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Commercial And Multifamily Mortgage Delinquencies Remain Low

Commercial and multifamily mortgage delinquencies stayed low in the first quarter of 2019, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Delinquency Report.


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“Steady U.S. economic growth continues to support the financing and values of commercial and multifamily properties,” said Jamie Woodwell, MBA’s Vice President of Commercial Research & Economics. “Commercial/multifamily mortgage delinquencies remain at or near record lows for most capital sources, and it’s hard to imagine loans performing better than they currently do. Given the environment, there’s little reason to expect a marked deterioration of near-term performance.”


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MBA’s quarterly analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80 percent of the commercial/multifamily mortgage debt outstanding.


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Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the first quarter were as follows:

  • Banks and thrifts (90 or more days delinquent or in non-accrual): 0.48 percent, unchanged from the fourth quarter of 2018;
  • Life company portfolios (60 or more days delinquent): 0.04 percent, a decrease of 0.01 percentage points from the fourth quarter of 2018;
  • Fannie Mae (60 or more days delinquent): 0.07 percent, an increase of 0.01 percentage points from the fourth quarter of 2018;
  • Freddie Mac (60 or more days delinquent): 0.03 percent, an increase of 0.02 percentage points from the fourth quarter of 2018; and
  • CMBS (30 or more days delinquent or in REO): 2.61 percent, a decrease of 0.16 percentage points from the fourth quarter of 2018.

MBA’s analysis incorporates the measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.


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Construction and development loans are generally not included in the numbers presented in MBA’s report, but are included in many regulatory definitions of ‘commercial real estate,’ despite the fact they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers, or other income-producing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties

Mortgage Applications Increase This Week

Mortgage applications increased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 31, 2019. This week’s results included an adjustment for the Memorial Day holiday.


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The Market Composite Index, a measure of mortgage loan application volume, increased 1.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10 percent compared with the previous week. The Refinance Index increased 6 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 14 percent compared with the previous week and was 0.5 percent higher than the same week one year ago.


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“Mortgage rates dropped to their lowest level since the first week of 2018, driven by increasing concerns regarding the ongoing trade tensions with China and Mexico,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Some borrowers, particularly those with larger loans, jumped at the opportunity to refinance, bringing the index and average refinance loan size to their highest levels since early April. Additionally, refinances for FHA and VA loans jumped by 11 percent.”


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Added Fratantoni, “Coming out of the Memorial Day holiday, and likely impacted by the financial market volatility caused by the trade tensions, purchase application volume declined for the week. Potential homebuyers may be more cautious given the heightened economic uncertainty.”


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The refinance share of mortgage activity increased to 42.2 percent of total applications from 39.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.1 percent of total applications.

The FHA share of total applications decreased to 9.5 percent from 9.6 percent the week prior. The VA share of total applications increased to 11.3 percent from 11.2 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.23 percent from 4.33 percent, with points decreasing to 0.33 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 4.09 percent from 4.18 percent, with points decreasing to 0.21 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.24 percent from 4.33 percent, with points decreasing to 0.33 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.65 percent from 3.73 percent, with points decreasing to 0.36 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.62 percent from 3.74 percent, with points decreasing to 0.19 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

Mortgage Applications Increase In Latest MBA Weekly Survey

Mortgage applications increased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 17, 2019.


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The Market Composite Index, a measure of mortgage loan application volume, increased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index increased 8 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 7 percent higher than the same week one year ago.


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“Mortgage rates fell for the fourth straight week, with the 30-year fixed rate mortgage hitting its lowest level since January 2018, leading to a rebound in refinances. The refinance index increased 8 percent to its highest level in over a month, and once again there was an increase in average refinance loan sizes, as borrowers with larger balances responded accordingly to lower rates,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase activity declined again, but remained around 7 percent higher than a year ago. We’re keeping a close eye on whether there may be some adverse effects of the ongoing global trade disputes on overall demand. Some potential homebuyers may be delaying their home search until there’s more certainty.”


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The refinance share of mortgage activity increased to 40.5 percent of total applications from 37.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8 percent of total applications.


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The FHA share of total applications decreased to 9.4 percent from 10.1 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.6 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.33 percent from 4.40 percent, with points increasing to 0.43 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) remained unchanged at 4.24 percent, with points increasing to 0.35 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.34 percent from 4.32 percent, with points decreasing to 0.47 from 0.49 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.78 percent, with points decreasing to 0.40 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.57 percent from 3.82 percent, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate
decreased from last week.

Commercial/Multifamily Originations Increase 12 Percent In The First Quarter

Commercial and multifamily mortgage loan originations rose 12 percent in the first quarter compared to the same period last year , according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. In line with seasonality trends, originations the first three months of the year were 34 percent lower than the fourth quarter of 2018.


