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Inside Mortgage Finance

August 15, 2013

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As Refis Slow, Retail Production Reaches New Market Share Milestone; Brokers Hit New Low

Residential mortgage production remained fairly strong in the second quarter thanks to an increase in retail-channel originations, which reached an all-time high of 64.6 percent in market share, according to a new analysis and ranking by Inside Mortgage Finance. The surge in retail production appears largely tied to ongoing strength in refinance activity. But lenders that are turning their attention to the purchase-mortgage market should consider that correspondents (34.8 percent) and brokers (22.0 percent) had higher concentrations of purchase loans than retail producers (19.3 percent) during the second quarter, based on Fannie/Freddie activity. Wells Fargo, as usual, continued...[Includes five data charts] Read More

Probes of SunTrust, PNC Indicate the Government Is Moving Down the Food Chain. So Who’s Next?

Last week, SunTrust and PNC separately disclosed they are being investigated by agencies of the federal government over some of their mortgage practices as the drive continues to bring enforcement actions in the wake of the financial crisis. For SunTrust, the U.S. government is probing whether it properly processed borrowers’ loan-modification applications under the Home Affordable Modification Program. SunTrust Mortgage “has been cooperating... Read More

Warehouse Lending Activity Steady in 2Q13, But Bankers Loosen Standards and Pricing

The warehouse lending market continued to hum along in the second quarter, but executives in charge of extending credit to nonbank mortgage lenders are beginning to see certain warning signs, including lower profit margins. “Profits are definitely tightening,” said Chuck Mueller, president and CEO of Fidelity Bank, Edina, MN, a one-branch bank whose forte is warehouse lending. Some executives note...[Includes one data chart] Read More

Freddie’s G-Fees Steeply Discounted Compared With Fannie’s as the GSEs Compete for Business

The guaranty fee charged to lenders by Freddie Mac has recently fallen significantly lower than the rate charged by Fannie Mae as the government-sponsored enterprise struggles to shore up its share of the GSE market. In the second quarter of 2013, Freddie’s average guaranty fee on new acquisitions was 50.7 basis points. During the same period, Fannie’s average g-fee for new acquisitions was 56.9 bps. In the second quarter of 2012, Freddie’s g-fee averaged 39.8 bps while Fannie’s averaged 40.3 bps. In a statement provided to Inside Mortgage Finance, Freddie said... Read More

Fannie and Freddie Note Dramatic Decline in Buyback Activity While Racking Up Huge Profits in Second Quarter

Fannie Mae and Freddie Mac posted a combined $15.1 billion in profit during the second quarter of 2013, along with the lowest inventory of repurchase activity since the two government-sponsored enterprises went into government conservatorship and began aggressively enforcing representations and warranties provided by sellers and servicers. As of the end of June, the two GSEs had a combined $5.78 billion in outstanding repurchase demands, a 16.8 percent decline from the first quarter. Although Fannie’s unresolved buyback caseload was...[Includes one data chart] Read More

Delinquency Rates Largely Declining, Foreclosure Timelines a Concern

Increases to home prices and employment rates along with servicers’ loss mitigation activities have combined to reduce delinquency rates to “normal” levels across most of the country, according to industry analysts. However, foreclosures remain a concern, particularly in states with a judicial foreclosure process. The overall delinquency rate fell to 7.38 percent in the second quarter of 2013 from 8.64 percent the previous quarter, according to the Inside Mortgage Finance Large Servicer Delinquency Index based on 17 lenders that service a total of $5.42 trillion in home mortgages. Thirty-to-60-day delinquency rates actually ticked up...[Includes one data chart] Read More

HARP Burnout Expected – Unless FHFA Continues Practice of Implementing Lender Feedback

After more than five years of operation, Home Affordable Refinance Program activity is expected to decline. However, industry analysts suggest that if the Federal Housing Finance Agency continues to implement changes requested by lenders, HARP activity could remain strong through 2014. “This deep cooperation and aggressive policy action are key reasons why HARP burnout has been elusive so far and suggests HARP risk is likely to remain elevated despite the interest rate sell-off, in our view,” analysts at Barclays Capital said late last week. Analysts at Bank of America Merrill Lynch project... Read More

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