Bank Profitability

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

November 7, 2014 - Inside Nonconforming Markets

Chase Tops Bank Holders of Non-Agency MBS

JPMorgan Chase had the largest amount of holdings of non-agency mortgage-backed securities – by far – among banks and thrifts at the end of the second quarter of 2014, according to a new ranking and analysis by Inside Nonconforming Markets. Chase held $44.53 billion in non-agency MBS at the end of June, accounting for 34.5 percent of all non-agency MBS held by banks and thrifts. TD Bank, the second-ranked holder of non-agency MBS, had a ... [Includes one data chart]


October 31, 2014 - Inside Mortgage Trends

EverBank’s Mortgage Strategy Clicking in 2014

EverBank has relied on its correspondent jumbo business to help prop up loan origination volume in 2014 at a time when agency production figures have fallen way off 2013 levels. In fact, during the third quarter of 2014, 52 percent of the company’s $2.30 billion of new mortgage lending were jumbos. Jumbo production – most of it coming through EverBank’s correspondent program – was up 55 percent from the third quarter of 2013, when it accounted for 28 percent of the bank’s total mortgage originations ...


October 31, 2014 - Inside Mortgage Trends

Mortgage-Banking Income Up at Regional Banks

Regional banks generally reported improvements to mortgage-banking income in the third quarter of 2014, according to an analysis by Inside Mortgage Trends. Third-quarter mortgage-banking income for a group of 17 regional banks rose 10.7 percent from the previous quarter and was up 12.5 percent from the third quarter of 2013, when some of the lenders reported record origination volumes. Results were mixed among the group. Flagstar Bank reported $58.40 million in mortgage-banking income ...


October 24, 2014 - Inside Nonconforming Markets

Banks Increase Jumbo MBS Participation

Two large banks are set to continue their participation in the jumbo mortgage-backed security market, including one deal backed largely by loans from banks that have plenty of capacity to hold mortgages in portfolio. JPMorgan Chase is set to issue a $262.23 million jumbo MBS with originations largely sourced from First Republic Bank and Chase. The deal is backed solely by 15-year fixed-rate mortgages, which many banks have been willing to retain in portfolio in recent…


October 24, 2014 - Inside Nonconforming Markets

Outlook Cloudy for Non-Agency MBS

It could take years for the non-agency mortgage-backed securities market to even approach the depth and liquidity it had before the housing meltdown, according to experts participating on a panel during the annual convention of the Mortgage Bankers Association this week in Las Vegas. The main reason non-agency MBS issuance does not amount to much is the huge bank demand for jumbo mortgages, said Tom Millon, president and CEO of Capital Markets Cooperative. Only about 77 percent of ...


October 17, 2014 - Inside Mortgage Trends

3Q14 Preview: Solid But Unspectacular Earnings, Unexpected Growth in Volume

Most mortgage industry experts had expected loan origination volume to drop off significantly in the third quarter of 2014, but early indicators suggest just the opposite. An Inside Mortgage Trends analysis of earnings reports from seven large banks with major mortgage operations shows their combined loan originations increased by 8.7 percent from the second quarter. Together, the group racked up $97.4 billion in mortgage originations during the third quarter ...


October 10, 2014 - Inside FHA Lending

Ginnie Mae MBS Issuance Increases in 3Q14

Ginnie Mae issuance for the first nine months of 2014 totaled $207.5 billion as government-backed purchase-mortgage activity picked up in the third quarter, according to an analysis of agency data. New issuances rose 19.8 percent from the second quarter. FHA loans accounted for $116.9 billion of new Ginnie Mae issuances while VA and the Rural Housing Development funneled $75.9 billion and $14.2 billion, respectively, of new loans into Ginnie Mae pools. Mortgage securities backed by home-equity conversion mortgages are not included. Purchase mortgages totaling $140.6 billion comprised the bulk of new issuances over the nine-month period while the share of refinances totaled $49.8 billion. Modified loans accounted for $17.1 billion. Most of the FHA and VA loans originated during the first nine months came through the ... [ 2 charts ]


October 10, 2014 - Inside FHA Lending

Millennial Agenda Underscores FHA’s ‘Blueprint’

President Obama this week released his agenda for creating economic opportunity for millennials, including greater access to mortgage credit through FHA. While the economy has recovered and there has been some improvement in the housing market, millennials are on a much slower pace toward homeownership than previous generations, the president said. Many are in rental housing, ready to become homeowners but are locked out by the tough, restrictive lending environment, he added. Millennials – identified as those born between 1982 and 2004, also known as Generation Y – are finding it harder to purchase homes because of lender overlays, high mortgage insurance premiums and high downpayment requirements. It also has been difficult for anyone with a credit score below 680 to obtain a purchase-mortgage loan. In his agenda, Obama expressed concern over the ...


