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Inside Mortgage Finance

March 4, 2010

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Agency Production Still Dominates 2009 Mortgage Lending; ARMs Rebound But Home-Equity Slumps

The breakdown in mortgage lending activity in 2009 looked a lot like the market’s profile in 2008, with an even more intense focus on the agency-conforming sector. A new Inside Mortgage Finance ranking and analysis shows that a staggering 90.1 percent of new loan originations in 2009 fit within the... [Includes three charts] Read More

Mortgage Repurchases, Indemnifications Soared to Record Levels in Late 2009

Commercial banks reported a hefty $18.85 billion in mortgage repurchases and indemnifications during the fourth quarter of 2009, according to a new analysis of call report data by Inside Mortgage Profitability, an affiliated newsletter. Fannie Mae and Freddie Mac both reported increases in the volume of loans they pushed back to their lenders in 2009 because of breaches... [Includes one chart] Read More

Fannie Launches Initiative to Focus on Origination Practices as Buyback Demands Continue Climbing

Citing lessons learned from the dramatic increase in loan repurchases it has forced lenders to make, Fannie Mae launched a new Loan Quality Initiative to bolster loan production practices. The initiative, announced late last week, focuses on validating and verifying the information gathered in originating loans and selling them to the government-sponsored enterprise. The LQI, for example... Read More

Freddie Drops IO Program

Freddie Mac this week said it will stop buying interest-only loans in September. “Our decision to stop purchasing all interest-only type mortgages – through all flow and bulk purchase paths – and to retire our Initial Interest fixed-rate and adjustable-rate mortgage products in the coming months is a result of continuing poor performance of these products in aggregate,” a company spokesman... Read More

Dodd-Corker Proposal to Entrust Fed with Consumer Protection Draws Mixed Reviews, Revives Ill Feelings

A plan proposed by Sen. Chris Dodd, D-CT, this week to house consumer protection in the Federal Reserve rather than in the Department of the Treasury as he initially planned is getting mixed reviews and reviving lawmakers’ animosity toward the agency. Democrats and consumer groups are opposed to the idea of entrusting consumer protection to an agency that has been vilified by some for failing... Read More

FDIC Works on Principal Forgiveness Option for Underwater Borrowers

The Federal Deposit Insurance Corp. is developing a program to reduce the principal owed by underwater borrowers whose loans were held by banks and thrifts that have gone insolvent. FDIC Chairman Sheila Bair last week announced the program, although agency officials have provided few details. Borrowers would be eligible for a reduction in their mortgage balances if they keep making... Read More

Fannie Mae Reports Strong Net Interest Income, But Losses Continue to Mount for Struggling GSE

Fannie Mae and Freddie Mac may be losing money at unfathomable rates, but one piece of their business – the one most reformists want to do away with – actually was more profitable in 2009 than it has been in years. Fannie reported $14.5 billion in net interest income in 2009, mostly from a retained investment portfolio that is under regulatory restraint. That was up from $8.8 billion in... Read More

HUD Drafts New RESPA Rule

The Office of Management and Budget is reviewing a proposed rule that would revise the definition of “required use” under Real Estate Estate Settlement Procedures Act regulations. The Department of Housing and Urban Development drafted the proposal on required use after withdrawing the provisions from the final RESPA rule that took effect Jan. 1. Required use is a prohibited practice... Read More

Large Mortgage Servicier Delinquency Rates

With the addition of more servicer data, the Inside Mortgage Finance Large Servicer Delinquency Index shows a significant increase in overall default rates in late 2009. The revised index, covering $6.997 trillion in home mortgages, found that 12.31 percent were in default or foreclosure as of the end of 2009... [Includes one chart] Read More

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