August 16, 2018

Latest from Inside Mortgage Finance

Secondary market activity by banks was down sharply in the first quarter.

Read more in Inside Mortgage Trends.

Jumbo Loan Originations Up Sharply in 2Q18 as Purchase-Mortgage Lending Fueled Production

First-lien mortgage originations were up across all product lines in the second quarter of 2018, but the jumbo market saw the biggest gains from the first three months of the year, according to a new Inside Mortgage Finance ranking and market analysis. [Includes two data charts.]

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Subservicing Growth Slows in 2Q18; Certain Top Vendors Could Change Hands by Yearend

The dollar volume of subservicing contracts grew by 1.8 percent in the second quarter on a sequential basis, another sign that this specialty niche is continuing to slow, according to a new ranking and analysis from Inside Mortgage Finance. [Includes one data chart.]

State Agencies to Tighten Mortgage Servicing Rules, But CFPB May Not Scale Back Its Enforcement

Some states are gearing up to tighten their regulation of mortgage servicers to pick up the slack from a perceived pullback by federal regulators, although attorneys said the Consumer Financial Protection Bureau is still enforcing its servicing regulation.

Feature Stories

Inside The GSEs

Purchase-Mortgage Boost Can’t Offset Falling Refi in July MBS

Fannie Mae and Freddie Mac issued a combined $65.85 billion of single-family mortgage-backed securities last month, a 1.0 percent decline from their June total, according to an Inside The GSEs analysis of MBS data. Compared to the first seven months of 2017, the GSE single-family business was down 7.4 percent as of the end of July. Most of the month-to-month slump was at Freddie, where MBS production fell 8.9 percent from June. Fannie managed a 5.0 percent increase in July. Both GSEs are off about the same on a year-to-date basis. [Includes two data charts.]

Inside MBS & ABS

Banks Retreat Slightly from MBS Market in 2Q18 Despite Big Moves by Handful of Large Investors

As a group, commercial banks and thrifts ended the second quarter of 2018 with slightly reduced holdings of single-family MBS, although several institutions raised their stakes in the market significantly, according to a new Inside MBS & ABS analysis and ranking. [Includes two data charts.]

Inside Mortgage Trends

GSE Sellers Continued to Stretch the Credit Box – Incrementally – in 2Q18

Mortgage lenders became slightly more daring in terms of the credit characteristics of the loans they sold to Fannie Mae and Freddie Mac during the second quarter of 2018, according to an exclusive new Inside Mortgage Trends analysis and ranking. [Includes two data charts.]

Inside Nonconforming Markets

New Players Enter Non-QM Market by Aggregating Loans and Issuing MBS

More competition is coming into the nascent business of aggregating non-qualified mortgages and issuing mortgage-backed securities drawn by the market’s potential for profitable growth.

Inside FHA/VA Lending

Purchase Lending Powers VA 2Q Surge, Ends First Half on High Note

VA home-loan guarantee volume rose in the first half of 2018 thanks to a second-quarter surge in purchase business. New VA loan guarantees totaled $89.9 billion at midyear, a 7.5 percent improvement from the same point last year. VA production was even stronger quarter-over-quarter, with $50.9 billion in originations, up a whopping 30.2 percent from the first quarter. Purchase loans accounted for 68.1 percent of VA guarantees in the second quarter, up 23.1 percent from the prior quarter. Purchase for the first six months of 2018 was up 19.5 percent from a year ago. VA refi business struggled in the second quarter as production fell 7.0 percent from the previous period, dropping the overall refi share to 31.9 percent. Most of the damage in VA production in the second quarter was in the Interest Rate Reduction Refinance Loan program, where volume tumbled 42.8 percent from the previous ... [Chart]

Inside the CFPB

CFPB Active Again in Enforcement Actions, But With New Tactics

The CFPB has been accelerating its enforcement actions in the past two months, and attorneys said Acting CFPB Director Mick Mulvaney is now defending the bureau’s enforcement power, with a new strategy and focus. “The enforcement actions are being announced more frequently now,” said Allen Denson, partner at Hudson Cook. “I expect the steady clip of settlements we’ve seen over the last two months to continue.” After Mulvaney took the reins at the ...

Poll

With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.

17%

11% to 25%. It’s a challenging market.

48%

25% to 40%. It’s going to be very ugly.

24%

No opinion.

11%