Fannie Mae, Freddie Mac and the FHA financed a record $31.2 billion in so-called conforming jumbo mortgages during the third quarter of 2012, according to a new Inside Mortgage Finance ranking and analysis. Business in conforming jumbo loans – defined as mortgages on one-unit properties that exceed $417,000 – rose 29.6 percent from the second quarter and represented the highest quarterly volume for the agencies since emergency loan limits went into effect back in 2008. Since that time, an estimated $363.0 billion of conforming jumbo mortgages have been originated. Conforming jumbo originations for the first nine months of 2012 reached...[Includes three data charts]
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Mortgage industry participants reading tea leaves expect that the Consumer Financial Protection Bureau will write a definition of “qualified mortgages” that covers about 90 percent of current production, and they suggest that the long-awaited final rule could even boost originations. However, concerns remain about the liability that will come with QM originations and the clarity of the QM definition. Speakers at a panel discussion hosted by the American Securitization Forum this week predicted that the pending QM rule will cover a large majority of current mortgage production, based on previous comments from Richard Cordray, director of the CFPB. Edward Mills, a research analyst and senior vice president at FBR Capital Markets, added...
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As part of negotiations regarding the fiscal cliff, the Obama administration and Democrats in the House are seeking principal reduction loan modifications for borrowers with negative equity. The Treasury Department has reportedly proposed a program targeting borrowers with mortgages in non-agency mortgage-backed securities while the debate about principal forgiveness for loans held by the government-sponsored enterprises has also been rekindled. The Obama administration would neither confirm nor deny the non-agency proposal, but details regarding the Market Rate Modification program have prompted talk among industry participants and a detailed analysis. “In order to assist...
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The Department of Housing and Urban Development announced FHA loan limits for calendar 2013 that include higher amounts for 19 counties, according to an Inside Mortgage Finance analysis. Of the 19 counties getting higher loan limits for FHA forward mortgages, 10 are part of the Houston metropolitan area, where the one-unit limit is going up just $1,500, to $272,550. The remainder are in various counties in Alaska. The “emergency” loan limits for high-cost markets – still $729,750 for FHA and $625,500 for Fannie Mae and Freddie Mac – were authorized...
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Fannie Mae and Freddie Mac this month completed implementation of the latest round of guaranty fee hikes, this one mandated by their regulator as a move to reduce the footprint of the government-sponsored enterprises and draw more private capital into the mortgage market. Experts say the 10 basis point fee hike will have a slight positive impact in the near term, but future moves in the same direction could help close the gap between agency and non-agency mortgage-backed securities. The Federal Housing Finance Agency ordered the GSEs to raise g-fees by 10 bps for cash deliveries starting in November, and for MBS transactions beginning in December. At the time, the FHFA said...
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The mortgage industry is fearful of expanded liability after the Consumer Financial Protection Agency reportedly asked financial institutions with wholesale mortgage operations to monitor and ensure correspondents’ compliance with consumer protection laws and regulations. Lenders are said to be anxious about being held liable for purchased defective mortgages originated by unaffiliated third parties, and they are wary about new entrants that are trying to fill the void left by the traditional, larger players when they exited the wholesale broker/correspondent market. The CFPB has not issued...
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The memorandum of understanding (MOU) announced recently between the Consumer Financial Protection Bureau and the Department of Justice does not represent a major policy shift but could lead to more referrals of fair lending cases to the DOJ, according to industry lawyers. Compliance attorneys said information-sharing between the two agencies will likely trigger new fair lending inquiries into origination and servicing practices. In addition, both agencies subscribe to the disparate impact theory and are expected to continue to push it, attorneys noted. The new MOU supplements...
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