Trends & Profitability

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

November 17, 2017 - Inside Mortgage Trends

OCC Pushes for Rebuilding in Distressed Areas

Recent guidance from the Office of the Comptroller of the Currency aims to allow banks to originate mortgages with high loan-to-value ratios to help borrowers in distressed areas complete home improvements. The OCC released guidance in August addressing originations of mortgages with LTV ratios above 90 percent, even allowing for LTV ratios above 100 percent in certain circumstances. Keith Noreika, the acting Comptroller of the Currency, discussed lending in ...

November 17, 2017 - Inside Mortgage Trends

First-Timers Constrained by Low Inventory

A lack of homes for sale is limiting the first-time homebuyer share of home purchases, according to the National Association of Realtors. NAR’s latest annual profile of homebuyers found 34 percent of respondents were first-time homebuyers, down from 35 percent in the 2016 report and the fourth lowest share for first-time homebuyers since 1981. The historical norm for first-time homebuyer share is 40 percent, according to NAR. Lawrence Yun, NAR’s chief economist, said a “severe drought” ...

November 17, 2017 - Inside Mortgage Trends

Homebuyers Monthly Mortgage Payments Up

Homebuyers’ “typical mortgage payment” has climbed about 10 percent in 2017 and may climb another 11 percent in 2018, according to a new analysis from CoreLogic. Company analysts attributed the payment change to rising mortgage rates over the past year. Typical mortgage payment (TMP) is a mortgage-rate-adjusted monthly payment based on each month’s median home-sale price. It is calculated using Freddie Mac’s average rate on a 30-year, fixed-rate mortgage with ...

November 17, 2017 - Inside Mortgage Trends

Tech Vendors Make Case for Greater Digitalization

As the mortgage industry continues evolving toward a 100 percent, end-to-end digital mortgage, automation and collaboration are playing essential roles, according to some top vendors. Bob Brandt, vice president of marketing and alliances at Optimal Blue, said, “The digital movement in the mortgage industry is all about automation – automation of the mortgage process truly from end to end: from lead generation to point of sale to processing and closing and the delivery of loans ...

November 17, 2017 - Inside Mortgage Trends

Mortgage Executives on the Move

Although mortgage companies are beginning to pare staff in anticipation of a seasonal production downturn, there appears to be a strong thirst for executive talent, as well as top managers looking elsewhere, according to interviews conducted over the past month by Inside Mortgage Trends. “Calls and e-mails from mortgage executives open to considering ‘a change’ usually spike at this time of year,” said Rick Glass, who runs the financial services recruitment firm that bears his name ...

November 17, 2017 - Inside Mortgage Trends

GSE Sellers Take Baby Steps on Risk

Mortgage lenders that sell single-family loans into Fannie Mae and Freddie Mac mortgage-backed securities continued to stretch the credit envelope during the third quarter, a new Inside Mortgage Trends analysis reveals. But the increase in the share of higher-risk lending is still going at a glacial pace, and low-risk mortgages continue to dominate the government-sponsored enterprises’ business. During the third quarter, mortgages in the lowest ... [Includes two data charts]

November 17, 2017 - Inside Mortgage Trends

As a Group, Publicly Traded Nonbanks Post Gain in Mortgage-Banking Income

Nine publicly traded mortgage companies posted a combined $52.22 million in mortgage banking earnings for the third quarter of 2017, according to a new analysis by Inside Mortgage Trends. The group’s third-quarter results represented a healthy 86.4 percent improvement over the paltry $28.02 million they earned from their core businesses during the April-June cycle. But the aggregate figures don’t begin to describe the state of most of these nonbank ... [Includes one data chart]

November 16, 2017 - Inside Mortgage Finance

Publicly Traded Mortgage Firms Not Exactly Setting The World on Fire. Is a Major Shake Up Coming?

Most of the nation’s six publicly traded mortgage firms have seen their share prices get smacked around this year. The exception is PennyMac Financial Services, a stand-out in a group that’s struggling to keep its head above water.

