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Inside Mortgage Finance

September 5, 2013

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Private Mortgage Insurance Excluded From New Proposed Definition of Qualified Residential Mortgage

Federal regulators dealt the private mortgage insurance industry a setback last week when they opted to ignore the presence of private MI coverage in defining “qualified residential mortgages” under a new proposed rule governing securitization. The new rule will require issuers of mortgage securities that are not backed by QRMs to retain a 5 percent share of the risk. As a practical matter, it won’t apply to Fannie Mae and Freddie Mac business as long as the government-sponsored enterprises are in conservatorship, although this exemption would not necessarily be extended to any post-GSE entity that Congress may create. If the agencies stick... Read More

Mortgage Market Still Dominated by Agency Programs, But Jumbo Lending Was Only Sector to Gain in 2Q13

Although agency originations and refinance activity continued to dominate residential mortgage lending during the second quarter of 2013, a new Inside Mortgage Finance analysis and ranking reveals that both those components were losing steam. In fact, the only product category to show growth during the period was the jumbo market, where originations increased by 9.3 percent and reached their highest quarterly volume – an estimated $59 billion – since the third quarter of 2007. On a year-to-date basis, jumbo originations were up 17.7 percent from the first half of last year. Agency production still accounted...[Includes two data charts] Read More

Mortgage M&A Market Comes to Life with LoanDepot Deal, but Potential Sellers Remain Picky on Price

With mortgage rates at their highest level in more than two years, the long-awaited boom in mergers and acquisitions may finally be here. But don’t expect sellers to accept just any price. “M&A is picking up,” said Larry Charbonneau, who runs a boutique advisory firm, Charbonneau & Associates. “The big fish want to buy the small ones, but the small ones don’t know if it’s in their best interest to sell yet.” Charbonneau points out... Read More

FHFA May Be Ready to Lower Fannie/Freddie Loan Limits in 2014 and Nothing Can Stop Them

The Federal Housing Finance Agency is expected to announce lower loan limits for Fannie Mae and Freddie Mac sometime this fall, a move that warms the hearts of non-agency jumbo originators everywhere, but is causing consternation among certain factions of the market, in particular, Realtors and the California Mortgage Bankers Association. “Any reduction in the loan limit will have a huge impact on the California market,” said Susan Milazzo, executive director of the CMBA. “We’re a high-cost state.” The trade group executive told... Read More

Experts: Senate Banking Committee Leadership Set to Take Up Own Housing Finance Reform Legislation This Fall

Look for the Senate leadership from both sides of the aisle to ramp up efforts to craft new legislation on comprehensive mortgage finance reform when Congress returns from its summer recess next week, although industry observers predict lawmakers will make only marginal progress this fall. Last month, at the behest of Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, senior committee staff met with various industry “stakeholders” – including trade associations, consumers groups and academics – to hear their thoughts on housing finance reform and the fate of Fannie Mae and Freddie Mac, according to meeting participants. The meeting takeaway among the stakeholders who spoke with Inside Mortgage Finance is... Read More

Mortgage Industry Asks for Enforcement Grace Period, as Multiple Rules Near Implementation

With the most significant collection of regulations to hit the mortgage industry in decades just a few months away from implementation, mortgage lenders are feeling tremendous pressure and continue to clamor for relief from regulators. Last week, the Mortgage Bankers Association asked the Consumer Financial Protection Bureau for a grace period of six to 12 months before it takes enforcement actions under any of the new mortgage rules implementing the Dodd-Frank Act. “Since the rules were issued... Read More

Radian Reduces Legacy Exposure in Pact with Freddie Mac, Credit Risk on More than 12 Percent Delinquent Loans Cut

Radian Guaranty has struck a deal with Freddie Mac on a pool of delinquent and reperforming mortgages, capping the private mortgage insurer’s exposure at $840 million and reducing the total number of delinquent loans by 12.6 percent. Announced on Aug. 29, the agreement covers a group of 25,760 first-lien loans insured by Radian and held by the government-sponsored enterprise that were delinquent as of Dec. 31, 2011. The agreement provides for the future treatment of these loans, including claim payments, loss mitigation and termination of insurance coverage. At the same time, Radian’s claim exposure on 9,756 delinquent loans and 4,586 loans that were... Read More

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