Bank Profitability

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

April 24, 2015 - Inside Mortgage Trends

Regulators Address Mortgage Capital Issues

Federal regulators issued a document this month clarifying Basel III capital requirements that apply to banks. Among other issues, the Federal Deposit Insurance Corp., Federal Reserve and Office of the Comptroller of the Currency addressed the treatment of certain loan modifications and FHA loans. The capital rules took effect Jan. 1 for most banks, with a phase-in period for many aspects of the rules. The federal regulators said that when a mortgage isn’t in default and ...


April 17, 2015 - Inside FHA/VA Lending

First Tennessee, DOJ Reach Interim Agreement on FHA-Related Claims

First Horizon National Corp. has announced an agreement in principle with the federal government to settle potential claims related to the underwriting and origination of FHA-insured mortgages during the run-up to the financial crisis. Disclosed in a regulatory filing, the agreement between First Tennessee Bank and the Department of Justice and the Department of Housing and Urban Development covers FHA loans originated from 2006 through 2008, which have gone to claim ...


April 17, 2015 - Inside MBS & ABS

Prime ARMs Went Delinquent 30 Percent More Often When Privately Securitized, Fed Economist Finds

Vintage prime adjustable-rate mortgages went delinquent at a rate 30 percent higher when they were securitized privately, according to an economist with the Federal Reserve System. The study was based on mortgages originated in 2005 and 2006, at the height of the aggressive underwriting in the non-agency mortgage market. “We find that private-securitized loans perform worse than observably similar, non-securitized loans, which provides evidence for adverse selection ...


April 16, 2015 - Inside Mortgage Finance

Mortgage Originations at Big Banks Increase in First Quarter of 2015, Positive Outlook for Margins

Originations of mortgages by big banks in the first quarter of 2015 were up strongly compared with a year ago as well as the fourth quarter of 2014. Competition has increased, but mortgage banking income and gain-on-sale margins were relatively strong, according to industry analysts. Five large banks that have reported earnings generated a combined $108.5 billion in mortgage originations during the first three months of 2015. That was up 9.4 percent from ...


April 10, 2015 - Inside The GSEs

Merger Creates Largest FHLB, More Than 100 Staff Laid Off

While creating the largest Federal Home Loan Bank in the system, both geographically and membership wise, about 75 percent of the Federal Home Loan Bank of Seattle workforce will be laid off due to a merger with the Federal Home Loan Bank of Des Moines. The merger, approved in December by the Federal Housing Finance Agency, officially goes into effect in June, trimming the Seattle bank’s workforce to just 35 employees in the regional office. About 109 employees will be laid off before 2015 ends. Both banks unanimously approved the merger and said it will result in a cooperative that is stronger than either bank on an individual basis. Once combined, the bank will be headquartered in Des Moines.


April 10, 2015 - Inside Mortgage Trends

JPMorgan Chase Adjusting Its Servicing Portfolio

Although JPMorgan Chase recently inked a deal to buy $45 billion of Fannie Mae mortgage servicing rights from Ocwen Financial, the bank plans to keep shedding receivables, at least over the short term. In particular, according to interviews with deal makers and analysts, Chase could see its “servicing for others” portfolio fall to $600 billion from $800 billion over the next few years before it begins rising again. “These reductions will come in the form of runoff and ...


April 10, 2015 - Inside Mortgage Trends

Bank Mortgage Repurchases Spiked in 4Q14

Banks and thrifts reported a 10.3 percent increase in mortgage repurchases and indemnifications during the fourth quarter of 2014 compared with the previous quarter, according to an Inside Mortgage Trends analysis of call-report data. Despite the late-year uptick, 2014 still ranked as the most benign for the industry since banks began reporting repurchases in 2008. Institutions repurchased or made indemnifications totaling just $4.25 billion ... [Includes one data chart]


April 10, 2015 - Inside Mortgage Trends

Experts Offer Tips on MSR Execution, Transfers

The vibrant market in mortgage-servicing rights challenges originators to figure out the best execution for the receivables they’ve created and for both sides of a servicing deal to make sure the transfer goes smoothly, according to industry experts. Nitin Dave, vice president for securitization and servicing at Southern Trust Mortgage, during a recent MSR conference sponsored by Information Management Network, noted that the market has become more dynamic as ...


