Sometimes it seems there is more talk of lenders loosening their credit standards than actual data supporting such a shift, but a new Inside Mortgage Trends analysis of Fannie Mae and Freddie Mac mortgage-backed securities data unearthed some positive signs. In the fourth quarter of 2015, 14.4 percent of purchase mortgages securitized by the two government-sponsored enterprises had credit scores ranging from 620 to 699. Back at the beginning of 2014 ... [Includes two data charts]
The Blackstone Group, according to industry sources, has amassed a war chest of roughly $250 million to buy non-agency, nonprime mortgages, another sign that “big money” investors have returned to the sector. At this point, it’s hard to say how much origination volume in the sector will grow. It’s well known that over the past 18 months, bond insurance giant PIMCO has been buying loans that don’t meet the qualified mortgage test from Citadel Servicing and others. The reason is ...
Fannie Mae is planning to release an updated version of Desktop Underwriter in June with more specific details to come by the end of this month. But for now the GSE notified its lenders about some of the changes they can expect in DU Version 10.0. The updates in the latest version will “help lenders underwrite with confidence while expanding access to credit and sustainable homeownership for creditworthy borrowers,” said Fannie in a notice that went out on Jan. 28. The release is targeted to take place the weekend of June 25, 2016, and will include enhanced credit risk assessment using trended credit data provided by Equifax and Transunion. This tool...
There was a hefty increase in mortgage originations for subprime borrowers with credit scores under 620, most of them FHA loans, according to Equifax. From January through October of 2015, some $50.7 billion of mortgages were originated for borrowers with credit scores below 620, the credit bureau said. That was up 28 percent from the same period in 2014. Equifax attributes this to smarter lending habits. Amy Crew Cutts, Equifax’s chief economist, said while there are many ...
The mortgage lending industry is seeing a convergence of regulation, technology and demographics that is fueling a drive toward eMortgages, eDelivery and greater use of mobile devices and other technologies to simplify, digitize and speed up the mortgage process, according to Jeffrey Nuckols, senior vice president of Xerox Financial Services. On the regulatory front, most of the latest impetus, of course, has come from the Consumer Financial Protection Bureau’s integrated disclosure ...
Mortgages to borrowers who misrepresented their occupancy status perform much worse than loans to borrowers who truthfully identify themselves as investors, according to a new analysis by researchers at the Federal Reserve Bank of Philadelphia. The researchers examined purchase mortgages originated between 2005 and 2007. Loan-level data from McDash Analytics was matched with credit bureau data from Equifax. The researchers defined borrowers as having committed ...
A U.S. Court of Appeals for the Federal Circuit recently upheld rulings that went against Mortgage Grader, a loan shopping website that has filed a number of patent-related lawsuits. The court upheld a ruling by a lower court that found that Mortgage Grader’s claims related to the “abstract idea” of anonymous loan shopping and that the patents obtained by the firm didn’t include an “inventive concept.” Mortgage Grader filed a lawsuit in January 2013 against Costco Wholesale and ...
The financial crisis has led to a broader, more demanding quality control process to ensure that mistakes are never repeated and that financial institutions adhere strictly to compliance requirements. As a result, mortgage lenders are much more vulnerable now to enforcement actions if they are found to have inadequate controls in place or to be noncompliant. One of the pitfalls lenders worry about is being held responsible – and potentially liable – for the actions of third-party ...
Fannie Mae launched a new version of Fannie Mae Connect on Jan. 29 that includes five seller/servicer reports that were added to the system based on customer feedback. The Loan Delivery Edit Dashboard replaces the Data Quality Dashboard and provides insight into any possible issues at delivery with loan-level detail for fatal, warning and informational edits. About six months worth of data will be provided under this new report. This is the only new report that can be accessed by servicers as well as sellers. The Lender Dashboard gives monthly lender-specific data on things like delivery activity, loan performance and operational activities. It also includes a comparison of profile to peers and to expected loan performance value.
Freddie Default and Work Reporting Changes. Freddie Mac announced last week that servicers are not able to directly change the reporting of a third-party sale to an REO status without submitting a rollback request. Freddie said it also updated its foreclosure sale reporting error codes to more accurately reflect today’s housing market and align it with servicer’s needs. Fannie Ends 2015 with $42.3B in Multifamily Loans. Fannie Mae said that it provided $42.3 billion in financing to the multifamily market in 2015 to support 569,000 units of multifamily housing, of which more than 90 percent of the units financed support affordable or workforce housing. Approximately 99 percent of the multifamily loans Fannie financed last year were securitized...