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Inside Mortgage Finance

July 26, 2012

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Mortgage Originations Rose Modestly in 2Q12; Momentum May Be Building for Strong Finish

New home loan originations in the second quarter of 2012 were up 5.2 percent from the first three months of the year, according to a new Inside Mortgage Finance ranking and analysis. Production trends varied significantly among the top lenders, however, and early estimates suggest that lenders further down the food chain may be picking up market share. Wells Fargo is still effectively lapping the field with more than double the origination volume of its nearest rival, but the industry leader managed a relatively modest 0.8 percent increase in production while its three closest competitors all reported double-digit gains. Although Wells may be mothballing some firepower by shutting down its wholesale broker business, the company was...[Includes two data charts] Read More

Lenders Projecting GSE Mortgage Repurchase Requests With Varying Levels of Confidence

Lenders’ experiences with repurchase requests from the government-sponsored enterprises appear to have diverged in recent months, with big banks emerging fairly confident in their dealings with the GSEs. Other lenders, meanwhile, appear to have started to have significant interactions with Fannie Mae and Freddie Mac on the issue only recently. Wells Fargo had a decrease in GSE repurchase requests in the second quarter of 2012 compared with the previous quarter but the lender increased its repurchase reserves by $239 million during that time due to an increase in expected demands from the GSEs regarding 2006 to 2008 vintages. “We continue to see... Read More

Industry Reps Take Issue With CFPB Public Posting Of Mortgage Complaints, Citing Accuracy, Privacy

Mortgage lending representatives say the Consumer Financial Protection Bureau should not publish unreliable data on complaints about noncredit-card financial products that will mislead rather than inform consumers, and that it should permit more time to resolve mortgage complaints before posting such complaints publicly. “We find the bureau’s decision to publish details of complaints which it correctly characterizes as unverified, and therefore unreliable, to be contrary to its mission to help consumers ‘with timely and understandable information to make responsible decisions about financial transactions’ and inconsistent with its proclamations to be ‘data-driven,’” the American Bankers Association said in a comment letter to the CFPB. The proposed disclosure of complaints about mortgages and other financial products exacerbates... Read More

Conservative Appraisals May Be Putting the Brakes On Rising Home Prices, HousingPulse Data Suggest

Are tough appraisal standards putting the brakes on rebounding home prices in many parts of the country? Yes, but in areas where cash transactions account for close to half of all residential purchases home prices are climbing at an alarming rate that indicates the potential for regional housing bubbles. These are some of the major findings contained in the June results of the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The big news in the housing market these days is the rebound... Read More

CFPB Regulatory Agenda Indicates a Crush of New Proposals Will Likely Be Unleashed in Six Months

The semiannual regulatory agenda released last week by the Consumer Financial Protection Bureau indicates the regulators have a very full plate and a tight January 2013 deadline. That means mortgage lenders will be just as busy trying to figure out what the new rules mean and how to comply with them. The most recent high-profile mortgage-related projects at the bureau include a detailed proposed rule to harmonize and streamline the mortgage disclosures that homebuyers must be given under the Real Estate Settlement Procedures Act and the Truth in Lending Act. In draft form, this one proposal ran more than 1,000 pages in length and has already raised industry hackles. Comments on the rule are due Nov. 6, 2012. The bureau also released... Read More

FHFA Hires Consulting Firm to Draft Receivership Action Plans for Fannie Mae, Freddie Mac, FHLBanks

The Federal Housing Finance Agency has hired PricewaterhouseCoopers to develop a plan for taking Fannie Mae, Freddie Mac and the Federal Home Loan Banks into receivership. The FHFA reports it has entered into a contract with PricewaterhouseCoopers to create a blueprint for liquidating Fannie, Freddie or any of 12 Federal Home Loan Banks, if ever necessary. But it is all part of routine planning activity under the agency’s mission, said a spokesperson. “The FHFA has engaged in... Read More

Treasury Establishes HAMP Fraud Alert System, Will Take Back Incentive Payments in Certain Circumstances

The Treasury Department announced harsh penalties this month for fraudulent activity uncovered in the Home Affordable Modification Program. In an unprecedented move for HAMP, the Treasury said that in certain circumstances it will recapture servicer, borrower or investor incentives previously paid. The Treasury said it hired a contractor to look for borrower fraud regarding identity, occupancy requirements, and certain criminal activity that the Dodd-Frank Act determined would make a borrower ineligible for HAMP. If the servicer cannot clear the borrower of the potential HAMP violation, the borrower’s HAMP mod will be rescinded along with any associated incentive payments. Beginning in October, the contractor will review... Read More

OIG: FHFA Must Improve Examination, Supervision of Fannie, Freddie REO Risk

The Federal Housing Finance Agency has not “effectively employed” its monitoring and supervision of Fannie Mae and Freddie Mac risk related to real estate owned properties, according to the FHFA’s Office of Inspector General. “The FHFA will benefit from a more comprehensive REO risk assessment and from using the assessment to enhance its planning and supervisory activities,” said the OIG. “A more comprehensive assessment of the risks associated with [Fannie’s and Freddie’s] shadow REO inventory can help the FHFA provide for the enterprises’ safety and soundness and help protect the taxpayers from undue losses by ensuring the agency focuses on its supervision where it can best mitigate risks.” From 2007 through 2011, the GSEs’ combined REO inventory rose... Read More

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