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Origination

Demand for Adjustable-Rate Loans Expected to Rise

As fixed interest rates continue on their upward path, initial-period rates on adjustable-rate mortgages (ARMs) remain near historic lows--a stat the Freddie Mac anticipates will factor into borrowing decisions in the year ahead. "As longer-term interest rates rise, ARMs with their lower initial interest rates will become more appealing to loan applicants," said Frank Nothaft, VP and chief economist for Freddie Mac. "We are expecting ARMs to gradually gain back some favor with mortgage borrowers."

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Suspect Mortgage Applications on the Rise

As if this month's regulatory changes weren't enough, lenders have another problem to grapple with: According to stats released by Kroll Factual Data, incidents of potential mortgage fraud are on the rise. Between the second and third quarters of 2013, the company recorded a 10.4 percent average increase in "possible fraudulent activity" in loan applications submitted for review. "The call for increased vigilance and processes for mitigating this risk is at a pitch not to be discounted or ignored," said Kroll president Rod Bazzani.

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Total Mortgage Rebrands Wholesale Division

In Connecticut, Total Mortgage Services' wholesale division is relaunching with a re-energized focus--and a brand new name, the company announced. Formerly known as TMS Funding, the division is now operating as Total Mortgage Wholesale.

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Refinances Push Up Application Volume

application

According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey, loan application volume rose 4.7 percent (seasonally adjusted) for the week ending January 17. The overall increase came entirely from a continued recovery in refinance numbers. The survey's Refinance Index was up 10 percent week-over-week, with refinance share accounting for 64 percent of total applications, the highest level in a month. Meanwhile, the seasonally adjusted Purchase Index dropped 4 percent compared to the prior week.

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Industry Experts Discuss QM Pitfalls

While the Consumer Financial Protection Bureau (CFPB) touts its recently enacted mortgage regulations as a "back-to-basics approach" to lending, not everyone agrees. Speaking on "Mortgage Markets Today," Chris Whalen, EVP and managing director for Carrington Holding Company, discussed the pitfalls in the new regulations with Louis Amaya, host of the Five Star Internet radio show and CEO of iServe Companies. Among other things, Whalen predicts politicians and regulators will see pressure to review the rules, which he says have gone too far.

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