October 10, 2014 - Inside FHA Lending

FHA Details Improvements to LEAP 3.0 System

Like all new automated systems, FHA’s Lender Electronic Assessment Portal (LEAP 3.0) was not without technical glitches when the agency rolled it out back in May. Users immediately reported difficulties in certain functions, such as adding new branches, making changes to existing branches and changing cash flow accounts. The FHA ever since has been working to iron out the kinks to allow lenders to submit their annual recertification packages with ease. So far, certain fixes have been implemented allowing lenders to add, edit and delete branch and regional managers, delete attachments uploaded to LEAP and properly update cash flow accounts in the database. The FHA also changed the way lenders edit their principal affiliations in LEAP. In addition, newly approved lenders now have access to the new system. Furthermore, the FHA expanded to 250 the maximum allowable characters lenders may use when ...


October 10, 2014 - Inside FHA Lending

New Regulations Cause HECM Volume to Drop

FHA reverse mortgage volume fell in the second quarter as well as during the first six months of 2014 as regulatory changes reduced profitability and increased the cost of originating the government-backed product, according to Inside FHA Lending’s analysis of agency data. Home equity conversion mortgage volume declined 19.9 percent quarter-over-quarter and dropped 9.0 percent during the first half of the year compared to the same period last year. HECM lenders reported $7.2 billion in total originations in the first half, with purchase loans accounting for 93.6 percent. Fixed-rate HECMs comprised only 22.2 percent of total volume as most borrowers turned to adjustable-rate HECMs for their reverse-mortgage needs. The top five HECM lenders – American Advisors Group, Reverse Mortgage Solutions, One Reverse Mortgage, Liberty Home Equity Solutions and Proficio Mortgage Ventures – accounted for ... [1 chart ]


October 10, 2014 - Inside FHA Lending

OIG Calls for HUD Action Versus Errant Lenders

The Department of Housing and Urban Development’s Inspector General has recommended that HUD require an approved FHA lender to reimburse the FHA $1.6 million for improper claims on 11 preforeclosure sales, including lender and borrower incentives. An IG audit of EverBank of Jacksonville, FL, attributed FHA’s losses to the bank’s failure to determine whether or not defaulted borrowers qualified for the agency’s preforeclosure sale program. The IG looked into the bank’s short sale activities because it had the highest preforeclosure sale claims in Florida. More than 50 percent of EverBank’s FHA claims were from short sales, with more than $12.9 million paid from 2011 through 2013, the audit found. In response, EverBank questioned the accuracy of the IG report. The bank maintained that certain allegations do not constitute violations of ...


October 10, 2014 - Inside FHA Lending

HUD-OIG Reports $582M in Recoveries for MMIF

The Department of Housing and Urban Development’s Office of the Inspector General has announced a total of $581.8 million in recoveries in September to strengthen and stabilize the ailing Mutual Mortgage Insurance Fund. The recovered amounts are part of larger settlements between the federal government, U.S. Bank and Bank of America to resolve allegations of false claims and mortgage fraud in relation to FHA-insured mortgages. Both banks were investigated separately by the HUD-OIG, Department of Justice and U.S. attorneys’ offices in Michigan, Ohio and New York in connection with their lending and underwriting practices and quality-control programs for FHA-insured loans. On June 30, U.S. Bank entered into a settlement agreement to pay $200 million, of which nearly $144.2 million went to the MMI Fund. The bank admitted to poor underwriting, flawed quality control and ...


October 10, 2014 - Inside FHA Lending

Loan Reviews Continue to Find Defects

Missing or incorrect files was the most common defect found in 49 percent of the loans, of which 29 percent were deemed initially unacceptable. Flawed credit or underwriting came in second at 26 percent, of which 67 percent were rated unacceptable. Program eligibility and operational deficiencies each had a 9 percent share while defective appraisals were common in 7 percent of all reviewed loans. Properly mitigated, the percentage of initially unacceptable loans usually drops to about 7 percent. The FHA tends to blames lenders for the defects but the bottom line is mistakes cut both ways, according to compliance experts. “Lenders make mistakes that can easily be corrected,” said one compliance consultant. “FHA also can be guilty of causing a mistake.” For example, poor communication and lack of clarity caused lenders to check a yes/no box to confirm whether or not they ...


Poll

What is it going to take to convince lenders to loosen the credit box (i.e., remove underwriting overlays)?

The recent rep and warranty changes announced by the Federal Housing Finance Agency should go a long way in protecting lenders from future buybacks and help expand mortgage credit.
There won’t be any significant elimination of underwriting overlays until the government stops seeking huge mortgage-related penalties and settlements from lenders.
There shouldn’t be any expansion of the mortgage credit box since looser underwriting is what caused the recent mortgage crisis.

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