Trends & Profitability

Browse articles from all of our Newsletters related to Trends & Profitability.

January 19, 2018 - Inside Mortgage Trends

Refi Boosts GSE Volume in 4Q17

Fannie Mae and Freddie Mac saw a 27.2 percent surge in refinance business during the fourth quarter that helped offset an 8.3 percent drop in purchase-mortgage acquisitions, according to an Inside Mortgage Trends analysis of mortgage-backed securities data. The wholesale-broker channel recorded a 7.4 percent increase in production during the fourth quarter, compared to smaller increases in retail (2.6 percent) and correspondent (6.0 percent) ... [Includes one data chart]


January 19, 2018 - Inside Mortgage Trends

United Shore in a Legal Battle After a Data Breach

A data breach involving United Shore Financial Services and Xerox has prompted a class-action lawsuit from borrowers and a legal battle between the lender and the loan document software vendor. United Shore is the parent company of United Wholesale Mortgage, a major player in the wholesale channel. In 2011, United Shore was using BlitzDocs to process and store loan documents. At the time, the software program was operated by Xerox Mortgage Services. Al Leibovic, a borrower, filed ...


January 19, 2018 - Inside Mortgage Trends

PennyMac Breaks into the Broker Channel

PennyMac is leaping into the wholesale-broker channel with its new Power platform as it eyes increased purchase-money and jumbo mortgage originations. The company’s enhanced production platform will provide mortgage brokers broad access to data, allowing them to proactively manage their pipelines, according to executives at the California-based firm. “Power is a proven, best-in-class platform,” said Kimberly Nichols, managing director of PennyMac’s ...


January 19, 2018 - Inside Mortgage Trends

Mortgage Industry Sees Promise in Blockchain

Distributed ledger technology known as blockchain has the potential to transform back-end functions in mortgage origination, servicing and secondary marketing, according to industry participants. Blockchain has gained some prominence as virtual currencies such as bitcoin are reliant on the technology. Tim Willis, head of the governance and controls practice at RiskSpan, an analytics firm, said reporting of servicing data to investors hasn’t changed much in the past two decades ...


January 19, 2018 - Inside Mortgage Trends

Situs Ready to Buy MSR Broker MountainView

Financial services provider Situs is two weeks away from closing on its purchase of MountainView Financial Solutions, Denver, one of the most active brokers of mortgage servicing rights in the nation. Once the transaction is completed, it will mark the second significant residential-related purchase of the past seven months for the New York-based Situs, which bills itself as a “global provider of business solutions for real estate and financial service firms.” Back in May ...


January 19, 2018 - Inside Mortgage Trends

Look to States to Counter Less Aggressive CFPB

Top compliance attorneys warn that multiple state attorneys general will follow through on their vow to step up more aggressively to counteract any lessening of enforcement zeal at the Consumer Financial Protection Bureau under the new command of Acting Director Mark Mulvaney. During a webinar this week sponsored by Inside Mortgage Finance, Melanie Brody, a partner with the Mayer Brown law firm in Washington, DC, elaborated on that view. “I think it’s really important for ...


January 19, 2018 - Inside Mortgage Trends

Servicing Transfers Ended a Boom Year In 2017 With Cooling in Fourth Quarter

Despite a slowdown during its final lap, 2017 was a strong year for sales of agency mortgage servicing rights, according to a new analysis of mortgage-backed securities data by Inside Mortgage Trends. The market saw some $538.49 billion of agency servicing rights change hands last year, a 22.0 percent increase from 2016. Most of the MSR transfers were bulk transactions, which totaled $406.78 billion, a huge 51.1 percent jump from the previous year. Bulk deals ... [Includes three data charts]


January 19, 2018 - IMFnews

Most Large Banks Report a Production Decline for 4Q17

The lone bank bucking the trend was U.S. Bank, Minneapolis, which funded $12.5 billion, a 3.3 percent improvement from the prior period.


January 18, 2018 - IMFnews

The Trend is Clear: Nonbanks Poised to Have a 50 Percent Agency MSR Share

The nonbank share of agency servicing grew by 4.7 percentage points during 2017.


