Bank Profitability

Browse articles from all of our Newsletters related to Bank Profitability.

June 24, 2016 - Inside Mortgage Trends

Banks Report Uptick in Mortgage Repurchases

Commercial banks and savings institutions reported a small increase in the volume of repurchases and indemnifications regarding single-family mortgages during the first quarter of 2016, according to an Inside Mortgage Trends analysis of call-report data. Banks reported $764.1 million of repurchases during the first quarter, a 3.9 percent increase from the previous period. That was down 23.3 percent from the first quarter of 2015, however, and sets a pace ... [Includes one data chart]

June 24, 2016 - Inside MBS & ABS

New Concerns Arise About Nonbanks’ Ability To Meet Ginnie Mae MBS Servicing Advances

Ginnie Mae is once again getting anxious about the growing – and large – presence of nonbanks that service the agency’s MBS, fearing a liquidity crisis could erupt because some firms rely too heavily on “non-traditional and very sophisticated funding mechanisms.” In a statement issued to Inside MBS & ABS this week, Ginnie contrasted nonbanks to depositories “who traditionally were the primary issuers of Ginnie Mae MBS.” The agency added...[Includes one data table]

June 23, 2016 - Inside Mortgage Finance

Subservicing Keeps Growing as Regulatory Headaches Force MSR Owners to Cut Costs and Outsource

Subservicing vendors continued to increase their contract totals in the first quarter as owners of mortgage servicing rights moved more of their business to these specialists to counter regulatory burdens that show few signs of abating. According to exclusive survey figures compiled by Inside Mortgage Finance, $1.625 trillion of home mortgages were being handled by subservicers at March 31, a 5.5 percent sequential increase and a 19.5 percent gain year-over-year. Subservicing firms – a business mostly dominated by nonbanks with one key exception – now process...[Includes one data table]

June 10, 2016 - Inside Mortgage Trends

Banks Still Backpedaling Away From MSR Business as Valuations Tumble

The banking industry still hasn’t touched bottom in its years-long retreat from the mortgage servicing rights business. Banks and thrifts reported a total of $4.001 trillion of single-family mortgage servicing for other investors, most commonly mortgage-backed securities trusts, as of the end of March. That was down some $52.9 billion from the previous quarter, a 1.3 percent decline, according to a new analysis of call-report data by Inside Mortgage Trends ... [Includes one data chart]

June 9, 2016 - Inside Mortgage Finance

Home-Equity Lending Down Slightly in 1st Quarter, But Unused HELOC Commitments Trended Higher

New home-equity lending activity fell during the first quarter of 2016, but the market started the year well ahead of the pace in early 2015, according to a new Inside Mortgage Finance ranking and analysis. New home-equity originations on home-equity lines of credit and closed-end second mortgages fell by 6.3 percent from the fourth quarter to an estimated $45.0 billion. However, that was up 18.4 percent from the first quarter of last year. The first-quarter drop in home-equity lending mirrored...[Includes three data tables]

June 3, 2016 - Inside FHA/VA Lending

Banks’ New 3% Down Programs Could Steal FHA Market Share

Two major banks recently launched their own 3 percent downpayment programs, which stakeholders say could shift volume from FHA to the government-sponsored enterprises. How much volume though remains unclear, analysts say. Last week, Wells Fargo and JPMorgan Chase rolled out their respective low downpayment programs for first-time homebuyers and low-to-moderate-income families, which require only 3 percent down. Neither program involves the FHA, and they appear designed to pick up where Wells and Chase left off when they decided to cut back on their FHA business in order to reduce liability risk. Wells and Chase are among several major banks and nonbanks that have coughed up billions of dollars in settlements with the federal government in the last couple of years to resolve allegations of fraud under the False Claims Act and violations of ...

June 3, 2016 - Inside Nonconforming Markets

Banks Seen as Key to Non-Agency MBS

Hopes for a resurgence of issuance of non-agency mortgage-backed securities backed by new mortgages appear to be tied more to banks than to steps Congress might take to reduce the government-sponsored enterprises’ footprint, according to industry analysts. Since the financial crisis, banks have largely opted to hold non-agency originations in portfolio instead of issuing MBS. According to an analysis by Bank of America Merrill Lynch, capital requirements have given banks ...

June 3, 2016 - Inside Nonconforming Markets

Mixed Trends in Banks’ First-Lien Holdings

Bank and thrift holdings of first-lien mortgages as of the end of the first quarter of 2016 declined compared with the end of 2015, according to an Inside Nonconforming Markets analysis of bank and thrift call reports. Banks and thrifts held $1.85 trillion in first-lien residential mortgages at the end of March, down 1.0 percent from the end of December. But industry holdings were up 1.6 percent from March 2015, suggesting that banks still have plenty of ... [Includes one data chart]

May 20, 2016 - Inside Nonconforming Markets

Banks Seen as Key for Non-QM MBS

For the issuance of mortgage-backed securities with non-qualified mortgages to take off, industry analysts suggest that banks need to play a larger role. To this point, nonbanks have been the only issuers of non-QM MBS. Ron D’Vari and Timothy Bernstein, analysts at New Oak, authored an overview of non-QM MBS issued in the latest issue of The Journal of Structured Finance, which was published this month. The analysts said real estate investment trusts and hedge funds ...

May 20, 2016 - Inside Nonconforming Markets

Competition, Cooperation Between Redwood, Banks

One of the biggest factors limiting the issuance of jumbo mortgage-backed securities is the strong appetite banks have to hold jumbos in portfolio. Redwood Trust, which aims to issue jumbo MBS, had adapted by competing with banks and working with them. Redwood had a gross margin of 140 basis points on its jumbo business in the first quarter of 2016, much higher than the 59 basis points in gross margins on jumbos Redwood had in the full year of 2015 ...

May 20, 2016 - Inside Nonconforming Markets

Portfolio Strategies Blend Funding, Product Targets

Portfolio lending remains a more viable option than securitization for lenders in the non-agency mortgage market in part because of the depth and variety of funding sources that allow them to offer a wide range of products. Depository institutions rely heavily on low-cost retail deposits to fund their retained mortgage portfolios, according to panelists speaking at the Mortgage Bankers Association secondary market conference in New York this week. A typical customer of ...

May 20, 2016 - Inside MBS & ABS

Banks Ramp Up Holdings of Residential MBS Despite Retreat by Some Goliaths of the Industry

Commercial banks and thrifts boosted their combined holdings of residential MBS to a new record, $1.661 trillion, during the first quarter of 2016, according to a new Inside MBS & ABS analysis. The data include held-to-maturity and available-for-sale accounts, but not trading assets, which included another $45.99 billion of residential MBS as of the end of March. The banking industry’s MBS holdings in HTM/AFS portfolios rose 1.0 percent from the end of 2015, and they were up a substantial 5.2 percent from a year ago. It’s worth noting that total assets in the banking industry actually rose a bit faster, by 2.1 percent, dropping the MBS share of total assets down slightly to 10.2 percent. Unlike some quarters, when activity by one or two dominant banks accounts for most of the industry’s change, the first-quarter increase was...[Includes two data tables]


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