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Inside Mortgage Trends

January 24, 2014

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Mortgage-Banking Income Slumped In 4Q13, Annual Earnings Down

Many of the top players in the mortgage industry reported declines in net mortgage-banking income during the fourth quarter, but they also showed resilience in the face of declining production and persistent buyback risk. A diverse group of 17 financial institutions reported a combined $1.42 billion in mortgage-banking profits during the fourth quarter of 2013, according to a new Inside Mortgage Trends analysis of earnings reports. That was down 2.0 percent from the previous quarter ... [Includes one data chart] Read More

FHA Losing First-Time Homebuyer Market Share

The fee increases and stiffer mortgage-insurance requirements implemented on FHA mortgages in the past year have helped reduce the agency’s share of originations to first-time homebuyers. First-time homebuyers have traditionally been heavily reliant on FHA financing and that continues to be the case, though the FHA’s dominance has declined significantly in the past year. At the start of 2013, FHA mortgages were used in about one of every two home purchases by a first-time buyer ... [Includes one data chart] Read More

Banks Seek to Outsource Origination Functions

With residential loan production expected to decline by at least 30 percent this year, bank originators are looking at ways to cut costs without damaging their ability to handle an unexpected uptick in applications should rates unexpectedly fall. According to both lending executives and outsourcing firms, inquiries are picking up at vendors that process, underwrite and close residential mortgages. “The banks are tired of ramping up and then cutting back,” said Jeffrey Taylor, managing partner at Digital Risk ... Read More

Opportunities Lean in Non-QM Lending

An entirely new mortgage market was formed on Jan. 10, 2014, but it remains to be seen who is in it, who will get in and what the sector will be made of. The landing of the ability-to-repay rule two weeks ago created two categories of qualified mortgages – prime and nonprime – plus a non-QM market. The new rule is going to limit the opportunities for lenders to move beyond the ultra-conservative standards of the past few years, but it won’t prevent a gradual expansion of credit ... Read More

CFPB Disclosure Rule Escalates Legal Liability

One sign of just how seriously Congress took the issue of consumer disclosure in the aftermath of the mortgage market meltdown is the dramatic escalation lenders will face for violating the new integrated disclosures from the Consumer Financial Protection Bureau, which take effect Aug. 1, 2015. Consider this: Under the Truth in Lending Act, lenders face a private right of action for violations (along with attorney’s fees and costs), as well as statutory penalties of up to $4,000 for failures to ... Read More

Banks Sold Fewer Mortgages in 3Q13

If mortgage bankers want to make money they have to sell loans, and loan sales fell off sharply in the third quarter of 2013, according to a new Inside Mortgage Trends analysis of bank and thrift call-report data. Banks sold $296.4 billion of home mortgages during the third quarter, a 23.0 percent drop from the previous period. It was the lowest sales volume since the third quarter of 2011 and coincided with an even sharper 41.7 percent decline in mortgage banking income reported by the ... [Includes one data chart] Read More

S&P: Best Practices Benefit All CRE Participants

Understanding best practices is useful for commercial mortgage servicers and other industry participants in fulfilling business responsibilities. However, understanding how best practices develop – and can be improved – is not only valuable but also serves the whole industry, according to a new report from Standard & Poor’s. There are many examples of best practices that could further improve performance and revise market expectations – for example, the investor reporting package, loan modification ... Read More

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