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Inside Mortgage Finance

February 14, 2013

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Private MIs Finish 2012 With Their Strongest Year Since 2008, Rebound in Market Share

Private mortgage insurers in 2012 posted their best year since the financial market collapse back in 2008 and suddenly – after being largely left as roadkill in the government’s bailout program – are attracting new capital. Private MIs reported $174.81 billion in total new insurance written in 2012, more than doubling the amount of business they did the year before, according to a new Inside Mortgage Finance ranking and analysis. With the FHA and VA programs growing at a more deliberate pace, it boosted the private MI share of the primary mortgage insurance market to 32.0 percent, up from 22.7 percent in 2011. A significant part of the private MI rebound came...[Includes three data charts] Read More

Global MI, Reinsurance Provider to Enter US Market by Acquiring PMI’s CMG MI, Business Platform and Assets

PMI Mortgage Insurance Co. may be out of the mortgage insurance business, but its surviving MI subsidiary, CMG Mortgage Insurance Co., will continue providing MI to credit unions under new management beginning in 2014. Last week, Arch Capital Group, a Bermuda-based provider of insurance and reinsurance, announced an agreement to acquire CMG MI from PMI Mortgage Insurance, as well as the latter’s operating platform and related assets. PMI is currently in rehabilitation and has been under the receivership of the Arizona Department of Insurance since 2011 after failing to meet statutory capital requirements. The transaction will not only allow... Read More

CFPB to Closely Monitor Servicing Transfers For Loss Mitigation Problems, Borrower Hassles

The Consumer Financial Protection Bureau announced this week that it will closely scrutinize servicing transfers due to complaints from borrowers tied to a recent increase in servicing sales. The federal regulator published CFPB Bulletin 2013-01 this week detailing the new oversight standards, with an emphasis on loss mitigation issues. “The CFPB has particular concerns related to servicing transfers that arise from consumer complaints and supervisory work related to servicing transfers,” the federal regulator said. “Among other complaints, consumers have complained about service interruptions when their loans are transferred during the loss mitigation process.” The problems are related... Read More

CFPB Plans Transition Aid

Lenders feeling oppressed by the onslaught of new mortgage regulations going into effect in January 2014 may have an unlikely ally: the agency that unleashed all the new rules. The Consumer Financial Protection Bureau this week announced several initiatives to help lenders comply with the new ability-to-repay and mortgage servicing rules, two of the most complex and far-reaching regulations. The agency said it will publish... Read More

Once Dormant, the Market for Loans Backed by Mortgage Servicing Rights May Spring Back to Life

Ever since Taylor Bean & Whitaker went down in flames a few years ago, the market for loans backed by mortgage servicing rights has been dormant with the nation’s largest banks pulling out of the business and vowing never to return. But now that MSRs are considered a “hot” investment with nonbanks such as Nationstar Mortgage, Ocwen Financial and Walter Investment Management gobbling up billions of dollars in receivables the past few years – and at bargain basement prices – banks, Wall Street firms, and other players are eyeing the market for a major comeback. According to servicing advisors and warehouse firms, there are... Read More

HUD’s Disparate Impact Rule Shifts Burden Of Proof to Lenders, Industry Experts Say

A new final rule from the Department of Housing and Urban Development may make it harder for lenders to defend against allegations of racially discriminatory policies and even more difficult to structure an effective compliance program under the Fair Housing Act, according to legal experts. Issued last week, the rule provides that HUD or a private plaintiff can establish a so-called disparate-impact liability under the FHAct, even if there is no intent to discriminate. The agency said the rule establishes no new law – since HUD and appellate courts have upheld the disparate impact theory in fair housing cases for decades – and aims to standardize the minor variations for determining liability under the statute. The rule establishes... Read More

Republicans Continue Attack on FHA and Galante But Offer No Clear Proposals to Strengthen Insurance Fund

FHA Commissioner Carol Galante fended off attacks by Republicans on the House Financial Services Committee this week, saying that the actual performance of the FHA single-family program over the course of FY 2013 and steps the agency takes during this period will determine whether the agency will need more cash to pay claims. In her first congressional appearance since her Senate confirmation in late December, Galante tried to assure critics that the FHA may not have to borrow from the U.S. Treasury to boost its claims-paying ability if the proposed budget President Obama releases next month does not show a shortfall. In last year’s proposed 2012 budget, the president anticipated... Read More

White House May Not Ask for Treasury Draw To ‘Bail Out’ FHA Mortgage Insurance Fund

With the White House budget delayed until sometime in March, there is renewed speculation that the Department of Housing and Urban Development will not ask for a draw from the Treasury Department to bolster the cash-starved Mutual Mortgage Insurance Fund of the FHA. In testimony this week before the House Financial Services Committee FHA Commissioner Carol Galante said underwriting changes and premium hikes have decreased the likelihood that the MMI will request additional cash. But she could not say for certain, noting that if a draw is needed it will not come until the end of fiscal 2013. Mortgage insurance professionals and consulting firms that work on HUD issues have estimated... Read More

New IL Fast-Track Foreclosure Law Casts Fresh Light On Proposed FHFA Five-State Guaranty Fee Hikes

It remains to be seen how or whether a newly signed law in Illinois to fast-track certain foreclosures will impact a proposal by the Federal Housing Finance Agency to levy extra guaranty fee charges on Fannie Mae and Freddie Mac mortgages originated in five slow-foreclosure states, including Illinois, but experts say other states may be inspired to follow suit. Last week, Illinois Gov. Pat Quinn, D, signed into law SB 16, which among other provisions, would allow servicers to expedite the foreclosure timelines for abandoned or vacant homes from about 18 months to as little as 90 days. Although the bill was... Read More

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