Compare ratios have been criticized by some factions of the mortgage industry. Some lenders have complained that the ratio is one reason why originators do not target underserved markets.
In a wide-ranging speech – and in supporting documents – Mel Watt also vowed that the GSEs will continue to permit “compensating factors” when weighing a decision to guarantee mortgages where the debt-to-income ratio is north of 43 percent.
On the M&A front, a new report from Compass Point Research & Trading estimates that if PHH Corp. finds a way to sell its mortgage and fleet divisions, the stock should be worth $30 a share.
Among the changes, the two GSEs will no longer require that a lender automatically repurchase a residential loan when a mortgage insurance company rescinds coverage.
It’s now believed that the legislation will clear the committee, but Majority Leader Harry Reid will not allow it to move any further because of weak support overall.
It seems that GSE officials, to some degree, are trying to manage future expectations, but one thing is certain: guaranty fee income remains very strong.
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