Profits and Losses

Browse articles from all of our Newsletters related to Profits and Losses.

March 24, 2017 - Inside Mortgage Trends

Walter/Ditech Looks to Shed Assets

Over the past three years, Walter Investment Management Corp. has posted net losses totaling $902.6 million – more than any other publicly traded mortgage company with the exception of one: Ocwen Financial, which lost $915.6 million over that period. And while Ocwen may finally be turning the corner in terms of both its regulatory problems and negative cashflow, the jury is still out on Walter, which saw its stock price fall to less than 70 cents a share this week ...


March 24, 2017 - Inside Mortgage Trends

Mortgage Banking Profits Softened in 4Q16

Mortgage bankers ended a very good year in 2016 on a somewhat offbeat note as overall company profits sagged and production margins shrank. The average mortgage-banking operation generated $3.513 million in pretax income during the fourth quarter of 2016, according to the latest data from the Mortgage Bankers Association. That was down 10.8 percent from the average pretax income in the trade group’s third-quarter Mortgage Bankers Performance report ...


March 24, 2017 - Inside Mortgage Trends

Public Nonbanks Had a Rough Go in 2016 But Managed to Turn Corner in 2nd Half

Publicly traded mortgage-banking firms had a rough ride in 2016, which turned out to be a turning point for one of the sector’s stalwarts, PHH Mortgage. The nine publicly traded mortgage lenders tracked by Inside Mortgage Trends posted a combined $563.8 million in net income on their mortgage-banking operations during the fourth quarter. That was up sharply from the third quarter, but it was not enough to offset huge combined losses during the first half of ... [Includes one data chart]


March 23, 2017 - Inside Mortgage Finance

M&A Roundup: Freedom Mortgage Poised For Growth, Ditech Headed for the Exit?

Although 2017 is expected to be a down year for originations, Freedom Mortgage – already a top-10 ranked lender – is poised for growth via mergers and acquisitions and is pondering deals for both servicing rights and other shops. Company CEO and founder Stanley Middleman told Inside Mortgage Finance bluntly: “We’re shopping.” Although Middleman declined to name any targets, he said...


March 17, 2017 - Inside FHA/VA Lending

Utah FHA Lender Pays $4.25 M to DOJ, HUD to Resolve Fraud Claims

Security National Mortgage Co. of Salt Lake City has paid $4.25 million to the Department of Housing and Urban Development to settle allegations of failing to comply with FHA loan requirements. Security National, a retail lender, has been an FHA-approved direct endorsement lender since October 1993, the year it was founded. The settlement resolves a joint civil investigation by the HUD Office of the Inspector General, Department of Justice and the U.S. Attorney’s Office for the District of New Jersey into Security National’s FHA origination and underwriting practices in connection with 100 FHA-insured loans. As part of the settlement, the lender “agreed it engaged in certain conduct in connection with its origination and underwriting of the loans.” The HUD OIG provided no details about the investigation. The OIG said the loans that were certified as compliant would not have been insured had ...


March 17, 2017 - Inside FHA/VA Lending

Trump Proposes Drastic Cuts to 2018 HUD Discretionary Spending

The Trump administration has proposed deep budget cuts in 2018 for the Department of Housing and Urban Development and the U.S. Department of Agriculture, but whether the agencies’ critical housing insurance programs would be affected is unclear. The cuts are part of the administration’s plan to reduce non-defense discretionary spending dramatically in order to fund increased defense spending and President Trump’s southern border wall, and to bring down a projected $9.4 trillion U.S. deficit over the next decade.Released this week, the preliminary 2018 budget seeks $40.7 billion in gross discretionary funding for HUD, $6.2 billion or 13.2 percent lower than the department’s approved spending in 2017. The $47.3 billion in discretionary budget authority enacted for fiscal 2017 does not include offsetting receipts from FHA and Ginnie Mae, which lowered the congressionally appropriated cost for ...


March 17, 2017 - Inside FHA/VA Lending

Georgia Appeals Court Finds for Wells Fargo in Provisional Win

A Georgia appellate court recently handed Wells Fargo Bank a provisional win in a lawsuit in which a VA borrower alleged breach of contract and wrongful foreclosure. In Wells Fargo Bank, N.A., d/b/a Wells Fargo Home Mortgage v. LaTouche, the court ruled that Wells did not breach its duty to the borrower to comply with VA foreclosure regulations. The court concluded that the trial court had erred in denying Wells Fargo’s motion for summary judgment as to the defendant’s claims for wrongful foreclosure that hinged upon the same VA regulations. The reversal stemmed from Wells Fargo’s request for an interlocutory review of the trial court’s denial of its motion for summary judgment on defendant Michael LaTouche’s claims for breach of contract, wrongful foreclosure and “surprise. An interlocutory review is undertaken when a question of law must be answered by an appellate court before ...


