Risk

Freddie Mac hit the $1 trillion mark on credit risk sharing for single-family mortgage loans with its second lower LTV deal of the year.

Genworth Financial's mortgage insurance business, which had slipped in market share, has more certainty about its future prospects after a federal government committee approved the holding company's acquisition by China Oceanwide.

Private mortgage insurance was used on approximately 4% fewer loans in 2017 when compared with 2016, according to the U.S. Mortgage Insurers.

The ability-to-repay standard is responsible for the reduction in loan application defects over the past four-plus years, according to First American Financial.

As mortgage lenders continue seeking ways get more trustworthy consumers into the housing market, a majority of them are utilizing alternative credit as a means of assessing borrower risk, according to Experian.

As the mortgage industry moves farther past the housing crisis, access to credit remains tight, especially for first-time homebuyers.

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.

There is now less fraud risk associated with adjustable-rate mortgage applications and this will offset some of the higher hazard associated with a purchase 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.

It is important for lenders to understand in what locations and property types their application fraud risk rests as the market share of purchase loans rises.