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Inside Mortgage Finance

October 2, 2008

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Congress Tries to Pick Up the Pieces After Bipartisan Rescue Plan Unravels

The Senate this week approved an elaborate concoction of proposed remedies for the U.S. mortgage market, tossing the fate of an ambitious, broad-based federal intervention in the capital markets back to the House of Representatives. As Inside Mortgage Finance went to press late this week, it was uncertain whether the House would approve the slightly revised legislation after... Read More

Ongoing Upheaval in Financial Markets Leads to Major Changes in Competitive Mortgage Landscape

Over $2.40 trillion in home mortgage servicing business – nearly 22 percent of the total amount outstanding – will have changed hands in the second half of 2008 in the biggest re-calibration of market share ever seen in the industry. With help from the government, huge financial institution acquisitions by Citigroup and JPMorgan Chase wiped out two top... [Includes one chart] Read More

GSE Appraisal Deal Has Been Changed, Implementation Expected to be Delayed

Changes have been made to the controversial appraisal policy being negotiated by Fannie Mae, Freddie Mac and the New York attorney general’s office, including a likely delay in the implementation date, according to federal officials. Federal Housing Finance Agency Director James Lockhart late last week told the House Financial Services Committee that some aspects of the appraisal deal have... Read More

HUD Issues Cautionary Notes on ‘Buy And Bail’ Scam, and Treble Damages

The FHA is urging lenders to be vigilant in fighting a new mortgage scam that appears to be taking root in the market: homeowners who buy a new house as their principal residence and then default on the mortgage on their previous home. In Mortgagee Letter 2008-25, the Department of Housing and Urban Development warns FHA lenders about the “buy and bail” scheme in which... Read More

MIs Adopt Extreme Measures to Survive Current Financial Crisis

Private mortgage insurers are fighting to stay afloat in the current financial crisis through asset sales, asset transfers, risk reduction, and even a possible spinoff. For some companies, the strategies appear to be paying off. Last week, MGIC announced it will no longer offer “captive reinsurance,” an arrangement in which an insurer and a lender share premium revenue and assume a portion... Read More

HUD Launches HOPE for Homeowners on Time But It May Take a While for Lenders to Gear Up

Department of Housing and Urban Development Secretary Steve Preston officially launched the HOPE for Homeowners program this week, but it’s unclear how quickly the complex program will ramp up significant production volume. Designed to give distressed homeowners a way to refinance mortgages that exceed the current value of their property, the program’s broad parameters were... Read More

Industry Not Optimistic on Getting a Delay on Controversial RESPA Rule

Industry representatives hoping to delay a controversial government proposal to reform mortgage settlement rules didn’t get a whole lot of encouragement from a recent meeting with Bush administration officials. A phalanx of industry groups including the Mortgage Bankers Association, Consumer Mortgage Coalition and National Association of Realtors met late last week with officials from... Read More

GSE Restructuring Continues With Freddie Departures; Bonuses Playing Key Role in Targeted Staff Retentions

With new appointees calling the shots at Fannie Mae and Freddie Mac, the two government-sponsored enterprises have undertaken a substantial restructuring of their business units and compensation packages, pushing some staff out the door while boosting efforts to retain other key employees. Late last week, Freddie indicated its conservator has eliminated the payment of annual... Read More

Housing Act Revisions to FHA Took Effect This Week, More Changes Ahead

Lenders are grappling with a slew of FHA modernization changes mandated by the 2008 housing act that took effect this week – and steadying for even more changes over the next few months. The Department of Housing and Urban Development has already implemented changes in premium rates for FHA loans that took effect Oct. 1, and loan-to-value requirements that will kick in on... Read More

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