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Inside Mortgage Finance

August 2, 2018

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Mortgage Servicing Market Continues Deconsolidation During 2Q18 as Middle Tier Players Keep Growing

All five of the top players in the single-family mortgage servicing business reported slight de-clines in their portfolios during the second quarter, according to an exclusive Inside Mortgage Finance ranking and market analysis. As a group, the top five participants reported $3.661 trillion in mortgage servicing at the end of June, an 0.7 percent decline from the previous quarter. Although the Federal Reserve’s official tally of home mortgage debt outstanding ... [Includes two data charts] Read More

An Early Departure by FHFA Director Watt Could Hasten Changes in Secondary Market

The mortgage industry this week was busy trying to handicap what immediate changes might be forced upon the secondary market in the event Federal Housing Finance Agency Director Mel Watt leaves the agency before his term ends in January. An early departure became more likely in the wake of sexual harassment allegations levied against Watt by an agency employee. The allegations surfaced last Friday in a report by Politico. Watt is widely viewed as an effective regulator whose ... Read More

Nonbanks Creep Toward 60 Percent of Outstanding Ginnie Servicing and Gain Ground in GSE Market

Depository institutions still have responsibility for most agency mortgage servicing, but nonbanks continued to gain share during the second quarter, according to a new Inside Mortgage Finance analysis of agency mortgage-backed securities data. As of the end of June, nonbanks serviced $2.887 trillion of single-family loans in MBS pools is-sued by Fannie Mae, Freddie Mac and Ginnie Mae. That was up 2.8 percent from March and represented ... [Includes two data charts] Read More

Treasury Backs Major Tech Development for Mortgage Industry, Clarity on FCA Claims

The U.S. Treasury Department this week called for a major technology push in financial markets that includes big upgrades in government mortgage-insurance programs. While most of the proposals could be accomplished by the agencies themselves, they also require funding from Congress. A new Treasury report backed Trump administration proposals to fund FHA technology up-grades, some of which could be used to expand digitalization of loan files. Funding legislation on ... Read More

Lobbying on the GSE Issue Moves from Congress to the Executive Branch. GOP Leader May Offer Bill Anyway

Although Rep. Jeb Hensarling, R-TX, has vowed to introduce Fannie Mae/Freddie Mac reform legislation sometime this fall, industry stakeholders have shifted their focus to working with the executive branch on the issue. Trade groups have given up on the idea of Congress coming up with a workable solution, believing that change will occur administratively with the Treasury Department working in tandem with the Federal Housing Finance Agency. This belief covers not only ... Read More

Senate Lawmakers Consider Proposal to Increase VA Home Loan Fees, Abolish Cap on VA Jumbos

The Senate Committee on Veterans Affairs is considering legislation that would raise the fee paid by veterans, servicemembers and reservists for having a VA guarantee on a mortgage loan. Proposed adjustments to the VA home loan fee is in H.R. 299, the Blue Water Navy Vietnam Veterans Act of 2017, which the House of Representatives approved on June 25. The bill primarily extends the presumption of service-related disability due to exposure to herbicides ... Read More

Traditional Calculation of Mortgage Denial Rate Skewed by Share of Low-Credit Applicants

The denial rate on mortgage applications calculated solely from Home Mortgage Disclosure Act data provides a misleading measure of credit availability, according to industry analysts. Analysts from the Urban Institute and the Federal Deposit Insurance Corp. authored a paper suggesting that the attributes of loan applicants should be taken into consideration when determining denial rates. “Higher denial rates can be the result of either a tighter credit environment or an increase in ... Read More

MBA Urges Federal Banking Regulators to Finalize Rules Raising the Cap on MSRs that May Count Towards Tier 1

The Mortgage Bankers Association recently asked the federal banking agencies to provide an update on a proposal to increase the amount of mortgage servicing assets that a bank may count to-wards Tier 1 capital. In a letter to the Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and the Federal Reserve, the MBA reiterated its support for the agencies’ proposal to raise a recommended 25 percent cap on the amount of mortgage servicing assets that may be ... Read More

Fannie, Freddie Combined Earnings Near $7 Billion in 2Q18, G-Fees Edge Higher

Fannie Mae and Freddie Mac generated a combined $6.96 billion in net income during the second quarter of 2018, down from $7.19 billion in the first three months of the year. While Fannie posted a solid 4.6 percent quarterly increase, hitting $4.46 billion in the most recent period, Freddie’s net income was down 14.5 percent from the first quarter. At the midway point in 2018, both government-sponsored enterprises were way ahead of where they were in the first six months of last year ... Read More

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