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Posts Tagged ‘mortgage market’

Wells Fargo Reports Growth in Originations

July 23rd, 2014 Comments off

According to nationalmortgagenews.com, Wells Fargo executives welcome the effort by Federal Housing Finance Agency Director (FHFA) Mel Watt to expand mortgage credit availability, but caution that capturing the lower-credit quality homebuyer is not likely to increase the size of the mortgage market nor impact earnings of mortgage originators. The nation’s largest mortgage lender reports a 30 percent increase in residential originations in Q2, but no growth in gain-on-sale margins. Wells Fargo Chief Financial Officer John Shrewsberry tells MHProNews, “The second quarter benefited from a seasonally stronger purchase market with 74% of our originations coming from home purchases compared to 66% last quarter.” ##

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Americans’ Optimism Grows about Housing Market

January 8th, 2014 Comments off

A monthly housing survey indicates half of the respondents are optimistic about obtaining credit for a mortgage, an increase over the 45 percent who felt that way one year ago, despite the recent rise in mortgage rates. This survey from December marks the highest sentiment of respondents since Fannie Mae began tracking consumers’ attitudes three years ago. Respondents who think it is a better time to sell their house and to buy a house both rose in the survey, MHProNews has learned from nationalmortgagenews.com. Says Doug Duncan, chief economist at Fannie Mae, “The marked improvement in housing market sentiment over the course of 2013 bore out our view going into the year that the housing recovery was on a firm footing. These consumer attitudes should support a continued but measured housing recovery as we move through 2014.”

(Photo credit:  Greg Vote/Getty Images–two-story  manufactured home for sale)

Fannie Mae’s Portfolio is Shrinking

January 2nd, 2014 Comments off

The secondary market mortgage portfolio of Fannie Mae has continued to decline, as directed by the government-service enterprise (GSE) regulator. The $42 billion in mortgages it acquired in November represented a 14 percent drop from October. As reported by nationalmortgagenews.com, Fannie’s portfolio fell below $500 billion for the first time in more than ten years. Just two years ago, MHProNews has learned the portfolio was at $700 billion. Fannie purchased $99 billion in loans in November from its lenders. Additionally, the secondary market agency committed to purchase $47 billion in November, a drop of 14.5 percent from October, 2013, the lowest level in two years.

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Mortgage Finance Reform Tops Congressional Agenda

July 8th, 2013 Comments off

House Republicans, led by Rep. Jeb Hensarling of Tex., Chairman of the House Financial Services Committee, are getting set to introduce mortgage finance reform legislation that will totally eliminate government sponsored enterprises (GSEs) and replace them with a private system. Knowing all the features are not likely to pass, the goal of the representatives who are assisting in drafting the measure is to mark a point from which to negotiate. The bipartisan bill from the Senate, introduced by Bob Corker (R-Tenn.) and Mark Warner (D-Vir.), while cutting out Fannie Mae and Freddie Mac, would still provide a definite role for the government in the mortgage market, and has already received some industry support. If Hensarling is too unyielding, he’s likely to lose support of the GOP representatives who have ties to the housing industry, according to what nationalmortgagenews tells MHProNews. If too moderate, he may lose the more conservative members who are dead set on eliminating the GSEs. Says Brandon Barford, a vice president at ACG Analytics, “Negotiating with the Senate and the White House and other stakeholders, I think he’s going to have difficulty if his bill is dramatically different than Corker-Warner, if there’s little to no government role. I also question whether he (Hensarling) has enough votes to get it out of committee. He’s not going to get any Democrats, and he has a very slim margin to lose Republicans.”

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CFPB Director takes Questions

June 25th, 2013 Comments off

Consumer Financial Protection Bureau Director Richard Cordray, in a speech followed by a Q and A before the Exchequer Club, said more commotion than necessary is being made about the qualified mortgage (QM) rule. He says lenders will continue lending as they have in the past, even outside the rule, according to nationalmortgagenews. For a lender “to not make those mortgages and leave that money on the table and leave people un-served because of some vague fear that they can’t quite articulate; that doesn’t sound to me like the kind of good decision-making that lenders have made for years,” said Cordray. He agrees with the chief economist at Moody’s Analytics, Mark Zandi, who says $20 billion of the $1.25 trillion mortgage market will fall outside the QM rule, which amounts to two percent of the total. Noting the agency is trying to be flexible in its overall approach, when questioned about the extensive mortgage data the CFPB is currently gathering, Cordray said the information collected will help a future director make more solid policy decisions. Speaking of his own battle with Republicans over his confirmation, as MHProNews has learned, he does not profess to know what was in the mind of the Dodd-Frank Act congressional creators, but feels the structure allows the ability to reshape policy as needed.