November 16, 2017 - IMFnews

Academy Mortgage Production EVP Departs

Nemec oversaw a retail network of 250 branches...

November 16, 2017 - IMFnews

Ginnie Mae President Candidate David Kittle Tells White House He Doesn’t Want the Job

Kittle was first approached by the White House nine months ago about the job.

November 16, 2017 - IMFnews

Conventional-Conforming Market Tapped into Surging Refi Business in 3Q17

Roughly $269 billion of conventional-conforming loans were originated from July through September, according to Inside Mortgage Finance...

November 15, 2017 - IMFnews

Speculation Mounts: More Banks May Exit Mortgages

Meanwhile, there’s already speculation that Capital One – known for its prowess in credit cards – might eventually re-enter the mortgage business in one way or another.

November 14, 2017 - IMFnews

HMDA Analysis: Higher-Priced Lending Spikes

Some $28.61 billion of non-government-insured higher-priced mortgages were originated in 2016, up 28.9 percent from the previous year…

November 14, 2017 - IMFnews

Correspondent Share of FHA Loans Nears the 49 Percent Mark

Correspondent programs are most dominant in the FHA market, perhaps reflecting a preference among large producers to have recourse…

November 13, 2017 - IMFnews

Nonprime Lenders Aim to Avoid a Mistake of the Past: Risk Layering

Angel Oak Mortgage Solutions, Atlanta, said it has underwriting standards that avoid risk-layering…

November 10, 2017 - Inside FHA/VA Lending

MBA Calls for Changes to LRS, Remedies for Lender Complaints

FHA lenders think the new Loan Review System is a “modern and streamlined system” that is less user-friendly than Neighborhood Watch, according to the Mortgage Bankers Association. In a letter to the Department of Housing and Urban Development, the MBA called on the FHA to continue its ongoing discussion with lenders and other industry stakeholders on how the improve the LRS and its response timelines. Implemented last May, the LRS is an electronic platform for monitoring and reviewing the quality of single-family mortgages that FHA has insured. It replaced the post-endorsement technical review performed by the FHA Connection/Underwriting Review System (URS), review functions for post-closing test cases submitted by direct endorsement lenders, and lender self-reporting functions in Neighborhood Watch. The LRS also includes a defect taxonomy, which features a list of ...

November 10, 2017 - Inside FHA/VA Lending

Will Net Tangible Benefit Test Stop Churning? Yes, Analysts Say

A new net tangible benefit test for ensuring that a VA borrower benefits from a refinancing appears to be the obvious solution to the VA’s churning problem, according to analysts at Bank of America Merrill Lynch (BAML). Modeled after the FHA net tangible benefit test, the test seems to be a “foregone conclusion” for VA, analysts said. A Ginnie Mae/VA task force is currently working to resolve the problem, which is causing rapid prepayments in Ginnie mortgage-backed securities and raising serious doubts as to whether aggressive refinancing truly benefits veterans and servicemembers. “There is a critical need to ensure that veteran borrowers are not harmed by repeated refinancings through VA’s Interest Rate Reduction Refinance Loan program,” said Mortgage Bankers Association President/CEO David Stevens during a recent appearance before the House Financial Services Committee. IRRRLs, also referred to ...

November 10, 2017 - Inside FHA/VA Lending

Correspondent Platforms Feast on FHA, VA Securitization Market

Correspondent-based lending operations are accounting for a growing share of the FHA and VA home loans pooled in Ginnie Mae mortgage-backed securities, according to a new analysis and ranking by Inside FHA/VA Lending. In fact, correspondent originations are the only production channel to see year-over-year growth in FHA and VA business through the first nine months of 2017. Retail and wholesale-broker production is down for both FHA and VA loans. Correspondent programs are most dominant in the FHA market, perhaps reflecting a preference among large producers to have recourse to a primary-market lender if the government later finds defects in how the loan was originated. Correspondents accounted for 48.7 percent of FHA loans pooled in Ginnie MBS during the first nine months of the year, up from 43.1 percent in all of 2016. Volume was up 1.7 percent from the ... [Charts]

