Category Archives: Lending

Mulvaney appoints Brian Johnson to CFPB acting deputy director

Consumer Financial Protection Bureau Acting Director Mick Mulvaney announced Monday that he promoted Brian Johnson, who served as principal policy director, to serve as the agency’s acting deputy director.

Johnson’s promotion follows the resignation of Leandra English, who served as deputy director following former Director Richard Cordray’s resignation. 

In November of last year, Cordray stepped down as director of the CFPB and handpicked English as his replacement.

As previously reported, the Trump administration instead chose Mulvaney, who also serves as the director of the Office of Management and Budget, to lead the agency as acting director, spurring a controversial legal case that divided the bureau for months.

Last Friday, English announced she was giving up her claims to the director’s office, thus leaving room for a new appointment.

Prior to Johnson’s appointment to the CFPB, he served as senior counsel to Rep. Jeb Hensarling, R-Texas, at the House Financial Services Committee.

Mulvaney says that Johnson was the first person he hired at the bureau and has been an indispensable advisor.

“Brian knows the Bureau like the back of his hand.  He approaches his role as a public servant with humility and unsurpassed dedication,” Mulvaney said. “His steady character, work ethic, and commitment to free markets and consumer choice make him exactly what our country needs at this agency.”

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Genworth reveals what keeps mortgage professionals up at night

Genworth Mortgage Insurance surveyed approximately 105 mortgage professionals attending the recent Mortgage Bankers Association’s National Secondary Market Conference and Expo, in order to gauge perceptions of issues facing the mortgage industry.

Here’s what they found is keeping mortgage professionals up at night.

Genworth’s survey determined that 79% of respondents believe both rising inflation and the re-emergence of alternative mortgage products present the two biggest challenges facing our mortgage industry. Notably, an additional 21% cited that the loosening of credit standards, and excess liquidity were also sources of concern, though the jury is still out on the former concern. Do you agree? Comment on the message boards below to let us know.

“Rising interest rates and inflation, when combined with today’s inventory shortage, are accelerating home price appreciation, causing some lenders and consumers to explore less-tested methods for financing home purchases,” Genworth Mortgage Insurance President and CEO Rohit Gupta said.

“Despite this, private mortgage insurance is experiencing another strong year, particularly among first-time homebuyers, as the majority of consumers and lenders still prioritize financing solutions backed by tested, well-capitalized businesses,” Gupta added. “We encourage prospective homebuyers to continue educating themselves on all available options prior to pursuing homeownership, and to ensure that their financing method is as sustainable as it is affordable.” 

Genworth’s additional data indicates that 26% of respondents included adoption of alternative credit scores and ambitious affordable housing goals for the GSEs as the best way to improve access to credit.

However, a whopping 74% of respondents think lowering compliance cost and removing legal uncertainty for lenders originating FHA-insured loans are better alternatives.

The good news is that those same mortgage professionals wanting to reform the process of FHA loan insurance have a silver lining, because on Tuesday, FHA Commissioner Brian Montgomery claimed the Trump administration plans to dial back the use of the False Claims Act. On a call with reporters, Montgomery said he believes this will bring more lenders back into FHA-backed lending.

“I think the previous administration made some moves in the right place around the defect taxonomy and the loan review system,” Montgomery said. “But lenders still want greater certainty around what’s the bright line, what are the parameters, if you will.”


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JPMorgan earnings increase despite drag from mortgage lending

In the second quarter of 2018, JPMorgan Chase saw a slight decrease in its earnings from the previous quarter, but still managed to increase from the previous year despite a drag from its mortgage banking sector. 

After climbing to $27.9 billion in the first quarter, JPMorgan’s revenue decreased in the second quarter to $27.8 billion. But this is still up from $25.7 billion, in the second quarter of 2017.

Net income followed a similar pattern, decreasing from the first quarter’s $8.7 billion but rising from the second quarter of 2017’s $7 billion to $8.3 billion in the second quarter this year. This is a total earnings per share of $2.29, up from $1.82 in the second quarter of 2017 and down from $2.37 in the first quarter.

The bank explained its increase from last year, saying that a rise in U.S. employment and moderate wage gains have resulted in strong consumer and business sentiment, which has produced tremendous economic growth.

“We see good global economic growth, particularly in the U.S., where consumer and business sentiment is high,” JPMorgan Chairman and CEO Jamie Dimon said. “Because of this broad growth and the strong underlying performance across each of our businesses, the company delivered record results this quarter. We also want to acknowledge that global competition is getting stronger.”

But while the bank is seeing higher revenues, the same can’t be said for its mortgage banking revenue, which created a drag on total earnings. 

JPMorgan’s home lending sector slowed down, decreasing 11% in revenue in the second quarter as it fell from $1.5 billion in the first quarter to $1.3 billion in the second quarter. This is also down 6% from $1.4 billion in the second quarter last year. The bank explained this drop was predominantly driven by production margin compression and lower net servicing revenue.

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