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Inside Mortgage Finance

January 16, 2014

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CFPB Eyeballs Loan-Origination Process, Asks Consumers for Input on ‘Pain Points’ in Closing

Now that the Consumer Financial Protection Bureau has delivered its integrated mortgage disclosure project, the agency is asking consumers to identify the key “pain points” associated with closing and how they might by mitigated by market innovations and technology. “The CFPB seeks to encourage the development of a more streamlined, efficient and educational closing process as the mortgage industry increases its usage of technology, electronic signatures and paperless processes,” the bureau said in a recent notice. The plan is to “encourage interventions that increase consumer knowledge, understanding and confidence at closing,” the agency said. Specifically, comment is sought... Read More

Watt Names New Advisors on Consumer, Industry Issues That May Reflect New Orientation for FHFA

Last week’s appointment of four special advisors to the Federal Housing Finance Agency by new Director Mel Watt has primed speculation of a policy-course correction at the FHFA but specific changes remain anyone’s guess, say industry observers. Watt added three current and former Obama administration officials into the agency’s fold “to provide counsel on policy and strategic decisions” at the agency while retaining an advisor from former FHFA Acting Director Edward DeMarco’s tenure. Two of the posts appear to represent new areas of focus for the agency – consumers and industry relations – that were often friction points under DeMarco. Bob Ryan, a former Freddie Mac executive, joins... Read More

Slammed by a Mountain of Servicing Transfers, Ginnie Wants to Triple the Time Needed to Approve MSR Sales

Ginnie Mae is telling sellers of mortgage servicing rights – and their advisors – that it wants upwards of 90 days to approve MSR transfers compared to just 30 currently. The agency gave seller/servicers a heads-up on the longer approval times in late November at an “education summit” in Washington attended by both new and existing issuers. A copy of Ginnie’s presentation was provided to Inside Mortgage Finance. Advisory sources said...[Includes one data chart] Read More

Legal, Reputational Risk Might Discourage Lenders From Originating Non-QM Loans

A lot of prospective homebuyers may be shut out of the market if their mortgage financing can’t pass muster with the Consumer Financial Protection Bureau’s qualified-mortgage standard, congressional testimony this week suggested. Witnesses from The Peoples Bank Company, of Coldwater, OH, and Quicken Loans said during a House Financial Services Financial Institutions Subcommittee hearing this week that their firms plan to stay away from making mortgages that don’t fit into either the safe harbor or the rebuttable-presumption QM boxes. “There is... Read More

Senator’s Comments on GSE Shareholder Efforts Ignite Market Frenzy, Issue Not Going Away, Say Experts

Expect Fannie Mae and Freddie Mac shareholders to continue to clamor for attention and satisfaction this year whether or not the Obama administration and lawmakers confront claims that the government-sponsored enterprises should share their profits with investors, say industry observers. Late last week, Sen. Bob Corker, R-VA, sought to walk back comments he made regarding GSE shareholder rights while speaking at a policy forum in Washington, DC. Corker said that he and other lawmakers drafting an enhanced GSE reform bill in the Senate recognize that shareholder claims “have to be dealt with.” Following news of Corker’s remark, GSE preferred shares posted... Read More

Existence of Housing Bubble Debated as Home Prices Rise, Cost of Homeownership at Issue

The housing market is in the midst of a bubble or a gradual recovery, depending on who you ask. Analysts on either side of the debate point to the agency dominance of the mortgage market as one of the factors driving up home prices. Peter Wallison, a senior fellow at the American Enterprise Institute, warned last week that the housing market is in the middle of another bubble. “Housing bubbles become visible – and can legitimately be called bubbles – when housing prices diverge significantly from rents,” he wrote in an op-ed published in the New York Times. Wallison pointed... Read More

Private MIs Scramble to Offer QM-Friendly Products, Tools to Help Lenders Comply With New Requirements

Private mortgage insurers have launched a number of initiatives to help lenders comply with the qualified-mortgage rule that took effect Jan. 10. The rule issued by the Consumer Financial Protection Bureau puts new emphasis on capping debt-to-income ratios at 43 percent – except for agency mortgages – and limiting points and fees to 3 percent. Radian has announced 45-minute webinars discussing how QM impacts mortgage insurance as well as new, lower pricing for borrower-paid MI. The firm’s Loan Amount Estimator enables lenders that are capping their debt-to-income ratios at 43 percent to calculate maximum loan amounts and sale prices based on the MI product selected. In addition, the tool can be used for non-MI loans and is available through the MI’s rate finder application, Radian Rates. United Guaranty’s QMI product allows... Read More

Megabank Production Volume Down Sharply in 4Q13, But Did the Nonbanks Gain Market Share?

The nation’s three largest funders of home mortgages – Wells Fargo, JPMorgan Chase and Bank of America – this week reported hefty declines in originations during the fourth quarter of 2013. Wells originated $50 billion in residential mortgages during the fourth quarter, a stunning 60 percent decline from the same period a year earlier. The last time this perennial market leader had fundings this low was in the fourth quarter of 2008 when financial markets were reeling worldwide and the U.S. housing market was in the throes of an historic collapse. But Wells’ closest competitors fared...[Includes one data chart] Read More

Editorial Note:

Inside Mortgage Finance recently revised its product mix estimates to reflect a larger volume of home-equity loans originated during the first nine months of 2013. We also made...[Includes one data chart] Read More

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