Originations of interest-only mortgages by lenders that are prominent in the niche have lagged behind overall mortgage production trends, according to a new ranking and analysis by Inside Nonconforming Markets. Through the first three quarters of 2015, first-lien IO originations by a group of 12 lenders increased by 13.2 percent compared with the same period in 2014. Overall mortgage production in that time increased by 42.9 percent, according to ... [Includes one data chart]
Some lenders offering non-qualified mortgages see the product as a way to generate volume in a sector of the market that most competitors are avoiding. However, even some prominent non-QM lenders aren’t comfortable originating the loans in New York State. New York was the fourth-ranked state in terms of total originations in 2014, according to an analysis of Home Mortgage Disclosure Act data by Inside Mortgage Trends, an affiliated publication, accounting for 4.2 percent of ...
Servicers and borrowers with subprime adjustable-rate mortgages would benefit from a new type of loan modification, according to research recently published by the Federal Reserve’s division of research and statistics and division of monetary affairs. The researchers suggested that mods triggered when housing price declines exceed a certain percentage may reduce delinquency and foreclosure rates along with reducing servicers’ costs. The results were detailed in a paper titled ...
Investors should see a higher share of VA collateral in Ginnie Mae mortgage-backed securities pools due to increasing VA loan originations, according to Deutsche Bank analysts. Given their rising share of VA collateral, new Ginnie pools are likely to have worse convexity than most of those originated in 2015, analysts said. “VA loans tend to prepay faster than FHA loans when in the money as VA loans have larger loan sizes, higher FICO scores and a more efficient streamline refi program that requires a minimum three months seasoning,” they observed. In addition, analysts expect the population of younger veterans to surge approximately 36 percent over the next five years. “[As such], there will be a healthy supply of new VA originations eligible for pooling,” they said. As a result, the share of FHA relative to VA collateral in new Ginnie II pools will likely decrease, they said. Such a trend has manifested itself slowly as ...
FHA lenders funded $12.3 billion in new Home Equity Conversion Mortgage loans during the first nine months of 2015, up a hefty 22.2 percent from the same period in the prior year, according to Inside FHA/VA Lending’s analysis of agency data. Likewise, HECM endorsements increased 17.3 percent to $4.5 billion in the third quarter from $3.9 billion in the prior quarter. This was the highest HECM endorsements have been since the second quarter of 2013, when they totaled $4.1 billion. Purchase loans accounted for 85.8 percent of all HECM originations over the nine-month period. The majority of borrowers favored adjustable-rate HECMs over fixed-rate HECMs, which accounted for only 14.8 percent of HECM transactions. In addition, the initial principal amount at loan originations totaled $7.3 billion, up from $4.6 billion midway through 2015. The volume increase is attributable to program changes implemented ... [1 chart]
Nearly 2,400 FHA lenders will receive electronic notifications on Jan. 1, 2016, from the Department of Housing and Urban Development instructing them to begin their recertification process or risk exclusion from the FHA program. HUD is encouraging the estimated 85 percent of FHA lenders that operate on a calendar-year basis, instead of a fiscal-year basis, to prepare their recertification packages for submission to the Lender Electronic Assessment Portal (LEAP). LEAP allows FHA lenders to complete annual recertification, among other things. The portal is accessible through FHA Connection, which provides lenders and business partners a path to HUD’s computer systems. Annual recertification can be a lengthy, time-consuming process for ...