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Inside Mortgage Finance

December 15, 2016

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Home-Equity Lending Softened Slightly in 3Q16 As Refinancing Surged; HEL Outstanding Fell

Home-equity lending cooled off in the third quarter of 2016 as consumers took advantage of low interest rates to refinance rather than draw down more second-mortgage debt. Lenders originated an estimated $50.7 billion of home-equity loans during the third quarter, including home-equity lines of credit and closed-end second mortgages. Although that was down 5.2 percent from the second quarter, it still marked the second highest three-month volume since the housing market collapse in 2008. And depository institutions, the dominant lenders in the HEL market, reported...[Includes three data tables] Read More

Thanks to a 75 Basis Point Spike in Rates, Outlook for MSR Sales Improves; However, Some Buyers Remain Cautious

Roughly $20 billion in mortgage servicing rights are now available for bulk purchase in the secondary market compared to just a few billion a month ago. The reason: higher interest rates. According to servicing advisers interviewed by Inside Mortgage Finance this week, the 75 basis point jump in rates since the election has suddenly transformed a glum-looking market into one that has great potential. “There’s... Read More

Subservicing Continues to Gain Market Share as More Firms Remain ‘Servicer of Record’ After Selling MSR

Subservicing specialists ended the third quarter with an estimated $1.80 trillion of contracts on their books, an 11.8 percent sequential gain and a 22.4 percent improvement from the same period a year ago, according to exclusive survey figures compiled by Inside Mortgage Finance. At the end of September, subservicers handled 17.8 percent of the $10.12 trillion residential loan market. A year ago, the sector had a market share of 14.8 percent. Some of the growth comes...[Includes one data table] Read More

New House Bills Focus on Increasing GSE Credit Risk- Sharing Through Pilot Programs, Deeper MI Coverage

Legislation introduced in the last weeks of the 114th Congress would push Fannie Mae and Freddie Mac deeper into the risk-sharing pool, including forcing them into a front-end structure they have so far resisted. The “Taxpayer Protections and Market Access for Mortgage Finance Act of 2016” would require the Federal Housing Finance Agency to push the two government-sponsored enterprises to transfer at least 400 basis points of their total risk. While it’s not clear how the legislation intends this to be measured, it appears... Read More

Servicing Market Grew Again in 3Q16 as Nonbanks Took Bigger Share of Burgeoning MSR Sector

The Federal Reserve late last week reported a modest 0.6 percent increase in the volume of single-family mortgages outstanding during the third quarter of 2016, the fifth straight quarterly gain in a market finally recovering from the housing meltdown. Still, at $10.123 trillion, the supply of mortgage debt outstanding was $1.118 trillion below the level it reached at the end of 2007. Most of the growth in the third quarter came...[Includes two data tables] Read More

CFPB Urged to Issue Guidance, Step Up Oversight As Lenders Increase Use of Private-Label Servicing

The growing popularity of private-label servicing and the way it’s offered to lenders are raising regulatory questions, underscoring the need for guidance and supervision, according to legal experts. With the most comprehensive offerings of private-label servicing, the borrower never knows the subservicer exists, and that’s the point of the arrangement, according to Craig Nazzaro, of counsel at the Atlanta-based law firm Baker Donelson. Nazzaro attributes... Read More

Low Appraisals Result in More Than 10 Percent Of Purchase-Mortgage Applications Being Denied

Appraisal-related issues cause more than one out of every 10 purchase-mortgage applications to be denied, according to CoreLogic. Below-contract appraisals comprised 11.3 percent of the first-lien purchase-loan appraisals ordered through the CoreLogic/FNC Collateral Management System, according to Yanling Mayer, director of research in CoreLogic’s office of chief economist. The CMS is a workflow and compliance platform used by many lenders, servicers and appraisal management companies. Mayer noted... Read More

Industry Experts Detail How to Creatively Compensate LOs and Still Stay Compliant

With rates at the highest they’ve been in 27 months, mortgage lenders have to make sure they keep their costs as low as possible to be competitive. At the same time, they have to retain and attract the most productive loan officers, while still staying within the bounds of the loan originator compensation rule from the Consumer Financial Protection Bureau. During a webinar sponsored by Inside Mortgage Finance this week, Paul Hindman, managing director at Grid Origination Services, said loan officer recruiting is not just about the Benjamins. “In no particular order, should they decide to explore, loan officers will evaluate and compare the following when assessing the right model match: company brand and culture ([including] mission, vision and values); compensation clarity, [and] loan products and consistent rates/pricing,” he said. Also important are... Read More

GSEs to Dabble in Personal MH

Fannie Mae and Freddie Mac will launch pilot programs to purchase personal loans tied to manufactured housing under the final duty-to-serve regulation released this week by the Federal Housing Finance Agency. The duty-to-serve requirement was mandated by Congress eight years ago but has never been implemented. The government-sponsored enterprises will devise three-year plans for serving low- and moderate income households in three underserved areas: manufactured housing, affordable housing preservation and rural housing. Like the annual affordable housing goals set for the GSEs, the duty-to-serve requirement does not include... Read More

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