Fannie Mae and Freddie Mac have released new guidelines designed to bring more of the two GSEs’ servicing requirements into alignment. The updated policies, both issued Oct. 3, focus on aligning contracts and the enforcement of remedies with seller/servicers in compliance with a Federal Housing Finance Agency directive. “The requirements announced in this bulletin build on the success [of previous announcements], and through our work with Fannie Mae, provide servicers with greater clarity, consistency and transparency across the enterprises on how servicer performance will be measured,” explained Freddie in its announcement.

A federal appeals court has refused to suspend proceedings in the case brought by the Federal Housing Finance Agency against one of the non-agency mortgage-backed securities issuers and underwriters for allegedly misrepresenting the deals that were sold to Fannie Mae and Freddie Mac. A three-judge panel of the Second Circuit Court of Appeals earlier this month made short work of rejecting the motion by UBS Americas to put the suit on hold while the appeals court hears UBS’ appeal of a lower court’s decision not to dismiss the case. “Upon due consideration, it is hereby ordered the motion is denied,” the judges ruled in their terse one-sentence Oct. 1 order.

The top mortgage lenders in the industry reported a record $8.35 billion in net income from their mortgage banking businesses during the third quarter of 2012, according to a new Inside Mortgage Trends analysis of early earnings reports. That represented a solid 9.1 percent increase over the second quarter and brought the group – which includes Wells Fargo, JPMorgan Chase, Bank of America, Citigroup and U.S. Bank – to a whopping $23.36 billion in mortgage banking income for the first nine months of the year. During the same period in 2011, these five lenders reported...

A plethora of new servicing rules from federal and state regulators are set to increase costs for servicers – particularly mid-sized and small servicers that have not faced servicing changes required by disciplinary actions. The latest and perhaps most significant proposal for servicing rules came from the Consumer Financial Protection Bureau in August. “Change imposes significant pressure on servicer costs, resources, and capacity,” David Stevens, president and CEO of Mortgage Bankers Association said last week in a comment letter submitted to the CFPB. “The mortgage industry has been going through chronic, piecemeal regulatory changes for some time, with no end in sight. The costs are becoming prohibitive for many smaller, and even larger, companies.” He warned...

Mortgages originated by lenders’ retail production programs accounted for 60.7 percent of single-family loans securitized by Fannie Mae and Freddie Mac during the third quarter of 2012, according to a new Inside Mortgage Trends analysis. Although many lenders have made strategic choices to focus on retail and scale back or abandon the wholesale market, a key factor in the dominance of retail originations was the heavy volume of refinance lending. Servicers continue to retain a significant share of their customers who refinance, and in programs like the Home Affordable Refinance Program for underwater Fannie and Freddie borrowers, retail captures the overwhelming share of the business. Loan level data from the government-sponsored enterprises do reveal, however, that mortgage brokers are contributing to the increase in HARP lending. Brokers tend...[Includes two data charts]

Cyber warfare is heating up in the United States and throughout the world, with “distributed denial of service” attacks up significantly in the third quarter against mortgage lenders and other financial services providers and corporate entities, according to a report released this week by Prolexic Technologies, a vendor of DDoS protection services. During the third quarter, Prolexic mitigated seven DDoS attacks of more than 20 gigabits per second (Gbps) for different clients across multiple industries, the firm said. A number of these attacks leveraged a toolkit called “itsoknoproblembro” that has been used in some recent high-profile DDoS attacks. In a DDoS attack, one or more hackers deploy...

Major banks reported increased charge offs and nonperforming assets for home-equity loans in the third quarter of 2012 due to new guidance from the Office of the Comptroller of the Currency. However, bank officials and industry analysts suggest that banks have largely already reserved for the new reported losses and that overall trends point toward improvements in HEL performance. In June, the OCC updated its accounting guidance to require banks to classify mortgages and other loans discharged by troubled borrowers in bankruptcy as troubled debt restructurings. The agency said a bank should charge off the excess of the loan’s carrying amount over the fair value of the collateral with the remaining balance of the loan placed into non-accrual status. “The bankruptcy court ‘removed’...

The Federal Housing Finance Agency’s five-year strategic plan aims to develop a “new system” for recording mortgages electronically and assuming custodianship of mortgage documents but is curiously silent about the role the Mortgage Electronic Registration System would play in a future revamped secondary mortgage market. The new system is among many initiatives and strategies outlined in the FHFA’s recently issued updated strategic plan for 2013-2017. The plan builds on an earlier plan for the conservatorships of the government-sponsored enterprises released in February. As part of building a new infrastructure to replace the GSE model, the FHFA said...

The mortgage industry does not appear to be making much headway when it comes to reducing the volume of complaints consumers lodge with the Consumer Financial Protection Bureau. In fact, according to the CFPB’s latest consumer complaint report, mortgage-related issues are becoming more prevalent. As of the end of the third quarter, the CFPB had received approximately 79,200 consumer complaints, including approximately 36,300 related to mortgages (46 percent), 23,400 for credit cards (30 percent), 12,900 related to bank accounts and services complaints (16 percent), and 2,900 having to do with private student loans (4 percent). Three months earlier, mortgages accounted...

Just two institutions – Fannie Mae and Freddie Mac – end up securitizing the vast majority of conventional home loans, but a large universe of lenders deliver a significantly diverse supply of loans to the government-sponsored enterprises. A new Inside Mortgage Finance special report based on loan-level securities disclosures reveals that 1,848 different institutions delivered single-family mortgages to the two GSEs during the third quarter. They ranged in size from Wells Fargo, which delivered nearly a quarter of mortgages securitized by Fannie and Freddie during the period, to Wisconsin-based Universal Mortgage Corp., which sold one small $39,000 loan to Fannie during the period. The report, GSE Seller Profile: 3Q12, shows...