November 8, 2018

Latest from Inside Mortgage Finance

Jumbo Lending Surges in 2Q18

Overall jumbo volume recovered from the the first quarter slump, but conforming-jumbo securitization continued to slip.

Read more in Inside Mortgage Finance.

Most Loan Products Saw Declining Volume in 3Q18, But Fledgling Expanded-Prime Sector Continued to Grow

The modest decline in total first-lien mortgage originations during the third quarter affected most sectors of the market, but it hit a little harder at the prime-jumbo space, according to an exclusive new Inside Mortgage Finance analysis. (Includes two data charts.)

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With Production and Profits Slowing, Ginnie Mae Tells Nonbank Servicers to Draft Liquidity Plans

Increasingly worried about the liquidity of its largest nonbank issuer/servicers, Ginnie Mae is telling this select group of companies to come up with a plan to address what an agency spokesman characterized as “eventualities.” (Includes one data chart.)

Purchase-Mortgage Lenders Adjusting to Tighter Margins As Market Shifts from Refinances

Lenders that predominantly originate purchase mortgages might have been better prepared for the shift away from refinances but they’re not immune to the tighter margins that have accompanied increased competition for volume in recent months.

Feature Stories

Inside the CFPB

CFPB Exams Continue Apace Despite Its Seemingly Soft Touch

Acting CFPB Director Mick Mulvaney is perceived as someone who’s taking a softer touch on enforcement matters than his predecessor, but nonbank mortgage originators are still being examined at a regular clip, according to industry attorneys As for how many lenders are being examined each year, that’s a different matter. The agency, as a practice, does not disclose those figures. “We’ve had a significant number of nonbank clients get examined by the CFPB ...

Inside Mortgage Trends

GSE Credit Box Opened Slightly Wider In Third Quarter as Rates Ticked Higher

The credit window for Fannie Mae and Freddie Mac single-family mortgages opened a little wider during the third quarter of 2018 as competition intensified in the primary market. A new Inside Mortgage Trends analysis of mortgage-backed securities issued by the government-sponsored enterprises during the third quarter revealed modest increases in the shares of purchase mortgages with low credit scores, although trends in loan-to-value ratios were mixed ... [Includes two data charts]

Inside MBS & ABS

Agency Single-Family MBS Production Softened in October as Purchase Market Continued to Deflate

New issuance of single-family MBS by Fannie Mae, Freddie Mac and Ginnie Mae took a predictable downward turn in October as seasonal factors weighed on the U.S. housing market and refinance activity continued to sputter. (Includes two data charts.)

Inside The GSEs

GSEs Report $6.7 Billion Combined Profits, Attract More CRT Investors

Fannie Mae and Freddie Mac posted a combined net profit of $6.72 billion for the third quarter while continuing to expand their credit-risk transfer programs. GSE earnings as a whole were down slightly from the $6.96 billion in the previous quarter, but that can be primarily attributed to Fannie’s 10.0 percent drop from the second quarter to $4.01 billion. Fannie’s new chief financial officer, Celeste Brown, said the decrease was due to lower credit-related income ... [Includes one data chart]

Inside Nonconforming Markets

Expanded-Credit MBS Underwriting Not Loosening Much; Prepayment Rates High

Trends in underwriting expanded-credit mortgages differ from what’s happening in the broader market, according to a new analysis by Inside Nonconforming Markets. Lenders have generally started to loosen standards for debt-to-income ratios and loan-to-value ratios as originations decline and the product mix shifts from refinances to purchase mortgages. However, in the expanded-credit market, credit characteristics were largely stagnant in the past year ... [Includes one data chart]

Inside FHA/VA Lending

Brokers Gain Share in FHA Lending, But Fall Back in VA Production

Wholesale-broker production of FHA loans was up 8.1 percent from the second to the third quarter of 2018, making it the fastest-growing channel in the program, according to a new Inside FHA/VA Lending analysis of Ginnie Mae mortgage-backed securities data. However, the volume of brokered VA loans securitized during the third quarter fell 4.0 percent from the previous period, the only channel to show a loss over that period. Correspondent production remained king in the FHA segment, with volume rising 7.4 percent from the second quarter. Correspondents generated 48.9 percent of FHA loans delivered into Ginnie MBS pools over the first nine months of the year. PennyMac Financial and Amerihome Mortgage duked it out as the top correspondent platforms in the third-quarter FHA market. Retail was runner-up with a 35.6 percent share of FHA year-to-date business, with wholesale-broker accounting for just ... [Charts]

Poll

With loan volumes declining, does your shop have plans to enter the non-QM lending market in 2019?

Yes, definitely. A solid move forward.
Yes, but only incrementally.
We’re pondering a move into non-QM, but haven’t made up our mind.
No, definitely not. We view it has too risky.

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