 | | | | By John Bancroft jbancroft@imfpubs.com Banks and thrifts reported an 11.0 percent decline in the volume of mortgage repurchases and indemnifications they made during the second quarter of 2014, compared to the first three months of the year. An Inside Mortgage Trends analysis of call-report data found that bank and thrift repurchases and indemnifications totaled $1.012 billion in the second quarter, the lowest level since the first quarter of 2008. Buyback volume has been generally declining since the third quarter of 2011 – except for a through-the-roof experience in early 2013 that resulted in $12.841 billion in buybacks, mostly by Bank of America. BofA was the buyback king at the midway point in 2014. Although its $569 million six-month total looks like peanuts compared to past amounts, BoA represented 26.5 percent of the industry total. For an exclusive look at the top 100 depositories by buybacks, see the new edition of Inside Mortgage Trends. Other areas of interest: Originations, Secondary/MBS, Regulatory, Fannie, Freddie | | By Paul Muolo pmuolo@imfpubs.com Federal Housing Finance Agency Director Mel Watt late Monday expanded ever so slightly on the regulator’s desire to keep captive reinsurers out of the Federal Home Loan Bank system: the agency wants members “to demonstrate ongoing mortgage lending activity instead of a one-time test used when an institution applies for membership.” To date, not one faction of the lending industry has expressed opposition to allowing REITs and other mortgage investors from gaining membership in an FHLB through a captive reinsurance affiliate. Speaking before a mortgage meeting sponsored by the North Carolina Bankers Association, Watt said he is aware that the proposed FHLB membership requirement “has generated significant discussion within the industry, and I encourage stakeholders to submit their views during the comment period.” He added: “In our role as regulator, FHFA has a responsibility to ensure that the banks are fulfilling their mission to support housing finance and that they are doing so in a safe and sound manner that complies with their statutory requirements.” As reported by IMFnews, 18 current members are affected by the proposed ban on captives, seven of which are mortgage real estate investment trusts. Other areas of interest: Originations, Secondary/MBS, Regulatory, Mortgage Lending & Servicing | | By Thomas Ressler tressler@imfpubs.com Consumer Financial Protection Bureau Deputy Director Steve Antonakes told attendees at the American Mortgage Conference in Raleigh this week that mortgage lenders need to start prepping for the bureau’s impending TILA/REASPA Integrated Disclosure rule, known in bureau-speak as the “TRID.” “While many mortgage institutions are already deep into implementing these changes, we want to make sure that everyone understands the need to be focusing on August 2015 now,” Antonakes emphasized. “We have allowed 21 months for the industry to implement these changes, but we are now nearly halfway through that time.” The CFPB also is working with other regulators to help ensure consistency in their examinations of mortgage lenders under the new rules and to clarify issues as needed. “We will make public our common examination guidelines and standards so that institutions will know what to expect,” the deputy director added. This week, the bureau issued an updated Small Entity Compliance Guide for the TRID, as well as the Guide to the Loan Estimate and Closing Disclosure forms, replacing the editions published early this spring. Meanwhile, Inside Mortgage Finance is sponsoring a webinar on the new regulation, “Planning for New Disclosures: The Time Is Now,” on Thursday, Sept. 11, 2:30 p.m. Other areas of interest: Originations, Regulatory | | By Paul Muolo pmuolo@imfpubs.com Stonegate Mortgage is likely to tap the securitization market by issuing securities backed by its mortgage servicing rights, according to a new research report from FBR & Co. Analyst Paul Miller and his team note that Stonegate management has been talking about securitizing MSRs for some time, but have never pulled the trigger. Such a maneuver would allow the publicly traded nonbank to leverage the asset “at favorable rates as an alternative to raising capital in either the debt or equity markets, which are high costing and could be dilutive to earnings.” Since the housing bust, very few mortgage firms have securitized MSRs, though they have used securitization vehicles for advances. MSR prices are the best they’ve been in years and given the quality of the underlying collateral an MSR bond, in theory, should do well in the market. According to figures compiled by Inside Mortgage Finance, Stonegate ranks 17th among all residential funders. Other areas of interest: Servicing, Secondary/MBS, Mergers & Acquisitions | | By Paul Muolo pmuolo@imfpubs.com Is the origination market starting to show promise once again? According to a new report on mortgage trends from Richey May & Co., Englewood, CO, the answer to that question could be yes. Unfunded lock pipelines increased among independent mortgage bankers in the second quarter, rising 38 percent over the previous quarter. According to Kenneth Richey, managing partner of RMC, “this uptick indicates that the improved market conditions will continue through the coming months.” He added: “The increase in unfunded lock pipelines suggests that we can expect to see similar, if not more improved, production in the third quarter of 2014 as well.” The advisory firm based its findings on the operating results of 37 independent mortgage banking companies across the U.S. According to figures compiled by Inside Mortgage Finance, second quarter originations turned out be better than what most analysts expected. The industry funded $295 billion in 2Q compared to just $235 billion in 1Q. IMF also has found that many large megabanks appear to be ceding origination market share to smaller nonbanks. Other areas of interest: Originations, Data/Rankings, Mortgage Lending & Servicing, Trends & Profitability | | By Charles Wisniowski, Paul Muolo, Thomas Ressler cwisniowski@imfpubs.com, pmuolo@imfpubs.com, tressler@imfpubs.com Lawmakers are finally back from their five-week August recess with House and Senate members facing a lengthy agenda and just a short period of time to get it done. Conspicuously absent from the Congressional to-do list: housing finance reform. With approximately 12 scheduled legislative days before the Nov. 4 midterm elections, industry observers note that lawmakers won’t get to some things until they return for the lame duck session, while other bills will fade away as the clock runs out. Then again, we all knew that GSE reform was a dead issue. Right? For further analysis, see Inside The GSEs… At a Senate hearing Tuesday, Sen. Warren Elizabeth, D-MA, took financial regulators to task for not making many criminal referrals to the Department of Justice regarding Wall Street executives’ role in the mortgage and housing bust… Inside Mortgage Finance and IMFnews are closing the door on their home equity lending survey. To date, roughly 25 percent of lenders said they hope to enter the home equity lending market over the next 12 months. Another 45 percent said they are already making HELOCs and hope to increase their offerings. Just 15 percent said they are not making seconds and have no plans to do so… So, you think prices being paid for nonperforming loans are getting too rich? Then you may want to try Peru. Lima, Peru, that is. DebtX said it plans to sell a $132 million portfolio of mostly residential loans on behalf of a financial institution in that South American country. ANOTHER SIGN THAT NONBANKS ARE DOING WELL: Mortgage Master of Walpole, MA, one of the largest nonbanks headquartered in the Northeast, said it is “enthusiastically looking” to increase its branch infrastructure in New York, New Jersey and Connecticut. In a statement issued to IMFnews, the company said it plans to recruit additional high quality loan originators. MORTGAGE PEOPLE: The Mortgage Bankers Association promoted Peter Grace to the position of senior vice president of strategy and member services. The announcement was made by the trade group Monday, but time constraints did not allow IMFnews to get the item in Monday’s edition. Grace has been with the trade group since 2012.
More Companies Finding Non-QM Lending a Low-Production Solution Originations are down. But each week more and more mortgage companies identify lending outside of the qualified mortgage standard as a way to boost production. What do they know that you should know? Attend the Sept. 24 Inside Mortgage Finance webinar “Unlocking the Potential of Non-QM Lending” to find out. Early bird pricing ends Sept. 10, so register now. Other areas of interest: Originations, Servicing, Personnel, Regulatory, Nonconforming | | | |
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