Bank Profitability

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

October 9, 2015 - Inside Mortgage Trends

Mortgage Activities Profitable for Smaller Banks

In the years after the financial crisis, returns on mortgage-banking activities have been more profitable for smaller banks than for large banks, according to researchers at the Federal Reserve. In an analysis of about 1,000 banks, William Bassett, a deputy associate director, and John Driscoll, a senior economist, found that returns on mortgage sales and securitization have been higher for community banks than for larger banks. Community banks also had higher returns on ...

September 25, 2015 - Inside Mortgage Trends

A Nonbank Buys Goldwater Bank in Arizona

It’s not every day – or every year, for that matter – that a nonbank purchases a federally insured depository. But it happened this month in Arizona. Well, sort of. This month, Kent Wiechert, owner and president of Westar Mortgage, Albuquerque, NM, closed on his purchase of Goldwater Bank, NA, a full-service bank with roughly $100 million in assets. The investment – no purchase price was disclosed – was a personal transaction entered into by Wiechert, but since he controls both ...

September 25, 2015 - Inside Mortgage Trends

Bank Mortgage Sales Increased Sharply In 2Q15, Not That Much Left in the Tank

Mortgage banking income rose substantially in the second quarter of 2015 mostly because lenders sold more loans in the secondary market, but the outlook for the second half of the year is murkier. Commercial banks and thrifts sold $198.64 billion of home loans during the second quarter, according to an Inside Mortgage Trends analysis of call-report data. That was up 19.9 percent from the first three months of the year, and it represented the busiest ... [Includes one data chart]

September 18, 2015 - Inside FHA/VA Lending

HECM Lending Rises in First Half, HMBS Issuance Up Same Period

FHA lenders funded $7.8 billion in new Home Equity Conversion Mortgage loans during the first half of 2015, up 8.2 percent from the same period a year ago. HECM loan production was slower in the second quarter with originations down 1.1 percent from the prior quarter. Purchase loans accounted for 86.1 percent of all HECM transactions during the first six months. Interestingly, borrower bias against adjustable-rate loans appeared to have eased. Fixed-rate HECMs accounted for only 15.4 percent of originations during the first half of the year. Initial principal amount at loan origination totaled $4.6 billion over the same period. On a fiscal year-to-date basis, the FHA reported a total of 53,372 HECM endorsements, up from 47,662 HECM endorsements in fiscal YTD 2014. Meanwhile, HECM endorsed cases increased to 5,750 in August compared to ... [ chart ]

September 18, 2015 - Inside FHA/VA Lending

Frustration Prompts Wells Fargo to Reinstate Overlays on FHA Loans

Wells Fargo this week reinstated the 640 minimum credit score requirement, following through on its threat to re-impose credit overlays due to its frustration with FHA’s republished loan-level certification proposal. Officials said the re-proposed version of the proposal, which was initially issued for comment in May, still disappoints in spite of industry input to put concerned FHA lenders at ease (See next story for background). In 2014, Wells dropped the minimum credit-score requirement to 600 for FHA borrowers after talks with the Department of Housing and Urban Development and policymakers. The FICO readjustment applies to Wells’ FHA retail purchase loans, aligning it with the 640 minimum credit score requirement for the bank’s correspondent business. In a previous statement, Wells reiterated the need for clearer rules in order to ...

September 18, 2015 - Inside FHA/VA Lending

Second Quarter Originations Fuel FHA Jumbo Securitization Surge

FHA jumbo securitization continued to rise over the first six months of 2015 on the back of soaring FHA jumbo production in the second quarter. FHA jumbo originations in the second quarter more than doubled to $6.8 billion, according to the Inside Mortgage Finance database. FHA data showed that the jumbo share of originations was highest in conventional-to-FHA refinance (14.9 percent) and streamlined FHA refis (13.3 percent,) but just 9.0 percent for purchase loans. Delivery of FHA jumbos, including modified loans, into Ginnie Mae jumbo mortgage-backed securities rose 131.9 percent in the second quarter from the prior quarter and was up 115.8 percent compared to the first six months of 2014. Wells Fargo led the market in the first half with $1.4 billion in jumbos contributed to MBS, up 123 percent quarter over quarter. That was good enough for a 12.7 percent market share. PennyMac Corp. accounted for ... [ chart ]

September 11, 2015 - Inside Mortgage Trends

Banks Continued to Shed Mortgage Servicing Rights During Second Quarter

Commercial banks and thrifts continued to back away from the business of servicing home mortgages for other investors during the second quarter of 2015, according to a new Inside Mortgage Trends analysis of call reports. At the end of June, the industry owned the servicing rights on $4.187 trillion of home loans held by other investors, typically as a result of mortgage securitization. That was down $94.2 billion from the previous quarter, a 2.2 percent decline ... [Includes one data chart]

September 4, 2015 - Inside Nonconforming Markets

Bank Holdings of First Liens Hit Levels Last Seen in 2009, Led by Wells and Chase

Bank and thrift holdings of first-lien mortgages continued to grow in the second quarter of 2015, according to an Inside Nonconforming Markets analysis of call reports. Most of the change occurred among the top three bank mortgage portfolios: Wells Fargo, Bank of America and JPMorgan Chase. Banks and thrifts held $1.81 trillion of first-lien mortgages as of the end of the second quarter of 2015. The holdings increased by 1.5 percent compared with ... [Includes one data chart]

August 28, 2015 - Inside Mortgage Trends

MBA Pushes Back on Basel Interest Rate Proposal

A proposal from the Basel Committee on Banking Supervision regarding banks’ interest rate risk includes provisions that would be “a step backward,” according to the Mortgage Bankers Association. In June, the BCBS issued a consultative document on the risk management, capital treatment and supervision of interest rate risk in its banking book. The committee of 28 regulatory bodies, including the United States, said the proposal aims to ...

August 28, 2015 - Inside Mortgage Trends

Banks Report Huge Increase in Mortgage-Banking Income During Second Quarter

Commercial banks and thrifts reported a hefty increase in profits from their mortgage-banking operations during the second quarter of 2015, according to a new Inside Mortgage Trends analysis of call reports. The industry generated $6.09 billion in mortgage-banking income during the second quarter, a 52.2 percent improvement over the first three months of the year. It was the highest income for the banking industry since the second quarter of 2013, when ... [Includes one data chart]


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TRID (Integrated Disclosures)
Uncertainty regarding "marketing service agreements"
Getting sued by HUD/DOJ for alleged underwriting violations
Declining loan volumes

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