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Inside Mortgage Finance

September 6, 2012

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Purchase-Mortgage Boost Helps Offset Decline In Refinance Activity During 2Q12; Jumbo Up

Despite increased activity in the Fannie Mae and Freddie Mac refinance programs for underwater borrowers during the second quarter of 2012, total refi originations declined by 4.8 percent from the first three months of the year, according to a new Inside Mortgage Finance analysis and ranking. Refinance activity still accounted for 68.1 percent of originations during the most recent quarter, but that was down from 75.3 percent in the first three months of the year. Partly offsetting the drop in refi business was a 35.8 percent increase in purchase-mortgage originations, which rose to an estimated $129.0 billion in the second quarter. But compared to the first half of 2011, purchase-mortgage lending was down 1.3 percent as of the midway point this year. Refinance originations appear to be climbing in the third quarter. Data on Fannie and Freddie securitization activity in July and August suggest that total refi business at the government-sponsored enterprises is...[Includes four data charts] Read More

Proxy Aspects of CFPB’s Loan Originator Comp Proposal Among the Most Troubling to Industry

One of the most worrisome elements to emerge so far in the Consumer Financial Protection Bureau’s proposed rule on mortgage loan originator compensation is the agency’s consideration of factors that may serve as proxies for prohibited transaction terms and how they may be used to restrict originator compensation. The CFPB proposal would implement statutory changes made by the Dodd-Frank Act to the Truth in Lending Act/Regulation Z loan originator compensation rule, including a new, additional restriction on the imposition of any upfront discount points, origination points or fees on consumers under certain circumstances. The proposal provides... Read More

FHFA Directs Fannie, Freddie to Increase Guaranty Fees by 10 Basis Points to Woo Back Private Capital

Fannie Mae and Freddie Mac late this year will raise guaranty fees on single-family mortgages by another 10 basis points, under a directive that the government-sponsored enterprises’ conservator announced late last week. The g-fee increases will be effective on Dec. 1, 2012, for loans exchanged for mortgage-backed securities, and on Nov. 1, 2012, for loans sold for cash. According to FHFA Acting Director Edward DeMarco, who telegraphed the move in a notification to Congress earlier this summer, the g-fee increases are designed... Read More

Settlement Monitor Looks for Noncompliance as Servicers Implement Pact, More Consider Joining

The initial progress report released last week on the national mortgage settlement drew attention to the early loss mitigation completed by the five banks participating in the settlement. However, Joseph Smith, the monitor of the $25.0 billion settlement, has also stressed that he is looking for noncompliance with the settlement’s 304 servicing standards. The Office of Mortgage Settlement Oversight allows borrowers and professionals assisting homeowners to detail experiences with servicers participating in the settlement. “It’s important for people in the marketplace to let me know if they see conduct that they think violates the settlement agreement,” Smith said. Smith said he has received... Read More

Small Mortgage Businesses Want CFPB to Delay Decision On Proposed Changes to Disclosures, HOEPA Coverage

The Small Business Administration is urging the Consumer Financial Protection Bureau to delay making any changes until it has fully analyzed the impact of a proposed rule establishing new disclosure requirements and forms under integrated federal consumer protection regulations. Speaking on behalf of small banks and settlement service providers, the SBA’s Office of Advocacy in a comment letter warned that proposed changes to the finance charge and to the high-cost mortgage coverage test could potentially lead some small businesses to leave the marketplace or stop making mortgage loans. In addition, the agency reiterated its concerns about the inadequate notice for small entities about the proposal. On Aug. 23, the CFPB published... Read More

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