Mortgage lenders closed a record $28.31 billion in mortgages with Veterans Administration home loan guaranties during the first quarter of 2012, breaking the previous all-time high set in the fourth quarter of last year. VA lending has been going gangbusters over the past few years as FHA’s market share has gradually declined. In 2011, the VA program provided more new primary mortgage insurance coverage than the private MI industry for the first time ever since the birth of the private MI business. In 2011, the VA accounted for 22.0 percent of the primary MI market, and 26.0 percent in the...(Includes one data chart)

Lenders should expect at least a short-term boost in profits from the Federal Housing Finance Agency’s recent tweaks to the Home Affordable Refinance Program, analysts say, but HARP 2.0’s long-run effectiveness to the pool of underwater borrowers remains an open question. Since January, the industry’s largest mortgage servicers, including Wells Fargo and JPMorgan Chase, have seen a significant uptick in new refinance applications for HARP 2.0. “This quarter should be one of the strongest quarters for mortgage banking we’ve seen in quite some time,” said FBR Capital Markets’ Paul...(Includes one data chart)

The Consumer Financial Protection Bureau this week indicated it will be pulling out its disparate impact playbook as it launches an offensive against the providers of mortgage credit and other lenders it believes are engaging in discriminatory behavior towards consumers. “We want consumers to avoid the marketplace’s silent pickpocket – discrimination,” said CFPB Director Richard Cordray. “We cannot afford to tolerate practices, intentional or not, that unlawfully price out or cut off segments of the population from the credit markets.” In CFPB Bulletin 2012-04 (Fair Lending), the bureau asserted its...

Wells Fargo and JPMorgan Chase reclassified more than $3 billion of second-lien mortgages as nonperforming loans in the first quarter of 2012, a move other banks have copied. Both Wells and JPMorgan said that federal guidance from late January was behind the change. Wells characterized $1.7 billion of subordinate home-equity loans as nonperforming and JPMorgan assigned $1.6 billion to that status. “We do not view this as a material shift in the performance of these loans or the reserving methodology,” Fitch Ratings wrote. “However, increased regulatory scrutiny of second liens may continue to...

Losses from Fannie Mae and Freddie Mac’s single-family credit guarantee business declined in 2011, but remained high primarily due to credit-related expenses, notably the provision for credit losses, according to the Federal Housing Finance Agency. The FHFA’s fourth-quarter conservatorship report noted that the two government-sponsored enterprises’ combined revenues for single-family credit guarantees of $11 billion last year was more than offset by $40 billion in credit-related expenses. “Credit-related expenses continue to drive the single-family credit guarantee segment for the enterprises,” said...

Lawmakers in California this week pulled from their agenda a series of bills designed to help borrowers in a significant, if temporary, victory for the mortgage industry in the long drawn-out legal battles spawned by the mortgage collapse in 2008. The proposed California Homeowner Bill of Rights featured many of the requirements that have been incorporated in evolving national servicing standards. One new provision would require servicers to pay a $25 “fine” each time a borrower defaults; the money would go to a fund to investigate fraud. But two of the six bills in the package were suddenly pulled from...

Ally Financial Inc. is cutting back significantly on its wholesale mortgage business and moving away from its correspondent and broker channel so that it can focus more on originations through the retail and direct channels. In recent filings with the Securities and Exchange Commission, Ally said the shift to the higher-margin retail and direct channels will not have a significant impact on profitability overall if both channels can assume the current volume of government-backed mortgages coming through the correspondent and broker wholesale conduits. “We will continue to evaluate this...

The mortgage lending industry is apprehensive about the multitude of mortgage servicing rules coming its way, and that anxiety is probably well justified, leading industry representatives suggests. Beyond last year’s consent orders and last month’s $25 billion mortgage servicing settlement and all the ramifications they have for industry servicing practices going forward, the most immediate concern has to do with a proposed rule on mortgage servicing due out this summer from the Consumer Financial Protection Bureau. Last week, the CFPB made a public “pre-announcement” of the...

With all the concern thatfs been raised about loan originator compensation since the mortgage marketfs collapse in 2008, and given a certain amount of gget-toughh rhetoric from leadership at the Consumer Financial Protection Bureau, the agency seemed to take a quick-and-dirty approach when issuing its first pronouncement in topic earlier this month. Back in September 2010, the Federal Reserve put out loan originator compensation rules under the Truth in Lending Act and Regulation Z, effective as of April 6, 2011. Then with enactment of the Dodd-Frank Act of 2010...

The U.S. Attorney General’s recently released 2011 annual report to Congress on the Equal Credit Opportunity Act Amendments of 1976 provides some useful insight as to what prompts it to litigate referrals from other agencies, as opposed to bumping them back for administrative resolution. Referrals that are most likely to be returned generally share a few characteristics, such as whether the practice at issue had ceased and there is little chance that it will be repeated. Another characteristic is whether the violation may have been accidental or stemmed from ignorance of the...