Trends & Profitability

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

May 26, 2017 - Inside FHA/VA Lending

VA LPOs School Lenders on Lending To Incapacitated Vet Borrowers

Loan processing for incompetent veterans presents significant challenges to VA lenders, requiring strict compliance with special guidance on top of the basic VA underwriting rules. One challenge is dealing with legal appointees who assist and represent veterans in legal transactions, such as applying for a mortgage loan. There are ways to determine whether a veteran is incompetent, said Mark Jamison, loan production officer (LPO) with the VA Cleveland Regional Center, during the VA Lender Conference in Kansas City, MO, last month. The Department of Veterans Affairs or a probate court can deem a veteran incompetent due to severe injury, medical conditions, mental disorders, and financial instability, he said. A mortgage lender could make a determination of incompetency if the initial purchase contract documents were signed by an attorney-in-fact, the veteran divulged the incompetency, or the ...


May 26, 2017 - Inside FHA/VA Lending

FCA Action Against Lenders Slows As DOJ’s List of FHA Targets Shrinks

False Claims Act enforcement against FHA lenders appears to have slowed with no new cases being filed by the Department of Justice or referred by the Department of Housing and Urban Development’s inspector general for nearly a year. Neither agency has gone after any lender for alleged False Claims Act violations since May of last year when the Department of Justice intervened in an FCA case brought by a whistleblower against Guild Mortgage, an FHA direct endorsement lender. The complaint alleged that San Diego-based Guild Mortgage knowingly approved loans that violated FHA rules while falsely certifying compliance with those rules. The alleged violations occurred between 2006 and 2011, resulting in “tens of millions of dollars” in losses to HUD. The case is pending in federal district court in Washington, DC. Indications are the FCA cases involving FHA lenders have ...


May 26, 2017 - Inside FHA/VA Lending

Housing Finance Reform Should Include FHA Lending Reform

The Financial Services Roundtable called for changes to FHA’s legal liability standards to encourage banks to make more FHA loans. Increased risks of False Claims Act enforcement and concerns about multi-million dollar penalties even for the slightest underwriting errors have forced banks to restrict their FHA lending. The top 10 FHA lenders, once dominated by banks, are now nondepository institutions, which accounted for 83 percent of FHA forward originations in the first quarter of 2017. Wells Fargo, once the leader in FHA lending, has dropped to a woeful 20th place in the rankings. “Some federal officials have expressed concern about the capacity of the government to evaluate the qualifications of lenders that are not subject to regulation by federal agencies,” the FSR said. The group also noted the credit overlays many FHA lenders have added to the loans due to ...


May 26, 2017 - Inside FHA/VA Lending

VA Production Drops in 1Q17 as Refinancing Train Loses Steam

VA originations saw a significant drop during the first three months of 2017 as refinancing continued to slow, according to an Inside FHA/VA Lending analysis of agency data. Lenders closed $42.9 billion of VA loans in the first quarter, down 28.1 percent from the previous quarter The numbers show purchase mortgages continued to drive VA originations. A slowdown in VA refinancing appears to be the key factor in the decline. Refis accounted for 27.7 percent of total VA production, down from the fourth quarter of 2016. A change in Ginnie Mae’s pooling rules aimed at discouraging churning has taken much of the steam out of the once-booming VA refi segment. The steep drop in volume ended an upward quarter-to-quarter trend in VA originations last year. Eight of the top 10 VA lenders saw huge quarter-over-quarter declines in their VA lending, with top-ranked Freedom Mortgage posting the largest ... [ Charts ]


May 26, 2017 - IMFnews

In the Mortgage M&A Game, Small and Medium-Sized Shops are Targets

In years past, RPM has been a selective buyer of mostly smaller shops.


May 25, 2017 - IMFnews

New Product Watch: Guild’s 1% Downpayment Loan; Stearns Pushes Temporary Rate Buydown

Stearns said that temporary interest rate buy-downs are good for borrowers who expect their incomes to increase in the relatively near future.


May 25, 2017 - IMFnews

Nonprime Lender Citadel Ready to Enter the Small-Balance Commercial Market

Citadel’s small-balance commercial program will include mixed-use retail and other loan types.


