Home mortgage production volume increased by 20.4 percent during the third quarter of 2011 as record-low mortgage interest rates sparked a new wave of refinancing activity. An estimated $325.0 billion in new residential mortgages were originated during the third quarter, according to a new Inside Mortgage Finance ranking and analysis. While that was up solidly from the previous three-month period, it still ranked as the second lowest quarter since the mortgage market collapsed at the end of 2008. Through the nine-month mark in 2011, total production for the year was still down 16.7 percent from...(Includes two data charts)

The Federal Housing Finance Agency this week announced a series of substantial and eagerly anticipated changes to the Home Affordable Refinance Program for borrowers with underwater Fannie Mae and Freddie Mac mortgages. Among the new HARP enhancements is the elimination of certain risk-based fees for borrowers who refinance into shorter-term mortgages and lower fees for other borrowers. Also removed is the current 125 percent loan-to-value ceiling for fixed rate mortgages backed by the government-sponsored enterprises. Furthermore, HARP 2.0 waives “certain” representation and warranties made by...

The mortgage lending industry is more likely to see a return to higher FHA loan limits than higher Fannie Mae and Freddie Mac limits, after the Senate gave its approval to legislation that would restore higher conforming loan levels all the way around, according to one top industry lobbyist. Late last week, the Senate voted 60-38 to approve a federal spending bill that included an amendment sponsored by Sens. Bob Menendez, D-NJ, and Johnny Isakson, R-GA, that would reinstate the higher loan limits for the government-sponsored enterprises and the FHA that ended on Sept. 30. Those limits dropped from a maximum of...

The Senate voted this week to reinstate the higher conforming loan limit that expired at the end of September, heeding calls by the real estate and mortgage industries. On a vote of 60-38, lawmakers passed an amendment to the FY2012 funding bill, S. 1596, for the Department of Housing and Urban Development, which, among other things, would raise the maximum loan amount that can be guaranteed by FHA, Fannie Mae and Freddie Mac. Introduced by Sen. Robert Menendez, D-NJ, the amendment restores the 125 percent median home price formula used to calculate the temporary higher loan limits in effect prior to Oct. 1, which was up to $729,750 in certain high-cost areas of the country and lower in other jurisdictions. After Oct. 1, the new loan limit calculation was ...

Buyback risk is raising costs throughout the mortgage industry and causing lenders to boost cred-it standards beyond the levels required by investors, according to several experts at last week’s annual convention of the Mortgage Bankers Association. “The industry is spending hundreds of millions of dollars in repurchases and defending repurchases,” said David Stevens, chairman and CEO of the MBA. At a time when lenders are being pushed to “keep skin in the game,” a 5 percent risk-retention requirement for securitization might almost seem like a better deal than the costly repurchase process, he added. Brian Chappelle said...

Flood insurance reform legislation in the Senate would result in higher net income to the National Flood Insurance Program and more federal revenues than the House version, according to a cost estimate by the Congressional Budget Office. The Senate Committee on Banking, Housing and Urban Affairs approved the bill, the Flood Insurance Reform and Modernization Act, on Sept. 8 by unanimous voice vote. The bill is awaiting Senate floor action. The House passed its bill, H.R. 1309, the Flood Insurance Reform Act of 2011, before the August recess by a vote of 406-22. Like its House counterpart, the Senate bill would reauthorize...

Despite the sound and fury from publicly peeved House Democrats directed at Federal Housing Finance Agency Acting Director Edward DeMarco, including calls for him to step aside, the consensus among industry insiders and those in the know on Capitol Hill is – good luck finding anyone else willing or able to jumpstart the underperforming GSE refinance plan while obeying the FHFA’s restrictive regulatory mandate.

The Federal Housing Finance Agency needs to explain why it hired expensive outside counsel instead of dispatching government lawyers in its massive litigation against the nation’s big financial institutions, as well as just how much the agency expects to recoup from the effort, according to a senior Republican congressman.

As the Federal Housing Finance Agency ponders possible improvements to the government’s Home Affordable Refinance Program, calls from different corners of the industry are growing louder for the FHFA to end fees charged to borrowers who refinance Fannie Mae and Freddie Mac mortgages.

Fannie Mae and Freddie Mac issued $177.19 billion in single-family mortgage-backed securities during the third quarter of 2011, a modest 14.3 percent improvement following two straight quarterly declines during the first six months of this year.The recent July-September cycle represented one of the weakest quarters historically for GSE MBS production since the financial markets crashed at the end of 2008.