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“The momentum seen in 2018’s record year of borrowing and lending continued in the first quarter of this year,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “First quarter volumes were higher for nearly every property type, and double-digit growth in loan volume for Fannie Mae and Freddie Mac led the increase among capital sources. Low interest rates and strong property values continue to make commercial real estate an attractive market for borrowers.”


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Compared to a year earlier, a rise in originations for industrial, health care and hotel properties led the overall increase in commercial/multifamily lending volumes. By property type, industrial (73 percent), health care (41 percent), hotels (14 percent), retail (9 percent) and multifamily (9 percent) all saw year-over-year gains by dollar volume. The dollar volume of office property loans was unchanged.


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Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) increased by 14 percent year-over-year. Life insurance company loans increased 7 percent, commercial bank portfolios increased 6 percent, while loans originated for Commercial Mortgage Backed Securities (CMBS) decreased 4 percent. 


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As is typical in the first quarter, originations decreased in comparison to last year’s fourth quarter, with total activity falling 34 percent. Among property types, declines were seen in health care (49 percent), hotels (45 percent), multifamily (40 percent), retail (32 percent) and office space (30 percent). Industrial properties bucked the overall trend, rising 17 percent from the fourth quarter of 2018.

Among investor types, the dollar volume of loans for GSEs decreased 43 percent, originations for commercial banks decreased 34 percent, loans for life insurance companies decreased by 28 percent, and loans for CMBS decreased 22 percent.

To view the full report of MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, please visit:https://www.mba.org/Documents/Research/1Q19CMFOriginationsSurvey.pdf

Independent Mortgage Bankers’ Production Volume And Profits Down In 2018

Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $367 on each loan they originated in 2018, down from $711 per loan in 2017, the Mortgage Bankers Association (MBA) reported today in its Annual Mortgage Bankers Performance Report.


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“Despite a healthy economy in 2018, the mortgage market suffered, as rate hikes hurt refinancing volume and low housing inventories priced some potential homebuyers out of the purchase market,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “For mortgage companies, there was the perfect storm of lower production revenues combined with rising expenses, which together contributed to the lowest net production income per loan since 2008. Production revenues per loan dropped despite study-high loan balances in 2018. At the same time, production expenses per loan grew to a study-high of $8,278 per loan last year.”  


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Added Walsh, “For those holding mortgage servicing rights (MSR), it was the silver lining that boosted overall profitability. Including both production and servicing operations, 69 percent of the firms posted overall pre-tax net financial profits in 2018, compared to only 47 percent of firms with net servicing income excluded.”


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Among the other key findings of MBA’s 2018 Annual Mortgage Bankers Performance Report:

>> Average production volume was $2.0 billion (8,171 loans) per company in 2018, down from $2.13 billion (8,882 loans) per company in 2017. On a repeater company basis, average production volume was $2.07 billion (8,502 loans) in 2018, down from $2.11 billion (8,824 loans) in 2017. For the mortgage industry as whole, MBA estimates production volume at $1.64 trillion in 2018, down from $1.76 trillion in 2017.


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>> In basis points, the average production profit (net production income) was 14 basis points in 2018, compared to 31 basis points in 2017. In the first half of 2018, net production income averaged 18 basis points, then dropped to 9 basis points in the second half of 2018. Since the inception of the Annual Performance Report in 2008, net production income by year has averaged 49 bps ($1,020 per loan).

>> The refinancing share of total originations (by dollar volume) decreased to 20 percent in 2018 from 25 percent in 2017. For the mortgage industry as a whole, MBA estimates the refinancing share last year decreased to 28 percent  from 35 percent in 2017.

>> The average loan balance for first mortgages reached a study-high of $251,084 in 2018, up from $245,500 in 2017. This is the 9th consecutive year of rising loan balances on first mortgages.

>> Total production revenues (fee income, net secondary marking income and warehouse spread) were 362 basis points in 2018, down from 379 bps in 2017. On a per-loan basis, production revenues were $8,645 per loan in 2018, down from $8,793 per loan in 2017.

>> Total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to $8,278 per loan in 2018, up from $8,082 in 2017.  

>> Personnel expenses averaged $5,524 per loan in 2018, up from $5,346 per loan in 2017.

>> Productivity was 1.8 loans originated per production employee per month in 2018, down from 1.9 in 2017. Production employees include sales, fulfillment and production support functions.

>> Net servicing financial income, which includes net servicing operational income, as well as mortgage servicing right (MSR) amortization and gains and losses on MSR valuations, was $203 per loan in 2018, up from $64 per loan in 2017.

Including all business lines, 69 percent of the firms in the study posted pre-tax net financial profits in 2018, down from 80 percent in 2017. In the first half of 2018, 73 percent of reporting repeater firms posted pre-tax financial profits, compared to 55 percent in the second half of 2018.

