Outside investors poking around the mortgage banking industry for a possible franchise deal first and foremost want the companies they’re courting to have Ginnie Mae approvals. “If you have the Ginnie eagle, it’s golden,” said Chuck Klein, managing director for mergers and acquisitions for Mortgage Banking Solutions. “Retained Ginnie servicing is what it’s all about.” Klein, of course, isn’t...

Fannie Mae and Freddie Mac saw a noticeable decline in Home Affordable Refinance Program activity during the final months of 2012, according to a new Inside MBS & ABS analysis. At a time when overall refinance business rose 11.0 percent at the two government-sponsored enterprises, deliveries of HARP loans fell 6.9 percent. The biggest decline was in issuance of MBS specifically geared for underwater mortgages. A total of $62.28 billion of high loan-to-value ratio mortgages were securitized...[Includes two data charts]

The massive legal action initiated by the Federal Housing Finance Agency about a year and a half ago on behalf of Fannie Mae and Freddie Mac against many of the nation’s biggest non-agency MBS issuers and underwriters for allegedly misrepresenting toxic MBS netted its first settlement this week with the prospect of more where that came from. In papers filed with the U.S. District Court, Southern District of New York, the FHFA “voluntarily dismisses with prejudice” its lawsuit against General Electric Co., ending the legal action in which the FHFA had claimed the firm had misled Freddie into purchasing some $549 million of toxic MBS. “This settlement resolves...

Fannie Mae is informing the mortgage cooperatives it works with that going forward that all the different affinity groups doing business with the government-sponsored enterprise will be treated the same when it comes to guaranty fees and charges for its Desktop Underwriter program, Inside Mortgage Finance has learned. One executive close to the situation told Inside Mortgage Finance that action by Fannie essentially “equalizes” all cooperatives in terms of the pricing breaks they receive from the GSE. Some affinity relationships have been in place...

The Consumer Financial Protection Bureau followed another mandate from the Dodd-Frank Act late last week, promulgating a final rule that requires mortgage lenders to provide applicants with free copies of all appraisals and other home-value estimates, and to inform consumers within three days of receiving an application for a loan of their right to receive copies of all appraisals. An applicant may waive the timing requirement for providing these copies, but must be given a copy of all appraisals and other written valuations at or prior to closing or account opening or, if the transaction is not consummated, within 30 days after the creditor makes a decision. While the rule prohibits...

Stringent appraisals have hindered home sales, limiting purchase-mortgage originations and constraining home prices, according to real estate agents responding to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Appraisers counter that they are accurately pricing homes and cite burdensome regulations along with new requirements from lenders trying to avoid buybacks. In certain circumstances, appraised home prices have been set well below listing price, frustrating sellers that have received multiple offers. “Appraisals continue to cause problems as the market is trying to recover value, but tight appraiser guidelines are not keeping up with the agreed sales prices between buyers and sellers,” according to a real estate agent in Michigan. The sales-to-list price ratio has trended...

The private mortgage insurance landscape is shifting in 2013 with the entry of a new MI provider, Genworth Financial’s announced plan to revamp its mortgage insurance business, and reports of a plan by Essent Guaranty to go public later this year. Fannie Mae and Freddie Mac last week approved National Mortgage Insurance Corp. as an eligible insurer, clearing the company’s entry into the U.S. mortgage insurance market with a scheduled launch in the first quarter of 2013. NMIC’s entry brings to seven the number of companies that are currently active in the MI market while three other companies are in a runoff mode. Earlier last year, NMIC parent NMI Holdings, Inc., raised...

Industry participants have mixed views on the outlook for joint ventures between lenders and real estate agents and homebuilders. Wells Fargo ended a significant number of its joint ventures in the second half of 2012, citing regulatory concerns, while just this week KB Home and Nationstar formed a mortgage company, suggesting the joint venture model is not exactly finished. In previous years, Wells had hundreds of joint ventures with Realtors but the lender said it dissolved most of them in the second half of 2012. “After careful analysis of market conditions and the impact of the regulatory environment on the business, Wells Fargo decided to dissolve several of its joint venture alliances,” a Wells spokesman said, noting that the lender would not comment on specific numbers for privacy reasons. Wells noted that it will not completely abandon...

It may be too early to declare an end to the cycle of servicers marking down the value of their mortgage servicing rights, but a new Inside Mortgage Finance analysis suggests that some large banks began raising their valuations in the fourth quarter. Across the board, all of the nation’s top five servicers – Wells Fargo, JPMorgan Chase, Bank of America, Citigroup, and U.S. Bancorp – increased the asset value of their MSRs in the fourth quarter of 2012, even though none of them reported significant growth in the unpaid principal balance of home loans serviced for other investors. Wells Fargo, the nation’s largest servicer with a market share of almost 19 percent, saw...[Includes one data chart]

In the end, there were no earth-shattering surprises in the Consumer Financial Protection Bureau’s final rule on mortgage originator qualification and compensation, but the residential finance industry isn’t quite done digesting the myriad details of the 541-page regulation, which goes into effect a year from now. Among many things, the rule codifies the difference between bank and nonbank loan officers, requiring the latter to get tested on a regular basis, a distinction that does not sit well with certain factions of the mortgage banking and brokerage industries. “The point is...