November 10, 2017 - IMFnews

The Red Ink Kept Flowing at Walter in 3Q17; Revenues Down 15 Percent

Walter CEO Tony Renzi: “Our operating performance is improving in many areas, and we are continuing our financial restructuring efforts…"

November 10, 2017 - IMFnews

Senate’s Tax Reform Bill Maintains Higher Limit for Mortgage Interest Deduction but Housing Industry Warns of Other Faults

NAR’s Mendenhall: such provisions “can turn the American Dream into a nightmare for families, as the rug is pulled out from under them.”

November 9, 2017 - Inside Mortgage Finance

Capital One Quits Mortgage Finance; Will More Lenders Follow in Its Tracks?

Capital One this week announced that it’s throwing in the towel on mortgage finance, laying off staff and shuttering offices in an attempt to improve profits. And now comes the big question: will other banks follow in its wake?

November 9, 2017 - IMFnews

Private MIs Gained Ground in 3Q17, but VA Shined the Most

Arch MI remained the top private insurer in the third quarter and year-to-date, although its competitors gained some ground…

November 9, 2017 - IMFnews

Digital Use Up, Customer Satisfaction Down. How Can That Be?

Among the key findings: digital use is surging, but not digital satisfaction...

November 9, 2017 - IMFnews

A New Option Emerges: Downpayment ‘Protection’ for the Homebuyer

A spokesman described the new product as “an additional feature not unlike private mortgage insurance” although he refuses to call it an insurance policy…

November 8, 2017 - IMFnews

Capital One Will Exit Mortgage Business but will Keep MSR Portfolio

Back in February, Capital One’s Senior Director of Home Loans Eric Declercq left the company for a position at loanDepot.

November 7, 2017 - IMFnews

As Industry Plans for Next Year, Layoffs Commence. CEO Changes Ahead?

Industry consultant Paul Hindman believes more executive changes are likely in the months ahead…

November 7, 2017 - IMFnews

Retail Still the Largest Source of Agency Loans

Correspondents generated 38.8 percent of the market and posted the highest purchase-mortgage concentration, 77.8 percent.

November 3, 2017 - Inside Mortgage Trends

Retail Still Largest Source of Agency Loans

Nearly half of the loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae during the third quarter came from lenders’ retail platforms, a new Inside Mortgage Trends analysis shows. Correspondents generated 38.8 percent of the market and posted the highest purchase-mortgage concentration, 77.8 percent. Mortgage brokers were involved in 11.6 percent of agency business, with a relatively high 35.9 percent refinance distribution ... [Includes one data chart]

November 3, 2017 - Inside Mortgage Trends

Collateral Analytics Estimates Appraisal Accuracy

Property value estimates from traditional appraisals may have a significant amount of uncertainty behind them, but Collateral Analytics says it may have a solution that could improve the accuracy of appraisals. Loan purchasers and portfolio lenders can benefit from CA’s new tool, which can be used for strategic lending and better risk management, according to Michael Sklarz, founder and president of Collateral Analytics. “We are taking an appraisal and its accompanying information ...

November 3, 2017 - Inside Mortgage Trends

Uptick in Purchase Mortgages Expected in 2018

Purchase-mortgage originations are expected to increase slightly in 2018, but not enough to offset declines in refinance activity, according to industry analysts. On average, economists at Fannie Mae, Freddie Mac and the Mortgage Bankers Association project that $1.21 trillion in purchase mortgages will be originated next year, up 5.9 percent from the amount expected in 2017. “All the pieces are in place for stronger growth in 2018 and beyond,” Michael Fratantoni, the MBA’s chief economist ...