(Photo credit: ABCNews–CFPB Director Richard Cordray)

Policymakers should Deal Gingerly with FHA

May 13th, 2013 Comments off

While many call for the Federal Housing Authority (FHA) to reduce its presence in the mortgage market, it would not be a wise move with purchase loans as low as they are. MHProNews has learned from nationalmortgagenews, even though much of the housing market news is encouraging, only 2.3 million purchase loans were originated in 2011, according to data from the Home Mortgage Disclosure Act, and figures from 2012 show little improvement. Federal Reserve Governor Elizabeth Duke says, “The purchase market is at the lowest levels since the 1990s.” Activity in the purchase mortgage market is nearly 50 percent below that of 2000, and 23 percent below 2008 levels. Currently the government backs around 90 percent of the mortgage market. In particular, lower income and younger homebuyers are the hardest hit. Gov. Duke says, “From late 2009 to 2011, the fraction of individuals under 40 years of age getting a mortgage for the first time was half of what it was in the early 2000s.” Now 13% lower than even the pre-bubble level of 2000, FHA purchase activity has declined 34% since fiscal 2010. Returning the FHA share of the market to 10-15 percent would cut FHA purchase activity to less than 50 percent of the current volume, and restrict home-buying to the wealthier who can qualify for a mortgage. Such a move would increasingly shut the door on creditworthy families’ ability to buy a home, and likely turn the economy back on its head.

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GSEs Winding Down? Says Who?

April 5th, 2013 Comments off

In addition to guaranteeing the majority of new residential mortgages across the country, HousingWire informs MHProNews Fannie Mae and Freddie Mac, the GSEs (government-sponsored enterprises), also guarantee half of the outstanding residential mortgage debt, with the private market picking up the other half. While the Congressional Budget Office (CBO) projects that Fannie and Freddie will wind down, the return to profitability for both will likely extend their strength and longevity in the mortgage market. As the result of the rebirth of the housing market, Fannie Mae posted a gain of $17.2 billion, its largest ever; and Freddie Mac earned net income of $11 billion.

(Photo credit: Jonathan Ernst/Reuters)

Mortgage Apps Rise

December 5th, 2012 Comments off

According to Mortgage Bankers Association’s (MBA) data, refinancings accounted for 83 percent of new mortgage business, up from 81 percent the week before, as mortgage applications rose five percent, apparently with little concern for the fiscal cliff issue. Tying the all-time low, the average contract rate for a 30-year FHA-insured loan fell two basis points to 3.34 percent. Nationalmortgagenews tells MHProNews 30-year fixed rate mortgages (FRMs) with jumbo loan balances rose four points to 3.79 percent. Tracking the market since 1990, MBA’s survey covers 75 percent of the retail residential mortgage market.

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Fed Lending Reforms due Soon

July 9th, 2012 Comments off

azstarnet reports the two major mortgage market overseers in the federal government are trying to convince private lenders to ease up on lending restrictions that have become tighter than those required by Fannie Mae and Freddie Mac, which are under the jurisdiction of the Federal Housing Finance Agency, and the Federal Housing Administration (FHA), which administers low-cost loans. Saying a minor infraction in documentation can conceivably cost hundreds of thousands of dollars, lenders have adopted “overlay” rules adding extra fees, larger down payments , and requiring higher credit scores than the GSEs require. In addition, loan originators are unsure of the effect of upcoming Dodd-Frank regulations, and do not want to be charged with underwriting deficiencies after 2-3 years of a loan that has been on time. MHProNews.com has learned FHFA and FHA are expected to announce reforms soon.

(Image credit: Federal Housing Administration)

CFPB to Require more Transparency in Reverse Mortgage Market

June 29th, 2012 Comments off

NationalMortgageNews reports senior citizens, the primary target of reverse mortgages, do not fully understand its risks and features and the tradeoffs involved, leading the Consumer Financial Protection Bureau (CFPB) to plan stronger disclosure requirements. In a conference call with reporters, CFPB Director Richard Cordray said, “They may focus primarily on the amount of money they can garner in the short term, and underestimate the long-term costs and risks.” A study by the bureau last year disclosed 73% of borrowers accessed nearly all of their home equity available in the reverse mortgage, with little or no planning for taxes and insurance in the future. While the bureau does not plan to eliminate any current products, Cordray reiterated CFPB will use its enforcement authority to root out unfair and deceptive practices. MHProNews.com has learned of mailed literature claiming a reverse mortgage is a government benefit.

(Image credit: Senior Equity Financial)