The mortgage securitization process is playing an increasingly dominant role in how residential mortgage loans are financed, gobbling up a record 74.3 percent of primary market originations during the first quarter of 2006. According to the Inside Mortgage Finance MBS Database, a whopping $498.1 billion of home loans were pooled in securities during the first quarter of this year. That accounted for 74.3 percent of the $670 billion of mortgages originated in the primary market… [One data table included]
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Adjustable-rate mortgages and so-called nontraditional loan products continued to comprise a substantial portion of the primary market originations during the first quarter of 2006, according to a new market analysis and ranking by Inside Mortgage Finance. Despite a flat yield curve that squeezes the payment advantage of adjustable-rate mortgages relative to fixed-rate products, lenders originated a healthy $282 billion of ARMs during the first three months of 2006. That represented 42.1 percent of total…
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Minorities are more likely to receive so-called alternative mortgages, according to a new study by the Consumer Federation of America. The study also raises concerns about the incomes and credit scores of borrowers who receive adjustable-rate loans and interest-only mortgages. While refusing to reveal its data source, the CFA said it analyzed certain borrower and loan characteristics of more than 100,000 mortgages originated between January and October 2005 for its study. The group reported that…
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Freddie Mac this week reported a sharp drop in net income for 2005 and cautioned the market that it too could be forced into a no-growth posture by its federal regulator. The government-sponsored enterprise reported $2.13 billion in net income for last year, a 27 percent drop from 2004 that was well below Wall Street’s expectation of $3.49 billion. Freddie executives attributed most of the decline in profitability to the cost of settling litigation (about…
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Thrift mortgage activity started the year ahead of the pace set in the early going of 2005, but down from the fourth quarter, according to data from the Office of Thrift Supervision. OTS-regulated thrifts reported $142.6 billion in mortgage originations during the first three months of 2006. That was down 13 percent from the fourth quarter of 2005, and up a modest 0.8 from year-ago levels. … [Two data tables included]
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Mandatory flood insurance may become less affordable and harder to obtain if certain provisions in a national flood insurance reform bill approved by a Senate committee last week are not modified, according to mortgage lenders. The Senate version of the Flood Insurance Reform and Modernization Act of 2006, or FIRM, would overhaul the bankrupt National Flood Insurance Program by updating flood maps, eliminating subsidies, expanding flood insurance requirements, and increasing penalties and premiums. The bill…
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Government officials this week sought advice and counsel from approved lenders on how to make FHA and VA programs more appealing to borrowers, even as they reported mixed results from their year-long effort to make the programs more competitive in the mortgage marketplace. At about the same time last year, top officials from the FHA, the Department of Veterans Affairs’ Loan Guaranty Services, and the Department of Agriculture’s Rural Housing Service announced major improvements…
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As fallout from an Internal Revenue Service crack-down on downpayment assistance programs continues, the Department of Housing and Urban Development this week released guidelines for determining whether aid from a program that loses or gives up its federal tax-exempt status can be used in FHA mortgage lending. In Mortgagee Letter 2006-13, HUD said if the homebuyer enters a contract of sale on, or before, the date the IRS officially announces that the charitable organization’s…
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