GSE earnings bounced back to a profitable status, as expected, in the first quarter, with Fannie Mae and Freddie Mac reporting a combined $7.2 billion profit. That number is up from the $9.4 billion earnings hit the GSEs took last quarter due to tax reform that went into effect in December 2017. [Includes one chart.]
Mortgage sellers continue to get a little more adventurous in the kinds of loans they deliver to Fannie Mae and Freddie Mac, according to an exclusive Inside Mortgage Trends analysis of data on mortgage-backed securities issued during the first quarter of 2018. The credit loosening was more apparent in the purchase-mortgage sector, which saw declining production volume from seasonal factors. In the first quarter, 12.61 percent of purchase loans sold ... [Includes two data charts]
About 70.4 percent of the home loans originated in 2017 were sold to secondary market investors, according to a new Inside Mortgage Trends analysis of Home Mortgage Disclosure Act data released this week. According to the preliminary HMDA data made available by federal regulators, lenders reported $1.738 trillion in first-lien single-family mortgage originations in 2017. HMDA data cover about 96 percent of the market. The biggest buyers were Fannie Mae ... [Includes one data chart]
A shift in origination trends from refinances to purchase mortgages led to reduced earnings at a number of private nonbanks in 2017, according to Moody’s Investors Service. In a recent report, the rating service detailed profitability levels for four large private nonbanks: Freedom Mortgage, Provident Funding Associates, Quicken Loans and Stearns Lending. The firms generally don’t disclose their financial results, but Moody’s maintains corporate ratings on them, which provides ...
The Consumer Financial Protection Bureau’s ability-to-repay requirements yielded higher costs for lenders and revealed flaws with vendors’ loan originations systems, according to a recent survey of lenders. The ATR rule and standards for qualified mortgages took effect in early 2014. Strategic Mortgage Finance Group surveyed 122 lenders about the regulation earlier this year. Lenders estimated that ATR/QM added $139 per loan to their ongoing origination costs. Only $44 of ...
The weighted average coupon for new issuance of FHA refinancing loans is much lower than FHA purchase loans due to a combination of factors, according to an analysis by Wells Fargo Securities. Wells analysts led by senior analyst Vipul Jain compared collateral characteristics of FHA purchase and refi production for 2017 based on the weighted average loan age (WALA) of newer collateral issuance. The team found that purchase-loan production in FHA carries higher-than-average ...
Although Ocwen Financial Corp. eked out a $2.6 million net profit for the first quarter – after years of reporting red ink – investors in the company will continue to wonder if the firm’s best days are behind it. In the nonbank’s new 10-Q filing with the Securities and Exchange Commission, the servicing giant summed up its situation best: “An investment in our common stock involves significant risk.” Still, Ocwen soldiers on, striking settlement agreements with regulators, buying another ...
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