The Consumer Financial Protection Bureau may formally address the treatment of affiliate fees in the points-and-fees calculation for qualified mortgages under the agency’s ability-to-repay rule, which takes effect in just a few weeks. Until such a decision is made, industry representatives have put together some guidance on how to exclude such fees from that 3 percent cap. “There has been significant industry confusion concerning the extent to which affiliate fees are included in the points-and-fees calculation, particularly when only a portion of a fee is retained by an affiliate,” the Mortgage Bankers Association said early this week. The trade group has put together a document outlining its understanding of the CFPB’s definitive guidance, based on discussions with bureau staff, on the treatment of affiliate fees in both the qualified mortgage and the Home Ownership and Equity Protection Act points-and-fees calculations. “Please keep in mind...

Mortgage banking income fell sharply in the third quarter and the compliance outlook remained murky, but banks reported a huge improvement in loan buybacks, according to a new Inside Mortgage Trends analysis of call-report data. Banks and thrifts repurchased or provided other indemnification totaling $1.998 billion during the third quarter, the lowest quarterly amount for the industry in five years. Banks first began reporting repurchase data in their call reports ... [Includes one data chart]

Since the beginning of 2012, it’s been relatively difficult to lose money in mortgage banking, but that was no longer the case in the third quarter of this year. According to the Mortgage Bankers Association quarterly performance report, slightly more than one fourth of the industry failed to turn a profit during the third quarter. Starting in the first quarter of 2012, over 90 percent of mortgage bankers in each period reported net pretax profits. The average pretax income for ...

Prospect Mortgage of Sherman Oaks, CA, is a strong candidate for an initial public offering: It’s a retail-only originator whose loan production is top-heavy in purchase-money loans and it has all the right agency and FHA approvals. The privately-held firm also has a $13 billion servicing portfolio and licenses to lend in 48 states. Moreover, in early September it raised $150 million by selling five-year senior notes in the capital markets. Over the past few months rumors have surfaced that the ...

Capacity constraints and demand for same-servicer refinances helped lenders book significant profits in recent years, according to an analysis published by the Federal Reserve Bank of New York. Lenders’ profits have declined in recent quarters with the shift toward purchase-mortgage originations due to higher interest rates. A group of researchers determined that higher prices paid by investors in agency mortgage-backed securities in recent years weren’t offset by corresponding increases in ...

Independent mortgage bankers saw increased value in their servicing assets that helped offset slumping production volume in the third quarter, according to a quarterly survey by Richey May & Co. The accounting and business advisory firm found that overall production slid 12.4 percent from the second quarter, and refinance volume was down 42.0 percent. The survey also found that average values of indies’ servicing portfolios increased by seven basis points from the second quarter to the third ...

The Department of Housing and Urban Development has issued guidance clarifying FHA lenders’ obligation to report voluntarily instances of fraud, misrepresentation and any other material findings in connection with the origination, underwriting and servicing of FHA-insured loans. Compliance experts say the guidance in Mortgagee Letter 2013-41 is a shot across the industry’s bow – a reminder to lenders about existing FHA policy requiring them to self-report fraud and misrepresentation to the FHA. Upon notification, the FHA works with the lender on any potential mitigation actions. In the inaugural issue of Lender Insight in June, the FHA reported ...

The Department of Housing and Urban Development is considering an industry request to delay the implementation of a proposal requiring FHA lenders to perform a financial assessment of all prospective borrowers of Home Equity Conversion Mortgage loans. In remarks during the National Reverse Mortgage Lenders Association’s recent annual meeting in New Orleans, FHA Commissioner Carol Galante said HUD is still studying the comments and will need more time to implement the rule. In September, the FHA published a notice in the Federal Register seeking comment on the financial assessment proposal. The proposal is currently in ...

With the FHA high-cost loan limit set to decline from its current statutory level of $729,750 to $625,500, the same level as Fannie Mae and Freddie Mac, nobody appears to be pushing for an extension. The temporary maximum loan limit for FHA is set to expire on Dec. 31, unless Congress votes for another extension, which appears unlikely, according to mortgage industry analysts. Neither lawmakers nor the White House have shown support for maintaining the current FHA high-cost loan ceiling. Although no one has conceded that the FHA lending ceiling will go down for certain areas, there has been no effort to ...

Many condominium properties continue to struggle to meet stringent FHA requirements while many condo projects are being denied approval despite the easing of FHA approval requirements in recent years. Panelists at a recent National Association of Realtors conference in New Orleans said condos are often the most affordable homeownership option for first-time homebuyers, single borrowers and senior citizens, especially when purchased with FHA financing. Condominium loans are among the strongest performing loans in the FHA portfolio, they added. However, FHA data show that ...