Wall Street and the Chicago City Council are at loggerheads over a revised ordinance establishing mortgage lender liability for vacant and abandoned buildings caught in the foreclosure process. Tentatively set to take effect Sept. 18, the ordinance addresses the issue of vacant and abandoned foreclosed properties for which ownership is unclear. It holds banks responsible for the upkeep and security of such properties even before they assume title to those properties. In a recent analysis, Moody’s Investors Service warned that such lender liability laws increase mortgage lending transaction costs, which will worsen if...

Two Harbors Investment Corp. said this week it is “impressed with the investment opportunities” in the non-agency MBS sector, particularly over the next year and beyond and is pushing forward with its plans to begin a securitization program. Thomas Siering, president and CEO of the New York-based real estate investment trust, said during a conference call to discuss the firm’s second quarter earnings that despite the “challenging” non-agency environment in June, there is tremendous opportunity to profit from non-agency MBS issuance throughout the rest of this year into 2012. “The recent pullback in the non-agency market has created...

Mortgage market watchers and insiders on Capitol Hill report there is little chatter and seemingly even less enthusiasm from the White House to send to the Senate another nominee to serve as the permanent director of the Federal Housing Finance Agency.As the FHFA’s Acting Director Edward DeMarco is set to begin his third year as the Finance Agency’s “temporary” head next month, no one among the legislative staffers, trade association officials and industry insiders who spoke with Inside The GSEs said they expect a change in the status quo. But neither did they have anything discouraging to say about his leadership or job performance to date.

A second round of mortgage banking earnings reports over the past two weeks suggests that the industry managed to churn out fairly stable profits despite a sharp decline in production during the second quarter of 2011. A group of 11 mortgage lenders over the past two weeks reported a combined $183.3 million in net earnings from their mortgage banking operations during the second quarter. That was down 48.7 percent from the group’s earnings for the first three months of the year. As was the case with the first round of earnings reports, the group’s combined results were heavily weighted by a substantial loss reported by one company. PHH Mortgage reported... [Includes one data chart]

The Federal Home Loan Bank Office of Finance announced late last week that preliminary combined net income for the FHLBanks fell 64 percent to $251 million in the second quarter, down from $698 million at the end of the fourth quarter 2010 and a drop of 23 percent from the same period last year.The FHLBank system’s lower profitability, which has been dwindling each quarter since the third quarter 2010 high of $732 million, was driven by a decline in yields on interest-bearing liabilities, as well as lower average balances of interest-earning assets and interest-bearing liabilities, said the Office of Finance.

MetLife isn’t getting enough bang for its buck out of its depository banking business to justify the amount of regulatory oversight it has to contend with in a highly competitive market. Facing the prospect of even more intensive regulation ahead, the company has decided to look for a purchaser for that line of its operations. But the insurance industry giant plans to keep its mortgage banking business, MetLife Home Loans, most of which was acquired from First Horizon in 2008. The company also picked up EverBank’s reverse mortgage business. Given MetLife’s focus as a global insurance and employee benefits player, the company has decided that...

Pound for pound, mortgage loan officers licensed to do business in California appear to generate a lot more business than their counterparts elsewhere around the country. A new analysis of state mortgage licensing data by Inside Mortgage Trends found that California had a relatively small number of registered mortgage loan officers, or MLOs, compared to the size of the state’s mortgage market. California typically accounts for 20 percent or more of U.S. residential mortgage activity, but its 3,519 registered MLOs represented just 3.5 percent of these individuals tracked in the National Mortgage Licensing System. That appears likely to... [Includes one data chart]

Despite the newly signed debt ceiling deal passed in the nick of time this week by Congress and signed by President Obama, Fannie Mae, Freddie Mac and the Federal Home Loan Banks remain at risk of having their AAA ratings downgraded if the government fails in the future to keep its fiscal house in order, according to Moody’s Investors Service.Moody’s confirmed the AAA government bond rating of the U.S. following the raising of the statutory debt limit on Aug. 2, but the credit rating agency assigned a “negative” rating outlook to Uncle Sam.

The Mortgage Bankers Association urged the Federal Housing Finance Agency to include other fee structures and not just seek public comment on one servicing fee structure in a forthcoming proposal. The FHFA has been working behind closed doors with Fannie Mae, Freddie Mac and Ginnie Mae to devise a new servicing compensation structure for mortgages securitized by the agencies, which account for over 90 percent of new lending. Industry groups and others have been consulted during the process, which is expected to result in an exposure document subject to public comment. The MBA cautioned the FHFA against showing preference for any...

The Federal Housing Finance Agency may make a number of minor but important tweaks before finalizing changes to its existing Freedom of Information Act regulations.