MGIC Investment Corp. announced last week it will pay Freddie Mac $267.5 million to settle their prolonged dispute over pool mortgage insurance coverage. The settlement was a condition set by the GSE to allow a new unit of MGIC to underwrite mortgages in seven states, though the MI said it won’t sign the deal until Freddie approves MGIC’s newly capitalized unit to write insurance.

The Federal Housing Finance Agency so far continues to bat 1.000 in court in its multiple lawsuits against non-agency mortgage-backed securities issuers for allegedly misrepresenting deals that were sold to Fannie Mae and Freddie Mac. This week, Judge Denise Cote of the U.S. District Court for the Southern District of Manhattan rejected motions to dismiss by Goldman Sachs Group Inc. and Deutsche Bank, in the defendants’ latest effort to make the FHFA’s massive legal action go away. In separate motions, Judge Cote rejected Deutsche’s and Goldman’s claims that the FHFA’s allegations are inadequate to support the agency’s claims of fraud.

A federal judge has allowed legal claims by current and former Fannie Mae employees over their employee stock ownership plan losses to proceed against several company directors including former CEO Daniel Mudd, as well as members of Fannie’s benefits plan committee. Lead plaintiffs Mary Moore and David Gwyer, who brought their claims against Fannie in 2009, seek compensation for losses on company stock that remained in employees’ retirement plans between April 2008 and May 2010. The government took over Fannie in September 2008 and put the GSE into conservatorship.

Mortgage bankers posted record profits on their loan origination and secondary market activity during the third quarter of 2012, according to a new Inside Mortgage Trends analysis of earnings reports from a diverse group of 10 lenders. The group, which included the four biggest lenders in the industry and eight of the top 20, reported a combined $5.344 billion in net production income during the third quarter, a record for the group. Production and secondary marketing income ... [Includes one data chart]

The Federal Deposit Insurance Corp. recently filed a lawsuit against the auditors of Colonial Bank alleging that they could have prevented “enormous losses” suffered by the bank due to fraud by Colonial’s largest mortgage banking customer, Taylor Bean & Whitaker Mortgage. The lawsuit is the first by the FDIC post-crisis against the accountants of a failed bank. Colonial was closed in August 2009 by the Alabama State Banking Department and the FDIC was named as receiver and is now ...

Two Harbors Investment and PennyMac Mortgage Investment Trust have seen healthy returns on their previous investments in vintage non-agency mortgage-backed securities but the real estate investment trusts have recently turned to other investments. Two Harbors has concentrated on agency MBS purchases while slowly ramping up jumbo loan purchases with an eye toward issuing its own MBS. PennyMac, meanwhile, shifted away from non-agency MBS purchases to correspondent lending and investing in ...

Community mortgage lenders increasingly anxious about complying with a growing regulatory burden got a strong show of support recently when Federal Reserve Board Governor Elizabeth Duke called for giving them a separate oversight regime that respects their unique differences when compared to their much larger competitors. “I am convinced that the best course for policymakers would be to abandon efforts for a one-size-fits-all approach to mortgage lending,” Duke said during a community bank symposium ...

A commissioned study of Ellie Mae’s Encompass360 has confirmed what the company’s clients have been saying all along: the popular software helps lower the total cost of originating mortgage loans. According to the study conducted by Forrester Consulting, a global research and advisory firm in Cambridge, MA, users of Encompass360 realized benefits in improved compliance and greater efficiency as well as a 57 percent return-on-investment (ROI) based on a three-year, risk-adjusted cash flow. Improved ...

Private mortgage insurers posted an impressive 26.5 percent increase in new insurance written during the third quarter of 2012, but four of the industry’s six active firms are gradually taking market share away from their rivals. Private MIs insured $51.76 billion in new mortgage originations during the third quarter, according to a new Inside Mortgage Finance ranking and analysis, making it the strongest quarter for the beleaguered industry since the second quarter of 2008. FHA and VA lending grew at a much slower pace, climbing just 2.1 percent and 4.0 percent, respectively, during the third quarter. The result was...[Includes two data charts]

The private mortgage insurance industry is expressing optimism with the positive changes seen lately in the housing market while hoping that Congress or the Obama administration do nothing to impede or spoil the market’s recovery. Industry executives say stabilizing home values, low interest rates, better quality mortgages and a shrinking FHA share of the mortgage market are helping MIs win back market share and write new business. “Everybody is trying to write as much business as they can to regain share,” said Michael Zimmerman, senior vice president for investor relations at Mortgage Guarany Insurance Corp. New insurance written is...