A widely-expected reduction in conforming loan limits for 2014 would help the jumbo market continue to broaden its footprint in mortgage originations, but the impact would be largely confined to a handful of states, according to a new Inside Mortgage Finance analysis. Jumbo production – originations of home loans that exceed varying conforming loan limits around the country – has been the brightest spot in a mortgage outlook made increasingly gloomy by rising interest rates. Non-agency jumbo originations rose 9.3 percent from the first to the second quarter, while total originations of Fannie Mae, Freddie Mac and FHA loans fell 3.8 percent. Jumbo mortgages accounted...[Includes four data charts]
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The secondary market for mortgage servicing rights is starting to look a bit frothy, so much so that many bulk offerings today garner upwards of 12 bidders per auction. A year ago just a handful of investors showed up. But that isn’t deterring Michael Lau, CEO of Pingora Asset Management, who earlier this year raised $500 million to buy MSRs. Lau said Pingora is plowing ahead with its acquisition plans, careful not to overpay while concentrating on “flow” deals on new originations. “We’re actively doing...
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The Department of Housing and Urban Development is doing a poor job of overseeing FHA lenders, according to the agency’s Office of the Inspector General, which has found high error rates in ongoing reviews of underwriting. FHA continues to struggle with poorly underwritten mortgages, according to testimony by HUD Inspector General David Montoya in a hearing this week before the House Financial Services Oversight and Investigations Subcommittee. In light of “the apparent systemic problems with the underwriting of FHA insured loans” and successful pursuit of civil enforcement against violators, the HUD IG joined with the Department of Justice and HUD’s Office of General Counsel in early 2012 to focus on the underwriting practices of 10 of the largest FHA-approved lenders. “To date, the underwriting of thousands of FHA insured...
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Two years ago, no megabank in its right mind would dare originate a jumbo mortgage without asking for at least a 20 percent downpayment – unless the borrower was a special client of the company’s wealth management division. Today, it’s a different story. As refi volumes begin to dwindle, a handful of large banks are loosening their jumbo underwriting standards, allowing for lower downpayment requirements and higher debt-to-income ratios. Wells Fargo has been offering...
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A number of lenders in July stopped offering mortgages with characteristics outside of those allowed for qualified mortgages, according to the Mortgage Bankers Association. The MBA said credit availability declined in August after four months of loosening. “The slight decline in the Mortgage Credit Availability Index in August reflected a reduction in the availability of certain loan features, particularly interest-only and terms exceeding 30 years,” said Mike Fratantoni, the MBA’s vice president of research and economics. “As these loan features are outside of the QM definition, these changes may reflect the beginning of QM implementation, and the fact that Fannie Mae and Freddie Mac are limited to acquiring loans that meet the QM definition.” The MCAI is...
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Stonegate Mortgage plans to raise up to $100 million in an initial public offering, according to documents filed with the Securities and Exchange Commission late last week. Meanwhile, stock prices for other mortgage-related companies that priced IPOs this year have declined. Stonegate is unique among mortgage company IPOs this year in that it’s not a real estate investment trust. Three of the four mortgage-related IPOs that have priced in 2013 have been for REITs and the other was a nonbank affiliated with a REIT. Stonegate was founded...
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The House Financial Services Committee’s senior Democrat is drafting her own legislation to reform the government-sponsored enterprises as an alternative to a Republican bill that was rammed through committee earlier this summer but is stalled getting to the House floor. During a speech this week at a meeting of the National Association of Federal Credit Unions, Rep. Maxine Waters, D-CA, said she is seeking industry input for her bill that would be “quite different” from the Protecting American Taxpayers and Homeowners Act, sponsored by Committee Chairman Jeb Hensarling, R-TX. Waters said...
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