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Inside Mortgage Finance

September 28, 2017

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Increase in Home-Equity Lending During 2Q17 Not Enough to Offset Ongoing Fall in Outstanding Debt

The supply of home-equity loan debt outstanding has been in such a steady decline since 2007 that even the mild revival in new lending has been unable to stop. At the end of June, there was $585.09 billion of HEL debt outstanding, including home-equity lines of credit and closed-end second mortgages. That was down 0.7 percent from March. The vast majority of those loans, some $556.94 billion, were held in portfolio by banks, savings institutions and credit unions. There was...[Includes three data tables] Read More

Third Quarter was a Barn-Burner for Some Originators But Just So-So for Others; Nonprime Lending Excels

Drawing to a close, the third quarter of 2017 is turning out to be modestly better than some lenders expected with both profits and production volumes getting a second wind recently thanks to falling interest rates. “We’re having a great quarter,” said Mat Ishbia, president and CEO of United Wholesale Mortgage, Troy, MI. According to Ishbia, not only will UWM post record originations of $8.6 billion in the third quarter, but volume at the privately held nonbank will be about 20.0 percent higher than ever before. According to figures compiled by Inside Mortgage Finance, UWM is... Read More

MSR Market Warms Up, But Hurricanes Are Having An Impact as Temporary Moratorium Hits Some Sales

After a couple of slow weeks, there appears to be renewed interest among investors looking to buy mortgage servicing rights, but in certain markets caution is being expressed regarding properties where hurricane damage might be an issue. In mid-September, Fannie Mae issued a bulletin temporarily suspending servicing transfers involving properties located within designated disaster areas. A week after the Sept. 13 bulletin was issued, Fannie clarified to market participants that the bulletin was meant as guidance and not a firm directive or prohibition on MSR transfers. According to Incenter Mortgage Advisors, Denver, some sellers of Fannie receivables “elected... Read More

Fannie, Fed Find Underwriting Standards Easing, MBA Sees Increase in Mortgage Credit Availability

Anecdotal and empirical evidence confirm that mortgage lenders are continuing to lighten up on their underwriting criteria. The loosening may not be as pronounced as it was in the run-up to the financial crisis, but there are concerns that it will intensify as the Federal Reserve raises interest rates. Fannie Mae’s latest mortgage lender sentiment survey found that more lenders said they have eased credit standards than tightened them, something the government-sponsored enterprise attributed to limited demand for residential finance and a negative outlook on profit margins. “The net share of lenders reporting easing of credit standards over the prior three months has continued... Read More

Industry Groups Feud Over Fannie/Freddie Capital Strategies. Will Congress Finally Act in 2018?

Resolving the long-running conservatorships of Fannie Mae and Freddie Mac is drawing a lot of attention, but policymakers and industry groups don’t seem any closer to a consensus. For the most part, the executive branch and many groups representing large financial institutions want Congress to tackle the problem through legislation. Investors and some groups representing smaller lenders say the Federal Housing Finance Agency and Treasury could do more to pave the way. Motivating the debate is... Read More

FHA Data Show Increased Usage of 203(h) Rehab/Purchase Loans for Disaster Victims; loanDepot Announces Product

LoanDepot has announced a key FHA disaster-related mortgage loan product to help families whose homes have been damaged or destroyed by hurricanes Harvey and Irma. Loans made through the FHA 203(h) Mortgage Insurance for Disaster Victims program are designed specifically for hard-hit homeowners in presidentially-declared major disaster areas (PDMDA) and can be used in tandem with a similar FHA product, the 203(k) property rehabilitation loan. Use of the 203(h) product spiked... Read More

Mortgage Servicing Market Hit 6-Year High in 2Q17, Thanks to Gains in Agency MBS, Portfolio Lending

The mortgage servicing market maintained its steady growth pattern during the second quarter of 2017, inching up 0.7 percent to $10.430 trillion, according to new Federal Reserve data. That was the biggest number for mortgage debt outstanding since the first quarter of 2011, when the market stood at $10.439 trillion. Most of the growth has been in Fannie Mae, Freddie Mac and Ginnie Mae servicing but portfolio holdings of whole loans are also on the upswing. There was...[Includes two data tables] Read More

HUD IG Finds Weak Agency Oversight of Servicer Loss Mitigation Activity, HUD Seeks Tweaks on Recommendations

The Department of Housing and Urban Development has asked its internal watchdog to make some “minor adjustments” to its recommendations following recent audit findings of inadequate HUD monitoring of servicers’ loss mitigation activities. Commenting on the HUD Inspector General’s report, HUD asked for some minor tweaks so that it can best implement the IG’s recommended changes, which include revisions in the department’s monitoring policies and procedures, development of new policies and procedures for sharing new information, and indemnification and administrative actions. The IG undertook... Read More

Banking Regulators Propose MSR Break for Smaller Banks

Federal banking regulators this week formally proposed changes to capital rules that would give smaller institutions more leeway to hold mortgage-servicing rights. Current rules require banks to take capital deductions for any MSR holdings that exceed 10 percent of tier 1 capital. Some say this requirement has contributed to the banking industry’s retreat from the mortgage servicing business. The proposal would raise... Read More

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