March 17, 2017 - Inside FHA/VA Lending

Quicken Loans Notches First Win After Court Narrows Scope of Case

A favorable court ruling on the statute of limitations for filing claims under the False Claims Act gave Quicken Loans its first win in a closely watched government case involving allegedly fraudulent FHA loans. Judge Mark Goldsmith of the U.S. District Court for the Eastern District of Michigan dismissed portions of the Department of Justice’s lawsuit against Quicken in a March 9 decision, narrowing the lender’s potential liability for FHA losses. The losses were blamed on sloppy underwriting, fraudulent certification and loan performance. The DOJ said the FHA would not have knowingly insured the loans had it known they were defective. The DOJ and the Department of Housing and Urban Development’s inspector general began an investigation of Quicken’s FHA lending activities in April 2012. The investigation encompassed some 246,000 FHA loans, which Quicken originated from ...


March 17, 2017 - Inside FHA/VA Lending

Serial Rapid Refinancing Continues As VA, MBA Explore Potential Cures

Solicitation of VA purchase loans for streamline refinancing within weeks of closing is apparently continuing despite Ginnie Mae’s efforts to stop the harmful practice. The Mortgage Bankers Association has expressed concern that guidance on pooling eligibility for streamlined refinance loans, which Ginnie issued in October last year, was far less effective than expected. Although the aggressive refinancing trend has slowed due to Ginnie’s action, there are still “pockets of that activity” being reported, said Pete Mills, MBA senior vice president. Refinancing a veteran’s purchase mortgage less than six months after its origination is not in the vet’s best interest because it strips equity from the house and results in higher financing costs, said Mills. While the rapid refi trend involves only a small number of loans in Ginnie mortgage-backed securities pools, investors do not get the full benefit of their investment because of early prepayment. Mills said there are a handful of lenders and brokers that ...


March 10, 2017 - Inside Mortgage Trends

It’s a Sellers’ Market for Independent Retail Shops

There are currently more buyers for retail origination platforms than there are entities available for sale, according to Strategic Mortgage Finance Group. Stratmor helped advise First Priority Financial last year as the lender was being acquired by Caliber Home Loans. First Priority had more than 370 employees with branches in California, Oregon, Washington, Idaho and Iowa. Terms of the transaction weren’t disclosed. “This deal, along with several other transactions in the Stratmor pipeline, now enable...


March 9, 2017 - Inside Mortgage Finance

Subservicing Sector Starting to Look Crowded As More Firms Choose ‘Capital Light’ Strategy

The nation’s residential subservicing specialists increased their contract base to $1.93 trillion at the end of 2016, a 2.7 percent sequential gain and an impressive 22.9 percent improvement over yearend 2015, according to survey figures compiled by Inside Mortgage Finance. It’s a sign that this segment of the industry is beginning to look a bit crowded, which means profit margins could come under pressure. Over the past year, several fairly large players in the market – Flagstar, Nationstar Mortgage, Walter/Ditech and PHH Mortgage – have sold...[Includes one data table]


March 3, 2017 - Inside FHA/VA Lending

FHA Primes Lenders for LRS, Defect Taxonomy; System to Go Live in 2Q

The FHA is nearing full implementation of a new loan review system (LRS) for managing FHA’s Title II single-family quality-control processes. No specific implementation date has been set but it could be sometime in the second quarter, the agency said. The LRS builds on FHA’s efforts to align the documentation of loan-review results. In addition, it incorporates the Single-Family Housing Loan Quality Assessment Methodology or defect taxonomy. The FHA said the new system would not be used to manage any aspect of the agency’s standard loan origination or endorsement processes. Rather, it would be used to review of test cases submitted by lenders seeking unconditional direct-endorsement authority. It would be used as well for various post-endorsement reviews of forward single-family loans. After the ...


