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Inside Mortgage Finance

December 18, 2014

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Home-Equity Production Increased in 3Q14, But Not Enough to Offset Ongoing Decline in HEL Outstanding

Home-equity lending continued to grow during the third quarter of 2014 – in fact, it was the fastest-growing segment of the mortgage market – but depository institutions reported further declines in the unpaid balances of these assets on their balance sheets. Lenders funded an estimated $20 billion of new home-equity lines of credit during the third quarter, up 17.6 percent from the previous three-month period. That compared to a 9.8 percent increase in total mortgage originations during the period, and it was the best quarterly HEL production figure in five years, according to Inside Mortgage Finance estimates. Still, the supply of home-equity loans outstanding fell...[Includes three data charts] Read More

Subservicing Volumes Stay Relatively Flat, But Big Drops for BofA, Nationstar, Ocwen

The nation’s subservicers, as a whole, reported a modest decline in their business volume during the third quarter, though some firms experienced large declines compared to a year ago, according to exclusive survey figures from Inside Mortgage Finance. The biggest year-over-year decline came at Bank of America, which had just $5 billion in subservicing contracts at Sept. 30, a 78.3 percent drop compared to the same period last year. BofA’s decline in the subservicing sector is...[Includes one data chart] Read More

CBO Projects Lenders Will Shift Some of Their Business Away from the GSEs in Coming Years

Lenders are likely to shift some of their business away from the government-sponsored enterprises and into the non-agency market in the coming years, regardless of GSE reform efforts, according to a report released this week by the Congressional Budget Office. “With house prices expected to trend upward, the balance sheets of lenders and investors should improve, as should borrowers’ financial positions,” the nonpartisan provider of analysis for Congress said. “Consequently, CBO projects that private companies will become more willing to make new loans and demand lower fees to compensate for the credit risks they take, which will reduce Fannie Mae and Freddie Mac’s pricing advantage over their private competitors.” If the private sector bears more mortgage credit risk, the CBO said... Read More

Transfers of Ginnie Mae Servicing Rights Fell Sharply in FY 2014; A Lack of Mega Deals?

Ginnie Mae approved the transfer of $66.06 billion in mortgage servicing rights during fiscal year 2014, a 56.5 percent tumble from the prior year as “mega” MSR transactions hit the skids. In fiscal 2012, just $25.39 billion in Ginnie product changed hands, but the market heated up significantly with $152.22 billion transferred in 2013. As always, transfers can be...[Includes one data chart] Read More

Following CFPB Rulemakings Could Indirectly Raise a Lender’s Fair Lending Risk, Attorney Warns

Complying with all of the Consumer Financial Protection Bureau’s mortgage rules that took effect this year could actually boost a lender’s fair lending liability under certain circumstances, according to one top attorney. “There are several possibilities where a person could be in complete compliance or even engage in behaviors incentivized by these rules, while also possibly increasing fair lending risk,” said Colgate Selden, counsel at the Alston & Bird law firm, during a webinar last week sponsored by InsideMortgage Finance. “The ability-to-repay, loan originator compensation, mortgage servicing, and Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rules all contain provisions where persons could indirectly increase their fair lending risk through compliance with those rules.” Among the ATR-related fair lending issues discussed by Selden, a former CFPB official, are... Read More

Mortgage Financing for Home Purchases Gaining Share from Cash Financing on a Yearly Basis

As the share of investors purchasing homes declines, mortgage financing continues to take market share from cash financing for home purchases, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Non-cash financing was used on 72.4 percent of home purchases in November, based on a three-month moving average. That’s up from a 70.7 percent share in November 2013 and a share as low as 66.9 percent in March 2012. Prior to the housing crisis, the non-cash share of total home sales averaged... Read More

President Obama Signs FY 2015 Omnibus Spending Bill, Some Rue Failure to Fund HAWK, FHA IT Upgrades

President Obama this week signed a comprehensive package of spending bills, providing funding to federal agencies through fiscal 2015 but missing two initiatives that would have toughened FHA enforcement and benefited new homeowners through enhanced housing counseling. The FY 2015 Consolidated and Further Continuing Appropriations Act is comprised of 11 funding bills for all federal agencies, including the Department of Housing and Urban Development. The bill provides... Read More

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