Fannie, Freddie Helped by Special Servicers. While nonbank servicers are under scrutiny from a number of different parties, Fannie Mae and Freddie Mac said special servicers reduce credit losses compared with traditional bank servicers. In its latest earnings report, Freddie said it facilitated the transfer of servicing for $55.6 billion in unpaid principal balance to special servicers in 2013. “Some of these specialty servicers have grown rapidly in the last two years and now service a large share of our loans,” the GSE said.

A continued decline in GSE refinances, in concert with faltering purchase activity midway through the first quarter, helped contribute to an overall drop in the volume of single-family mortgages securitized by Fannie Mae and Freddie Mac in February. Fannie and Freddie issued $44.6 billion in single-family mortgage-backed securities in February, a 5.1 percent decline from January and a steeper 62.0 percent drop for the first two months of 2014 compared to the same period in the previous year.

Fannie Mae and Freddie Mac in 2013 wrapped up most of the massive amount of repurchase demands they made on legacy loans originated before 2008, but the GSEs are looking more closely at new production and, increasingly, servicer performance. Together, Fannie and Freddie reported a total of $37.87 billion in mortgage repurchases and other settlements of buyback claims, which typically means the lender indemnified the GSE for its losses.

Other firms had more of a jumbo focus. Second-ranked PHH Mortgage reported that 50.0 percent of its originations in 2013 were non-agency jumbos.

A number of lenders said they have put an increased emphasis on jumbo ARMs due to the rise in interest rates that started in May of 2013.

Not only is the spring home buying season beginning to show signs of life, so too is the M&A market for mortgage companies.

When conflicts of interest were unearthed, Aurora terminated the contract in 2012, leaving $28 million in unpaid bills. But Allonhill wanted its money.

FHA lenders reported $8.7 billion in new originations in January, down from $10.9 billion in December and $23.7 billion from a year ago. Most were fixed-rate mortgages and 77.1 percent were purchase transactions.

The mortgage market has gradually shifted upstream since the collapse of the housing market and the painstakingly slow recovery, with big-ticket mortgages capturing a growing share of new originations, according to a new Inside Mortgage Finance analysis. Mortgages exceeding the traditional conventional loan limit of $417,000 accounted for 19.8 percent of new originations in 2013, up from 16.2 percent during the previous year. And with overall mortgage-production volume slumping over the second half of 2013, the jumbo share of new originations rose to 23.3 percent in the fourth quarter. The secondary-market agencies accounted...[Includes three data charts]

It’s been a busy quarter for sales of mortgage servicing rights, but most of them have involved portfolios of $2 billion or less, spurring talk in the industry that regulatory oversight of MSR transfers is affecting the mergers and acquisition market. In particular, dealmakers are starting to call it the “Lawsky Effect,” named after Benjamin Lawsky, the superintendent of the New York Department of Financial Services who in early February put a “hold” on Wells Fargo’s sale of $39 billion in MSRs to Ocwen Financial. Lawsky has stated his concerns about Ocwen’s fast growth, its capacity to take on massive new assignments and complaints about some of its servicing practices. “I have not heard...