Fannie Mae and Freddie Mac have finished the underwriting reviews of mortgages they acquired prior to their takeover by the federal government in 2008 and have now recovered more than $18 billion in restitution for breaches of selling representations and warranties, according to a new “progress” report from the Federal Housing Finance Agency. The GSE regulator notes that Fannie and Freddie have each executed multiple risk-sharing transactions, beating their mandated goal of $30 billion. The two also have achieved the Conservator Scorecard Objective of gradually reducing the less-liquid portions of their retained portfolios, according to the Finance Agency’s report.

The Federal Home Loan Bank of Seattle announced that its regulator, the Federal Housing Finance Agency, has amended the Bank’s consent order in keeping with its improved financial performance. In October 2010, the FHFA directed the Seattle Bank to implement steps to stabilize its business, improve its capital classification and return to normal operations.

Reform-minded lawmakers should move with all deliberate speed to restructure, recapitalize and remove Fannie Mae and Freddie Mac from the government’s hands or risk the taxpayers’ stake in the mortgage market, experts told members of the Senate Banking, Housing and Urban Affairs Committee. The committee’s hearing prior to the Thanksgiving break focused on when and how to terminate the charters of the two government-sponsored enterprises, as well as whether current revenue held by Fannie and Freddie should be used to offset the cost of the new system.

Freddie Rescinds Fraud Training Requirement. Freddie Mac has withdrawn a requirement announced in September mandating fraud training in Bulletin 2013-13, issued Nov. 15. Freddie had required that seller/servicers provide third-party vendors retained to perform functions relating to origination and servicing of mortgages with training on fraud prevention, detection and reporting. The GSE decided to revisit the issue. In addition, the bulletin updates payment history verification requirements for manually underwritten mortgages, and announces that eligibility requirements applicable to higher-priced mortgage loans, previously announced in August, are applicable to higher-priced covered transactions (as defined in the Consumer Financial Protection Bureau’s ability-to-repay/qualified mortgage rule) and not solely to HPMLs.

Fannie Mae and Freddie Mac issued $58.7 billion in single-family mortgage-backed securities during the month of November, a 13.4 percent decline from October but a 4.8 percent drop for the first 11 months of 2013, according to a new Inside The GSEs analysis.

Mortgage banking income fell sharply in the third quarter and the compliance outlook remained murky, but banks reported a huge improvement in loan buybacks, according to a new Inside Mortgage Trends analysis of call-report data. Banks and thrifts repurchased or provided other indemnification totaling $1.998 billion during the third quarter, the lowest quarterly amount for the industry in five years. Banks first began reporting repurchase data in their call reports ... [Includes one data chart]

Since the beginning of 2012, it’s been relatively difficult to lose money in mortgage banking, but that was no longer the case in the third quarter of this year. According to the Mortgage Bankers Association quarterly performance report, slightly more than one fourth of the industry failed to turn a profit during the third quarter. Starting in the first quarter of 2012, over 90 percent of mortgage bankers in each period reported net pretax profits. The average pretax income for ...

Prospect Mortgage of Sherman Oaks, CA, is a strong candidate for an initial public offering: It’s a retail-only originator whose loan production is top-heavy in purchase-money loans and it has all the right agency and FHA approvals. The privately-held firm also has a $13 billion servicing portfolio and licenses to lend in 48 states. Moreover, in early September it raised $150 million by selling five-year senior notes in the capital markets. Over the past few months rumors have surfaced that the ...

Lender-paid mortgage insurance has garnered renewed interest lately from mortgage lenders as an alternative to FHA-insured loans, whose increased costs have shut out many cash-strapped borrowers. David Williams, vice president of RightStart Mortgage in Pasadena, CA, said his firm has been getting a lot of requests from wholesale brokers for conventional conforming loans with LPMI because the FHA product has lost its competitive edge. With borrower-paid private MI, the homeowner pays a monthly ...

Nonbanks are better than banks at controlling foreclosure timelines and servicing costs, according to industry analysts. Nonbank special servicers have significantly increased their servicing portfolios in the past year and expect to acquire even more servicing from banks in 2014. “The cost of servicing for banking institutions has increased in lockstep with the additional processes to maintain compliance with regulatory requirements,” according to Fitch Ratings. “In response, a number of large banks have employed ...