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Inside Mortgage Finance

April 18, 2013

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With Volume Up Slightly in Early 2013, HARP Gets Extended for Two More Years

The federal agency caretaking Fannie Mae and Freddie Mac extended the streamlined refinance program for underwater mortgages at the government-sponsored enterprises for an extra two years, although it remains unclear how much gas is left in the tank. A new analysis of GSE securitization data by Inside Mortgage Finance suggests that activity under the Home Affordable Refinance Program increased by only 1.3 percent during the first quarter of 2013. A total of $69.0 billion of refinance mortgages with loan-to-value ratios exceeding 85 percent were securitized by Fannie and Freddie in the first three months of the year, representing the highest quarterly volume in the evolving program’s four-year history. Most of the increase came...[Includes two data charts] Read More

Mixed Bag for Top Lenders: Lending Down At Wells While Other Banks Boost Production

The long-awaited slowdown in residential originations may finally be at the doorstep of the nation’s largest banks, according to first-quarter results released over the past week by the “giants” of the industry including Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and U.S. Bancorp. In general, gain-on-sale margins eroded or held steady, but most megabanks hiked the asset value of their mortgage servicing rights. And some, like Wells and U.S. Bancorp, continued to hold some of their agency-eligible mortgage originations on their books instead of selling them to Fannie Mae and Freddie Mac. “Revenues have peaked for everyone,” Brian Foran, an analyst with Autonomous, told... Read More

Moody’s Zandi Newest, Best Positioned Candidate for FHFA Head; Stands on HARP, Writedowns Are Key

The latest unofficial nominee purportedly under White House consideration to replace the Federal Housing Finance Agency’s acting head is far from a shoo-in, but industry observers say that Moody’s Analytics’ Chief Economist Mark Zandi is the most credible candidate yet who could not only clear Senate confirmation but also advance final reform of the government-sponsored enterprises. Zandi would neither confirm nor deny to Inside Mortgage Finance this week that he’s being considered by the Obama administration to replace FHFA Acting Director Ed DeMarco as the agency’s permanent director. However, sources say... Read More

CFPB Compliance Guide on ATR Rule Leaves Large Lenders Chomping at the Bit for Guidance

The Consumer Financial Protection Bureau last week issued a small-entity compliance guide on its groundbreaking ability-to-repay rule promulgated in January. It’s a document that may help smaller firms but leaves big players wanting more. “Our goal with this guide is to provide a comprehensive rule summary in a plain language and Frequently Asked Questions format, which makes the content more accessible and consumable for a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff,” the CFPB said. The bureau recommended... Read More

Regulators Pressured by Democrats in Congress to Increase Servicer Oversight

Democrats in Congress are putting pressure on federal regulators to increase oversight of servicers due to problems with independent foreclosure reviews and the $25.0 billion national servicing settlement. The regulators have pushed back to some extent while indicating that servicers will be subject to tighter oversight going forward. In 2011, consent orders from the Federal Reserve and the Office of the Comptroller of the Currency required independent foreclosure reviews to be completed by 14 servicers with the help of consultants. In January, most of the servicers agreed to stop the reviews and alternatively provide $8.5 billion in relief to borrowers. The regulators acknowledged... Read More

Wells Fargo Steps Up Plans to Sell MSRs, Unloads Big Reverse Package and Scouts for Project Manager

No one is suggesting that Wells Fargo will begin lopping off large chunks of its $1.9 trillion residential servicing portfolio in a fashion similar to what Bank of America has done the past two years, but clearly selling mortgage servicing rights is on its to-do list. The big question is how much Wells Fargo is willing to part with. The bank declined to discuss the matter with Inside Mortgage Finance, but confirmed that it seeks to hire what it calls a “project manager” to oversee the effort. A spokeswoman for Wells downplayed the significance of the hire, saying the person who eventually joins the staff will be a “non-executive.” At least four servicing professionals said... Read More

District Court Allows Class Action on Captive Reinsurance to Proceed Against Lender, MIs

A major mortgage lender and four private mortgage insurance companies – all co-defendants in a class-action lawsuit over captive reinsurance – failed to convince a federal court that the case should be thrown out because the charges were brought well after the timeframe allowed under the Real Estate Settlement Procedures Act. Instead, the U.S. District Court for the Eastern District of Pennsylvania ruled that the mortgage borrowers should have the benefit of “equitable tolling,” which allows plaintiffs to bring cases beyond the normal limits of the law if the defendant actively misled them or the plaintiff was prevented in some extraordinary way from asserting his rights in a timely manner. RESPA generally requires... Read More

House Budget Subcommittee Shows No Sympathy for HUD’s Spending Request, Chairman Calls for Line-by-Line Analysis

The Department of Housing and Urban Development’s fiscal 2014 budget proposal is in for some rough sailing in Congress as House appropriators, unmoved by pleas to soften the impact of sequestration, criticized HUD’s lack of commitment to fiscal reform. Appearing as the sole witness before the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, HUD Secretary Shaun Donovan had an earful from Republican lawmakers who expressed “deep concern” about the lack of comprehensive reform proposals in the proposed budget. Subcommittee Chairman Tom Latham, R-IA, expressed... Read More

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