Fannie Mae and Freddie Mac are poised to see enhanced competition in the multifamily mortgage-backed securities market in 2014, but it remains to be seen whether the GSEs’ regulator will follow through on proposed restraints on their multifamily footprint. The two GSEs await fresh direction from the FHFA in terms of any possible further constriction of their multifamily activity, after they were directed in 2013 to reduce their multifamily loan purchases by 10 percent from the previous year.

FHFA Launches ‘Servicing Project’ to Watch Counterparty Risk. The Federal Housing Finance Agency has launched what industry officials have labeled “a servicing project” to keep an eye on all large servicing sales where the underlying collateral is guaranteed by Fannie Mae and Freddie Mac. Sources briefed on the effort said the FHFAis now officially asking that the GSEs get agency approval for any sales of mortgage servicing rights where 25,000 or more in loans are being transferred. This translates into deal sizes of at least $5 billion.

A steady decline in GSE refinances throughout 2013 coupled with faltering purchase mortgage activity during the final third of the year helped contribute to an overall dip in the volume of single-family mortgages securitized by Fannie Mae and Freddie Mac both on a month-to-month and year-end basis, according to a new Inside The GSEs analysis. Fannie and Freddie issued $55.8 billion in single-family mortgage-backed securities in December, a 4.9 percent decline from November.

Fannie Mae’s and Freddie Mac’s home-retention activity declined for the most part during the third quarter of 2013, according to a new analysis of Federal Housing Finance Agency data by Inside The GSEs. Total loss mitigation activity – total home-retention efforts and foreclosure activities combined – declined 8.3 percent during the third quarter to 152,101 and was down 21.3 percent from a year-ago.

Fannie Mae and Freddie Mac combined did less business in single-family mortgage-backed securities in 2013 than the previous year while a growing share of business came from small and mid-sized lenders, according to an Inside The GSEs analysis. For the year, the two GSEs produced $1.161 trillion in single-family MBS, down 8.4 percent from their overall production in 2012.

Many of the top players in the mortgage industry reported declines in net mortgage-banking income during the fourth quarter, but they also showed resilience in the face of declining production and persistent buyback risk. A diverse group of 17 financial institutions reported a combined $1.42 billion in mortgage-banking profits during the fourth quarter of 2013, according to a new Inside Mortgage Trends analysis of earnings reports. That was down 2.0 percent from the previous quarter ... [Includes one data chart]

The fee increases and stiffer mortgage-insurance requirements implemented on FHA mortgages in the past year have helped reduce the agency’s share of originations to first-time homebuyers. First-time homebuyers have traditionally been heavily reliant on FHA financing and that continues to be the case, though the FHA’s dominance has declined significantly in the past year. At the start of 2013, FHA mortgages were used in about one of every two home purchases by a first-time buyer ... [Includes one data chart]

With residential loan production expected to decline by at least 30 percent this year, bank originators are looking at ways to cut costs without damaging their ability to handle an unexpected uptick in applications should rates unexpectedly fall. According to both lending executives and outsourcing firms, inquiries are picking up at vendors that process, underwrite and close residential mortgages. “The banks are tired of ramping up and then cutting back,” said Jeffrey Taylor, managing partner at Digital Risk ...

An entirely new mortgage market was formed on Jan. 10, 2014, but it remains to be seen who is in it, who will get in and what the sector will be made of. The landing of the ability-to-repay rule two weeks ago created two categories of qualified mortgages – prime and nonprime – plus a non-QM market. The new rule is going to limit the opportunities for lenders to move beyond the ultra-conservative standards of the past few years, but it won’t prevent a gradual expansion of credit ...

One sign of just how seriously Congress took the issue of consumer disclosure in the aftermath of the mortgage market meltdown is the dramatic escalation lenders will face for violating the new integrated disclosures from the Consumer Financial Protection Bureau, which take effect Aug. 1, 2015. Consider this: Under the Truth in Lending Act, lenders face a private right of action for violations (along with attorney’s fees and costs), as well as statutory penalties of up to $4,000 for failures to ...