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Inside Mortgage Finance

February 16, 2017

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Private MIs Expanded Market Share in 2016 Despite Fourth-Quarter Surge by VA Guaranty Program

Private mortgage insurers grew their share of the primary mortgage insurance market during 2016 even though they lost some ground during the second half of the year, according to a new Inside Mortgage Finance ranking and analysis. Private MIs wrote an estimated $270.30 billion of new mortgage insurance last year, a robust 23.1 percent increase from 2015. The main engine was a 24.2 percent increase in traditional, or flow, MI business, coupled with a jump in bulk primary coverage – though such activity totaled just $860.0 million in 2016. Private MIs covered...[Includes three data tables] Read More

CHOICE Act 2.0 Would Disembowel CFPB, Hensarling Would Use Budget to Push Through

A key Republican leader in the House of Representatives is looking to push legislation that would effectively neuter critical aspects of the Consumer Financial Protection Bureau that could lead to major changes in the agency’s oversight functions and capabilities, including mortgage rulemaking, supervision and enforcement. The congressman also indicated he might use a procedural technique related to the budget to ram his legislation past Democrat opponents in the Senate. The legislative vehicle of choice is... Read More

The Time is Right for a Boom in Servicing Sales. Another Month or Two of Slow Prepayments Could Spur Market

The secondary market for bulk agency mortgage servicing rights is beginning to pick up a decent head of steam, but one factor is holding it back from a full-throttle: worries about prepayment speeds. “We’ve had one month of low prepayment numbers,” said Mark Garland, president of MountainView Servicing Group, Denver. “A couple of more months would be better.” According to investment bankers who work the market, although rates have been on a steady climb since the November election – the yield on the benchmark 10-year Treasury is... Read More

If President Trump Wants to Fire CFPB’s Cordray, He’s Going About it All Wrong, Law Professor Says

Whether President Trump is serious about replacing the head of the Consumer Financial Protection Bureau remains to be seen. But his enthusiasm over the prospect may have gotten the better of his legal judgement and in fact perhaps laid the foundation for such a replacement to be reversed, one noted legal scholar suggested recently. “If Trump is planning on attempting to remove CFPB Director Richard Cordray ‘for cause,’ he’s hardly going about it in a smart way,” Adam Levitin, a law professor at Georgetown University, said in a recent online blog posting. “The Trump administration keeps generating more and more evidence that any for-cause removal would be purely pretextual, which strengthens Cordray’s hand were he to litigate the removal order (as he surely would).” To begin with, the reasons that are offered as justification for sacking Cordray – such as claims of employee discrimination at the bureau or the agency’s settlements with auto finance companies – refer... Read More

Delinquencies Increase on a Quarterly Basis At the End of 2016, Foreclosures Decline

Mortgage delinquencies in the fourth quarter of 2016 hit their highest level of the year, erasing declines from the previous quarter, according to the Inside Mortgage Finance Large Servicer Delinquency Index. The foreclosure rate continued to decline, hitting levels last seen in 2007. Among the servicers tracked by the index, the total mortgage delinquency rate was 5.05 percent as of the end of the fourth quarter. The rate was at 5.54 percent at the end of 2015 and declined each quarter until the most recent period. Each delinquency bucket increased...[Includes one data table] Read More

PE Investors Making Bets on ‘Disruptors’ That Use Tech to Build a Better Lending Mousetrap

A dozen or so private equity firms are taking a close look at investing in mortgage lending start-ups that claim they can originate and underwrite more cheaply than traditional players because of their cutting-edge technology. A handful of PE firms have already taken out their checkbooks, investing millions of dollars in lenders such as Better Mortgage and Nexera Holding LLC, which operates consumer-direct lender Newfi and a wholesaler called Bluestream. Roughly six months ago, Better received... Read More

UI Report says Credit Access Tight, Harder to Obtain Mortgage Loan Today than Pre-Crisis

Despite some reports of credit access loosening, it’s harder to get a mortgage today than it was during the housing bubble, according to the Urban Institute. With borrowers being denied at a much higher rate than in the past, lower-credit mortgage applicants are dropping out of the housing market. As access to credit tightened after the financial crisis, many lower-credit applicants were discouraged from applying, the UI study noted. That led to a higher-credit applicant pool, which in turn led to a lower rejection rate. This caused... Read More

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