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Inside Mortgage Finance

February 27, 2014

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Retail Still Prevailed in 2013, But Lost Share To Correspondents as Refi Volume Slowed

Lenders leaned more heavily on their own internal production capacity during 2013, but third-party originations staged a modest rebound during the fourth quarter, according to a new ranking and analysis by Inside Mortgage Finance. Retail loan production -- including consumer direct, refinance business through the servicing unit and old-fashioned marketing through real estate agents and brokers -- accounted for 62.1 percent of total originations last year. That was the highest retail market share since Inside Mortgage Finance began estimating channel production figures back in 1994. The retail share of new production declined...[Includes five data charts] Read More

Mortgage Servicing Transfers to Nonbanks Continue To Get Regulatory Attention; Ocwen in the Spotlight

Mortgage industry investors and analysts are getting nervous about all the regulatory scrutiny being placed on servicing transfers and the rise of fast-growing nonbanks that have quickly amassed a large market share position. One analyst who tracks the market closely told Inside Mortgage Finance that some of these nonbank servicers are starting to "lawyer up" because of New York state's recent decision to block, at least temporarily, the sale of $39 billion in non-agency mortgage servicing rights by Wells Fargo to Ocwen Financial. Initially, servicing executives and their advisors believed... Read More

Mortgage-Delinquency Rates Edge Lower in Late 2013, Small Increase in Less-Severe Categories

Mortgage-delinquency rates continued to improve as 2013 came to a close, ending the year at the lowest level in over five years. The overall delinquency rate was 7.73 percent as of the end of December, according to the Inside Mortgage Finance Large Servicer Delinquency Index, the lowest reading since the third quarter of 2008, when it was 7.42 percent and rocketing higher.... Read More

Many Mortgage Lenders Were Not Fully Prepared for ATR Rule, Evidence Suggests

Many mortgage lenders were not 100 percent battle-ready when the Consumer Financial Protection Bureau's ability-to-repay rule and its qualified mortgage lending standard kicked in on Jan. 10, 2014, according to a new industry survey and anecdotal reports. A recent survey conducted by the National Association of Realtors between Jan. 6 and Jan. 20 found that 16.7 percent of respondents indicated that they had already adapted to the ATR rule, while 44.4 percent said they would be ready within three months. "Nearly a third of respondents indicated... Read More

Warehouse Funding Is a Major Issue for Brokers That Are Making the Shift to Mini-Correspondents

Increased regulation of mortgage brokers has prompted some to switch their business models to become so-called mini-correspondents. Industry lawyers suggest that being a mini-correspondent can offer benefits to those previously working as brokers, but the switch also comes with significant changes to business practices. "If you're a broker, think about what this is going to mean: higher net-worth requirements, warehouse lending, new compliance systems, new software systems to develop and generate the disclosures, and more importantly, significantly higher liability," Jonathan Jaffe, a partner at K&L Gates, said this week during a webinar hosted by the law firm. 'So there's a trade-off there if you're a broker thinking about converting," he said. Some brokers see... Read More

Fannie, Freddie Post Combined $132 Billion Profit In 2013 as Guaranty Fee Income Continued to Climb

Fannie Mae and Freddie Mac reported significant profits during the fourth quarter of 2013, capping a year in which rising guaranty fees had little impact on the market share of the two government-sponsored enterprises. Fannie reported net income for 2013 of $84.0 billion, compared to $17.2 billion in 2012, but over half of last year's earnings (roughly $45 billion) came from recaptured deferred tax assets. The company reported fourth-quarter earnings of $6.5 billion, its eighth consecutive quarterly profit. After it makes its next dividend payment to the Treasury Department in March, Fannie will have paid... Read More

House Weighs Bill to Restore Grandfathered Flood Insurance Rates, Repeal New Policy Rate Hikes

The House of Representatives this week is expected to vote on the amended version of H.R. 3370, the Homeowner Flood Insurance Affordability Act, which would provide comprehensive reform and longer-term relief from skyrocketing premiums in the National Flood Insurance Program. But there is a possibility that the vote could take place next week as Republicans and Democrats continued to negotiate on proposed changes and further protection for homeowners who face hefty rate increases caused by the Biggert-Waters Flood Insurance Reform Act of 2012, sources said. Congress passed the act to address the NFIP's solvency problems. Authored by Reps. Michael Grimm, R-NY, and Bill Cassidy, R-LA, H.R. 3370 builds... Read More

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