With most “easy” refinance business long gone, some lenders have turned their attention to lower credit-quality borrowers. New research from Fair Isaac suggests that borrowers with the lowest credit scores are showing improved performance, helping to ease some concerns about lending to such borrowers. Ethan Dornhelm, principal scientist at Fair Isaac, said average FICO scores tend to decline during an economic downturn, as consumers have more difficulty meeting loan obligations ...

Fannie Mae and Freddie Mac customer buybacks totaled $1.269 billion during the second quarter of 2014, according to an Inside Mortgage Trends analysis of Securities and Exchange Commission disclosures made by the two government-sponsored enterprises. Lender buybacks had declined to just $522.5 million in the first three months of 2014, but the repurchase volume jumped 142.8 percent in the second quarter. While Fannie and Freddie reported that they ... [Includes two data charts]

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 ...

When two mortgage companies combine forces, the merged operation may have to deal with redundancies in operations, fulfillment, human resources and other areas that result in staff cuts. However, loan officers can see opportunity if the companies are combining to reach new markets. Not all LOs stay. In fact, once word leaks out that a company is a takeover target, many LOs start weighing their options, contacting competitors and sales managers who tried to ...

The use of Federal Home Loan Bank advances among bank and thrift members rose overall during the second quarter of 2014, according to the Inside Mortgage Finance Bank Mortgage Database. All of the nation’s banks and thrifts used a combined $437.7 billion in advances as of June 30, 2014, up 11.6 percent from the first quarter of 2014 and an 18.8 percent increase from the same period a year earlier.

The Inspector General of the Federal Housing Finance Agency is among a growing list of official government watchdog agencies authorized to employ armed investigators when ferreting out waste, fraud and abuse, according to a recent report. The report issued by the Congressional Research Service listed some three dozen IGs that possess law enforcement authority, which legally empowers them to make arrests, seek warrants and carry firearms.

IG Recommends FHFA Upgrade Its Recordkeeping. The Federal Housing Finance Agency is in compliance with its recordkeeping procedures but the policy and infrastructure of its records management could do with an upgrade, concluded an evaluation by FHFA’s Inspector General last week. The IG said that the Finance Agency’s Division of Enterprise Regulation’s recordkeeping practices “have limitations that impede the efficient retrieval” of examination workpapers by agency staff and by IG auditors.

The 12 Federal Home Loan Banks contributed some $300 million to affordable housing in 2013, according to a report by the Federal Housing Finance Agency. The report, issued last week, is part of the FHFA’s mandate to monitor and report annually on the FHLBanks’ support of their low-income housing and community development activities. In 2013, the Banks contributed approximately $297 million to the Affordable Housing Program, equal to 10 percent of their net earnings for the preceding year and up approximately 57 percent from 2012, noted the FHFA.

In an unusual move, a Washington, DC, think tank has publicly taken to task the official watchdog of the Federal Housing Finance Agency, finding a recent audit of the FHFA’s representation-and-warranty policy “incomplete.” The September report by the FHFA’s Inspector General concluded that the Finance Agency’s implementation of the rep-and-warrant framework was premature and resulted in “significant and unresolved operational risks” to Fannie Mae and Freddie Mac. An analysis by the Urban Institute found that the OIG’s conclusions were “incomplete and overstate the risk of the plan.”