May 25, 2017 - IMFnews

TPO Lenders Fared Slightly Better Than Retail in a Declining 1Q17 Market

The retail segment saw the biggest decline, dropping 34.6 percent to an estimated $221.0 billion.


May 24, 2017 - IMFnews

The MSR Market Firms Up; More Buyers; What Could Go Wrong?

Servicing advisors Steve Harris and Mark Garland view the MSR market as improving…


May 23, 2017 - IMFnews

Nonbank Mortgage Firms Report Dour 1Q17 Earnings

PHH Mortgage continues to ooze losses as well…


May 19, 2017 - Inside Mortgage Trends

MSR Holdings Seen as Helpful for Nonbanks

As interest rates increase, nonbanks’ holdings of mortgage servicing rights will help offset losses tied to lower originations, according to analysts at S&P Global Ratings. “We expect market trends affecting nonbank mortgage companies to change dramatically now that rising interest rates are driving MSR valuations higher,” the rating service said in a recent report. Freddie Mac and the Mortgage Bankers Association separately forecast that the average interest rate ...


May 19, 2017 - Inside Mortgage Trends

Newfi Hopes New Brand Will Spur Production

Newfi Lending, an online residential mortgage lender, is looking forward to a big origination year with the consolidation of its product lines under the “Newfi Lending” brand. A multi-channel lender, the Emeryville, CA-based lender previously operated as Nexera Holdings under two national brands – Newfi for its consumer-direct retail business and Bluestream Lending for third-party originations. In conjunction with the change, Newfi’s wholesale-broker business will now be ...


May 19, 2017 - Inside Mortgage Trends

Digitalizing the Back Office is the Next ‘Big Thing’

Plenty of attention continues to be paid to online mortgage shopping and to getting the e-mortgage off the ground in hopes of revolutionizing the entire home loan origination experience for the consumer. But if the potential of digitalization and related technologies is to be fully realized, the back office needs to be addressed, and soon; otherwise lenders run the risk of creating massive backlogs because of the resultant choke points. On the first point, Nate Longfellow ...


May 19, 2017 - Inside Mortgage Trends

Subservicers Require Due Diligence, Monitoring

As lenders increasingly turn to subservicers to handle various functions, up-front due diligence and ongoing monitoring are necessary to help increase originations and maximize return on investment, according to Kurt Blohm, a senior manager at Richey May & Co. Blohm is the leader of the consulting firm’s subservicer oversight review service and he recently authored a white paper on selection and oversight responsibilities for holders of mortgage servicing rights ...


May 19, 2017 - Inside Mortgage Trends

Blend Wants to Help ‘Digitize’ Mortgages

Since its founding roughly five years ago, mortgage technology vendor Blend has landed five top-10 residential lenders for its digital origination platform and 20 customers overall. It also has raised $60 million in seed money from investors, but has no current plans to tap the private equity market for cash, which is probably a good sign. “We may raise more money, but not at the moment,” said company Co-founder and Chief Executive Officer Nima Ghamsari. But is Blend profitable ...


May 19, 2017 - Inside Mortgage Trends

Nonbanks Report Dour 1Q17 Earnings

Publicly traded nonbank mortgage lenders and servicers reported weak earnings during the first quarter of 2017, according to an Inside Mortgage Trends summary. The nine nonbank lenders posted a combined profit of $116.69 million for the first three months of the year. That was down 79.4 percent from the fourth quarter, although it represented a huge improvement from the $509.68 million loss the group recorded in the first three months of 2016 ... [Includes one data chart]


May 19, 2017 - Inside Mortgage Trends

Legacy Buyback Issues Fade Further Into the Rearview Mirror in Early 2017

Mortgage originators and the government-sponsored enterprises in the first quarter of 2017 continued to distance themselves from the contentious sparring over repurchase demands related to loans sold to Fannie Mae and Freddie Mac prior to the housing market collapse. An exclusive Inside Mortgage Trends analysis of GSE repurchase disclosures shows a spike upward in total repurchases during the first quarter, but the move was linked to ... [Includes two data charts]


May 18, 2017 - IMFnews

All Major Loan Categories Saw Big Drops in 1Q17 Originations; GSE Market Hurt the Most

The nonprime residential market is getting more attention as the big product categories hit the skids.


