Mortgage servicing, particularly by non-banks, will be a top priority for the Consumer Financial Protection Bureau, according to officials at the new regulator. The CFPB will take over authority to administer federal consumer financial protection laws on July 21. About half of the top 20 subprime servicers, and two of the top five – Ocwen Financial and American Home Mortgage Servicing – are non-banks. At a joint hearing last week by two subcommittees of the House Financial Services Committee, Raj Date, associate director of research, markets and regulations at the CFPB, said the agency “will use ...

An increasing number of credit unions and other lenders have recently started offering a mortgage that allows borrowers to adjust their interest rates as frequently as every 120 days. While many lenders have avoided alternative mortgages since the collapse of the non-agency market, credit unions have not shied away from offering innovative products. This week, for the first time, a HarmonyLoan borrower executed an interest rate reset without the expense and requirements of the traditional refinancing process. The borrower took out ...

At least three lenders are looking to re-establish the market for non-prime lending. Two firms are hoping to attract additional funding and begin non-prime lending shortly, while a smaller player is already offering the loans. Shellpoint Partners has plans to expand the offerings of a recently acquired agency originator, New Penn Financial. Shellpoint is a specialty finance company and joint venture with Ranieri Partners. Lewis Ranieri, a co-founder of Shellpoint, said...

Subprime borrowers in rural areas have been significantly impacted by mandatory escrow requirements on higher-priced mortgages, according to community banks. The Independent Community Bankers of America is leading efforts by banks to limit or remove escrow requirements currently enforced by the Federal Reserve. The minimum period for mandatory escrow accounts for most first-lien higher-priced mortgages would be expanded...

Trade groups representing home builders and real estate agents are warning Congress that a decrease in conforming loan limits will result in higher interest rates for borrowers and other less favorable loan terms. However, the housing advocates face a tough battle in extending temporarily elevated conforming loan limits. Without action from Congress, the high-cost loan limit for agency mortgages and the FHA will fall from $729,750 to $625,500 beginning Oct. 1. Some 5.25 million owner-occupied homes will no longer qualify...

FHA jumbo originations took a 32.2 percent tumble during the first quarter of 2011 yet remained strong enough when combined with Fannie Mae and Freddie Mac’s jumbo numbers to beat non-agency jumbo originations for the quarter, according to a new Inside FHA Lending ranking and analysis. FHA, Fannie and Freddie accounted for $26.15 billion, or 15.7 percent, of all jumbo loans – those exceeding $417,000 – originated in the first quarter, compared to $25.0 billion in new non-agency jumbo loans produced during the same period, data from Inside Mortgage Finance show. During the first quarter, FHA jumbo production fell to... [Includes two data charts]

Ocwen’s pending purchase of Litton Loan Servicing’s $42.32 billion portfolio will make Ocwen the largest subprime servicer while also potentially increasing integration problems. Ocwen has faced some issues handling the $24.9 billion HomEq portfolio it acquired last year, and Litton’s business practices are substantially different from Ocwen’s. The combined Ocwen-Litton subprime portfolio is $96.42 billion as of the end of the first quarter of 2011, according to Inside Nonconforming Markets. If the transaction is completed as anticipated later this year, Ocwen will...

Serious delinquency rates on subprime mortgages improved in the first quarter of 2011 for a fifth consecutive quarter. However, analysts warn that the sector faces increased risks due to scrutiny from federal regulators and Congress. Meanwhile, subprime originations remain all but nonexistent, causing the amount of subprime mortgages outstanding to fall to an estimated $605.0 billion in the first quarter of 2011, according to Inside Nonconforming Markets. In 2005, an estimated $625.0 billion in subprime mortgages were originated, with another...[includes one data chart]

Stated-income lending, once a staple of the non-agency market, has not disappeared completely. A few portfolio lenders currently offer the loans, largely to wealthy borrowers looking for jumbo mortgages.In 2006, 54.6 percent of mortgages in non-agency mortgage-backed securities were originated based on alternative, stated or no documentation, according to the Inside Mortgage Finance MBS Database. The mortgages generally performed extremely poorly as borrower income was often overstated. However, private wealth lenders – including California-based...

Two Harbors Investment plans to issue a $250.0 million jumbo non-agency mortgage-backed security this year, with gradual increases in issuance planned in the coming years, officials at the real estate investment trust said last week. William Roth, a co-chief investment officer at Two Harbors, said there is tremendous opportunity to profit from non-agency MBS issuance – not so much in 2011, but in 2012 through 2014. “Our ability to generate loans to our guidelines and create credit pieces is a runway that could be extremely long,” he said at an investor conference hosted by...