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Inside Mortgage Finance

February 28, 2013

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GSEs Drive Huge Surge in Conventional Conforming Lending, Lift 2012 to Best Year Since Market Crash

Conventional conforming mortgage originations – mostly financed by Fannie Mae and Freddie Mac – accounted for a record 66.8 percent of total single-family lending last year, according to a new market analysis and ranking by Inside Mortgage Finance. Mortgage lenders originated a whopping $1.273 trillion in conventional conforming mortgages in 2012, the highest level since the all-time record of $2.460 trillion was set back in 2003. Volume in the sector started strong and kept building throughout the year, including a 19.1 percent jump from the third to the fourth quarter. For the year, conventional conforming originations were...[Includes two data charts] Read More

Experts: Private MI Inclusion in Bipartisan Policy Center’s Proposal to Overhaul Federal Housing Finance a Good Sign

A new mortgage reform proposal drafted by a blue-ribbon panel gives a fairly prominent role to private credit enhancement as a key feature in a new mortgage securitization system. While the plan released this week by the Bipartisan Policy Center’s Housing Commission – like all others that came before it – calls for a smaller government role in the mortgage sector, it remains to be seen whether it will get the reform process off the ground in a stalled political environment. The commission, comprised of former lawmakers and cabinet officials, both Republican and Democrat, calls for phasing out the government-sponsored enterprises in favor of a new federal entity that explicitly acts as a backstop of last resort after the private sector. It would replace Fannie Mae and Freddie Mac over a five- to 10-year period with a new “Public Guarantor,” a wholly government entity that would provide an explicit, but limited guaranty on mortgage-backed securities. “The government would cover... Read More

House Financial Services Panel Urges FHA to Charge ‘User Fees’ to Invest in Technology, Cover Administrative Costs

A recent recommendation by the House Financial Services Committee to the FHA to consider charging “additional user fees” to strengthen and protect the Mutual Mortgage Insurance Fund has raised questions in the industry as to what lawmakers meant by user fees. The FHA, apparently, has no authority to do so. In its recently published views and estimates related to the FY 2014 budget, the committee noted that while the FHA has increased its mortgage insurance premiums, lawmakers remain concerned that the agency “has failed to make full use of its existing authorities to protect the health of the fund.” The committee urged... Read More

Sequestration Threatens to Slow Down HUD, Ginnie Mae Services; VA Exempt from Cuts

The Department of Housing and Development, and possibly Ginnie Mae, might be forced to place employees on furlough as a result of mandatory, across-the-board spending cuts scheduled to take effect on March 1. In recent testimony before the Senate Committee on Appropriations, Department of Housing and Urban Development Secretary Shaun Donovan said sequestration would result in forced employee leaves or other personnel actions, which would affect many of the 9,000 HUD employees in 81 field offices around the country. Donovan said... Read More

Certain Wells JVs Told They Are ‘Solid’ but Questions Remain, Some Seek Warehouse Lines Just in Case

A year ago, Wells Fargo had a stake in roughly 100 joint venture mortgage banking companies, mostly with real estate brokers. Today that number stands at 10 or so with some of the remaining JVs voicing concerns that the nation’s largest lender might pull the plug by the time 2013 ends. However, at least two Wells JVs – HomeServices Lending and Prosperity Mortgage – have been reassured by the bank that their relationships are on firm footing and they have nothing to worry about. Still, there is a growing concern among some JV partners that, in the words of one executive: “Wells is allocating resources away from JVs.” This source, who spoke under the condition his name and company not be published, said... Read More

Residential Delinquencies Continued To Tumble Across the Board in 4Q12

Companies that make their living from servicing delinquent and “high touch” mortgages may want to reconsider their business options going forward. According to new figures compiled by Inside Mortgage Finance, late payments on home mortgages continued their downward trend in the fourth quarter with the nation’s top servicers recording a combined delinquency rate of 9.48 percent, a 141 basis point improvement over the same period a year earlier. Compared to the third quarter, late payments fell 74 bps, another sign that the problem loans are...[Includes one data chart] Read More

Lenders Urge Bureau to Go Further in Lessening Double Counting of Originator Comp in QM Loans

Mortgage industry representatives strongly support efforts by the Consumer Financial Protection Bureau to lessen the potential for double counting in loan originator compensation calculations for “qualified mortgages” under the CFPB’s recently issued ability-to-repay final rule. And they’d like the bureau to go even further. When the CFPB issued its ATR rule last month, it also proposed adding two comments and potentially one of two others to the accompanying commentary that would specify calculation methods to lessen the problem of double counting of loan originator compensation in the points and fees calculation for QM loans. The first comment, “exemption for consumer paid mortgage broker/brokerage compensation,” would clarify... Read More

Servicers on their Way to Completing $25 Billion Settlement Obligations, But Some Issues Remain

The five servicers participating in the $25 billion national mortgage servicing settlement could complete their borrower relief obligations well before the 2015 deadline, according to a report released late last week by the settlement’s monitor. However, complaints from borrowers regarding servicing are increasing, with greater scrutiny expected from the Consumer Financial Protection Bureau and the possibility of further requirements as part of the settlement. The five servicers participating in the settlement have $20.0 billion in consumer relief requirements and provided $45.8 billion in gross relief to borrowers through the end of 2012 as part of the settlement. However, most of the servicers have not yet met their relief requirements as the loss mitigation must be provided via a number of different tactics credited at varying levels. Short sales accounted... Read More

FHA Losing Favor as Source of Low Downpayment Purchase-Mortgage Financing, HousingPulse Finds

Recent and impending changes to FHA program requirements have shifted purchase-mortgage activity to other sources, according to industry analysts. While the FHA remains the go-to financing method for borrowers who can only provide a 3.5 percent downpayment, conventional financing with a 5.0 percent downpayment is seen as more favorable for qualified borrowers. Beginning April 1, the annual FHA mortgage insurance premium will increase by 10 basis points for purchase mortgages, following a number of other premium increases in recent years. FHA financing accounted... Read More

Editorial Note:

Inside Mortgage Finance has published updated private MI rankings to reflect survey data from United Guaranty Read More

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