Underwriting

Fannie Mae and Freddie Mac enjoy considerable advantages because of their lower cost of capital and significant government subsidies. But with some conforming loans, the private market is finding a way to compete.

Paycheck information gleaned from bank accounts is emerging as an alternative to verifying a mortgage applicant's income and employment with a 4506-T tax transcript request to the IRS.

Black Knight has acquired HeavyWater, a developer of artificial intelligence and machine learning technology for the mortgage industry, and plans to incorporate the startup's borrower data verification and other automation capabilities into its existing product suite.

Preferred Bank's experience with an apartment developer is a reminder of how important strict underwriting terms will be as loan demand increases, rates rise and lenders try to outdo each other.

Fannie Mae's first-quarter profits were enough for it to rebuild its minimum capital buffer and pay the Treasury Department dividend after being forced to take a draw during the previous fiscal period.

If Freddie Mac's credit-risk transfer activities continue to grow, mortgage lenders could eventually see a reduction in the guarantee fees they pay to the government-sponsored enterprise, according to CEO Donald Layton.

The CFPB finalized an amendment to its "know before you owe" mortgage disclosure rule that gives lenders more flexibility to adjust closing cost estimates and pass those increases on to borrowers.

Servicers are still trying to figure out how they can best take advantage of the growing use of electronic notes and other digital mortgage tools by lenders and the secondary market.

Freddie Mac and Arch Capital are testing a new form of risk-sharing deal to boost investor appetite for low down payment mortgages. But the pilot is raising concerns about "charter creep" because it dictates private mortgage insurance decisions typically made by lenders.

Tight margins, regulatory clarity and a renewed appetite to expand have made mortgage brokers and the wholesale channel attractive again, at least to the small and medium mortgage lenders.