The average daily trading volume of agency MBS hit $223.2 billion in September, the strongest reading of the year and a sign that liquidity in the market has improved. According to figures compiled by the Securities Industry and Financial Markets Association, daily trading volume increased by 17.7 percent compared to the same month a year ago. But the year-to-date averages are much closer: $206.6 billion for 2016 compared to $199.9 billion last year. In the agency space there is...

Industry participants looking to originate non-qualified mortgages or acquire the loans continue to insist that the relatively low volume of such loans is due to a lack of effort from lenders. “It’s not that the non-QM space is competing for borrowers that are getting loans elsewhere, it’s that the non-QM space is competing for origination capacity at existing originators,” said Matt Nichols, CEO of Deephaven Mortgage. Many have placed...

Jumbo mortgages accounted for 18.3 percent of total first-lien originations in 2015, according to a new Inside Mortgage Finance analysis of Home Mortgage Disclosure Act data recently released by federal regulators. That was virtually unchanged from the 18.1 percent share that jumbo loans held in the 2014 HMDA data. The analyses match conventional loan amounts and county information about the secured property to Fannie Mae/Freddie Mac conforming loan limits, including adjustments for high-cost markets, in effect at the time. Purchase mortgages accounted...[Includes two data tables]

According to investment bankers, there continues to be plenty of talk about mergers and acquisitions in the mortgage industry, but deals just aren’t getting done for the simple reason that the primary targets – midsized nonbanks – are posting strong profits and want top dollar for their franchises. “We’re still having conversations with potential buyers,” said Chuck Klein, managing partner with Mortgage Banking Solutions, Austin, TX. “But there continues to be a wide gap between the bid and the asking price.” Klein also noted...

A number of mortgage trade groups this week called upon the Consumer Financial Protection Bureau to extend its current “diagnostic” approach to enforcing the agency’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. The groups were responding to the CFPB’s request for public comments on its proposed TRID clarifying rulemaking, which was issued at the end of July. It’s...

Last week’s closely-watched appeals court ruling in the wrangling between PHH Mortgage and the Consumer Financial Protection Bureau over Section 8 of the Real Estate Settlement Procedures Act is being widely viewed by many as a clipping of the agency’s wings. But expectations about just how restrained the CFPB will be in enforcement actions going forward vary from compliance attorney to compliance attorney. Lawyers with the Stinson Leonard Street law firm pointed out that the director still holds all of the same enforcement power as before, despite the court’s conclusion that the bureau’s leadership structure, with a sole, independent director who can only be removed for cause, is unconstitutional. “For example, the CFPB administrative appeals process is...

A federal court ruling that the Consumer Financial Protection Bureau’s structure is unconstitutional raises questions that similarly-structured agencies such as the Federal Housing Finance Agency could also be challenged. A DC Circuit Court judge in the PHH Corp. v. Consumer Financial Protection Bureau case ruled that the CFPB’s single-director structure was not constitutional because it lacked a multi-member board of directors and its sole director cannot be fired without cause. In court, lawyers from the CFPB called...

The CFPB took a whipping last week in the long-awaited court ruling in its dispute with PHH Mortgage – so much so, in fact, that not only are its future enforcement actions likely to be curtailed, but even past actions might be challenged by the affected industry participants. “The ramifications of this case go far beyond restricting the CFPB’s reach, clarifying the interpretation of the Real Estate Settlement Procedures Act, and resolving the question of how statutes of limitation apply to the CFPB’s enforcement actions,” said Craig Nazzaro, of counsel with the Baker Donelson law firm in Atlanta, in a review of the case. As he sees it, this case makes clear that the bureau has exceeded its bounds and that ...

Last week, the U.S. Court of Appeals for the District of Columbia Circuit brought the powerful CFPB down to earth in its legal wrangling with PHH Mortgage, ruling that two aspects of the bureau’s structure – the dismissal of the director of the agency only for cause, and the single directorship as opposed to a multi-member bipartisan commission – were unconstitutional. “As an independent agency with just a single director, the CFPB represents a sharp break from historical practice, lacks the critical internal check on arbitrary decision-making, and poses a far greater threat to individual liberty than does a multi-member independent agency,” wrote Circuit Judge Brett Kavanaugh on behalf of the court. “All of that raises grave constitutional doubts about the CFPB’s ...

PHH Mortgage – and the rest of the mortgage industry, for that matter – came out with a clear and decisive win against the CFPB last week when the U.S. Court of Appeals for the District of Columbia Circuit vacated the $109 million disgorgement order imposed on the lender by the director of the bureau, Richard Cordray. PHH argued that the CFPB incorrectly interpreted RESPA Section 8 to bar so-called captive reinsurance arrangements involving mortgage lenders such as PHH, their affiliated reinsurers and private mortgage insurers. The lender also asserted that, in any event, the CFPB departed from the consistent prior interpretations issued by the Department of Housing and Urban Development, and that the bureau then retroactively applied its new interpretation of ...