January 17, 2018 - IMFnews

In 4Q17, A Sharp Increase in Prime Jumbo MBS, and Expanded-Credit Deals

Expanded-credit MBS – which include loans with alternative documentation, non-qualified mortgages and nonprime loans – hit $4.08 billion in 2017…


January 17, 2018 - IMFnews

A Slight Production Decline for BofA in 4Q17, but MB Profits Take a Hit

According to figures compiled by Inside Mortgage Finance, BofA ranked sixth among first lien lenders in the third quarter, but U.S. Bank isn’t too far behind in the number seven spot.


January 16, 2018 - IMFnews

BB&T to Invest in ‘Fintech’ Companies Including Those with a Mortgage Focus

Banks and nonbanks alike are in a rush to build digital lending platforms that are consumer friendly and result in cost savings...


January 16, 2018 - IMFnews

Wells Fargo Reports Lower Originations for 4Q17, Lower Mortgage Profits and Branch Closings

Thanks to the new bill signed by President Trump, Wells enjoyed a $3.35 billion after tax benefit. However, the company also recorded a $3.25 billion pre-tax expense tied to “litigation accruals for a variety of matters, including mortgage-related regulatory investigations..."


January 16, 2018 - IMFnews

Residential Production at Chase Fell 9.2 Percent in 4Q17; Servicing Revenue Nicked

Chase continues to grow the volume of residential whole loans kept on its balance sheet: $197.3 billion at yearend compared to $181.2 billion at the end of 2016.


January 12, 2018 - Inside FHA/VA Lending

Around the Industry

FHA Announces Revised Method for Calculating Initial MIP for HECM Refis. FHA has modified the formula for calculating the initial mortgage insurance premium for Home Equity Conversion Mortgage refinances with case numbers assigned on or after Sept. 19, 2017. The formula was modified on Nov. 14, 2017. The change conforms to the final rule FHA implemented last year to strengthen the HECM program. The revised formula has been posted on FHA’s HECM page on hud.gov, FHA Connection Release Notes, dated Dec. 28, 2017. The FHAC Release Notes outline the changes and processing instructions for lenders to calculate the initial MIP for HECM refis. HUD Releases Guide to Help Borrowers and Disaster Victims Avoid Foreclosure. The Department of Housing and Urban Development has released the Homeowners Guide to Success to help struggling homeowners and ...


January 12, 2018 - Inside FHA/VA Lending

Florida District Court Allows U.S. to Intervene in FHA FCA Suit v. BofA

A federal district court in Florida has agreed to a government motion to intervene in a False Claims Act lawsuit against Bank of America in order to reach a settlement on behalf of a relator. Bruce Jacobs, a foreclosure attorney and relator in South Florida, filed the lawsuit. A former Miami prosecutor, he now represents homeowners in foreclosure proceedings initiated by financial institutions, including BofA. In his lawsuit, Jacobs alleged that BofA submitted false claims in violation of the FCA. Specifically, the bank allegedly submitted endorsements with unauthorized signatures and false mortgage assignments that would confer standing to foreclose. In addition, Jacobs additionally asserted a reverse FCA claim alleging that BofA made false statements when entering into the 2012 National Mortgage Settlement (NMS) consent judgment with the U.S. government. The landmark $25 billion settlement with ...


January 12, 2018 - Inside FHA/VA Lending

VA Clarifies Buyout Criteria for Uninsured, Unguaranteed Loans

Ginnie Mae is redefining the term “defective mortgage” to remind issuers of their obligations when confronted by a mortgage that does not have federal insurance or guarantee. The action also clarifies options issuers may consider in dealing with defective mortgages. Under their guarantee agreement with Ginnie, issuers are required to cure, buy out or replace single-family mortgages or manufactured home loans that are missing the requisite FHA insurance or VA or U.S. Department of Agriculture guarantee within 120 days after the issue date of the mortgage-backed securities. Ginnie made clear that mortgages that do not have federal insurance or guarantee by the deadline for final certification of the related pool or loan package are defective. In addition, mortgages that have been rejected by FHA, VA or USDA, or for which federal insurance or guarantee have been withdrawn, are defective as ...


January 12, 2018 - Inside FHA/VA Lending

Galante’s FHA Restructuring Plan Elicits Bland Stakeholder Response

A former FHA commissioner’s proposal to restructure FHA as part of broader housing-finance reform has received mixed responses from industry stakeholders and the Department of Housing and Urban Development. While participants in a recent panel discussion hosted by the Urban Institute praised the proposal, they admitted to still being unsure about FHA’s role in a revamped world of Fannie Mae and Freddie Mac, and a single mortgage-backed security. The recommendation for a reconstituted FHA is part of a paper presented for debate at the Urban Institute this week by Carol Galante, faculty director of the Terner Center for Housing Innovation at the University of California Berkeley, and former head of FHA during the second Obama administration. Under Galante’s proposal, all of FHA’s mortgage insurance programs would remain with the agency while rental assistance and other ...