March 3, 2017 - Inside FHA/VA Lending

GNMA Issuance Tumbles in 1Q17 Following 2016’s Stellar Volume

Ginnie Mae production fell substantially in February from January as the government-insured lending market continued to lose steam in the first quarter of 2017. Ginnie mortgage-backed securities issuance fell 24.0 percent from January as fewer purchase and refinance loans were pooled for securitization, bringing February’s total issuance to just $32.2 billion. Year-over-year Ginnie MBS issuance, on the other hand, increased by 6.2 percent. The government-insured market set an all-time record of $545.0 billion in originations during 2016, a whopping 31.0 percent jump from the previous year. That total eclipsed previous records for originations of FHA, VA and rural housing loans guaranteed by the U.S. Department of Agriculture, according to data compiled by affiliate Inside Mortgage Finance. In addition, government-insured lending accounted for a record ... [ 3 charts ]


March 3, 2017 - Inside MBS & ABS

Pressure on Capital, Dividends Remains as MBS Settlements Linger for Foreign Banks, Says Fitch

The threat of large, unpredictable settlements are looming over several European banks that have not yet resolved their remaining MBS lawsuits, putting pressure on their earnings and capital, according to a new Fitch Ratings report. Uncertainty about the scale of penalties from legacy MBS lawsuits will compel the affected banks to continue being cautious about managing and retaining capital, and distributing dividends. Though most of the banks have strengthened their capital positions considerably since the financial crisis, there would be no rest for them until the last settlement dime has been paid, the report indicated. Bank settlements with U.S. agencies relating to fraud investigations of their roles in the financial crisis, specifically their legacy MBS business, have...


March 3, 2017 - Inside MBS & ABS

Mortgage Gain-on-Sale Margins Come Under Pressure And Could Influence Lenders’ Decisions to Securitize

Secondary market gains headed south in the final three months of 2016, and so far it’s not looking too bright for the first quarter of 2017, which has about four weeks to go before it’s a wrap. According to a new report from Piper Jaffray, gain-on-sale margins declined to an average of 94 basis points in the fourth quarter, compared to a more robust 106 bps in the third. Piper said GOS is currently tracking at about 88 basis points. The research firm’s coverage universe includes...


February 24, 2017 - Inside Mortgage Trends

Banks’ Mortgage-Banking Income Rose in 4Q16

Commercial banks and savings institutions reported a combined $5.479 billion in net income from mortgage-banking activity during the fourth quarter of 2016, according to a new Inside Mortgage Trends analysis of call-report data. The industry’s mortgage-banking income was up 5.8 percent from the third quarter, lifting the total for the year to $17.544 billion. That was down 4.6 percent from 2015. Bank of America ranked as the top earner in ... [Includes one data chart]


February 24, 2017 - Inside Mortgage Trends

Will Dwindling Refinances Lead to Layoffs?

As interest rates continue to inch upward and refinance activity drops, it stands to reason that more residential lenders will move to cut staff, if they haven’t already. But so far, there have be no major layoffs – at least none that have been registered. But that doesn’t mean industry executives aren’t thinking about it. According to interviews conducted by Inside Mortgage Trends over the past month, it’s a mixed bag when it comes to hiring. Non-agency/nonprime lenders such as ...


February 23, 2017 - Inside Mortgage Finance

PHH Shifts Gears to ‘Capital Light’ Focus On Subservicing, Dumping PLS Business

Nonbank mortgage giant PHH Corp. – which posted combined losses of $347 million the past two years – is betting its future on subservicing, a business it describes as being “capital light” and one that could lead to riches down the road. As outlined by senior management during a recent call with analysts, the company will focus on processing loans for other shops, splitting the underlying servicing fee – 25 basis points on Fannie Mae/Freddie Mac loans – with the owner of those receivables. PHH CEO Glen Messina described...


February 17, 2017 - Inside FHA/VA Lending

4Q16 Spike in FHA Delinquencies Justifies Trump’s Premium Action

The spike in FHA delinquencies in the fourth quarter of 2016 justifies the Trump administration’s decision last month to suspend and review the outgoing administration’s lowering of FHA mortgage insurance premiums, said House Financial Services Committee Chairman Jeb Hensarling, R-TX. Commenting on the Mortgage Bankers Association’s quarterly delinquency rate survey, Hensarling praised President Trump’s decision to set aside the 25-basis-point premium reduction, which Inside FHA/VA Lending reported first on Jan. 6, 2017. “Lowering premiums at this time was a big mistake,” said Hensarling. “The sudden increase in delinquencies makes it clear that President Trump was absolutely right to undo the previous administration’s irresponsible action.” Hensarling recalled that in 2013 “taxpayers had to spend $1.7 billion to bail out the FHA.” Going forward, the FHA must be fiscally sound, with a ...


Poll

With the spring homebuying season in full swing, what percentage of your March 2017 application volume has been for “purchase” loans?

75% or higher
50% to 74%
30% to 49%
Under 30%

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