit of good news, despite Congress’ continuing concern about the FHA. Last year, an independent actuarial audit found a projected $16.3 billion shortfall in the MMIF as of the end of fiscal 2012. The audit also revealed that capital reserves for unexpected losses had fallen to negative 1.44 percent. Technically, the FHA has...

Consumer advocates are calling on the Obama administration to extend the Home Affordable Modification Program beyond the end of this year. While HAMP is far from meeting performance goals set by the administration, consumer advocates claim the program is favorable to proprietary loan modifications completed by servicers. “Extending the HAMP program for several years – or, at a minimum, for one year – would greatly assist the housing market in general and neighborhoods most affected by high foreclosure rates in particular by helping more homeowners avoid foreclosure,” 36 consumer groups, including the Center for Responsible Lending and the National Consumer Law Center, said in a recent letter to Jacob Lew, secretary of the Treasury Department. In January 2012, the Obama administration announced...

Two major auto dealer trade groups have some serious objections to the guidance the CFPB put out last month on auto lending, particularly taking issue with whether the CFPB’s position on dealer rate participation is going to make much difference in helping car buyers. The National Automobile Dealers Association and the National Association of Minority Automobile Dealers said the guidance issued by the bureau attempts to force auto finance sources into changing the way they compensate dealers without any indication that...

Reaction to a report about Obama administration efforts to get banks to increase their purchase mortgage lending, particularly through the FHA, has ranged from supportive to dire warnings of déjà vu. Apparently, administration officials are trying to push banks to make more loans to qualified lower-income borrowers as well as minority and first-time homebuyers who have been shut out of the mortgage market because of stringent credit overlays. The report, which ran in the April 2 Washington Post, described the targeted borrowers as “people with weaker credit,” which, for some, conjures up the ...

The FHA is seeking comment on a proposal to change the period for reviewing loans for direct endorsement from pre- to post-closing in order to increase the number of acceptable loans and, therefore, reduce any potential risk to the Mutual Mortgage Insurance Fund. Under the proposal, a lender applying for unconditional direct endorsement authority would be required to submit the necessary loan files only after closing. After determining that the mortgage is acceptable and meets all FHA requirements, the agency would notify the lender that the loan has been endorsed. Current regulations provide for ...

Borrowers rushing to get their purchase-mortgage applications submitted before FHA’s higher annual mortgage insurance premiums took hold April 1 helped boost total purchase applications last week, according to the latest data from the Mortgage Bankers Association. The MBA’s weekly mortgage applications survey for the week ending March 29 showed a surge in purchase applications for government loans. The surge, fueled mostly by FHA applicants, helped boost the total number of purchase applications received by lenders during the period. “Total purchase applications increased last week, due to an almost ...

Four private mortgage insurance companies this week agreed to pay $15.4 million in penalties to resolve government charges that they improperly paid kickbacks to mortgage lenders for business referrals in violation of the Real Estate Settlement Procedures Act. The Consumer Financial Protection Bureau filed complaints and proposed consent orders against Genworth Mortgage Insurance Corp., Radian Guaranty, Inc., Mortgage Guaranty Insurance Corp. and United Guaranty Corp. for the alleged illegal business practices that contributed to the financial crisis. The CFPB said the MI companies engaged in illegal ...

Fannie Mae ended 2012 with its single best quarterly and yearly profit in company history, prompting the government-sponsored enterprise to predict sustained profits “for the foreseeable future,” without taking into income any of the massive allowance it has built up related to deferred taxes. Fannie reported net income this week of $17.2 billion for 2012, compared to a net loss of $16.9 billion in 2011, with fourth quarter earnings of $7.6 billion. A year earlier, the GSE posted a $2.4 billion loss for the fourth quarter of 2011. “We had...