April 3, 2015 - Inside Nonconforming Markets

Principal Reduction Mods Less Frequent

Large bank servicers significantly reduced their use of principal reduction loan modifications in the past year, according to new data from the Office of the Comptroller of the Currency. Principal reduction mods – which are largely limited to non-agency mortgages – were used in 6.5 percent of the loan mods completed in the fourth quarter of 2014 by eight large bank servicers tracked by the OCC. In the fourth quarter of 2013, large bank servicers employed principal reduction on ...


April 3, 2015 - Inside Nonconforming Markets

Little Change in Bank and Thrift HEL Holdings

Home-equity loan holdings by banks and thrifts have largely held steady in terms of performance while declining slightly in balance during the past year, according to the Inside Mortgage Finance Bank Mortgage Database. Banks and thrifts held $982.99 billion in home-equity lines of credit, HELOC commitments and closed-end second liens as of the end of the fourth quarter of 2014. The holdings declined by 0.8 percent compared with the previous quarter ... [Includes one data chart]


March 27, 2015 - Inside Mortgage Trends

Third Federal Offers $1,000 Credit to Homebuyers

Third Federal Savings & Loan in Cleveland is wooing first-time homebuyers with an offer of a $1,000 credit to spend as they wish if they close a purchase mortgage with the lender. There is no catch, said David Reavis, marketing manager for Third Federal. “There are no points and fees on the back end to cover the credit,” he said. “Third Federal is paying for it. We think the combination of a competitive rate and the $1,000 in the form of a check is an attractive offer that will ...


March 27, 2015 - Inside Mortgage Trends

House Bill Would Delay Basel MSR Requirements

A House bill with bipartisan support would delay Basel III capital requirements relating to mortgage servicing rights for all but the largest banks. The House Financial Services Committee this week approved, 49-9, H.R. 1408, the Mortgage Servicing Asset Capital Requirements Act. Introduced by Rep. Ed Perlmutter, D-CO, the bill would require federal banking regulators to study the appropriate capital requirements for mortgage servicing assets for ...


March 26, 2015 - Inside Mortgage Finance

Home-Equity Market Continued to Warm Up In Late 2014 Despite Handful of Warning Flares

Home-equity lending gained modest momentum during the fourth quarter of 2014, although the outstanding supply of second-lien mortgage debt continued its seven-year decline. Mortgage lenders originated an estimated $21 billion of home-equity loans, including home-equity lines of credit and closed-end second mortgages, during the fourth quarter. That was up 5.0 percent from the third quarter and brought full-year production ... [Includes one data chart]


March 20, 2015 - Inside FHA/VA Lending

Advocates Say New HECM Rule is A Disaster for Surviving Spouses

Consumer advocates and attorneys are urging the Department of Housing and Urban Development to delay the implementation of a new policy that purports to provide relief to surviving spouses of reverse-mortgage borrowers and to find solutions that are more effective. The group said the policy HUD announced in Mortgagee Letter 2015-03 on Jan. 29 is so restrictive that virtually all surviving non-borrowing spouses will get no relief. A letter to the agency, drafted by the National Consumer Law Center and signed by the Consumers Union, California Reinvestment Coalition, National Housing Law Project, Housing and Economic Rights Advocates and Institute on Aging denounced the new policy. They said most surviving spouses of deceased borrowers of Home Equity Conversion Mortgage loans will not be able to meet the policy’s stringent guidelines and will ...


March 20, 2015 - Inside FHA/VA Lending

RHS Seeks Comments on Proposed QM Rule, Simplified Refinancing

The U.S. Department of Agriculture-Rural Housing Service has proposed to revise regulations for the single-family housing guaranteed loan program pertaining to qualified-mortgage (QM) requirements, refinancing, principal reduction and lender indemnification. The deadline for comments is May 4, 2015.The RHS is proposing to amend its regulations to indicate that a loan with an RHS guarantee is a qualified mortgage if it meets certain requirements set by the Consumer Financial Protection Bureau. The CFPB published a QM rule, which became effective on Jan. 10, 2014. Among other things, the rule requires creditors to make a reasonable, good faith determination of a borrower’s ability to repay the mortgage loan. In addition, the rule establishes a safe harbor from liability for transactions that meet the QM requirements or, in certain cases, a rebuttable presumption of ...


