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Volume 11 - Number 10

May 18, 2018

CHLA Asks FHFA to Look into Unfair Private MI Pricing, Discount Perks

Community mortgage lenders called for an investigation of pricing practices of private mortgage insurers regarding their use of volume discounts and other incentives to get more business from lenders selling loans to Fannie Mae and Freddie Mac. In a letter to Federal Housing Finance Agency Director Mel Watt, the Community Home Lenders Association raised concerns about “pricing disparities” in lender-paid mortgage insurance based on lender size and volume. Such practices may involve better pricing offers to larger lenders or bidding out loan pools based on the percentage of discounts larger lenders get from their customary private MI pricing, the CHLA said. In addition, some private MIs offer special pricing to lenders that agree to do business exclusively with them – a type of proxy for volume discount. The group asked the FHFA, as the regulator of Fannie and Freddie, to investigate whether ...

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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%