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Inside Mortgage Finance

December 5, 2013

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Agency Jumbo Market Softened in 3Q13 While Non-Agency Volume Rose; ARMs Strengthen

The lift in jumbo mortgage production during the third quarter of 2013 came from the non-agency segment of the market, while new originations of “conforming jumbo” loans faltered, according to a new analysis and ranking by Inside Mortgage Finance. Fannie Mae, Freddie Mac and the FHA financed $25.48 billion in single-family loans that exceeded $417,000 during the third quarter, down 15.5 percent from the second quarter. Meanwhile, non-agency jumbo originations edged up 2.7 percent during the third quarter, hitting a six-year high. The strength of the non-agency jumbo market at a time when securitization of these loans has slowed...[Includes three data charts] Read More

Best Practices Stressed for Surging Jumbo Sector As More Lenders Enter the Non-Agency Market

Originations of non-agency jumbo mortgages are stronger than the overall market, big banks are competing for wealthy borrowers and smaller firms are looking to enter the market. While jumbos originated in recent years have performed exceptionally well, Standard & Poor’s stresses that lenders should control their growth. “In our opinion, controlled growth is a key aspect to the comprehensiveness and ultimate success of an originator’s business strategy,” the rating service said in a recent overview of jumbo performance and best practices. “We believe that aggressive growth strategies could result in difficulties managing the quality of the origination process.” S&P noted... Read More

Some MIs May Shift to Full Underwriting Under New GSE Master Policy; Capital Requirements Awaited

The mortgage insurance industry is anxiously awaiting new risk-to-capital rules from the Federal Housing Finance Agency, hoping that the regulator will go easy on an industry that is beginning to recover from a years-long debacle and reclaim market share from the FHA. Private MI executives close to the matter told Inside Mortgage Finance that the FHFA will likely issue a minimum risk-to-capital ratio of 18:1, a tougher standard than the current 25:1, but there is also talk of a phase-in period and “bifurcation” for legacy versus new companies. According to its securities filings, National MI, a new MI, has agreed... Read More

Broker Group Planning to Sue CFPB Over Disclosure of Lender-Paid Compensation

The National Association of Independent Housing Professionals is maneuvering to sue the Consumer Financial Protection Bureau over broker disclosure of lender-paid compensation under the new ability-to-repay rule, but has yet to green-light an actual filing, pending a needed fundraiser, Inside Mortgage Finance has learned. “The CFPB is an independent agency with no oversight. From their inception on July 21, 2011, they have continually used their authority to pick winners and losers, causing unprecedented harm to consumers, mortgage brokers, loan originators, appraisers and other small-business housing professionals,” the organization said in a fund-raising appeal. “In order to stop these anti-consumer, anti-competition, job-killing rules, NAIHP is filing suit.” In its fundraising pitch, the group noted... Read More

W.J. Bradley Case Against Top Loan Producer Hinges on Ownership of Customer Information

A civil complaint filed by W.J. Bradley Mortgage in California state court against a former top loan officer and her new employer could decide what type of contact and other information an LO can take with them when they leave a firm. Since the fall, the WJB suit filed against former company LO Shelly Logemann, her new employer RPM Mortgage, its owners and others has been the talk of mortgage-banking circles in California and elsewhere. The case is being closely watched... Read More

Hensarling Might Push the PATH Act to House Floor but Lobbyists Say the Votes Aren’t There

House Financial Services Committee Chairman Jeb Hensarling does not have the votes needed to pass the Protecting American Taxpayers and Homeowners Act in the House and, unless he is willing to be flexible on certain key issues, the package may not reach the House floor at all in this Congress, according to industry lobbyists. Talk that Hensarling, R-TX, may make another push to get the PATH Act to the House floor surfaced this week following an opinion piece he published in the Nov. 27 issue of the Washington Times. In that op-ed, the chairman focused on the bill’s FHA reform component. Hensarling underscored... Read More

S&P: Big Banks Could Pay Over $100B in Mortgage Legal Costs; Well Positioned For Now, But Expect More Suits

Expect the largest U.S. banks to continue to feel the effects of the mortgage implosion as they pony up over $100 billion to get out from under their legacy mortgage litigation issues, according to an analysis by Standard and Poor’s. Since 2009, S&P noted that the big banks – Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo – together have paid or set aside more than $45 billion for mortgage representation-and-warranty issues and have incurred some $50 billion in combined legal expenses. This does not include... Read More

Small Financial Institutions Continue to Push Back Against CFPB Mortgage Rules

Representatives of community banks and credit unions again told sympathetic members of Congress about the harmful effects they anticipate upon their mortgage business once all of the related rules promulgated by the Consumer Financial Protection Bureau finally kick in come early January. “Every aspect of mortgage lending is subject to new, complex and expensive regulations that will upend the economics of this line of business,” Industrial Bank President and CEO Doyle Mitchell, representing the Independent Community Bankers of America, told members of the House Small Business Subcommittee on Investigations, Oversight and Regulations during a hearing this week. In particular, community bankers are deeply concerned... Read More

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