January 12, 2018 - Inside FHA/VA Lending

GSE Housing Reform, Enforcement Highlight FHA, VA Outlook in 2018

2018 might not turn out to be a record-breaking production year for FHA and VA, but it could become significant in terms of enforcement and housing finance reform, according to industry stakeholders. Ed Pinto, codirector of the American Enterprise Institute’s International Center on Housing Risk, expects a slight increase in FHA’s and VA’s mortgage unit production and stronger dollar volumes due to rising house prices. Pinto believes loose purchase lending, particularly by FHA, and declining housing inventory are driving housing prices. This in turn results in FHA/VA cash-out refinancing at very high loan-to-value ratios, which helps feed the general economy but makes FHA lending riskier, he said. “We see a stronger demand for housing amid constrained housing supply,” said Pinto. “We’re seeing this vicious cycle of purchase transactions becoming more risky, cash-out transactions increasing in ...


January 12, 2018 - Inside FHA/VA Lending

VA, Ginnie Mae Working on Long- Term Cures to Rapid Refinancing

Ginnie Mae and the Department of Veterans Affairs have announced additional measures to curb serial refinancing of VA loans. Testifying before a House Veterans Affairs subcommittee this week, officials from both agencies said the latest measures will complement guidelines Ginnie issued last year to deal with the loan-churning problem. Lenders urged Congress and the two agencies to be cautious in prescribing fixes that could potentially cut off VA funding. Jeffrey London, director of the VA Loan Guaranty Service, said a proposed rule that includes a net tangible benefits test for veterans as well as seasoning and recoupment requirements will be issued soon. The VA is also planning to require upfront lender disclosure of the terms and benefits of a streamline or cash-out refi, including the recoupment period of the new transaction. Even though serial refinancing is not systemic to the VA portfolio, it has grown in ...


January 12, 2018 - Inside FHA/VA Lending

Bipartisan Bill Introduced to Deal With VA’s Vexing Churning Problem

Senate lawmakers this week introduced bipartisan legislation to protect veterans and servicemembers from predatory refinancing schemes. Introduced by Sens. Tom Tillis, R-NC, and Elizabeth Warren, D-MA, the bill would require lenders offering streamline or cash-out refinancing to demonstrate a material benefit to veterans with a VA loan. The Protecting Veterans from Predatory Lending Act reflects measures Jeffrey London, director of VA’s Loan Guaranty Service, talked about when he testified during a hearing on loan churning before the House Veterans Affairs Subcommittee on Economic Opportunity (See next story.) Prior to submitting a refi loan for a VA guarantee, a lender would be required to certify that all fees associated with the transaction would be recouped by the veteran through lower monthly payments within 36 months. Such fees would include closing costs and any expenses other than ...


January 12, 2018 - Inside FHA/VA Lending

Ginnie MBS Program Faltered In 2017, Refi Flow Up in 4Q17

Ginnie Mae set records for new issuance of single-family mortgage-backed securities in 2015 and 2016, but production sagged last year, according to a new analysis and ranking by Inside FHA/VA Lending. The agency issued $443.20 billion of MBS backed by forward single-family mortgages in 2017, a 10.8 percent decline from the previous year. Including FHA reverse mortgages and that are not truncated, 2017 issuance fell 10.3 percent to $455.00 billion. Meanwhile, the private mortgage insurance business – based on Fannie Mae and Freddie Mac MBS data – saw a smaller decline of 5.0 percent from 2016 to last year. The VA program generally held up better than the FHA program during the fourth quarter, when refinance lending was climbing. But the FHA had a better year overall despite some loss of market share in purchase-mortgage activity. Deliveries of FHA loans into ... [ Charts ]


January 12, 2018 - IMFnews

PennyMac Enters Broker Channel Looking for Growth in Purchase Mortgages and Jumbos

After some delays, PennyMac Financial Services launched its broker channel operations this week.


January 11, 2018 - IMFnews

Production Income Slipped in 3Q17, Servicing Up

Mortgage bankers saw a small decline in profitability during the third quarter of 2017 despite a favorable turn in servicing and a bump up in mortgage production, according to the Mortgage Bankers Association’s quarterly performance report.


