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Inside Mortgage Finance

March 8, 2012

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Late 2011 Refinance Surge Has Staying Power, Expanded HARP Looks to Be Gaining Ground

The refinance wave that lifted mortgage origination volume in the fourth quarter of 2011 appears to be holding steady in early 2012, according to a new Inside Mortgage Finance analysis. Average monthly securitization of refinance loans by Fannie Mae and Freddie Mac increased by 3.6 percent from the fourth quarter of 2011 to the first two months of this year. That’s somewhat faster than the 1.2 percent increase in average total securitization volume by the two government-sponsored enterprises. The refi market may gain momentum in the coming months. The Mortgage Bankers...(Includes four data charts) Read More

Administration Announces Pricing Cuts to Spur Use of FHA’s Streamline Refinancing Program

The Obama administration this week announced price cuts for refinancing loans already insured by the FHA in an effort to provide relief to underwater homeowners, estimating that as many as 3 million borrowers could take advantage of the program. Beginning June 11, the FHA will lower its upfront mortgage insurance premium from 1.0 percent to .01 percent for streamlined refinancing of FHA loans originated before June 1, 2009, and reduce the annual fee for such refis from 1.15 percent to .55 percent. To qualify for the streamline refinancing, borrowers must be current on their existing FHA... Read More

Mortgage Lending Credit Overlays May Be Here To Stay If Policymakers Don’t Make Big Changes

Mortgage lenders have become so risk-averse and sensitive to potentially punitive judicial or regulatory overkill that they’re demanding near-pristine credit histories and imposing their own credit overlays on top of existing underwriting standards that are already considerably tougher than they were during the years of the mortgage boom. And that’s unlikely to change and may in fact get worse unless federal policymakers make dramatic changes to the legislative and regulatory landscape. That was the main take-away that Paul Miller, managing director and group head of financial services research at... Read More

DOJ, Congress Continue Efforts Against Perceived Mortgage Lending Discrimination, Other Abuses

The Justice Department and some members of Congress are unconvinced the mortgage industry is up to the task of fairly making and servicing mortgages in a tough housing market. That’s motivating them to use all of the tools at their disposal – and considering new ones – to combat discrimination and other abusive behavior. “In the coming year, we will continue our efforts to provide justice to those families who were harmed by discriminatory conduct during the mortgage boom and to hold lenders responsible for their actions,” U.S. Assistant Attorney General Thomas Perez said in testimony before the Senate Judiciary... Read More

FHFA Official: Servicer Compensation Changes Are ‘Integral Part’ of Strategic Plan but Roll Out Delayed

The Federal Housing Finance Agency is not backing away from its plan to overhaul servicing compensation on government-sponsored enterprise mortgages, but an official has acknowledged that the change will come more slowly than first expected. FHFA Special Advisor Mario Ugoletti told attendees at the Mortgage Bankers Association’s Mortgage Servicing Conference & Expo in Orlando two weeks ago that “servicing compensation reform [is] not dead or on the back burner,” contrary to the industry’s hopeful expectations. Ugoletti said any revisions to servicing compensation practices ought to result in enhanced... Read More

HAMP Servicer Incentives to BofA and JPMorgan Restored, With Backpay, Thanks to AG Settlement

Bank of America and JPMorgan Chase will once again receive servicer incentives for modifying loans after more than seven months during which these payments were withheld by the Treasury Department for unsatisfactory performance in the Home Affordable Modification Program. The two banks will also get all the withheld incentives as part of the multistate foreclosure settlement. In June 2011, Bank of America, JPMorgan and Wells Fargo were all called to the carpet by the Treasury for their HAMP performance following a 10-month audit of participating servicers. The main issue was timeliness – while mods... Read More

Complaints Surface That New HAMP Participants Are Speculators Coasting on Taxpayer Subsidies

The extension of the Home Affordable Modification Program announced in late January was coupled with changes, including the new eligibility of investor-owned properties. While the expansion of the program could allow for a half million more participants, there are complaints that it is no more than a taxpayer bailout of speculators. Timothy Massad, the assistant secretary for financial stability at the Department of Treasury, said the inclusion of investor-owned properties will help low- to moderate-income renters, because the foreclosure of investor-owned properties disproportionately affects them. An advocate for... Read More

FHFA Inspector General Criticizes Freddie Oversight Of Loan Servicers, Urges More Regulator Involvement

The Federal Housing Finance Agency’s hands-off approach to regulating Freddie Mac’s relationship with servicers is a problem, according to a new report from the regulator’s inspector general. While the FHFA has taken some steps, like its Servicing Alignment Initiative, the IG said that the regulator should be looking directly at the books of servicers and other counterparties, instead of taking the government-sponsored enterprises’ versions of events. The regulator’s ability to keep track of the GSE servicer risk might be “impaired by its lack of direct access to servicer books and records relating to the... Read More

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