May 17, 2017 - IMFnews

Going, Going and Soon to be Gone: ‘Distressed’ Housing Units?

Deutsche noted that after years of a steady broad-based housing market recovery “investors are now facing severe shortages in distressed housing pipelines.”


May 17, 2017 - IMFnews

Redwood’s ‘Expanded Prime’ Program Making Inroads

Redwood generally prefers to have multiple execution options. The company is considering issuing MBS backed solely by Choice mortgages.


May 17, 2017 - IMFnews

Deephaven CEO: Secondary Market Demand is Strong for Non-QMs

Performance of non-QM loans has been strong, buoyed by good house-price appreciation and the fact there have been no lawsuits based on the ability-to-repay rule.


May 17, 2017 - IMFnews

PHH, Ocwen and Walter All Have the Same Plan: Sell MSR and Continue as the Subservicer

All three hope to raise cash by selling MSR assets, eliminate the need to hold large sums for servicing advances and – importantly – buy some time.


May 16, 2017 - IMFnews

DocuSign First Got Wind of Malicious Email Campaign May 9

A DocuSign spokesman did not return a telephone call and email regarding the hacking campaign.


May 16, 2017 - IMFnews

Serious Delinquency Rate Resumes Downward Trend in 1Q17, Slight Uptick in Foreclosure Starts

Marina Walsh, the MBA’s vice president of industry analysis, said mortgage performance has been helped by growth in employment and income...


May 16, 2017 - IMFnews

Nonbanks Dominate FHA Primary Market; Volume Slowed in 1Q17

The 14 largest FHA originators were all nonbanks, led by Quicken Loans, Freedom Mortgage and loanDepot.


May 16, 2017 - IMFnews

Brian Hale Out as CEO of Stearns; Former JPM Exec David Schneider is In

Out as CEO is Brian Hale, who helped groom the company for much of this decade. Hale is departing for a new venture called DCC Holdings.


May 16, 2017 - IMFnews

JPM to End a Two-Month Drought in Issuance of Prime Non-Agency MBS

The size of the pending jumbo deal from JPM has not been disclosed yet, but AMC, Clayton and Opus are working on reviews...


May 15, 2017 - IMFnews

Short Takes: Nationstar Mails ‘Mr. Cooper’ Notices / B.D. Cooper? / This is Not a Loan Transfer / Messina on PHH Staffing Levels / Alterra Makes National Hire

Alterra Home Loans hired Tom Middleton as senior vice president of business development and national expansion. He joins the nonbank from On Q Financial...


May 15, 2017 - IMFnews

Invitation Homes Posts $42.4 Million Net Loss for 1Q, But ‘FFO’ Looks Good

Although it lost money on an accounting basis, its funds from operations, or FFO, came in at $78.2 million compared to $64.3 million for 1Q16.


May 15, 2017 - IMFnews

Trump’s Tax Proposals: Should Housing Worry? Really?

The plan to raise the standard has been met with hostility by many in the residential real estate industry, said Matthew Pointon, an economist at Capital Economics.


May 15, 2017 - IMFnews

Jumbo Lending Down 29 Percent in 1Q17: JPM Tops the List…

JPMorgan Chase ranked first in the jumbo production with $10.89 billion…


May 12, 2017 - Inside FHA/VA Lending

Preparations for LRS Intensifies as May 15 Effective Date Approaches

With only days to go before the implementation of its new Loan Review System, the FHA is encouraging lenders to take a few more steps to ensure smooth transition to the new system. The LRS will go live on May 15, 2017, as the new electronic platform for FHA’s Title II single-family, quality-control processes. Lenders will use the LRS to interact with FHA during post-endorsement loan reviews, direct endorsement authority test cases, lender monitoring reviews and lender self-reporting of fraud and other material findings. Findings will be communicated through the system’s defect taxonomy, which provides a streamlined method of identifying and capturing information about defects uncovered during individual loan reviews. In its latest guidance, the FHA instructs lenders to check access to FHA Connection for any potential glitches. All users access the LRS through FHA Connection via the ...


