SunTrust Mortgage has agreed to pay $968 million to the federal government and 49 state attorneys general to resolve allegations of improper FHA origination and servicing practices. The company will pay $418 million to resolve potential liability under the False Claims Act for flawed FHA loans made from January 2006 through March 2012. …

As one jumbo participant put it: “More is good.” Redwood Trust also is working on a deal, industry officials said.

The terms of the settlement include $500 million in consumer relief and a cash payment of $468 million.

“Right now there’s a large discrepancy between what the buyer wants to pay and what the seller wants to sell at,” said Chuck Klein, managing partner in Mortgage Banking Solutions.

One competitor to Prospect described Mike Williams as a “great technical guy.” He added that having Prospect go public is “the next step” in Sterling’s exit strategy.”

The average loan size is $215,080, the average loan-to-value ratio 72 percent. The first round of bidding is scheduled for next Wednesday, June 25.

Norcom wants its wholesale account executives to be in the office, not traveling the roads.

Although the Wells Fargo-Ocwen MSR transfer is still on hold, other institutions continue to trim their mortgage servicing portfolios.

Outside of CitiMortgage and SPS, no other servicers received one-star ratings on the seven metrics tested for the Treasury in the first quarter of 2014.

Analysts point out that bank earnings have suffered less than revenues, and many institutions responded quickly by downsizing their mortgage operations, although these cost-cutting efforts won’t show up in expenses immediately.