Originations of non-agency jumbo mortgages through two quarters in 2012 were 35.8 percent above the pace set in 2011, according to affiliated publication Inside Mortgage Finance. Almost all of the major jumbo lenders are increasing production and the vast majority of originations continue to be held in portfolio. An estimated $37.0 billion in non-agency jumbos were originated during the second quarter of 2012, up 5.7 percent from the previous quarter and up 60.9 percent from the ... [Includes one data chart]

The government-sponsored enterprises’ guaranty fees will increase by an average of 10 basis points in the coming months as the Federal Housing Finance Agency works to align agency pricing with the private market. An increase earlier this year brought interest rates on agency mortgages slightly closer to the rates on non-agency jumbo mortgages but industry analysts suggest that the conforming loan limits have a greater impact on the market share for non-agency originations. “These increases will move [GSE] pricing ...

After years of holding off, Homeward Residential last week launched a principal forgiveness program for proprietary loan modifications. The program follows a settlement with the Massachusetts attorney general and success with principal reduction by other nonprime servicers. “We view this program as an additional safety net for borrowers who have limited options,” said Javid Jaberi, an executive vice president of servicing operations at Homeward Residential, formerly known as American Home Mortgage Servicing ...

Performance of jumbo mortgages originated before 2005 is declining, bucking a trend among non-agency mortgages, according to Fitch Ratings. Most of the remaining pre-2005 jumbo borrowers have been unable to refinance. “Many high-quality mortgage borrowers are refinancing to take advantage of record-low interest rates, leaving the remaining mortgage pools increasingly concentrated with borrowers unable to refinance,” said Grant Bailey, a managing director at Fitch. More than 93.0 percent of the roughly ...

The Federal Housing Finance Agency and the National Credit Union Administration recently filed separate lawsuits seeking repurchases of mortgages in non-agency mortgage-backed securities. The FHFA lawsuit filed in August against DB Structured Products relates to ACE Securities Corp. Home Equity Loan Trust, Series 2006-FM1, which Freddie Mac purchased in August 2006. The FHFA did not disclose the size of Freddie’s investment. And last week the NCUA filed a lawsuit against UBS Securities ... [Includes three briefs]

The House of Representatives this week overwhelmingly approved legislation that would help the FHA remain solvent and avoid a potential taxpayer bailout. Lawmakers passed the FHA Fiscal Solvency Act of 2012 by a vote of 402-7 on the heels of a Department of Housing and Urban Development report to Congress showing a slight second-quarter decline in the single-family Mutual Mortgage Insurance Fund. The report, which provides a quarterly view of the composition and credit quality of new insurance, showed FHA capital decreasing slightly over the last quarter from $32.3 billion to $31.6 billion. FHA’s total capital is ...

Cash flow from FHA’s business operations funded almost 70 percent of net claims losses over the last year, according to the Department of Housing and Urban Development’s quarterly report on the FHA Mutual Mortgage Insurance Fund programs. HUD paid $5.4 billion in claims in the second quarter of 2012, more than twice the amount of premiums collected during the period. As a result, net cash flows from business operations were negative $1.7 billion during the quarter. Premium collections contributed $8.1 billion over the last four quarters even as paid claims totaled $17.2 billion over the same period. This indicates that ...

The reverse mortgage industry is at odds with consumer advocates and the Consumer Finance Protection Bureau over a recent CFPB study, which claimed that consumers find reverse mortgages too complex and difficult to understand and that the risk of fraud and other scams persist. The latest dispute flared as reverse mortgage lenders and consumer groups responded to the CFPB’s request for information on abusive financial practices that affect elderly Americans. The comment period ended on Aug. 31. To assist its ongoing study of reverse mortgage transactions, the CFPB in July sought ...

The Department of Housing and Urban Development’s disciplinary arm hit 14 FHA-approved lenders with civil money penalties totaling $2.31 million for various violations of FHA regulations. HUD’s Mortgagee Review Board imposed the fines as a result of separate administrative actions against the lenders from Aug. 1, 2011, to Dec. 31, 2011. The MRB report, which was published in the Sept. 10 Federal Register, cited various offenses, including improper lending practices, failure to follow FHA origination guidelines, fraudulent reporting, failure to remit mortgage insurance premiums, failure to report ...

SunTrust Banks, Inc. is planning to shift $3 billion of loans, including an undetermined number of delinquent Ginnie Mae loans and other nonperforming loans, to its held-for-sale portfolio and record a $375 million provision for mortgage repurchases in the third quarter of 2012. The moves are expected to strengthen SunTrust’s mortgage portfolio and put the company in a better position by improving its risk profile and balance sheet and stabilizing its capital ratios. The $3 billion transfer of loans to the held-for-sale (HFS) category will include ... (1 chart)