May 12, 2017 - Inside FHA/VA Lending

FY 17 Spending Bill Passed, FHA, Ginnie Mae Budgets Unchanged

Appropriation levels for FHA and Ginnie Mae from the previous fiscal year were unchanged in the FY 2017 omnibus spending bill, which President Trump signed into law on May 5. The bill, which passed the House by a 309-118 vote and the Senate by a 79-18 vote on May 4, will fund the federal government through the rest of the fiscal year ending Sept. 30, 2017. Among other things, the bill allocates $400 billion to single-family guarantee commitments under the FHA Mutual Mortgage Insurance Fund, and provides $130 million for administrative contract expenses. In addition, the budget provides an additional $30 million if guaranteed loan commitments exceed $200 billion. The agreement also sets aside up to $30 billion for FHA multifamily and specialized loan guarantees during FY 2017. A total of $55 million was set aside for housing counseling programs, $65.3 million for fair housing activities, and $4 million to ...


May 12, 2017 - Inside FHA/VA Lending

VA Clarifies QM Safe Harbor Rules For Streamlined Refinancings

The Department of Veterans Affairs’ interim final rule on qualified mortgages (QM) implements the Dodd-Frank provision requiring creditors to make a reasonable and good faith determination that the borrower has a reasonable ability to repay the loan. The VA interim final rule defines QM to mean any loan that the agency guarantees, insures or originates. However, certain limitations apply to VA’s Interest Rate Reduction Refinance Loans (IRRRLs) in the rule’s guidance for “safe harbor.” Under the safe harbor requirements for an IRRRL, the loan being refinanced must have been originated at least six months before the new loan’s closing, and six payments must have been made. In addition, the veteran should not have been more than 30 days past due during the six months preceding the new loan’s closing. The QM rule’s six-month seasoning requirement, however, inadvertently created an ...


May 12, 2017 - Inside FHA/VA Lending

VA Explains Characteristics of an ‘Egregious Loan,’ Discusses Cases

What is an “egregious” VA mortgage loan? Panelists at last month’s VA Lending Conference in Kansas City, MO, helped shed light on such loans by describing them as flawed and in violation of VA requirements. “But there’s more,” said Greg Nelms, VA chief of loan policy. Unstable income and use of active-duty income when that income will be extinguished within one year could taint a VA loan and make it egregious, said Nelms. High debt-to-income ratio, residual income that is below VA requirements and failure to consider a spouse’s debts or credit in a community-property state also could have an adverse effect on a VA loan, he added. The panel presented several “egregious loan” scenarios involving reviews of several mortgages from 2016 in which lenders were required to sign indemnification agreements. The first example consisted of a VA home loan for $102,047, which closed in ...


May 12, 2017 - Inside FHA/VA Lending

Nonbanks Dominate FHA Primary Market; Volume Slowed in 1Q17

Nonbank lenders far out-produced depository institutions in originating FHA mortgages during the first quarter of 2017. A new Inside FHA/VA Lending analysis reveals that nonbank lenders produced over 83 percent of FHA forward loans endorsed during the first quarter. With over 8,000 entities listed as originators and sponsors in FHA loan-level data, the overwhelming majority of them were independent mortgage banks, mortgage brokers and other nonbank lenders. The 14 largest FHA originators were all nonbanks, led by Quicken Loans, Freedom Mortgage and loanDepot. One sign of the overwhelming fragmentation in the FHA primary market is the fact that these three lenders accounted for just 11.3 percent of first-quarter endorsements. The largest depository originator of FHA loans was PrimeLending, an affiliate of PlainsCapital Bank. It ranked 15th in production with a ... [charts ]


May 11, 2017 - IMFnews

Servicing Sales Market Looking Much Stronger

The MSR market is in a good place now, said MountainView’s David Bennett.


May 11, 2017 - IMFnews

Post-Merger, Arch MI Looks Ahead

Overall, Arch MI wrote coverage on $12.66 billion of home mortgages in the first quarter, of which 81.9 percent were monthly premium policies…


May 10, 2017 - IMFnews

Yet More Red Ink for PHH Mortgage; Loan Production Down 34 Percent from 4Q16

Glen Messina is slated to step down as CEO in June. He has served as CEO since January 2012.


