Share of Portfolio Lending Hits New Low in 2007

Lenders securitized a record share of their originations in 2007, according to a new analysis of data in the Inside Mortgage Finance MBS Database. Portfolio lending accounted for 25.9 percent of the $2.43 trillion in total mortgage production last year, the lowest share on record. The government-sponsored enterprises increased their share of mortgage origination funding in 2007, accounting for 43.7 percent of production, up from 27.6 percent the previous year.

HUD Inches Toward RESPA Complaint Web Site

The Department of Housing and Urban Development is soliciting comments for the third time in four years on a proposed Web site through which complaints regarding alleged violations of the Real Estate Settlement Procedures Act can be filed. HUD said the Web site will be used to assist in RESPA enforcement and protect consumers against unfair and illegal fees and charges, as well as abusive lending practices. After years of delays, the proposal was sent to the Office of Management and Budget for review last week.

Latest Survey Shows Results of Various Workout Strategies

Mortgage servicers, investors and others are employing a variety of workout strategies to minimize their current losses and resolve problem loans. But there are some big differences in the way various players handle mortgage defaults and property sales.

That’s why Inside Mortgage Finance and Campbell Communications have just completed the first national study of loss mitigation performance, involving a major survey of real estate agents and brokers.

An unprecedented survey report, Mortgage Loss Mitigation in 2008: Real Estate Agents Report on Lender Practices, will be released in early April. The survey focuses on loss mitigation activity in January and February 2008 and will provide critical insights for servicers, investors, and asset managers.

Key issues to be addressed in the study are:

• What are the best real estate management practices for pre-foreclosure sales, short sales, and REOs?
• What real estate commissions are commonly being paid for short sales and REO sales?
• Do reduced real estate commissions result in slower sales?
• What are the most effective tactics for speeding up the sale of REO properties?  
• What are the reasons some agents do not list short sales or REOs?
• What are the reasons some agents do not show homebuyers short sale and REO properties?  
• How do real estate agents rate specific mortgage servicers on pre-foreclosure and short sales?
• How do real estate agents rate specific mortgage investors on REO sales?

Actionable Intelligence for Senior Management

The survey report will provide mortgage servicing executives and loss mitigation teams with quantifiable data about what is working and what is not – for servicers, real estate agents and home sellers – in today’s stressed workout environment. 

For more about this important new study, view the complete prospectus at
http://www.imfpubs.com/survey_reports/prospectus.pdf. 

The survey instrument can be viewed online at http://www.campbellsurveys.com/agent08.

For information on how to obtain the full survey results, contact John Campbell at at john@campbellsurveys.com or (202) 363-2069.

Reports of Administration Talks to Loosen FHA Underwriting for Refis

Representatives of the Bush Administration reportedly were actively debating this week whether to loosen FHA’s underwriting requirements in order to permit more troubled subprime borrowers to refinance into more affordable fixed-rate FHA loans.

According to reports, the talks revolve around the FHA’s current underwriting requirement that borrowers can’t have missed a loan payment in the previous six months, regardless of whether they are current at the time of applying for a new FHA mortgage. It was unclear whether the administration’s latest mortgage relief initiative would be channeled through FHASecure or the regular FHA mortgage program.

OFHEO Agrees to Lower Fannie’s and Freddie’s Capital Surcharge

In a move aimed at encouraging Fannie Mae and Freddie Mac to do more to help add liquidity to the battered residential mortgage market, the Office of Federal Housing Enterprise Oversight announced this week it was immediately reducing the two companies’ capital surcharge from 30 to 20 percent.

Regulators said the move would give Fannie and Freddie the ability to purchase another $200 billion in MBS for their portfolios. The agency also said this change and other initiatives would give Fannie and Freddie the ability to guarantee and/or purchase about $2 trillion in mortgages this year. Last year the GSEs portfolio purchases totaled $297 billion while their total business – guarantee and portfolio purchases – reached $1.32 trillion.

Mortgage Market on Wild Roller Coaster Ride This Week

The mortgage market and companies linked to the industry’s well publicized woes found themselves on a wild roller coaster ride this week. Most mortgage-related firms saw their stock prices fall dramatically on Monday in the wake of news that investment bank Bear Stearns was being sold off at a fire-sale price of just $2 a share.

But then the combination of another hefty cut in the Fed’s interest rates and news that regulators would be loosening Fannie Mae’s and Freddie Mac’s capital requirements, sent mortgage stocks soaring upwards on Tuesday. Countrywide, Fannie Mae and Freddie Mac saw their per share stock prices jump 25 percent or more on Tuesday. And those mortgage-related stock gains continued in early trading on Wednesday even though the Dow Jones Industrial Average was down.