The latest economic and policy trends facing mortgage servicers

Join this webinar for an in-depth roundtable discussion on economic and policy trends impacting servicers as well as a look ahead at strategies servicers should employ in the next year.

2021 RealTrends Brokerage Compensation Report

For the study, RealTrends surveyed all the firms on the 2021 RealTrends 500 and Nation’s Best rankings, asking for annual compensation data for the 2020 calendar year.

Zillow analyst on whether home prices can keep climbing

Today’s episode of HousingWire Daily features an interview with Nicole Bachaud, as she discusses annual and monthly home price appreciation growth, rising inventory levels and rent prices.

Lenders, it’s time to consider offering non-QM products

The non-QM market is making a comeback following a pause in 2020. As lenders rush to implement, Angel Oak is helping them adopt these new lending products.

Mortgage

FHA loans could face “tidal wave of defaults”

All indices hit series high

The National Mortgage Risk Index for Agency purchase loans rose in November to 11.69%, up from the average of 11.29% for the prior three months, according to the American Enterprise Institute’s International Center on Housing Risk.

The risk indices for Fannie Mae, Freddie Mac, the FHA, and the VA all hit series highs in November.  

"The increase in risk for all the major government agencies over the past two years is cause for concern," said Stephen Oliner, co-director of AEI's center. "This is especially true for FHA loans, which would experience a tidal wave of defaults if we have another severe financial crisis."  

The November results are based on 208,000 home purchase loans, nearly the universe of such loans with a government guarantee.  With the addition of these loans, the total number of loans that have been risk rated in the NMRI since November 2012 moved above 5 million.  

Other notable takeaways from the November NMRI include the following:

  • There continues to be little discernible volume impact from the QM regulation: over the past 3 months, 23% of loans had a total DTI above 43%, up a shade from the share in 2013:H2. 
  • FHA is not compensating for the riskiness of its high DTI loans; Fannie and Freddie are compensating only to a limited extent.
  • Fannie is not compensating for the riskiness of its 97%% CLTV loans, having acquired 68,000 such loans over the last 25 months.
  • Major shifts have occurred in originator type, with non-bank lenders now accounting for over 50 percent of agency securitizations and demonstrating increasing risk levels.  Fed and OCC surveys have failed to capture these trends. 
  • FHA’s NMRI stood at 24.26% in November, up 0.3 percentage point from the average for the prior three months (revised).   The November level is 1.7 percentage points  higher than a year earlier and 3.4 percentage points higher than two years ago. The high level risks fueling home price volatility, particularly in lower income and minority areas.
  • The softness in mortgage lending is not due to tight standards but to reduced affordability, loan put back risk, and slow income growth for many households. 

Most Popular Articles

These are the hottest housing markets in America

A housing market report from RE/MAX found that 36 of 51 metro areas had double-digit year over year sale price increases in August. Boise led the way.

Sep 17, 2021 By

Latest Articles

Housing permits hold the key for economic expansion

Housing permits, for me, is one of the most important housing and economic data lines we have in America. As long as housing permits are moving upward, not only is housing doing ok but the economic expansion is moving along nicely post-1996. HW+ Premium Content.

Sep 21, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please