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Inside Mortgage Finance

March 30, 2017

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Top Lenders, Banks Reclaim Some Market Share In 4Q16, Community Banks Major Players in Retail

The top tier of mortgage producers gained some market share in 2016, but call-report data show that community banks continued to play a huge role in the primary market, according to a new analysis and ranking by Inside Mortgage Finance. The top 100 lenders produced a hefty $1.622 trillion in first-lien mortgages last year, including their correspondent and wholesale-broker programs. Although their production faltered by 2.5 percent in the fourth quarter, full-year volume was up 18.2 percent from 2015. Banks, thrifts and credit unions ended...[Includes two data tables] Read More

Fannie and Freddie Met Scorecard Goals for Expanding Credit and Testing MI in Credit-Risk Transfers in 2016

Fannie Mae and Freddie Mac “made significant progress” in meeting the goals of their conservatorships for 2016, according to the Federal Housing Finance Agency. Most of the objectives set by the so-called scorecard were focused on testing new concepts or perfecting existing ones, and relatively few of them had hard targets in terms of business volume. A first strategic goal for the government-sponsored enterprises was to maintain credit availability, including increasing access to credit. There has been barely any change in the credit profile of the two GSEs’ business, and the regulator did not set any specific goals other than the affordable housing goals. And some critics would argue that the FHFA hasn’t done much to encourage more risk taking in that it has held guarantee fees steady. Last year, both Fannie and Freddie started... Read More

Signs of Life in the Ginnie Mae Servicing Market? Not Really, but Hope Springs Eternal

Over the past six quarters, selling Ginnie Mae servicing rights has been a difficult task with buyers turning their noses up at the product, preferring instead to stay within the safe confines of deals tied to Fannie Mae and Freddie Mac loans. According to investment bankers interviewed by Inside Mortgage Finance, the Ginnie market for mortgage servicing rights has been problematic for two main reasons: the fear of lawsuits and sanctions tied to FHA lending, and fast prepayment speeds tied to FHA and VA streamline refis. But now that rates have risen – and mostly stayed that way – there are... Read More

Mortgage Industry Expects FHFA Chief Watt to Change the GSE Dividend to Annual Instead of Quarterly – This Year

As the clock ticks down on Fannie Mae and Freddie Mac running out of a capital buffer in early 2018, there is a growing belief in the mortgage industry that the Federal Housing Finance Agency will move to change dividends payments by the two from a quarterly to an annual basis. If the FHFA pulls the trigger, it would allow the government-sponsored enterprises to sit on a pile of cash before upstreaming it to Treasury – money that would give them a buffer if rates turn the wrong way and a hedging loss ensues in a given quarter. Ron Haynie, senior vice president of mortgage policy at the Independent Community Bankers of America, told... Read More

Industry Says Act Now or Pay Later On GSE and Housing-Finance Reform

Since 2012 Fannie Mae and Freddie Mac have provided the government with a hefty amount of funds thanks to the Treasury sweep of GSE profits, which could be a perverse disincentive to move forward on housing finance reform. The two government-sponsored enterprises expected to pass along a combined $9.97 billion during the first quarter of 2017, the net profits they earned in the fourth quarter that exceeded the $600 million cap on retained capital. That brings... Read More

Lenders Push for Changes to QM Standards; Some Divisions on Portfolio QM Proposal

With House Republicans set to resume work on legislation to overhaul provisions in the Dodd-Frank Act, mortgage lenders testified at a hearing this week calling for changes to standards for qualified mortgages. “As a result of some of the constraints in the QM definition, many borrowers who should qualify for a QM are unable to access safe, sustainable and affordable mortgage credit,” said David Motley, president of Colonial Companies and chairman-elect of the Mortgage Bankers Association. He made the comments at a hearing by the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. The MBA urged... Read More

GSEs, FHFA have Eased Borrower Access to Credit, Now It is FHA’s Turn to Expand Credit Availability

The government-sponsored enterprises and their regulator, the Federal Housing Finance Agency, have done a lot to improve borrower access to credit, and now it is FHA’s turn to do the same, according to a new analysis by the Urban Institute. Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute, noted that Fannie Mae, Freddie Mac and the FHFA have been more successful than the FHA in reassuring lenders that they would be held liable only for underwriting errors and not for whether the borrower defaults on the loan. The GSEs and the FHFA have removed... Read More

Mortgage Share of Home Purchases Rising, FHA Posts Large Gains on New-Home Sales

Mortgage lenders continue to gain share in the home-purchase market as investors and other cash buyers have become less prevalent and the supply of distressed properties declines. Some 562,000 new homes were sold in 2016, according to the Census Bureau and the Department of Housing and Urban Development. Mortgage financing was used for 95.0 percent of the sales, up from a 92.0 percent share the previous year. The cash share of new home sales hit... Read More

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