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Volume 19 - Number 5

February 27, 2015

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Mortgage Banking Income Declined in 4Q14, Nonbanks Made Things Worse

A handful of nonbank mortgage companies reporting substantial losses during the fourth quarter weighed down industry-wide mortgage banking income, according to a new Inside Mortgage Trends analysis of earnings reports. A diverse group of 31 mortgage lenders that includes the biggest players in the market earned a combined $3.227 billion on their mortgage banking operations during the fourth quarter. That was down 8.2 percent from the group’s $3.516 billion during the third quarter. The fourth quarter was...[Includes one data chart]

If You’re Not Testing for TRID, You’re Late

Conversations with executives at leading industry technology vendors suggest that if mortgage lenders are not already testing their systems and processes for compliance with the impending integrated disclosure rule from the Consumer Financial Protection Bureau, they are already behind the curve. Tech vendors have been working with some of their clients for months already, and in some cases for more than a year, testing systems and process as they prepare for “TRID,” the Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rule. Scott Stucky, chief strategy officer at DocuTech, said...

Top Loan Producers Commanding Bonuses

Not only are residential loan officers in high demand these days – especially ones with fat Rolodexes – but some of these top performers are being offered “signing bonuses” of $5,000 to $40,000, and even more to jump ship. Moreover, according to interviews conducted by Inside Mortgage Trends, the most aggressive bidders for high-performing LOs are nonbanks, which have been steadily stealing market share away from the megabanks the past few years. “Most depositories are not committed...

Don’t Even Think of Basing Comp on Loan Terms

Lenders should stay as far away as possible from even the appearance of basing any part of a loan officer’s pay on the terms of a mortgage. During an Inside Mortgage Finance webinar this week, Amy Durant, an attorney with the Bodman law firm in Ann Arbor, MI, emphasized the importance of the restrictions on compensation that are embedded in a Consumer Financial Protection Bureau rule. The rule states...

Improvements Seen in Processing of Short Sales

Servicers are benefitting from quicker transaction times on short sales, according to Fannie Mae. The government-sponsored enterprise said transaction time has been cut in half for short sales compared with the end of 2012, though the number of these transactions has also declined significantly. Short-sale transaction timelines currently average 45 days to 60 days, down from an average of 120 days in late 2012, according to a post on Fannie’s Housing Industry Forum website. The GSE said the HomePath short sale portal has helped reduce the time it takes to complete a short sale. The portal was released...

AEI Finds Risk Rising on Purchase Mortgages

The default risk index for securitized agency purchase mortgages rose to a new high in January, the fifth straight month of a steady increase in the composite National Mortgage Risk Index, according to the American Enterprise Institute. The NMRI increased to 11.97 percent, a 0.4 percentage point increase from the average default risk in fourth quarter last year and 0.8 percentage points up year over year. Data also indicated...

Bank Mortgage Banking Income Down in 4Q14

Commercial banks and thrifts earned $3.54 billion from their mortgage-banking activities during the fourth quarter of 2014, down 23.9 percent from the previous quarter, according to a new Inside Mortgage Trends analysis of call-report data. That was only slightly better than the $3.35 billion banks earned during the first quarter of 2014. For the year, the industry generated $16.41 billion in mortgage-banking income, down 36.3 percent from 2013. Last year was the second-worst year since the financial crisis in 2008; the worst was 2011, when Bank of America nearly sank the ship. BofA was...[Includes one data chart]

Poll

With the recent dip in interest rates, how do you feel about loan volumes this year?

We see loan production ending 2015 flat compared to 2014.
We’re optimistic that our originations will rise by 10 to 20 percent year over year.
We’re really optimistic: We expect production to increase by 20 percent or better from last year.
We’re not so bullish. Originations for us may actually fall.

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