January 10, 2018 - IMFnews

Bank Mortgage Repurchases Hit Record Low

Commercial banks and savings institutions reported another decline in the volume of home mortgages they repurchased from investors during the third quarter, according to an Inside Mortgage Trends analysis of call-report data.


January 9, 2018 - IMFnews

Short Takes: Delinquencies Increase / Citi Adopts Digital Platforms / Interest Rate Trends by Credit Score / TMS Plots Growth

CoreLogic noted that early-stage delinquencies continued to increase in October in some areas hit by hurricanes.


January 9, 2018 - IMFnews

Non-Agency MBS Issuers to Bring a Flurry of Deals After a Lull in December

Redwood Trust is preparing two prime jumbo MBS, JPMorgan Chase has one of its own and an affiliate of Caliber Home Loans plans to issue a nonprime deal.


January 9, 2018 - IMFnews

Large Lenders Increase their Share of GSE Business in Fourth Quarter

The top five sellers to Fannie Mae and Freddie Mac posted a combined 14.1 percent increase in volume from the third to the fourth quarter, boosting their share of the market to 38.4 percent.


January 8, 2018 - IMFnews

Short Takes: The Tax Bill and Home Sales / Demand from Buyers Declines / Equity Adds Up / NMI to Take a Tax Hit

Enactment of the Tax Cuts and Jobs Act will impact home sales and financials at National Mortgage Insurance Corp., among many other areas.


January 5, 2018 - Inside Mortgage Trends

Bitcoin Fever Spills Over into Mortgage Finance

The cryptocurrency Bitcoin recently surged above $19,500 a unit for a short time, briefly surpassing the “tulip mania” of the Netherlands in the 17th century to become the biggest recorded asset bubble in the history of Western civilization. That caused a number of participants in that space to slip into “irrational exuberance” mode, going to such extremes as not only buying Bitcoin with their credit cards but also taking out mortgages to snap up as much of the cryptocurrency as they possibly could ...


January 5, 2018 - Inside Mortgage Trends

New Treatment of Dividends a Boon for mREITs

Mortgage and commercial real estate investment trusts stand to benefit from a provision in the Tax Cuts and Jobs Act of 2017 that offers individuals a 20 percent deduction for REIT dividends. Analysts at Keefe, Bruyette & Woods said the deduction applies to “qualified business income,” which includes qualified dividends paid by REITs. The tax reform bill was signed into law on Dec. 22, 2017. Previously, non-capital gains dividends from a REIT were taxed as ...


January 5, 2018 - Inside Mortgage Trends

What Do Tax Cuts Mean for Mortgage Bankers?

Although the GOP tax overhaul will dampen use of the once-sacred mortgage interest deduction by consumers, owners of mortgage companies will be able to keep more of the money they earn each year, according to interviews conducted by Inside Mortgage Trends. In particular, firms that have C-corporation status will benefit the most, thanks to a reduction in the corporate tax rate to 21 percent from 35 percent. S-corps, on the other hand, likely will not do as well because ...


January 5, 2018 - Inside Mortgage Trends

Banks Seek Looser Capital Standards for MSR

Federal regulators’ efforts to simplify bank capital requirements relating to mortgage servicing rights don’t go far enough, according to industry participants. The institutions that the proposal is aimed at want even less stringent capital requirements, and large banks want to be included in the loosening. In October, federal banking regulators proposed simplified capital treatment for various assets, including mortgage servicing assets. The proposal would largely apply to banks with ...


January 5, 2018 - Inside Mortgage Trends

Third-Party Originators Gained Ground in 3Q17

Correspondent production platforms and wholesale-broker programs gained market share in all three major mortgage categories during the third quarter of 2017, according to a new Inside Mortgage Trends analysis. Correspondent lending showed the strongest gains. The channel’s production volume was up 15.6 percent in the conventional-conforming market, up 10.7 percent in government-insured lending and by a more modest 3.1 percent in ... [Includes two data charts]


January 5, 2018 - Inside Mortgage Trends

Production Income Slipped in 3Q17, Servicing Up

Mortgage bankers saw a small decline in profitability during the third quarter of 2017 despite a favorable turn in servicing and a bump up in mortgage production, according to the Mortgage Bankers Association’s quarterly performance report. The average firm participating in the survey reported $1.743 million in pretax income for the third quarter, down 17.7 percent from the previous three-month period. Average year-to-date pretax income on mortgage banking activities was ...


