The rule from Dodd-Frank with the largest ramifications for mortgage banking was reopened for comment late last week, and industry players are pleased that the Consumer Financial Protection Bureau is trying to get the definition of “qualified mortgage” right. “The reason things have slowed down is that the bureau learned more and realized what the impact of this rule is,” said Bob Davis, executive vice president at the American Bankers Association. “They have responded prudently and wisely by reopening the comments.” The qualified mortgage definition will outline a set of standards for what will become the new...

Despite the sharp increase in production under the Home Affordable Refinance Program, the overwhelming majority of refinance mortgages financed by Fannie Mae and Freddie Mac are well below current property values with substantial borrower equity. According to official data released late last week by the Federal Housing Finance Agency, HARP production jumped a whopping 93.4 percent in the first quarter of 2012, hitting a record 180,185 loans. HARP volume at Freddie was up more than double from the fourth quarter, while Fannie production jumped 79.8 percent. The first...(Includes three data charts)

The housing inventory is at its lowest level since 2006, according to Pro Teck Valuation Services. The number of homes listed for sale in May was down 21 percent nationally, with the remaining housing inventory averaging 6.3 months. Accord to the CEO of Pro Teck, this indicates that the housing market as a whole is stabilizing. CEO Tom O’Grady noted that the inventory of housing was at or below a five-month supply throughout the 2002 to 2005 period, a time when house prices were recording their biggest gains. The firm reported positive trends in states like Michigan, Illinois and parts of California...

Nearly one-third of homeowners are underwater on their mortgages, Zillow reported last week, a significantly higher number than other analysts have estimated. Zillow, a real estate information company, said nearly 16 million homeowners, or 31.4 percent, owe more than their house is worth. The company partnered with credit agency TransUnion to take into account second mortgages to calculate total loan-to-value ratios. In its most recent report, CoreLogic said 11.1 million homeowners were in a negative equity situation in March. CoreLogic relies on public data and bases its estimates on the...

Special servicer Homeward Residential is stepping up in the market with diversified product offerings supported by a new brand and identity, and upgraded servicer ratings. Formerly American Home Mortgage Servicing, Homeward Residential is now a full-service mortgage banking operation with a full suite of services, including correspondent and warehouse lending, residential loan servicing (including subservicing and special servicing), and loan settlement services. The company ranked as the 15th largest wholesale lender in the first quarter of 2012 after just venturing into mortgage...

Home Loan Servicing Solutions, recently launched as an independent acquirer of high quality mortgage servicing assets from Ocwen Financial Corp., is off to a good start as analysts gave it a thumbs up after a promising first-quarter debut. Analysts with Keefe, Bruyette & Woods gave the new company an Outperform rating and projected upward-trending dividend yields of 8.2 percent in 2012 and 9.9 percent in 2013-14. On May 8, the company declared a 10-cent monthly dividend, and the 30-cent quarterly dividend is slightly below KBW’s estimate of quarterly earnings-per-share of 32 cents...

Kroll Factual Data, based in Loveland, CO, announced it has upgraded its verification solution to meet what it says is the growing risk of fraudsters attempting to con mortgage lenders, resulting in an additional cost of doing business. Kroll, which provides customized mortgage credit reports, mortgage-related services and technology solutions for originators and investors, cited an uptick in potentially fraudulent activity flagged by its system during the past year. More than 14 percent of the loan files Kroll processed in 2011 and during the first quarter of 2012 contained certain applicant...

Bank of America could turn a profit by re-securitizing the $330 million of recently originated “defective” mortgages that it agreed to buy back from Freddie Mac, according to analysts, but the bank said it will hold the loans in portfolio. Resecuritizing repurchased performing residential mortgages could potentially result in substantial gains for lenders such as BofA, if they can fix the minor deficiencies and misrepresentations and re-pool the loans into new Freddie Mac bonds after a manual appraisal, analysts said. Freddie officials have said the government-sponsored enterprise will not...

The housing market remains the one big drag for the overall economy, but home prices may have finally bottomed out in the first quarter of the year and pent-up demand will eventually bring market forces to a decisive tipping point at which time a quick turn-around might occur, according to one analyst. In the current market, challenges remain, perhaps most notably the big disconnect between housing affordability and market demand. “Despite record low mortgage rates, housing demand remains weak,” said Christopher Flanagan, managing director and head of U.S. securitized product research for Bank of...

Banks earned a record $7.96 billion on their mortgage banking activities during the first quarter of 2012, according to a new Inside Mortgage Trends analysis of bank call reports. First-quarter earnings from mortgage banking were up a whopping 42.8 percent from the fourth quarter of 2011, and they more than double the amount banks earned during the first three months of last year. One factor contributing to the big increase in mortgage banking income was the expansion of the universe of financial institutions that complete the bank call report to include thrifts. The now obsolete...(Includes two data charts)