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Volume 21 - Number 25

December 15, 2017

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Banks Report Small Increase in Servicing For Others, Uptick in MSR Values

It hasnít happened often in recent years, but commercial banks and thrifts were actually servicing more home mortgages for other investors at the end of September than they had at the midyear point. A new analysis by Inside Mortgage Trends of bank call reports shows the industry was servicing $3.652 trillion of home loans for other investors at the end of the third quarter. Most of this SFO business is tied to mortgage-backed securities pools, and the ... [Includes one data chart]

Freddie Repurchase Activity Jumped in 3Q17

Mortgage repurchase activity was up sharply at Freddie Mac during the third quarter, while buybacks were down at Fannie Mae, according to an Inside Mortgage Trends analysis of disclosures filed by the two government-sponsored enterprises. Loan sellers repurchased or made other indemnification related to $142.43 million of loans sold into Freddie mortgage-backed securities during the third quarter, a sharp 48.3 percent increase from ... [Includes two data charts]

‘Gig Economy’ Challenges Homeownership Rate

Drivers for ride-sharing companies and other participants in the so-called gig economy largely work the jobs to earn extra money. But even with the supplemental earnings, many in the gig economy donít expect to purchase a home any time soon, according to a survey by Fannie Mae. The lack of demand for mortgages from workers in the gig economy is significant because 16 percent of adults in the U.S. work in the sector, including ride sharing, food delivery, handyman services ...

Price-to-Income Ratio Seen as Good Risk Gauge

Mortgages with high home price-to-income ratios tend to perform worse than mortgages with lower PTI ratios, according to economists at the Federal Reserve. The analysts suggest that PTI ratios are a helpful tool for gauging mortgage risk by tracking housing affordability. ďBanks that have greater exposure of mortgages to high PTI regions have higher mortgage delinquency and charge-off rates and significantly higher probabilities of failure, even after controlling for ...

Some Lenders Plan Hiring Binges for 2018

When it comes to hiring, mortgage banking firms arenít quite sure what to make of the coming year, though some shops arenít shy about planning for growth. One firm thatís squarely in the optimism column is United Wholesale Mortgage, the nationís largest table-funder. The privately held nonbank currently employs 2,300 and hopes to add 450 next year as it tries to move up in the ranks. Mat Ishbia, president and CEO of UWM, told Inside Mortgage Trends the company is hiring in ...

Analysts Predict Flat Mortgage Originations in 2018

Mortgage origination volumes are expected to stay flat year-over-year in 2018 at $1.65 trillion, as modestly rising purchase-mortgage volume is partially offset by declining refinances. The one bright spot is the mortgage insurance sector, according to analystsí outlook in 2018. Sluggish mortgage activity suggests modest revenue growth in the sector with one exception Ė mortgage insurance, according to a Keefe, Bruyette & Woods analysis. KBW expects its ďoutperformĒ ratings for ...

Industry Groups Lobby on Capital Gains Exclusion

A coalition of industry groups has urged the Senate Committee on Finance to retain the current capital gain exclusion on the sale of a principal residence, warning that such a provision in the Republican tax reform plan would adversely affect young families and those relocating to new jobs. Specifically, the proposal in the House and Senate versions of the tax bill would retain the $500,000 capital gain exclusion ($250,000 for unmarried taxpayers) but lengthen ownership and use requirements ...

Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.

33%

No. It’s still difficult compliance/regulatory-wise.

20%

Maybe. It’s under consideration.

33%

Not now. But things could change as 2018 progresses.

13%