November 3, 2017 - Inside Mortgage Trends

Here Are Five Steps to Sound Digital Investments

Stratmor Senior Partner Garth Graham recently offered a handful of things mortgage lenders should consider to make the best decisions possible about their investments in digital technology. First, lender executives should be sure they clearly know the business case for the investments they are making. “Without a very specific business case, it is very difficult to generate the additional revenue or lower the expense necessary to handle the investments that are being made in new technology ...

November 3, 2017 - Inside Mortgage Trends

MBA CEO Retires in Less Than A Year

It’s been less than two weeks since Mortgage Bankers Association CEO Dave Stevens surprised the industry by announcing his retirement next fall – and already speculation is mounting about his successor. One participant involved in the effort said the trade group is looking to hire at least two private firms to aid in the search, which is being managed internally. MBA members, speaking under the condition of anonymity, laid out a few parameters for the job: first and foremost, the likely ...

November 3, 2017 - Inside Mortgage Trends

Newcomer Unveils Next-Gen POS Solution

A lender doesn’t have to be one of the big dogs in the industry to be competitive, thanks to continuing technological innovation. A case in point: Former U.S. Comptroller of the Currency Gene Ludwig and former Freddie Mac Chief Operating Officer Bruce Witherell have formed a new company in the mortgage technology and fulfillment solutions spaces, Promontory MortgagePath, which just rolled out what it’s touting as the next generation of point-of-sale solutions for lenders ...

November 3, 2017 - Inside Mortgage Trends

Mortgage Brokers Poised to Gain Market Share

The industry’s shift toward originations of purchase mortgages could help mortgage brokers gain market share, according to industry analysts. “This is a much more promising sector of the business than it was three or four years ago,” James Modrycki, a vice president of correspondent sales at Impac Mortgage Holdings, said at the Mortgage Bankers Association’s annual convention in Denver. Brokers originated $87.0 billion of mortgages in the first half of 2017, accounting for ...

November 3, 2017 - Inside Mortgage Trends

Mortgage Banking Profits Declined Slightly for Banks in Third Quarter

Most banks and thrifts continued to report solid earnings from their mortgage banking activities during the third quarter, but profits generally weakened and year-to-date performance clearly has not kept up with the pace set in 2016. A diverse group of 24 banks reported a combined $2.36 billion in mortgage banking income for the third quarter, down 11.3 percent from the previous period. Half of them posted declines. The group generated $7.33 billion in mortgage ... [Includes one data chart]

November 6, 2017 - IMFnews

Mortgage Brokers Poised to Gain Market Share?

Brian Vieaux, a senior vice president of third-party originations, said loan brokers are an “extension” of Flagstar’s reach through the retail channel.

November 6, 2017 - IMFnews

Mortgage Banking Profits Declined Slightly for Banks in 3Q17

Meanwhile, the indicators point to a drop in production volume for the fourth quarter…

November 3, 2017 - IMFnews

A New Fed Chairman is Picked but that Might be the Only Major Change at the Central Bank

“There was no drama surrounding this meeting of the FOMC,” said Michael Fratantoni, chief economist for the Mortgage Bankers Association.

November 3, 2017 - Inside MBS & ABS

GSEs Report $7.6 Billion in Earnings for 3Q, Reduced Portfolios Mean More Income Generated by G-Fees

This week, the government-sponsored enterprises reported combined earnings of $7.69 billion in the third quarter of 2017, which was up almost $3 billion from the previous period. As the end of the year approaches, they also continue to reduce their retained investment portfolios as mandated by the Federal Housing Finance Agency. Fannie Mae and Freddie Mac earnings were boosted by a legal settlement with the Royal Bank of Scotland over non-agency MBS ... [Includes one data chart]

November 2, 2017 - Inside Mortgage Finance

Fannie, Freddie Combined Earnings Reach $7.7 Billion In Third Quarter, G-Fee Income Continues to Grow

Fannie Mae and Freddie Mac generated a combined $7.69 billion in net income during the third quarter of 2017, up significantly from the $4.86 billion in the second quarter, according to an Inside Mortgage Finance analysis of earnings reports released this week. Freddie’s earnings were unusually high at $4.67 billion thanks to a legal settlement with the Royal Bank of Scotland over non-agency mortgage-backed securities sold by the investment firm to the government-sponsored ...

