Expect mortgage lenders to finally conquer their fear of repurchases in 2016 and ease their standards, but whether those changes will be enough to spur major growth in volume is the big question.
The sources of that doubt are several likely drags on the market: higher rates, higher costs and mixed conditions in the secondary market.
On the plus side, lenders seem increasingly comfortable with Fannie Mae and Freddie Mac’s demands.
“We fully understand when we might be buying back a mortgage if we underwrite to their [expanded] guidelines,” said Scott Haymore, TD Bank’s head of pricing and secondary markets. “I think they’ve made it very clear.”
Both the government-sponsored enterprises, and the Federal Housing Administration that insures loans sold by into Ginnie Mae securitizations, have been encouraging broader lender underwriting and plan to continue to do so next year.
The GSEs have limited lenders’ liabilities […]
The House Financial Services Committee approved a bill Tuesday that would direct the Federal Housing Administration to relax restrictions on its condominium loan program.
Sponsored by Rep. Blaine Luetkemeyer, R-Mo., the bill would streamline the FHA’s certification requirements for condo projects, allow more commercial space in FHA-approved condo buildings and relax owner-occupancy requirements.
Supporters of the condo bill claim it would open up homeownership opportunities for first-time buyers and urban families. The bill would also provide the Rural Housing Service with direct endorsement authority for the first time. Currently, RHS officials must approve each loan package. The committee approved the legislation by a 44-10 vote.
The House committee also approved a data security bill that would require all financial companies to have similar security protections and notification requirements as banks.
The bill, sponsored by Reps. Randy Neugebauer, R-Texas, and John Carney, D-Del […]
The Federal Housing Finance Agency said Wednesday that conforming loan limits for mortgages purchased by Fannie Mae and Freddie Mac will remain at existing levels except in 39 high-cost counties.
The current loan limits are $417,000 nationwide and $625,000 in high-cost areas. The limits will rise in 2016 in 11 counties in Colorado, five in Massachusetts, two in New Hampshire, four in California, 14 in Tennessee and three in Washington.
In California, Napa County’s loan limits will be the highest in 2016 at $625,500, followed by San Diego County at $580,750 and Sonoma County at $554,300. Colorado will see the highest increases in 2016, up $34,500 to $458,850 in 11 counties including Denver and Boulder.
The FHFA, the regulator of Fannie, Freddie and 11 Federal Home Loan Banks, sets higher loan limits in high-cost counties as a function of […]
The implementation of new mortgage disclosure requirements by the Consumer Financial Protection Bureau has been a significant transition for all lenders, but the compliance process has been particularly thorny for wholesale lenders.
The rules, which took effect Oct. 3, put a premium on accuracy and require that borrowers have three days to review a final Closing Disclosure before closing.
But the complications with upgrading software in order to produce the new forms and ensuring that estimated loan pricing in the disclosure is accurate, among other things, have been magnified in wholesale loan transactions, where there are three parties to the loan transaction instead of just two.
“Wholesale is a weak link in the [CFPB] rule, because the rule says the least about the interaction that exists between the” wholesale lender and the mortgage broker, said Robert Lotstein, managing attorney of Lotstein Legal in Washington.
Issues have included mortgage brokers providing […]