So, mortgage firms are reducing “overlays” and expanding credit to borrowers in need. Right? Not necessarily.

Overall, the group reported a 5.8 percent increase in total mortgage banking income – which for some firms includes activity not captured in either production or servicing – during the fourth quarter.

Among those buying into MI stocks is Paulson & Co., the legendary hedge fund that made $15 billion by shorting publicly traded subprime firms via the ABX Index in the run-up to the housing bust.

In an interview with IMFnews, Millon said CMC now owns roughly $5 billion in MSRs, compared to just $1.5 billion a year earlier. “We’re buying rights from the members of our cooperative,” Million said.

A spokesman for Ocwen said the company did not like the way the IMFnews story was being “interpreted.” After the story was published early Friday afternoon, Ocwen’s share price began to rise and continued to increase Monday.

Citigroup will not provide representations and warranties for fraud on the MBS and half of the mortgages were originated with stated- or no-documentation.

Does nonbank servicing giant Ocwen Financial have a target on its back?

With the Federal Reserve acquiring a significant portion of new agency MBS issuance, the aggregate MBS holdings of banks and thrifts continued to decline in late 2013, according to a new ranking and analysis by Inside MBS & ABS. Commercial banks and savings institutions held a total of $1.507 trillion of residential MBS in portfolio as of the end of last year, newly-released call-report data reveal. That was down 0.4 percent from the end of the third quarter and marked the industry’s fifth consecutive quarterly decline. Bank and thrift MBS holdings fell...[Includes two data charts]

Banks and thrifts earned a hefty $5.292 billion on their mortgage-banking activities during the fourth quarter of 2013, boosting the year to one of the industry’s best in recent memory. Mortgage banking income reported by banks and thrifts rose 12.7 percent from the third to the fourth quarter of last year, according to a new analysis of call-report data by Inside Mortgage Trends. The fourth-quarter surge brought annual earnings from mortgage banking to $25.857 billion in 2013 ... [Includes one data chart]

Researchers at the Federal Reserve determined that, contrary to “the prevailing view in economics literature,” quantitative easing initiatives by the Fed over the past few years had an impact on the pricing and yields for agency MBS. In a new study, Fed analysts Diana Hancock and Wayne Passmore found that the central bank’s purchases of Treasury securities and agency MBS since 2008 lowered MBS yields and mortgage interest rates by more than what would have been suggested by changes in market expectations alone. Hancock and Passmore said...