May 10, 2017 - IMFnews

Originations Down Sharply for Impac in 1Q17, but Firm Remains Profitable; An Emphasis on Non-QM

Impac Mortgage is making major run at the non-QM market, advertising its products on cable TV…


May 10, 2017 - IMFnews

By Selling Assets, Walter Investment Posts a Gain After Years of Losses

At March 31, Ditech serviced 1.9 million accounts, with an unpaid principal balance of $220.2 billion. During the quarter, the company suffered a net disappearance rate of 13.56 on its MSR portfolio.


May 9, 2017 - IMFnews

Banking Sector Sees Significant Drop in Mortgage Banking Income in 1Q17

Only two depositories – HomeStreet Bank and Citigroup – reported a net loss on mortgage banking.


May 9, 2017 - IMFnews

At Banks, Mixed Trends in Demand for Purchase Mortgages; Underwriting Loosened Slightly in 1Q17

For GSE-eligible mortgages, 12.9 percent of the banks surveyed loosened their underwriting standards compared to the previous quarter…


May 8, 2017 - IMFnews

The BLS Numbers: Mortgage Bankers Trim Head Count, Loan Brokers Hire

AmeriHome Mortgage, a larger correspondent buyer of loans, recently said it’s hiring internal support positions.


May 8, 2017 - IMFnews

LO Compensation Differs For Retail, Consumer Direct

Consumer-direct LOs had a higher average base compensation than retail LOs but received much lower incentive payments.


May 5, 2017 - Inside Mortgage Trends

Higher Rates Chill HELOC Appetite

Lack of basic information and knowledge about the application process and concern about rising interest rates are reasons why most homeowners are reluctant to take out home-equity lines of credit to meet their financial needs, according to a study by mortgage solutions provider Digital Risk. A company survey of 1,038 homeowners found that 21 percent have no clue what a HELOC is, while 45 percent did not even know how to apply for one. Sixty-five percent said they ...


May 5, 2017 - Inside Mortgage Trends

States Challenge OCC’s ‘Fintech’ Charter

State regulators filed a complaint last week seeking to prevent the Office of the Comptroller of the Currency from creating a national charter for nonbank financial technology companies. The charter would preempt state laws, eliminating a “patchwork” of compliance issues for marketplace lenders and other fintech companies. “If the OCC is allowed to proceed with the creation of a special-purpose nonbank charter, it will set a dangerous precedent that any federal agency can ...


May 5, 2017 - Inside Mortgage Trends

GSE Sellers Gradually Expand Credit Box

Fannie Mae and Freddie Mac are getting more business in loans with lower credit scores and higher loan-to-value ratios, a new Inside Mortgage Trends analysis reveals. Some 22.08 percent of purchase mortgages securitized by the two government-sponsored enterprises in the first quarter of this year had credit scores ranging from 620 to 699. That was up from 21.46 percent in the fourth quarter of last year, and it represented the highest ... [Includes two data charts]


May 5, 2017 - Inside Mortgage Trends

LO Compensation Gap for Retail, Consumer Direct

There are sharp differences in compensation structures for loan originators who work out of retail branches and those in the consumer-direct business, according to Strategic Mortgage Finance Group. Stratmor, an advisory firm, recently released details from its most recent “compensation connection” survey, covering compensation in 2015. The results focused on traditional retail LOs and consumer-direct LOs who tend to focus on call-center/online originations. Retail LOs were found to ...


May 5, 2017 - Inside Mortgage Trends

Post-Merger, Arch MI Looks Ahead

Now that Arch Mortgage Insurance is the largest player in the MI space – thanks to its yearend purchase of United Guaranty Corp. – it has no intention of taking it easy. In a recent interview with Inside Mortgage Trends, company CEO of Global Mortgage Insurance and Reinsurance Andrew Rippert touched on future growth, including plans for further expansion into international markets, increasing the firm’s coverage into more non-agency loans, and reinsuring its mortgage risk to ...


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