Continued Deterioration in Origination Quality

As home lenders and investors have recently been a little more relaxed about credit qualifications compared to just after the crisis, mortgage quality has weakened. Still, quality is better than before the crisis.

During the past three years, the quality of residential loans originated has weakened, though credit quality remains far stronger than the early 2000s and the late 1990s.

Components of borrower character like credit scores are the strongest feature of current mortgage originations, and they have weakened little over the past few years.

Source: Mortgage Daily

Best Mortgage Lenders By Category

A report based on a recent survey of consumers who were shopping for a residential loan has identified the best home lenders in a variety of categories — including government programs, jumbo loans and online services.

The 10-question survey of prospective mortgage borrowers found that before they applied for a home loan, 40 percent checked their credit report or credit score.

Saving for a down payment was cited by 36 percent. More than a quarter reported that they paid down debt, while nearly a quarter indicated they reduced spending.

Source: Mortgage Daily

Business Falls to 6-Month Low at Freddie

New business at the Federal Home Loan Mortgage Corp. retreated to its lowest level in six months. Delinquency, meanwhile, remained at its lowest level in a decade.

When September was over, Freddie Mac’s total mortgage portfolio stood at $2.1513 trillion — including a $0.2278 trillion in mortgage investments and $1.9235 trillion in outstanding mortgage-related securities and other guarantees.

The McLean, Virginia-based company revealed the metrics in its Monthly Volume Summary, which indicated that the book of business had expanded from $2.1472 trillion a month earlier and $2.0568 trillion a year earlier.

Source: Mortgage Daily

Large Agency MSR Offering Hits Market

Bids are being sought for servicing rights on a large portfolio of agency mortgages. The offering has a moderate concentration of Golden State and Sunshine State loans.

Mortgage servicing rights on 20,168 residential loans that had a collective unpaid principal balance of $5.232 billion as of Sept. 30 are being sold through the auction process.

Included in the offering are MSRs on $2.005 billion in Fannie Mae loans, $0.310 billion in Freddie Mac mortgages, and $2.917 billion in Ginnie Mae l loans.

Source: Mortgage Daily

Mortgage Rates Up 92 BPS From Year Ago

Over the past year, weekly fixed interest rates on single-family loans have soared 92 basis points. But little change was reported from last week, and more of the same is expected.

On conventional loans utilized to finance a home purchase with amounts up to the conforming mortgage limit of $453,100, thirty-year fixed rates averaged 4.77 percent during September.

Compared to the previous month, conforming interest rates slipped a single basis point. Mortgage rates have soared, however, 63 BPS from September 2017.

Source: Mortgage Daily

Diamond Residential Mortgage Settles Alleged Fraud

Diamond Residential Mortgage Corp. has agreed to pay more than $1 million to settle alleged fraudulent activity by former employees.

In March, the Lake Forest, Illinois-based mortgage-banking firm was forced by the Illinois Department of Financial and Professional Regulation to shut down a branch in Springfield.

The department says it has evidence that employees who worked at the branch had engaged in fraudulent loan origination activities.

Source: Mortgage Daily

OCC Sued Again Over Non-Bank Regulation

A second lawsuit has been filed against the Office of the Comptroller of the Currency alleging that a new OCC charter for non-banks violates federal laws and procedures. But the OCC is confident in its authority.

In April 2017, the Conference of State Bank Supervisors filed a complaint in U.S. District Court for the District of Columbia against the OCC, the regulator for national banks.

The CSBS, a national organization of state bank regulators, was challenging an OCC decision to create a new special-purpose national bank charter for financial technology and other non-bank firms.

Source: Mortgage Daily

Mortgage Delinquency Skyrockets

Thirty-day delinquency jumped last month more than it has in a decade. But the level of foreclosures is now lower than before the recession.

Residential loans that were either at least 30 days delinquent or in the foreclosure inventory numbered 2.317 million as of Sept. 30, Black Knight Inc. reported.

The U.S. non-current inventory consisted of 2.049 million mortgages delinquent but not in foreclosure, and another 268,000 loans in the foreclosure pre-sale inventory.

Source: Mortgage Daily

Record YTD Originations at Guild Mortgage

Quarterly originations slowed at Guild Mortgage Co., though year-to-date volume ascended to an all-time high. The servicing portfolio reached a new record, and staffing hasn’t changed much over the past year.

The San Diego-based company reported that it serviced roughly 217,146 residential loans with a collective unpaid principal balance of $44.86 billion as of Sept. 30.

That turned out to be the biggest mortgage servicing portfolio ever for Guild since its inception in 1960. While the third-party portion of the portfolio wasn’t disclosed, it was last reported at nearly $42 billion.

Source: Mortgage Daily

Rise in Mortgage Applications Driven by Refinances

Mortgage application volume moved higher last week, and it was refinances that drove the increase. Jumbo rates remained lower than conforming rates — which rose to a seven-year high.

Applications for home loans during the week ended Oct. 19 accelerated on a seasonally adjusted basis from one week earlier by 4.9 percent, according to the Market Composite Index.

Even without any seasonal adjustments, the index — a measure of retail residential loan application volume — moved higher by 5 percent from the week ended Oct. 12.

Source: Mortgage Daily