Higher guaranty fees and improving housing markets propelled Fannie Mae and Freddie Mac to banner profits during the fourth quarter of 2013 and for the year as whole. The two GSEs reported a combined 2013 net income of $133 billion, helped by significant nonrecurring items related to deferred tax allowance valuation reversals, private-label residential mortgage-backed security lawsuit settlements, increased representation and warranty settlements, and sizeable decreases in loan-loss reserves.

Fannie Mae and Freddie Mac issued $44.6 billion in single-family mortgage-backed securities during the month of February, a 5.1 percent monthly decline and a 62.0 percent drop for the first two months of 2014. February’s decline was less steep than January’s 15.8 percent month-to-month fall off in MBS. Top-ranked Wells Fargo’s Fannie and Freddie securitization at $6.70 billion rose by 25.9 percent on a monthly basis but dropped 71.9 percent year-to-date.

The advance business for the 12 Federal Home Loan Banks increased throughout 2013 ending the year ahead both on a quarterly and an annual basis, according to preliminary figures released by the Federal Home Loan Bank Office of Finance. Advances increased 7.2 percent to $498.6 billion during the fourth quarter of 2013 while posting an even larger 17.1 percent increase from $425.8 billion a year earlier. The Office of Finance attributed the increase in advances due to “higher member borrowing, particularly by large-asset members.”

Commercial banks and savings institutions made $1.447 billion in mortgage repurchases and other indemnifications during the fourth quarter of 2013, according to a new Inside Mortgage Trends analysis of call-report data. Repurchase totals for the final three months of last year were the lowest quarterly volume since the second quarter of 2008, when the industry made $1.533 billion in mortgage repurchases and indemnifications. The fourth-quarter ... [Includes one data chart]

When the going gets tough in the mortgage industry, nonbank lending firms start pondering the once unthinkable: selling their franchises, hoping the cash will tide them over until the next upswing in the cycle. The situation is no different this time around. Investment banking advisors say there are plenty of potential acquirers – all hunting for bargains – but sellers are picky. “Cheap is the goal now,” said Chuck Klein, a managing partner at Mortgage Banking Solutions ...

In new guidance to examiners and bankers, the Office of the Comptroller of the Currency is stressing the risks posed by mortgage banking, particularly for banks that rely heavily on the mortgage industry to turn a profit. “A mortgage banking operation’s income and expense components can change at significantly different rates and in different directions over time, resulting in substantial shifts in profitability,” the OCC said in its new handbook on mortgage banking ...

Officials at nonbank special servicers said they will continue to work to acquire servicing from banks, but they prefer to generate their own servicing via originations. Officials at Nationstar Mortgage, Ocwen Financial and Walter Investment Management noted that creating mortgage-servicing rights via their own originations can be more cost effective than acquiring MSRs or subservicing from other lenders. Nationstar originated $24.0 billion in mortgages in 2013, making it the ...

In the last couple of years, the wholesale origination channel has been a revolving door for industry players, with some exiting for various reasons and new ones coming in to take up the slack. Those currently in the game expect the instability will continue for some time. Wholesalers say the decision to exit the business or enter at one’s own peril boils down to perception: Is the glass half empty or half full? Brian Benjamin, a mortgage broker and president/CEO of Two River Mortgages ...

Loan correspondents and mortgage brokers continue to play a major role in the agency mortgage market, accounting for 42.9 percent of loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae in 2013, according to a new Inside Mortgage Trends analysis. Correspondents accounted for most of the third-party originations securitized by the agencies, and Wells Fargo was the top producer of these loans. Just over half of the loans sold by Wells were ... [Includes one data chart]

Warehouse lines of credit extended by commercial banks to non-depository lenders fell a modest 11.8 percent in the fourth quarter on a sequential basis, but executives who work in the sector are reporting usage ratios as low as 20 percent. Based on exclusive survey figures compiled by Inside Mortgage Finance, warehouse providers had an estimated $30.0 billion in commitments at Dec. 31 compared to $34.0 billion at the end of the third quarter. But a commitment is...[Includes one data chart]