MBA’s Mortgage Bankers Performance Report series offers a variety of performance measures on the mortgage banking industry and is intended as a financial and operational benchmark for independent mortgage companies, subsidiaries and other non-depository institutions. Of the 280 firms that reported production, 80 percent were independent mortgage companies and remaining 20 percent were subsidiaries and other non-depository institutions.

Mortgage Credit Availability Increased In March

Mortgage credit availability increased in March according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool.

The MCAI rose 1.1 percent to 182.1 in March. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI increased (3.6 percent), while the Government MCAI declined (1.2 percent). Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 5.2 percent, while the Conforming MCAI increased by 1.4 percent.


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“Credit availability increased in March, primarily due to a spike in jumbo mortgage offerings. The jumbo sub-index increased 5 percent and reached its highest level since last November, as the recent decline in mortgage rates led to a jump in refinances from borrowers with larger loans,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The credit supply for government loans decreased in March, as investors continue to reduce FHA and VA streamline refi offerings.” 

CONVENTIONAL, GOVERNMENT, CONFORMING, AND JUMBO MCAI COMPONENT INDICES

The MCAI rose 1.1 percent to 182.1 in March. The Conventional MCAI increased (3.6 percent), while the Government MCAI declined (1.2 percent). Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 5.2 percent, and the Conforming MCAI increased by 1.4 percent. 


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The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk/availability for their respective index. The primary difference between the total MCAI and the Component Indices are the population of loan programs which they examine. The Government MCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government loan programs. The Jumbo and Conforming MCAIs are a subset of the conventional MCAI and do not include FHA, VA, or USDA loan offerings. The Jumbo MCAI examines conventional programs outside conforming loan limits, while the Conforming MCAI examines conventional loan programs that fall under conforming loan limits.


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The Conforming and Jumbo indices have the same “base levels” as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted “base levels” in March 2012. MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the “base period”) relative to the Total=100 benchmark.                                                       


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EXPANDED HISTORICAL SERIES

The Total MCAI has an expanded historical series that gives perspective on credit availability going back approximately 10-years (expanded historical series does not include Conventional, Government, Conforming, or Jumbo MCAI). The expanded historical series covers 2004 through 2010, and was created to provide historical context to the current series by showing how credit availability has changed over the last 10 years – including the housing crisis and ensuing recession.  Data prior to March 31, 2011, was generated using less frequent and less complete data measured at 6-month intervals and interpolated in the months between for charting purposes. Methodology on the expanded historical series from 2004 to 2010 has not been updated.

Hamilton Group Funding’s Mark Korell Joins MBA Opens Doors Foundation Board of Directors

The MBA Opens Doors Foundation (Opens Doors) today announced that Mark L. Korell, Chairman of Hamilton Group Funding, has joined its Board of Directors. Opens Doors provides mortgage and rental assistance to families with critically ill or injured children, allowing parents and guardians to be by a child’s side during treatment, without fear of jeopardizing their home.

“Mark has deep experience not just in the mortgage industry, but in volunteer leadership for non-profit housing related organizations,” said Debra W. Still, CMB, President and CEO of Pulte Mortgage, and Opens Doors Foundation Chairman. “He will bring a genuine commitment to the vulnerable families struggling to keep a roof over their heads during one of the most difficult times in their lives. We are thrilled he will lend his time and expertise to the board.”


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Korell brings an extensive track record of success to Opens Doors. Currently, he serves as Chairman of Hamilton Group Funding, where his leadership helped the firm boast record levels of residential mortgage lending volume and profitability in the over four years that he served as President and CEO. Prior to Hamilton Group Funding, Korell held senior leadership positions at JP Morgan Chase, Wells Fargo Home Mortgage, GMAC Mortgage Group, and Residential Funding Corporation (RFC), and was on the Fannie Mae National Advisory Council and the Mortgage Bankers Association (MBA) National Board of Governors. 


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“On behalf of Hamilton Group Funding, I am honored to partner with the Opens Doors Foundation as a board member, working to advance its important commitment to assist families in need of housing support as they deal with the emotional and financial stress of a critically ill child,” said Korell. “As an industry leader with more than 30 years of involvement with major charitable housing organizations, I am excited to help ODF move forward to become a major national resource to families in need.”


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“Mark’s enthusiasm and energy will aid the Foundation as we enter a new phase of growth,” said Opens Doors Foundation President Deborah Dubois. “His leadership on the National Board of Trustees of Mercy Housing, and his role as Vice Chairman of the International Board of Directors for Habitat for Humanity, will serve us well.”


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Since 2012, the Foundation has helped more than 3,100 families from 47 states, distributing more than $4.3 Million in funding. Support from MBA allows the Foundation to pass on 100 percent of donations to families in need of assistance. Potential grant recipients are identified through the Foundation’s ongoing relationship with children’s hospitals in Akron, Ohio; Boston, Massachusetts; Dallas-Fort Worth, Texas; Denver, Colorado; Houston, Texas; Northern and Southern California; and Washington, D.C. 

