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Inside Mortgage Finance

March 19, 2009

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Wilting Private MI Industry Intensifies Counterparty Risk for Fannie, Freddie

In the rubble of the massive financial losses reported by Fannie Mae and Freddie Mac over the last two weeks is mounting evidence of the growing counterparty risk faced by the two government-sponsored enterprises. Of particular concern is the exposure Fannie and Freddie have to the struggling private mortgage insurance business. “Most of our mortgage insurer and bond insurer... Read More

MBA to Seek Delay of Appraiser Code Implementation; Lack of Clarity Creates Procedural Hassles, Group Says

The Mortgage Bankers Association is planning to ask Fannie Mae, Fredde Mac and their regulator to delay implementation of a controversial appraiser code of conduct slated to take effect May 1.The trade association is concerned that there are too many procedural obstacles to the implementation of the Home Valuation Code of Conduct and that neither the Federal Housing Finance... Read More

Better Mortgage Banking Data Systems Could Help Restore Battered Markets

Overconfidence in financial technology helped push mortgage markets over the cliff in the past few years, but industry experts argue that technology also has to play a significant role in the market’s recovery. Investors and rating services relied too much on complex mathematical models to build a market in mortgage securities that ultimately collapsed, said Michael Berman, president and... Read More

Lenders, Regulators Try to Find Balance Between Restoring Financial Health and Stimulating Markets

Top banking officials met last week with the Federal Deposit Insurance Corp. to try to unscramble what most agree have been mixed messages from a federal government that wants the industry to lend more in a faltering economy while shoring up its financial condition.“We, as the federal government, inevitably are sending the banks a mixed message,” said Rep. Barney... Read More

Mortgage Servicing Supply Continued to Decline In Late 2008, More Loans Tied to Agency MBS

An unprecedented decline in the overall size of the mortgage market that began in the second quarter of 2008 gained momentum late in the year, according to data released by the Federal Reserve. There was a total of $11.030 trillion of 1-4 family mortgage debt outstanding at the end of last year, down 0.8 percent from the end of 2007. That marked the... [Includes one chart and one graph] Read More

HUD’s Opinion Sought on Whether Servicers Are Exempt from SAFE Licensing Requirement

The Department of Housing and Urban Development is reviewing an industry plea for clarification that mortgage servicers are excluded from national mortgage licensing and registration requirements enacted under last year’s Housing and Economic Recovery Act. Financial industry groups – the Mortgage Bankers Association, American Bankers Association, American... Read More

Wells Fargo Ranked as Top Refinance Lender And Top Purchase-Money Originator in 2008

Refinance lending accounted for over half of new mortgage originations last year, helping to prop up a market under serious distress from a swoon in housing sales activity. Wells Fargo ranked as the top refinance lender in 2008, with $103.2 billion in such production for the year. That represented 43.5 percent of the company’s total originations... [Includes two charts] Read More

Industry Experts Eye Future Of Mortgage Finance System

The Obama administration wants to overhaul the mortgage industry by ramping up regulatory oversight, improving capital requirements and transparency and putting in place authority to deal with systemic risk, according to a White House insider. Michael Barr, counselor to the director of the National Economic Council, said the Obama administration is focused on creating a... Read More

FHA Tightens Cash-Out Refi Rules

The FHA announced tighter loan-to-value requirements for cash-out refinances, citing the need to limit its exposure to undue risk. According to Mortgagee Letter 2009-08, a borrower’s LTV must be 85 percent or less on any cash-out refi, beginning April 1. The change from an existing 95 percent limit is “being instituted on a temporary basis while FHA further... Read More

Mortgage-Related Problems Plague Home Sales This Year, New IMF-Sponsored Study Finds

More than half of failed home sale transactions this year have been the result of mortgage-related issues, according to preliminary results contained in a new study sponsored by Inside MortgageFinance and slated to be released in early April. Most of the mortgage-related problems relate to the sale of distressed properties, which accounted for a hefty 56 percent of... Read More

Interest in Reverse Mortgages Likely to Continue to Grow

The reverse mortgage has been one of the few loan products to see some growth in the last few years, and experts say new regulatory changes and a favorable market environment could continue to keep the momentum going in 2009. Over the past five years, the FHA home equity conversion mortgage program has grown from about $5.4 billion a year to more than $17.3 billion in 2008. Meg Burns, director of... Read More

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