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Inside Mortgage Finance

May 14, 2015

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Government Mortgage Insurance Programs Make a Run on Private MIs; First-Timers Shifting the Scales

The volume of new mortgage originations with primary mortgage-insurance coverage held steady during the first quarter of 2015, but there was a noticeable shift toward the government MI programs, according to a new Inside Mortgage Finance analysis and ranking. Private mortgage insurers wrote coverage on $45.24 billion of new conventional originations during the first quarter, a 5.3 percent decline from the fourth quarter of last year. But FHA and Veterans Administration loan originations were up over the same period, by 5.5 percent and 6.0 percent, respectively. Based on Ginnie Mae securitization data, the volume of new rural-housing loans insured by the Department of Agriculture fell...[Includes three data charts] Read More

CFPB May Review Lender-Paid MI as Pricing Gets More Competitive. But Who’s at Risk Here: MIs or Lenders?

It’s no secret that pricing on lender-paid mortgage insurance policies has come down over the past several months and now it appears the Consumer Financial Protection Bureau may take a look at what’s going on behind the curtain. According to industry officials who claim to have knowledge of the situation, the powerful consumer regulator may focus on whether there is some kind of quid pro quo going on between lenders and mortgage insurers. In particular, the agency may look... Read More

Shelby Reg Relief Bill Would Grant QM Status To Portfolio Loans, But Dem Support Uncertain

Residential mortgages held in portfolio would be granted safe-harbor qualified-mortgage status under draft regulatory relief legislation circulated early this week by Sen. Richard Shelby, R-AL, chairman of the Senate Banking, Housing and Urban Affairs Committee. To get that classification, the lender would have to hold the loan in portfolio from inception, and any person acquiring the loan must continue to hold it in portfolio. The loan cannot provide for negative amortization or interest-only payments, and the loan term could not exceed 30 years. Also, the lender would still have... Read More

FHFA Provokes Critics on Capitol Hill by Weighing Hefty Increases in Fannie/Freddie CEO Compensation

The Federal Housing Finance Agency is drawing flak after asking Fannie Mae and Freddie Mac CEOs to submit executive compensation analyses that could significantly boost pay for top management at the government-sponsored enterprises. The FHFA capped Fannie and Freddie CEO salaries at $600,000 in 2012, but FHFA Director Mel Watt wants to change that. In its first-quarter earnings statement, Freddie revealed that the regulator asked the GSEs’ boards to review CEO compensation. Rep. Ed Royce, R-CA, doesn’t... Read More

Ocwen Making Headway on GSE Servicing Sales, But It’s Unclear Why the Firm Is Holding Onto its Ginnie Rights

Since late February, Ocwen Financial has struck four different deals to sell $89.4 billion in Fannie Mae/Freddie Mac servicing rights. Although buyer interest in the high-quality receivables was strong, getting those transactions past the Federal Housing Finance Agency has been a different matter. Industry advisors note that in general Fannie and Freddie promise their seller/servicers they will approve MSR transfers within 60 days unless there’s a problem. Last summer, the approval time was increased from 30 days, a change that did not receive much publicity. The FHFA, on the other hand, offers... Read More

CFPB Director Cordray Resists Continued Pressure From Lawmakers to Delay TRID Enforcement

Consumer Financial Protection Bureau Director Richard Cordray continues to tell the mortgage industry and its allies in Congress that the CFPB will not look the other way while the industry grapples with implementation of the integrated mortgage disclosure rule. The director’s latest official rebuff was delivered in a recent letter to Rep. Blaine Luetkemeyer, R-MO, who has been pressing the director for some kind of an enforcement grace period. Cordray historically has been... Read More

Strong Demand Seen from First-Time Homebuyers, Originations Expected to See Looser Underwriting

Underwriting standards, not a lack of income or significant student loan debt, have held back originations of mortgages to first-time homebuyers in recent years, according to industry analysts. As lenders gradually loosen their underwriting standards, originations of mortgages for first-time homebuyers are expected to increase in the coming years. In a recent brief, analysts at Capital Economics stressed that there doesn’t appear to have been a fundamental shift in homeownership aspirations, even though housing is currently slightly over-valued compared with renting. “There is... Read More

Fresh Faces, Ideological Differences Continue To Darken Outlook for GSE Reform Legislation

Realtors want Congress to tackle reform of the government-sponsored enterprises, but they are keenly aware of the huge difficulties facing the effort, according to participants at this week’s annual legislative conference held by the National Association of Realtors. “I think what we want to get through to people in Congress is that these [GSE] programs were designed to be around and to be effective in times of a recession and prosperity in every single section of the country. That’s what they were there to do,” said Jerry Giovaniello, NAR’s senior vice president of government affairs. He said... Read More

FHA Recaptures Some Market Share in Recent Months, Thanks to Premium Price Cut, Economic Factors

FHA volume in Ginnie Mae mortgage-backed securities rebounded in April because of the agency’s price cut in late January and improvements in the economy, according to industry participants. Recent data from the FHA show a sharp uptick in refinance business, which jumped from $2.29 billion in endorsements in February to $8.15 billion in March. Total FHA forward-mortgage business rose by 83.8 percent from February. The surge came... Read More

State Regulators Seek Input for Changes to Be Made to NMLS Mortgage Call Report, Noncompliance a Concern

State regulators are seeking comments regarding a number of potential changes to the Nationwide Multistate Licensing System and Registry licensing forms and the mortgage call report. Among other issues, state regulators are working to continue state adoption of the MCR as the sole activity reporting requirement for state-regulated lenders. About 14,500 companies fill out the MCR each quarter, detailing originations and other metrics. The State Regulatory Registry, which operates nationwide systems for state regulators, said compliance with the MCR remains a concern. “Compliance has steadily improved... Read More

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