Bank Profitability

Browse articles from all of our Newsletters related to Bank Profitability.

November 2, 2018 - Inside FHA/VA Lending

Around the Industry

Reporting on VA Loans Impacted by Natural Disaster. The Department of Veterans Affairs is cautioning servicers against reporting as delinquent VA loans that are impacted by a natural disaster. The electronic default notification (EDN) should only be reported prior to the 61st day of delinquency if the borrower intends to abandon the property or pursue an alternative to foreclosure, according to VA. Cite “property problems” as the reason for default, the agency added. On the 61st day of delinquency, servicers should use “casualty loss” as the reason for default when reporting the EDN. This will help VA identify loan defaults caused by a natural disaster. Texas USDA Guaranteed Housing Program See Increased Volume. The USDA guaranteed single-family guaranteed housing programs in the Lone Star State are experiencing significant volume increases, and consequently, ...

November 2, 2018 - Inside FHA/VA Lending

QM Patch Expiration Could Shift More High-DTI Loans to FHA

Certain potential changes could materially affect origination volume and determine the government-sponsored enterprises’ direction going forward, according to analysts. One of those changes could have a significant impact on the FHA market. Wells Fargo Securities analysts recently looked at three potential developments in the Fannie Mae/Freddie Mac sphere and evaluated their effects on the broader mortgage market. Two of those potential changes – loan limits and guarantee fees – are controlled directly by the Federal Housing Finance Agency, while the third relates to the temporary GSE qualified-mortgage exemption, or “QM patch,” which could affect the FHA market. All three factors loom over the mortgage landscape as the FHFA expects a new director in January 2019, who is likely to be more right leaning and could shift the focus back to shrinking the ...

November 2, 2018 - Inside FHA/VA Lending

Brokers Gain Share in FHA Lending, But Fall Back in VA Production

Wholesale-broker production of FHA loans was up 8.1 percent from the second to the third quarter of 2018, making it the fastest-growing channel in the program, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. However, the volume of brokered VA loans securitized during the third quarter fell 4.0 percent from the previous period, the only channel to show a loss over that period. Correspondent production remained king in the FHA segment, with volume rising 7.4 percent from the second quarter. Correspondents generated 48.9 percent of FHA loans delivered into Ginnie MBS pools over the first nine months of the year. PennyMac Financial and Amerihome Mortgage duked it out as the top correspondent platforms in the third-quarter FHA market. Retail was runner-up with a 35.6 percent share of FHA year-to-date business, with wholesale-broker accounting for just ... [Charts]

November 2, 2018 - Inside Nonconforming Markets

Wells Plans to be a Regular Issuer of Jumbo MBS

A test of the jumbo mortgage-backed security market by Wells Fargo went well enough that the bank plans to regularly issue deals after avoiding the market for years. “Based on the positive response from investors to Wells Fargo’s recent private residential MBS transaction and given acceptable market conditions, we expect to do periodic offerings of private residential MBS going forward,” said Tom Goyda, a spokesman for the bank. The $441.3 million issuance from Wells that closed ...

October 26, 2018 - Inside Mortgage Trends

Big Banks Post Mixed Results in 3Q18 Originations

The nation’s major banks had a challenging third quarter as residential production declined at most of the larger shops while nimble-footed nonbanks outperformed, according to a new analysis by Inside Mortgage Trends. Wells Fargo, the nation’s largest home lender and a bellwether for the industry, originated $45.2 billion in residential first liens during the third quarter, a 7.1 percent sequential decline. Its closest competitor, JPMorgan Chase, fared a bit better, funding $24.6 billion of ...

October 19, 2018 - Inside Nonconforming Markets

First Republic Looking to Gain Market Share

A rise in interest rates on mortgages will help First Republic Bank, San Francisco, gain market share in jumbo originations, according to officials at the bank. Through the first six months of 2018, First Republic ranked fourth among non-agency jumbo lenders, accounting for 3.8 percent of the estimated $140.0 billion of jumbo originations, according to Inside Nonconforming Markets. James Herbert, chairman and CEO of First Republic, noted that some jumbo lenders are reducing staff as originations decline ...

October 19, 2018 - Inside Nonconforming Markets

Wells Fargo Returns to Jumbo MBS Market with its First Issuance Since Housing Crisis

Wells Fargo was set to price its first post-crisis jumbo mortgage-backed security this week, marking a significant occasion for the sector. Wells is the largest originator of jumbo mortgages and the bank has been holding production in portfolio instead of issuing non-agency MBS. Company officials note that the $441.3 million Wells Fargo Mortgage Backed Securities 2018-1 Trust is in part a test of the MBS market by the bank. The deal is scheduled to close on Oct. 25. MBS issuers generally can't ...


With loan volumes declining, does your shop have plans to enter the non-QM lending market in 2019?

Yes, definitely. A solid move forward.
Yes, but only incrementally.
We’re pondering a move into non-QM, but haven’t made up our mind.
No, definitely not. We view it has too risky.

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