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Inside Mortgage Finance

January 17, 2013

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CFPB’s Mortgage Servicing Final Rule Gets Tougher on Industry’s Dual Tracking Behavior

The Consumer Financial Protection Bureau issued its final rule on mortgage servicing this week, with perhaps the most significant change from the proposed rule being tougher treatment on the servicing industry’s dual tracking practices. However, the bureau threw the industry a few bones along the way. The CFPB decided not to require a single point of contact for distressed borrowers, but will require servicers to have “dedicated staff” to handle borrower concerns with their mortgages, something the bureau refers to as “continuity of contact.” The final rulemaking also essentially pre-empts... Read More

HARP Accounts for Small Share of PMI-Covered Mortgages Securitized by GSEs During 4Q12

During the final three months of 2012, Fannie Mae and Freddie Mac securitized some $52.72 billion of single-family home loans that were covered by private mortgage insurance, according to a new Inside Mortgage Finance analysis. That total represented 14.4 percent of the business done by the two government-sponsored enterprises during the fourth quarter – although there was significant variation among the GSEs’ top sellers in terms of the share of their deliveries covered by PMI. Some $8.42 billion of PMI-insured mortgages were pooled...[Includes one data chart] Read More

CFPB Tries to Split the Difference on Points and Fees, Asks for More Input on ATR Originator Compensation

The Consumer Financial Protection Bureau’s new rule implementing ability-to-repay underwriting requirements uses origination compensation as one of the factors in whether a loan meets the coveted “qualified mortgage” designation – but the agency acknowledged that there is some ambiguity in the Dodd-Frank Act and asked for more input before the rule takes effect. To be eligible for QM status, total points and fees cannot exceed 3.0 percent of the loan amount, although prime-rate mortgages can have up to an additional 2.0 percent in discount points. The question the CFPB wrestled with was how to calculate the total, particularly in cases where the loan originator may be getting payments from multiple sources. Dodd-Frank specifically says... Read More

Mortgage Servicing Market Shrinks Below $10 Trillion Despite Marginal Increase in Agency Sector in 3Q12

The residential mortgage servicing market continued its incredible shrinking act during the third quarter of 2012, falling below the $10 trillion mark for the first time since early 2006. The Federal Reserve reported that total single-family mortgage debt outstanding declined by 0.9 percent during the third quarter, drifting down to $9.926 trillion. The supply of mortgage servicing has been in a steady decline since peaking at $11.179 trillion in March 2008. The agency servicing market was...[Includes two data charts] Read More

Investment Advisors Expect Brisk Activity In Mortgage Merger and Acquisitions in 2013

Investment bankers that ply their trade in mortgage finance expect 2013 could turn out to be a strong year for mergers and acquisitions as current players, flush with cash, look to expand their franchises. But according to interviews conducted by Inside Mortgage Finance, “outside” money – including private-equity capital and hedge funds – might finally take the plunge this year as well. “PE firms are definitely looking,” said Chuck Klein, managing partner of Mortgage Banking Solutions. But he also cautions that hedge funds are hardly pushovers as buyers. “Hedge funds do... Read More

Inside Mortgage Finance Publications, Inc., Settles Copyright Infringement Case for More Than $250k

Inside Mortgage Finance Publications, Inc. announced this week that it has just settled a major copyright infringement dispute with a large national financial institution for more than one quarter of a million dollars. Without admitting any infringement, liability or wrongdoing, the financial institution agreed to pay IMFP to settle charges that it had violated federal copyright laws by making unauthorized copies of Inside Mortgage Finance. IMFP alleged that the financial institution had engaged in ongoing infringement, distributing infringing copies of dozens of registered issues to a group of non-subscribing employees. “We never like to pursue... Read More

Credit Unions Ask FHFA to ‘Carefully Consider’ Any New GSE Buyback Policies Following Release of QM Rule

New Fannie Mae and Freddie Mac buyback policies, advanced at the behest of the Federal Housing Finance Agency, could lead to a secondary mortgage market with fewer products and less competition from credit unions and smaller lenders, according to a trade group representing CUs. In a comment letter to the FHFA this week, the National Association of Federal Credit Unions said any new buyback requirement by the two government-sponsored enterprises could hurt CUs and other small lenders disproportionately because they lack the volume of loans or the capital needed to support a buyback program. “This would be... Read More

New Rules Tighten Standards for Nonprime Loans, But Little Impact Expected as Few are Originated

A number of rules from federal regulators in the past two weeks aim to tighten standards for nonprime mortgage lending, including requirements for ability to repay, appraisals and escrow accounts. Industry analysts suggest that the standards would have limited subprime mortgage lending during the boom of 2005, but those markets were dried up long before the new rules will take effect. In setting new rules for the nonprime market, federal regulators have established criteria for “higher-priced mortgage loans.” First-lien HPMLs are those with an annual percentage rate of at least 1.5 percentage points above the “average prime offer rate” for similar loan types, and more than 3.5 percentage points for junior-lien HPMLs. Some $12.38 billion in higher-priced mortgages were sold... Read More

Veteran Mortgage Editor/Reporter Paul Muolo Joins Inside Mortgage Finance Editorial Team

Paul Muolo, a veteran mortgage industry reporter and editor for more than 25 years and the co-author of a recent book on the mortgage crisis, has been hired as the new managing editor at Inside Mortgage Finance Publications, it was announced this week. At IMFP, Muolo already has left his mark by re-launching IMFnews as a free daily news service with comprehensive coverage of breaking mortgage-related news. As managing editor, he will contribute stories to the weekly Inside Mortgage Finance and Inside MBS &ABS newsletters as well as work with the four other reporters/editors at the company. “We are very pleased... Read More

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