Commercial banks and savings institutions generated $3.37 billion in mortgage banking income during the first quarter of 2014, according to a new Inside Mortgage Trends analysis of call reports. First-quarter bank and thrift mortgage banking profits were down 36.2 percent from the fourth quarter of last year and 56.2 percent off the robust $7.70 billion the industry earned in the first three months of 2013. The first quarter of 2014 marked the lowest ... [Includes one data chart]

A decline in refinance activity has prompted a number of lenders to turn to correspondent producers in an effort to boost originations. While correspondent lenders could anticipate better pricing due to the demand for their originations, firms buying the production concede that it’s not the most profitable origination channel, suggesting that pricing might not improve much. Big banks continue to dominate the correspondent channel while reducing ...

Mortgage servicing rights will never trade as freely as mortgage-backed securities, but agency officials say they are considering ways to facilitate the increasingly active MSR market. “The market is undergoing tremendous changes with great opportunities in mortgage servicing,” said Bob Ryan, a special advisor at the Federal Housing Finance Agency, during last week’s Secondary Market Conference sponsored by the Mortgage Bankers Association. “It has attracted ...

The mortgage market’s shift from a focus on refinances to purchase mortgages won’t be enough to prompt an increase in purchase-mortgage originations in 2014, according to industry economists. The Mortgage Bankers Association revised its origination projections last week, predicting that purchase-mortgage originations will decline by 4.0 percent in 2014 compared with the previous year. An estimated $680 billion in purchase mortgages ... [Includes one data chart]

Reset issues in the government’s Home Affordable Modification Program will begin to surface in 2016 and worsen in later years, but the impact will be less severe than predicted, according to a new commentary by the Urban Institute. Analysts with the institute’s Housing Finance Policy Center said HAMP resets will be a challenge for many borrowers, particularly those who received the steepest interest rate reduction. “However, we are likely years away from ...

Mortgage credit tightened slightly in April, according to the latest Mortgage Credit Availability Index from the Mortgage Bankers Association, a measure which analyzes underwriting trends in data from the AllRegs Market Clarity product. The index slipped from 114.0 in March to 113.8 in April, after increasing for each of the first three months of the year. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening ...

With housing finance reform legislation effectively stalled just short of a Senate floor vote, the industry is beginning to shift its expectant gaze to the Federal Housing Finance Agency to take the initiative as the debate moves toward GSE preservation. Although the reform bill, S. 1217, by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, cleared the Senate Banking, Housing and Urban Affairs Committee earlier this month, its less than impressive 13-9 vote margin all but ensures that Senate leadership will ignore the measure’s bid for a floor vote through the remainder of the 113th Congress.

Expect it to take years for the courts to resolve lawsuits filed by private investors in Fannie Mae and Freddie Mac stock, with the odds heavily stacked in the government’s favor, note industry observers. Speaking during a recent Bloomberg Industries webinar on Fannie Mae and Freddie Mac litigation, Brooklyn Law School Professor David Reiss noted it could take the courts up to a year simply to resolve the introductory motions.

Fannie Mae and Freddie Mac are moving forward slowly on the common securitization platform even after the Federal Housing Finance Agency recently narrowed the project, according to an agency official. Bob Ryan, a special advisor to the FHFA, told attendees at last week’s Mortgage Bankers Association Secondary Market Conference that the development of a common GSE securitization platform would take several years. The Finance Agency’s 2014 strategic plan for the GSEs includes clarifying the scope of the CSP project, which has been in the works for over a year.

Over roughly two years, Fannie Mae and Freddie Mac have spent about $65 million on the common securitization platform project, but without employing a timeline on the massive undertaking or a total cost estimate, according to a new report from the Inspector General of the Federal Housing Finance Agency. In its report, released last week, the IG notes that the regulator/conservator of the GSEs has yet to fully employ these “two basic project management tools,” which it deems critical to the project’s success.Although some progress has been made in developing the CSP, the project faces “considerable challenges that could undermine the project.”