January 5, 2018 - Inside Mortgage Trends

Bank Mortgage Repurchases Hit Record Low

Commercial banks and savings institutions reported another decline in the volume of home mortgages they repurchased from investors during the third quarter, according to an Inside Mortgage Trends analysis of call-report data. The banking industry repurchased or made indemnification for $698.3 million of single-family loans during the third quarter, down 2.0 percent from the previous period. That was the lowest quarterly repurchase figure since ... [Includes one data chart]


January 5, 2018 - Inside Mortgage Trends

More of the Same in 2018? Production and Profits Expected to Drop Again

Industry economists and mortgage lenders widely expect 2018 to look a lot like 2017: slowing production volume, a further shift toward purchase-mortgage lending and more pressure on profits. The average of mortgage origination forecasts from Fannie Mae, Freddie Mac and the Mortgage Bankers Association indicates that production will total $1.688 trillion this year, a 4.8 percent drop from 2017. The refinance sector will take the biggest hit ... [Includes one data chart]


January 4, 2018 - IMFnews

Angel Oak Raises Almost $300 Million for Non-QM Investments

Angel Oak has securitized $850 million of non-QM loans since 2015.


January 4, 2018 - IMFnews

GOP Tax Bill Will Boost GSE Earnings by $3 Billion. However…

And now for the bad news: The lower corporate tax rate will force Fannie and Freddie to write down the value of their deferred tax assets by $15.3 billion…


January 3, 2018 - IMFnews

PHH Will Pay $45 Million to Settle State Servicing Allegations

PHH Mortgage is in the process of transforming into a subservicing specialist.


January 2, 2018 - IMFnews

First California Mortgage Still Operating?

FCM is headed by Chris Hart, who is also a member of Fannie Mae’s western region advisory board.


January 2, 2018 - IMFnews

New Wholesale Non-QM Lender Altloan Promises to be a ‘Disruptor’

Looks like Angel Oak, Caliber and Citadel Servicing Corp. are about to get some competition in the non-QM sector…


December 29, 2017 - IMFnews

HUD IG Anxious About Legacy Tech Systems; 87 Percent are ‘Old’

What could go wrong? For starts, FHA might not be able to pay claims…


December 29, 2017 - IMFnews

Want to Buy Mortgage Servicing Rights? You’d Better Have a License

“If the state requires it, then the GSEs would require it, and could use their remedies in connection with any failure to do so,” said one attorney…


December 29, 2017 - IMFnews

MBS Analysis: Looks Like the GSEs are Taking Market Share from FHA

Wells Fargo, Quicken, and United Wholesale Mortgage are the top three firms originating these low-downpayment loans…


December 29, 2017 - IMFnews

A Gain for Correspondents in Jumbo Market Share

Wells Fargo and JPMorgan Chase are the two dominant lenders in the jumbo market but their channel preferences have diverged over the past year…


December 28, 2017 - IMFnews

Short Takes: The Most Profitable Company in America (Per Employee) is Fannie Mae / What About Ginnie? / Coming in January: A New FHA Commissioner / What’s the Hold Up? Answer: Sen. Warren

The ranking was determined by dividing a company’s profit over the last financial year by the number of employees…


December 28, 2017 - IMFnews

Banks Continue to Add Home Mortgages to Portfolio

JPMorgan Chase continued to boost its first-lien holdings even as it issued a number of relatively large jumbo MBS deals…


December 27, 2017 - IMFnews

Short Takes: Homes Prices Still Increasing / A Slowdown Expected / Flagstar Takes Hit from Tax Bill / Proceeds from FCA Cases Decline

Nationally, home prices increased by 6.48 percent in October compared with a year ago, according to Black Knight.


December 27, 2017 - IMFnews

Competition for Lower Volume of Originations Driving Down Lenders’ Projections for Profit Margins

Some lenders said they’re loosening underwriting standards in in an effort to compete for volume.


Poll

How many new retail loan officers (net) is your shop looking to hire in the first quarter of 2018?

1 to 10. We’re being careful.
11 to 30. We’re feeling slightly bullish.
31 or more. We’re in expansion mode.
None. We’re staying right where we are, for now.
We’re cutting back.

vote to see results