GSE shareholder litigation activity continues into mid-year with two new cases being filed in the past week. Joshua Angel, a corporate restructuring lawyer and owner of junior preferred stock, filed a lawsuit this week to sue Fannie Mae, Freddie Mac and their respective board of director members who were serving on Aug. 17, 2012, when the Treasury sweep was formalized. Angel seeks to recover damages from the defendants for his pro-rated share of the $10 billion dividend entitlement loss he and other junior preferred shareholders have incurred to date.

Housing-finance reform may want to take some cues from the mortgage-finance system in Denmark, according to the Federal Reserve Bank of New York in a new report comparing and contrasting the two systems. In fact, the creditor-friendliness of the Danish system means that relatively more price risk is borne by the homeowner. One of the bases for NY Fed’s recommendation is that, unlike in the U.S., the Danish system remained stable and solvent during the 2007-2009 financial crisis. And, despite falling home prices, the Danish system didn’t require government intervention or funding. The authors chose that system because they said it’s most similar to the model in the U.S.

The Federal Housing Finance Agency is seeking feedback regarding the level of paperwork burden placed on it when it comes to making sure that appraisal management companies meet the minimum reporting and record keeping requirements. A 2015 regulation made it mandatory that states with appraisal management companies, intermediaries between appraisers and lenders, establish a minimum registration and supervision program. And within that requirement, states are to review and approve or deny any application for registration.The FHFA noted that this burden is divided equally among the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, the Board and the FHFA.

Treasury Official Sees Major Impact from Single Security. A key Treasury Department official suggested that issuers of non-agency MBS may someday participate in the common securitization platform being developed by Fannie Mae and Freddie Mac. Craig Phillips, counselor to the Treasury, said the industry has made a lot of progress toward the launch of the single security that is scheduled for June 2019. “Industry preparedness is about an eight or nine on a scale of 10,” he said during remarks at this week's secondary market conference sponsored by the Mortgage Bankers Association in New York. Phillips characterized the...

Independent mortgage bankers lost money on loan production during the first quarter of 2018, according to preliminary figures reported by the Mortgage Bankers Association at the group’s annual secondary market conference in New York this week. Respondents to the quarterly mortgage banking performance survey reported, in aggregate, a negative margin in the “mid to high single digits” for the first quarter, said MBA Chief Economist Mike Fratantoni. Researchers are still putting together the ...

Credit characteristics continue to vary greatly between the two government-sponsored enterprises in the conventional market and Ginnie Mae. During the first quarter, the average credit score at Fannie Mae was 741.15, slightly below the average 744.73 at Freddie Mac. But the average score for Ginnie business was just 686.91. Purchase mortgages typically have higher credit scores – along with higher debt-to-income ratios – than refinance loans ... [Includes two data charts]

Servicers, lenders and other industry participants are starting to introduce artificial intelligence services to borrowers and use the technology internally. Late last week, Bank of America launched what it claims is “the first widely available AI-driven virtual financial assistant.” The assistant can help the bank’s customers complete tasks, including checking loan balances and scheduling mortgage payments. The assistant is being rolled out to the 25 million customers who use BofA’s mobile application ...

While numerous concerns have been raised about how capital requirements impact bank holdings of mortgage servicing rights, few banks are selling MSRs because of capital requirements or regulatory issues, according to an American Bankers Association survey. In 2017, 5.0 percent of banks sold MSRs due to regulatory requirements or capital treatment, up from a 2.0 percent share in 2016. And 12.0 percent of banks said they’re contemplating selling MSRs due to new regulatory ...

Homebuyers in Tampa, Kansas City (MO), Portland and New York saw the biggest mortgage rate savings by shopping around for home loans compared to buyers in other US cities, according to a new study by LendingTree. The rate spreads in the four cities are the largest for purchase-mortgage loans overall, while New Orleans, Salt Lake City and Indianapolis have the largest differences in refinance mortgage rates, the study found. Also, due to the large loan sizes, California borrowers ...

Some big swings in mortgage banking profitability yielded an unexpected $4.31 billion bonanza for commercial banks and thrifts in the first quarter of 2018. According to call-report data analyzed by Inside Mortgage Trends, the industry’s mortgage banking was up 38.0 percent from the prior period. Several key banks reported gigantic increases, including Wells Fargo’s 170.0 percent jump to $1.22 billion and Bank of America’s 214.1 percent surge to ... [Includes one data chart]