Fifth Third Bank received the highest ranking among servicers ranked by Fannie May during the first half of 2012, the GSE recently announced. In 2011, Fannie rolled out its Servicer Total Achievement and Rewards (STAR) program, designed to encourage customer service improvements and better foreclosure prevention outcomes for homeowners by rating servicers on their performance in those areas.

Mortgage repurchases and indemnifications by Fannie Mae and Freddie Mac seller-servicers increased during the second quarter of 2012, but the inventory of pending and disputed buyback demands continued to grow. A new Inside Mortgage Trends analysis of repurchase disclosures made by the two government-sponsored enterprises reveals that lenders repurchased some $3.03 billion of home loans, or otherwise indemnified the GSEs for losses on these loans, during the second quarter. That was ... [Includes one data chart]

Banks and thrifts reported a substantial decline in the volume of mortgages they repurchased during the second quarter of 2012, according to a new Inside Mortgage Trends analysis of call-report data. The financial institutions reported a total of $3.86 billion in mortgage repurchases and indemnifications during the second quarter, down 6.1 percent from the first three months of the year. It marked the lowest quarterly repurchase volume since the final three months of 2008, when banks reported ... [Includes one data chart]

The average mortgage banking business earned a tidy $2.94 million in after-tax income during the second quarter of 2012, up 44.9 percent from the first three months of the year, according to the Mortgage Bankers Association’s latest performance report. Midway through the year, average after-tax income was $4.97 million for the 300-odd companies that participate in the MBA survey. That was up more than five-fold from the first half of last year. The stronger earnings resulted from increased profitability ...

The Federal Housing Finance Agency’s streamlined short sale guidelines set to kick in Nov. 1 could increase losses on certain home-equity loans and second liens held in bank portfolios, according to a recent analysis by Fitch Ratings. