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.

The Federal Home Loan Bank Topeka now lets members invest in residential whole loan mortgages originated under the Mortgage Partnership Finance Program as an added opportunity and as a risk-sharing measure. This is the first time that an FHLBank has opened its shared credit risk program to members. Dan Hess, chief business officer and senior vice president of FHLBank Topeka, told Inside The GSEs that the bank has had a lot of success with the MPF program since it began 15 years ago and wanted to extend the opportunity to its members. “It’s been a high quality asset for us with a low level of defaults throughout the financial crisis,” he said.

Conservatorship has left Fannie Mae and Freddie Mac in a state of flux, according to former Federal Deposit Insurance Corp. Chairman William Isaac, who recently criticized the federal government’s verdict to let the Treasury Department take the bulk of the GSEs profits. As anxiety continues to grow about the sustainable profitability of Fannie and Freddie, Isaac said there doesn’t appear to be light at the end of the tunnel. “We need to bring some fresh thought to this issue,” he said during a teleconference sponsored by Investors Unite last week. Although he said there has been very little movement on the issue within the past year. Isaacs said until a resolution is reached, “it’s very important that the government treat...

Freddie Pre-markets STACR Offering. Freddie Mac announced on April 6 a plan to pre-market its first actual loss STACR offering, STACR 2015-DNA1, starting April 13, subject to market conditions. Instead of allocating losses to the debt note based on a fixed severity approach, losses will allocated based on the actual losses realized on the related reference obligations. One Analysis of the Upcoming G-Fee and LLPA Announcement. In anticipation of the announcement surrounding guaranty fees and loan level price adjustment requirements, FBR Capital Markets released a couple of observations on April 8 regarding the possible income and impact on the market. “We still believe G-fees and LLPAs will be cut for a significant percentage of mortgage production,” FBR analysts said. However...

First Horizon announced on Thursday that its regional bank agreed to a $212.5 million settlement with the Department of Justice and the Department of Housing and Urban Development. The settlement relates to First Tennessee Bank’s underwriting and origination of FHA-insured mortgages from 2006 through 2008.

Mortgage brokers played an increasingly important role in the conventional conforming market during the first quarter of 2015, according to a new Inside Mortgage Trends analysis of mortgage-backed securities issued by Fannie Mae and Freddie Mac. Mortgage brokers were responsible for $23.8 billion of single-family mortgages securitized by the two government-sponsored enterprises during the first three months of this year. That was up 16.0 percent ... [Includes two data charts]

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 ...

The average mortgage banking firm saw a decline in net income during the fourth quarter of 2014, but the industry ended 2014 in much better shape than it started the year, according to data reported by the Mortgage Bankers Association. The average firm participating in the MBA’s Quarterly Mortgage Bankers Performance Report earned $901,000 in pretax income during the fourth quarter. That was off 36.9 percent from the third quarter, and it brought total income for 2014 to ...

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]

Repurchase requests on new production are few and far between, according to the government-sponsored enterprises. Fannie Mae and Freddie Mac both recently issued reviews of their quality control processes, noting that lenders have plenty of tools to help ensure loan quality and avoid buybacks. Carlos Perez, a senior vice president and chief credit officer for single-family business at Fannie, said that as of the end of 2014, 0.33 percent of the single-family ...