November 2, 2017 - Inside Mortgage Finance

GOP Tax Reform Effort Poised to Reduce Homeownership Incentives Provided by the Mortgage Interest Deduction

One of the biggest takeaways for the mortgage industry in Republicans’ tax reform effort is that homeownership incentives provided by the mortgage interest deduction will be reduced significantly. Republican leaders have stressed that they don’t plan to eliminate the MID. But a near doubling of the standard deduction and other provisions included in tax reform will make the deduction worth much less, according to Leonard Burman, an institute fellow at the ...

November 2, 2017 - Inside Mortgage Finance

Nationstar Mortgage May be in Play, But It’s Hard to Predict Who Possible Suitors Could Be

The possible sale of Nationstar Mortgage could have ramifications for a handful of other publicly traded nonbank mortgage firms, including Ocwen Financial, New Residential Investment Corp., and Walter Investment Management Corp. For now, Nationstar and its largest investor – Fortress Investment Corp. – are saying little about the matter, but it’s been widely reported the past week that SoftBank (soon to own Fortress) has hired investment bankers to explore a sale of ...

November 2, 2017 - Inside Mortgage Finance

Fannie ‘Servicing Marketplace’ Program Isn’t Operational Yet but It’s Causing Consternation in Certain Circles

In an attempt to help its smaller seller/servicers achieve better pricing on coissuance transactions, Fannie Mae will launch a new “Servicing Marketplace” designed as an upgrade to an existing program that some say was seldom used. The new platform allows sellers to choose a Fannie-approved coissuance servicer and commit to sell servicing rights at the same time they sell the loan into a Fannie mortgage-backed security. All transactions are on a bifurcated basis; that is, the seller is still ...

November 2, 2017 - Inside Mortgage Finance

Minor Retreat for Top Tier of Mortgage Servicers In 3Q17, Market Share Tilts Further to Nonbanks

There were no seismic shifts in the demographics of the mortgage-servicing business during the third quarter of 2017, although a new Inside Mortgage Finance ranking and analysis revealed an unexpected decline in the total holdings of the top servicers and a shift in composition. The top five shops held a whopping $3.716 trillion of servicing on their books at the end of September, down 0.2 percent from the previous quarter. The only top-five servicer to ... [Includes two data charts]

November 2, 2017 - IMFnews

Between Multiple Hurricanes and Wild Fires, a Market Develops for a New Breed of ‘Scratch & Dent’ Loans

According to bidders in the market, the early action focuses on loans that are “stuck” on warehouse lines.

November 2, 2017 - IMFnews

Nationstar Reports a $7 Million Profit for 3Q17. Smaller MSR Markdowns

Nationstar originated $4.25 billion of new home mortgages in 3Q17…

November 2, 2017 - IMFnews

Ocwen Takes $6.1 Million Loss in Third Quarter but Results Could Have Been Worse

The loss would have been worse if not for a one-time tax benefit of $23.2 million…

November 2, 2017 - IMFnews

Minor Retreat for Top Tier Mortgage Servicers in 3Q17, Nonbanks Continue March Forward

The only top-five servicer to report an increase in volume was Nationstar Mortgage...

November 1, 2017 - IMFnews

Mortgage Applications Decline Again

The trade group also found that refinancings are declining as well: down to 48.7 percent of all new applications from 49.5 percent for the week ending Oct. 20.

November 1, 2017 - IMFnews

Redwood Set to Issue its Second ‘Expanded Prime’ MBS, Suggesting Strong Origination-Volume and Investor Demand

The total unpaid principal balance for mortgages backing the deal has yet to be disclosed.


With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.
No. It’s still difficult compliance/regulatory-wise.
Maybe. It’s under consideration.
Not now. But things could change as 2018 progresses.

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