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Inside Mortgage Finance

May 12, 2006

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New Business Volume Declines for Private MIs, But Performance Indicators Appear Solid in Early 2006

Private mortgage insurers saw a decline in new business volume during the first three months of 2006 that mostly paralleled the overall shrinkage in the mortgage market, but the growing strength of the bulk MI market is significantly changing the industry’s pecking order. The seven private MIs reported a total of $62.53 billion of net new insurance written during the first quarter of this year, down 11.3 percent from the previous quarter. Total home loan… [Three data tables included] Read More

Private MIs Cede $753 Million in Premiums to Lender Captives in 2005, United Guaranty Takes Rising Share

Private mortgage insurers last year diverted a record $753.2 billion of mortgage insurance premiums to captive reinsurance vehicles sponsored by their primary market lender customers, according to a new ranking and analysis by Inside Mortgage Profitability, an affiliated newsletter. The flow of MI premiums into lender captives rose 7.4 percent last year, a bit slower than the 12.7 percent increase reported in 2004. But the trends in sharing premiums with lender captives were by no… [One data table included] Read More

Wachovia Surprises Wall Street, Mortgage Industry With $26 Billion Takeover of ARM Pioneer Golden West

Coveting a place among the top mortgage lenders in the U.S., Wachovia has bought its way into the top 10 with a largely unexpected $25.50 billion purchase of Golden West Financial, the quintessential mom-and-pop thrift that grew to become one of the biggest in the industry. Not including its acquisition of American Mortgage Network late in the year, Wachovia ranked 12th in total originations in 2005 with $57.71 billion, while Golden West (via its… Read More

Fannie and Freddie Place Their Hopes for Regaining Share On Primary Market Coming Back to Fixed-Rate Focus

Rather than chase the mortgage market into nonprime credit and nontraditional products, Fannie Mae and Freddie Mac appear content to peg their strategy for recapturing lost market share on a shift in the primary market back to their strength: fixed-rate mortgages. According to the Inside Mortgage Finance MBS Database, Fannie and Freddie have seen their combined share of new mortgage-securities production plummet in the past two years. After peaking at 70.4 percent in the refi… Read More

A Tougher Mortgage Market Brings More Competition, Consolidation, and Big Unknowns

2006 may be the toughest year for lenders in the last decade, as a slowing market is driving some companies out of business, forcing others to restructure or spin off parts of their operations, and bringing more pressure on everyone. The largely unexpected acquisition of Golden West by Wachovia galvanized the issue for many of the executives at the Mortgage Bankers Association National Secondary Market Conference held this week in Chicago. There have been… Read More

GOP Lawmakers Urge Leadership to Move GSE Regulatory Reform Bill to Senate Floor

Senate Republicans called on their top leaders to bring a bill reforming government-sponsored enterprise regulation to the Senate floor, citing concerns about continued taxpayer exposure to GSE risk if regulatory reform is not enacted this year. In a May 5 letter to Senate Majority Leader William Frist and Alabama Sen. Richard Shelby, chairman of the Senate Committee on Banking, Housing and Urban Affairs, 20 Republican senators urged both lawmakers to bring S. 190, the… Read More

After IRS Ruling, FHA Borrowers are Better Off Without Seller-Funded Aid, Says HUD

Homebuyers could be well served by financing through the Federal Housing Administration than relying on assistance from seller-funded nonprofit “gift” providers, according to the Department of Housing and Urban Development. In a statement following an Internal Revenue Service action last week against downpayment assistance programs, HUD said that loans with downpayment assistance do not perform as well as loans to borrowers with no such assistance, and that borrowers would be better off with straight… Read More

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