March 20, 2015 - Inside FHA/VA Lending

Large Coastal States Account for Bulk of FHA/VA Securitizations

Security issuances backed by FHA and VA loans totaled $267.6 billion in 2014, with several large states accounting for a significant share of FHA/VA originations. An estimated $158.1 billion of FHA-insured loans, including modified loans, were securitized last year, with purchase home loans comprising most of the transactions. Approximately $30.0 billion of FHA refinance loans were securitized as well. The FHA MBS had an average loan-to-value ratio of 92.3 percent and a debt-to-income ratio of 40.1 percent. The average FICO score was 672.3, which was indicative of first-time homebuyers and borrowers with slightly tainted credit. First-ranked California, Texas (#2) and Florida (#3) combined for a total of $48.0 billion, which represented 30.3 percent of FHA loans in Ginnie Mae mortgage-backed securities in 2014. Fourth-ranked New York reported a total of $6.7 billion while ... [ 2 charts]


March 20, 2015 - Inside FHA/VA Lending

VA Originations Increase in 4Q14, 2014 a Record Year for Purchases

Production of mortgages with a VA guaranty grew a hefty 17.9 percent in the fourth quarter, providing an emphatic ending to a record year of VA purchase-loan originations, according to Inside FHA/VA Lending’s analysis of agency data. Total VA volume for the entire year was $112.0 billion in purchase and refinance loans. VA streamlined refinancings accounted for 22.4 percent of overall VA originations for 2014. Production for the full year, however, was down 13.8 percent compared to the same period in 2013. Lenders attributed the increased VA market share to the younger generation of soldiers and sailors engaged in foreign wars as well as veterans returning from the war front. Last year, 18 percent of VA loans were made to active-duty service members and 82 percent were loans to veterans, said Mike Frueh, director of the VA Home Loan guaranty program. “There is a lot more ... [1 chart]


March 20, 2015 - Inside Nonconforming Markets

Mixed Trends for ARM Originations in 2014

Originations of adjustable-rate mortgages were nearly level in 2014 compared with the previous year, according to a new ranking by Inside Nonconforming Markets. The ARM share of total originations increased because mortgage production overall was down in that time, though some big banks that dominate ARM originations also slowed their production. An estimated $198.0 billion in ARMs were originated in 2014, up 1.0 percent ... [Includes one data chart]


March 20, 2015 - Inside Nonconforming Markets

Bank/Thrift First-Lien Holdings Up in 2014

Bank and thrift portfolio holdings of first-lien mortgages increased in 2014, according to an Inside Nonconforming Markets analysis of call reports. Retention of new jumbo mortgages and even some conforming loans helped outpace portfolio runoff. Banks and thrifts held a total of $1.77 trillion in first-lien mortgages at the end of the fourth quarter of 2014. The holdings increased by 0.3 percent compared with the previous quarter and were up ... [Includes one data chart]


March 19, 2015 - Inside Mortgage Finance

Mortgage Servicing is ‘Trending’ as 1-4 Family Debt Outstanding Increases for Second Consecutive Quarter

The supply of home mortgage debt outstanding grew for the second consecutive quarter during the final three months of 2014, eking out a slim 0.1 percent gain from the end of September. The Federal Reserve late last week reported that $9.862 trillion of 1-4 family mortgage debt was outstanding at the end of last year. It may not sound like much, but it marked the first time since ... [Includes one data chart]


March 19, 2015 - Inside Mortgage Finance

Robust Market in MSR Deals Expected In 2015, Room for Banks and Nonbanks

The volume of mortgage-servicing right transfers is expected to continue growing in 2015, perhaps hitting as high as $500 billion, according to experts attending the MSR conference sponsored by Information Management Network this week in New York. Although the focus in recent years has been on the advance of nonbank servicers, observers agree that banks will remain a major force in the industry. The wild card in the MSR market is ... [Includes one data chart]


March 13, 2015 - Inside Mortgage Trends

Banks Took on More Servicing in 4Q14

For the first time in nearly three years, commercial banks and thrifts increased their mortgage servicing rights accounts during the fourth quarter of 2014, according to a new Inside Mortgage Trends analysis of call reports. At the end of last year, banks serviced residential mortgages with an unpaid principal balance of $4.416 trillion for other investors, an increase of $3.6 billion from the third quarter. That represents a tiny 0.08 percent increase ... [Includes one data chart]


Poll

The Supreme Court recently decided that mortgage loan officers are entitled to overtime pay. How has this affected your shop?

It's a very big deal, but our company will limit OT pay or pay very little.
It’s sort of a big deal, but we have no plans to pay overtime pay at all.
We have no problem paying our LOs OT.
We’re still studying the case and have not yet decided what to do.

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