Mortgage servicing activities generated stronger profits during the fourth quarter, helping to offset a drop in production-related income, according to a new Inside Mortgage Trends analysis of corporate earnings releases from a group of 13 major lenders. As a group, the 13 lenders reported $612.9 million in mortgage servicing income for the fourth quarter, up 94.5 percent from the previous three-month period. However, three shops reported losses during ... [Includes one data chart]

United Guaranty, the largest private mortgage insurer in the nation, filed to go public this week, touting its market position, longevity and the strong profits it posted over the past two years. Then again, it’s been a tough market for mortgage-related stocks this year. Overall, United Guaranty hopes to raise $100 million by selling 19.9 percent of the firm, with its parent company, American International Group, retaining the balance while setting the stage for eventual ...

Commercial banks and thrifts reported $153.1 billion in single-family home loan sales by their mortgage-banking operations during the fourth quarter of 2015, a steep 24.8 percent drop from the previous quarter. For the year, secondary market activity was up from 2014 but still relatively sluggish. Depository institution mortgage-banking shops sold $721.2 billion of home mortgages last year, a 19.9 percent increase from 2014. But 2015 was the ... [Includes one data chart]

An estimated 96 million adults in the U.S. are renters who have never had a mortgage, many of whom would seem to be prime targets for first-time homeownership. However, more than half of the renter population is unlikely to receive mortgage financing anytime soon, due to underwriting factors or a preference to remain a renter, according to industry analysts. In a new report, researchers at the Urban Institute’s Housing Finance Policy Center developed ...

Individual borrowers purchasing homes in the era of the Consumer Financial Protection Bureau’s integrated disclosure rule, dubbed TRID, generally seem to be having an improved overall customer experience, despite a few bumps in the road, according to two recent surveys. But the progress for homeowners is coming at the expense of mortgage lenders. A survey from the STRATMOR consultancy found that overall borrower satisfaction is at a multi-year high ...

Fannie Mae and Freddie Mac purchased $127.7 billion of single-family loans last year that failed to meet the baseline qualified-mortgage standard set by the Consumer Financial Protection Bureau, according to a new analysis by Inside The GSEs. Under the agency’s ability to repay rule, the GSEs can ignore the restriction that qualified mortgages must have a debt-to-income ratio of 43 percent or less. This so-called agency “patch” was set up to last for seven years, or until 2021, as long as Fannie and Freddie remain in conservatorship or receivership. In other regards, such as the 30-year limit on maximum loan term and the prohibition on interest-only payments, the GSEs...

The idea of constructing a national highway system of sorts for the mortgage market by merging the GSEs into one has been making its rounds in the industry this week. And there’s been some dispute as to whether the plan is feasible. Five mortgage industry veterans – including two who worked in the Obama White House – floated the new plan aimed at preserving the government guaranty on conventional mortgage-backed securuties and finally ending the uncertainly plaguing the secondary market. Tim Howard, former Fannie CFO who left the GSE in 2004 and was involved in litigation regarding his tenure there, said the authors “greatly underplay the dangers of making a $10 trillion market...

The relatively new “A More Promising Road to GSE Reform” plan from five industry veterans is getting a hearing in Congress – but only informally. According to at least one of the plan’s authors, the white paper has been passed on to key members of the House and Senate committees that oversee Fannie Mae and Freddie Mac, including staffers for Rep. Jeb Hensarling, R-TX, who chairs the House Financial Services Committee. “We’re getting a lot of interest in this,” said Mark Zandi, chief economist for Moody’s Analytics, and one of the white paper’s five authors. (Zandi said he has not met with Hensarling’s staff, though another...

The Federal Housing Finance Agency announced last week that it’s mulling over the idea of allowing principal reductions for underwater homeowners and it expects to make a decision, one way or the other, within the next couple of weeks But some say if implemented, the overall impact will be fairly muted. Back in 2012, the agency decided that limited principal reduction could save Fannie Mae and Freddie Mac money, but the plan didn’t have the support of former Acting Director Ed DeMarco, who said it could encourage voluntary loan defaults. Since that time, FHFA Director Mel Watt revealed in a recent speech last week that he’s been...

Although nonconforming mortgage seller/servicers have been faced with numerous headaches in the secondary market because of TRID errors, that’s not the case over in the GSE camp. TRID became effective on Oct. 3 2015 and the GSEs amended their contractual obligations with customers so that they know they are responsible for any losses due to violations of the TRID rule. “They’re basically turning what was a repurchase obligation into an indemnification obligation. They don’t have to be the arbiter of what’s valid or invalid,” said John Levonick, head of compliance at Clayton Holdings, in a recent phone interview. “The whole industry on the...