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Inside Mortgage Trends

August 10, 2012

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Fannie and Freddie May Be Turning The Corner, Private MIs Still Struggle

The mortgage credit-enhancement business has been no place to be the past few years, but many observers think the market has touched bottom and is starting to come back. After hemorrhaging losses since 2008, the two biggest mortgage credit-enhancement providers – Fannie Mae and Freddie Mac – reported positive net income on their single-family guaranty businesses during the second quarter. The private mortgage insurance industry hasn’t gotten there yet. Fannie and Freddie reported...[Includes two data charts] Read More

HARP Offsets Slowing GSE Refinance Market

The expanded Home Affordable Refinance Program saw a major surge in business activity during the second quarter of 2012, following a similar boom during the first three months of the year, but overall refi business appears to be slowing. The Federal Housing Finance Agency this week reported a huge 86.6 percent jump in HARP volume in June, mostly resulting from a new securitization option for refi mortgages with loan-to-value ratios exceeding 125 percent. Fannie and Freddie purchased some 53,758 of such loans during June, and they accounted for 24.9 percent of HARP business during the second quarter. There was also...[Includes two data charts] Read More

Nonbanks Compete for Correspondent Originations

A number of nonbanks have increased their correspondent originations recently with plans to take more market share as the big banks focus on retail lending. Redwood Trust, PennyMac Mortgage Investment Trust, Homeward Residential and others have all touted their recent correspondent efforts, both for agency mortgages and non-agency originations. Since 2010, Redwood has used its conduit platform to supply... Read More

Guaranteed Marketing Yields Results

A mortgage marketing program with a money-back guarantee sounds too good to be true, but participating lenders that reported more than 400 percent return-on-investment can probably attest it is no scam. Mortgage Returns, a provider of customer relationship management and marketing solutions, reported that 35 lenders in its Guaranteed Marketing program averaged a 426 percent ROI after using it. The program revolves around the company’s Five-Touch mortgage refinance campaign. Launched in May, the program generated... Read More

Average Closing Cost Drops Seven Percent to $3,754

The cost to close on a mortgage has dropped seven percent to an average $3,754 in the past year, according to the eighth annual closing costs survey from Bankrate.com. Title insurance and other third-party fees fell 12 percent from last year’s levels, while origination fees dipped a slight one percent. “This is the second year in which lenders are required... Read More

Ocwen to Lower Tax Rate Via the Virgin Islands

Ocwen Financial is set to reduce its effective tax rate by more than half due to the recent formation of a subsidiary corporation in the U.S. Virgin Islands. The federal corporate income tax rate in the U.S. is 35.0 percent and Ocwen had an effective tax rate of 36.0 percent through two quarters in 2012. “We believe [Ocwen’s effective tax rate] will be mid-to-high single digits,” said Bill Erbey, executive chairman of the servicer, during an earnings presentation last week. He said the lower tax rate could take effect... Read More

Younger Homeowners Felt More Stung by Collapse

Confidence in homeownership is shifting among consumers in the wake of the 2008 collapse of the housing market, but it’s mostly younger homeowners whose faith has been rattled the most, according to some new research. Economists at the Boston Federal Reserve Bank recently surveyed individuals about their attitudes toward renting versus buying a home, about commuting, and about how much to spend on a mortgage. They found that younger respondents are relatively less confident about homeownership after larger price declines, while older respondents are relatively more confident. “People who in 2008 lived in ZIP codes that were hardest hit by the crash in housing prices – as compared to those who resided in areas that were least severely affected – are... Read More

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