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Inside Mortgage Finance

November 15, 2012

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HARP Helps Boost Private MI Resurgence, But Divergence Continues to Reshape the Industry

Private mortgage insurers posted an impressive 26.5 percent increase in new insurance written during the third quarter of 2012, but four of the industry’s six active firms are gradually taking market share away from their rivals. Private MIs insured $51.76 billion in new mortgage originations during the third quarter, according to a new Inside Mortgage Finance ranking and analysis, making it the strongest quarter for the beleaguered industry since the second quarter of 2008. FHA and VA lending grew at a much slower pace, climbing just 2.1 percent and 4.0 percent, respectively, during the third quarter. The result was...[Includes two data charts] Read More

Private MIs Express High Hopes Going into 2013, Urge Administration, Congress Not to Rock the Boat

The private mortgage insurance industry is expressing optimism with the positive changes seen lately in the housing market while hoping that Congress or the Obama administration do nothing to impede or spoil the market’s recovery. Industry executives say stabilizing home values, low interest rates, better quality mortgages and a shrinking FHA share of the mortgage market are helping MIs win back market share and write new business. “Everybody is trying to write as much business as they can to regain share,” said Michael Zimmerman, senior vice president for investor relations at Mortgage Guarany Insurance Corp. New insurance written is... Read More

GSE Repurchases Eased in 3Q12, But Pipeline Of Unresolved Buybacks Continued to Grow

Fannie Mae and Freddie Mac reported a sharp decline in the volume of mortgage repurchases and indemnifications made by lenders during the third quarter, as well as a slowdown in the volume of new buyback demands, according to a new Inside Mortgage Finance analysis of data reported by the two government-sponsored enterprises in financial reports released last week. During the third quarter, lenders repurchased or otherwise indemnified the GSEs for $4.396 billion of mortgages that had been subject to buyback demands, a decline of 26.0 percent from the second quarter. It was the lowest repurchase volume since the first three months of last year. On a year-to-date basis, repurchases are...[Includes one data chart] Read More

MBA Doubts Adverse Actuarial Report Will Compel FHA To Seek Taxpayer Rescue or Prompt Congress to Intervene

Reportedly dire findings of the annual independent audit of the FHA insurance fund due for release late this week may set off alarms in Congress and calls for reform but not a taxpayer rescue as some FHA critics have suggested, according to the Mortgage Bankers Association. Recent news reports indicated that the fiscal 2012 actuarial review of the FHA’s Mutual Mortgage Insurance Fund will show a negative economic value or capital reserve position, which some say could require the Treasury to bail out the FHA to boost its claims-paying ability. There is speculation that the fund could go from a predicted economic value of positive $9.4 billion in last year’s study to as much as negative $10 billion this year. A deficit should not be... Read More

Experts: Uncertainty Over ‘Fiscal Cliff’ Outcome Could Stall Housing Recovery; Mortgage Deduction on Table

Although mortgage market watchers cautiously expect President Obama and the lame-duck session of the 112th Congress to come up with at least a stop-gap deal to avoid the looming “fiscal cliff” at year’s end, building uncertainty among homeowners and potential borrowers as to whether important mortgage tax deductions will exist in 2013 threatens to thwart housing’s fragile recovery. Unless Congress and the president create and sign new legislation to change existing law before Jan. 1, 2013, taxpayers are poised to be hit with a massive combination of expiring tax breaks, tax hikes and deep, automatic federal spending cuts. A report last week by the Congressional Budget Office concluded that a failure to avoid the cliff would push the economy back into recession with the unemployment rate shooting up to 9.1 percent by next fall. Fitch Ratings warns... Read More

Mortgage Lenders Win Federal Court Dismissals of Subprime RICO, Force-Placed Insurance Complaints

The mortgage lending industry won a couple of key legal challenges recently, including an unusual claim brought under the Racketeer Influenced and Corrupt Organizations Act. In Cabrera v. Countrywide Financial, the U.S. District Court for the Northern District of California recently dismissed, without prejudice, most of the complaint brought by two borrowers who accused the mortgage lender of engaging in fraudulent loan practices in violation of the RICO Act. In July 2007, Manuel Cabrera received... Read More

Regulators Note Mortgage Concerns on Basel III Proposal, Put Emphasis on Community Banks

Federal regulators working to establish Basel III capital requirements for banks this week appeared to be more concerned about how community banks will cope with the controversial rule than its potential negative impact on the mortgage market. Late last week, federal regulators announced that implementation of Basel III capital requirements is not expected to begin on Jan. 1, 2013, as initially planned because rules proposed in June have yet to be finalized. In a hearing at the Senate Banking, Housing and Urban Affairs Committee this week, staff for the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. stressed that they are still reviewing more than 1,500 comments and that a final rule is far from complete. Community banks filed... Read More

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