Commercial And Multifamily Mortgage Delinquencies Remain Low

Commercial and multifamily mortgage delinquencies remained at a low rate in the final three months of 2018, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Delinquency Report.


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“It’s hard to imagine commercial and multifamily mortgages performing much better than they have recently,” said Jamie Woodwell, MBA’s Vice President of Research and Economics. “Future performance will be largely driven by changes in the economy and how they affect property incomes, property values and the ability of owners to refinance when their loans come due. Currently, all of those factors are favorable.”


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MBA’s quarterly analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.


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Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the fourth quarter were as follows:

>>Banks and thrifts (90 or more days delinquent or in non-accrual): 0.48 percent, unchanged from the third quarter of 2018;

>>Life company portfolios (60 or more days delinquent): 0.05 percent, an increase of 0.01 percentage points from the third quarter of 2018;

>>Fannie Mae (60 or more days delinquent): 0.06 percent, a decrease of 0.01 percentage points from the third quarter of 2018;

>>Freddie Mac (60 or more days delinquent): 0.01 percent, unchanged from the third quarter of 2018; and

>>CMBS (30 or more days delinquent or in REO): 2.77 percent, a decrease of 0.28 percentage points from the third quarter of 2018.

MBA’s analysis incorporates the measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.


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Construction and development loans are generally not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers, or other income-producing properties.  The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties.

The Rising Role Of Independent Mortgage Banks

The Mortgage Bankers Association (MBA) released a white paper, The Rising Role of the Independent Mortgage Bank – Benefits and Policy Implications, which emphasizes the vital role Independent Mortgage Banks (IMBs) play in single-family real estate finance.


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“IMBs have always served the needs of a wide variety of consumers, particularly low- and moderate-income families and first-time homebuyers. Their historic and current contribution to the mortgage market reinforces their importance to making the American dream of homeownership a reality,” said Robert D. Broeksmit, CMB, President and CEO of the Mortgage Bankers Association.


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Broeksmit continued, “It is the responsibility of all stakeholders, including regulators, to protect consumers by supporting rules and regulations that support IMBs. MBA believes the recommendations put forth in this white paper will enhance market stability and strengthen the housing finance system to better serve consumers.”


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In order to ensure a stable and liquid mortgage market for consumers that features robust competition among a wide variety of types of mortgage lenders, the white paper details a series of policy recommendations. They include:Ensuring that QM standards, as well as GSE and FHA/VA lending standards, remain focused on creditworthy borrowers and safe products. 


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>>Enhancing IMB access to longer-term, stable sources of liquidity to supplement short-term warehouse funding.

>>Providing the government housing finance programs (FHA, VA, USDA, and Ginnie Mae) with the funding and resources needed to implement improved counterparty risk standards that are transparent and risk focused, as well as to identify and respond to emerging risks.

>>Ensuring the mortgage servicing compensation regimes of the GSEs and Ginnie Mae preserve and support a deep and liquid market for mortgage servicing rights (MSRs) for servicers of all sizes and business models.

>>Further improving the value and liquidity of Ginnie Mae MSRs by continuing to advance options discussed in the Ginnie Mae 2020 white paper, including improvements to their MSR financing agreements and allowing loan-level servicing transfers (i.e., “split pools”).

>>Standardizing the servicing requirements at the government guarantors and clarifying the nature of the liability that participation in their programs entails. 

>>Making the mortgage market more attractive to banking institutions, including by addressing punitive capital requirements on mortgage servicing assets and reducing FHA False Claims Risk.

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New Home Purchase Mortgage Applications Rise In January, But Remain Flat Year-Over-Year

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for January 2019 shows mortgage applications for new home purchases remained unchanged from a year ago. Compared to December 2018, applications increased by 43 percent. This change does not include any adjustment for typical seasonal patterns.


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“After two lackluster months, new home sales surged almost 30 percent in January to the fastest pace since our survey began in 2013,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “ The healthy job market, faster wage growth, moderating price gains and lower mortgage rates,  all helped home sales recover. Additionally, builders seem to be seeing improvement in their labor shortages, as government survey data showed increases in construction hiring and openings in December.”


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MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 713,000 units in January 2019, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.


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The seasonally adjusted estimate for January is an increase of 29.2 percent from the December pace of 552,000 units. On an unadjusted basis, MBA estimates that there were 54,000 new home sales in January 2019, an increase of 45.9 percent from 37,000 new home sales in December.


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By product type, conventional loans composed 68.7 percent of loan applications, FHA loans composed 18.6 percent, RHS/USDA loans composed 0.5 percent and VA loans composed 12.2 percent. The average loan size of new homes decreased from $334,944 in December to $334,532 in January.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.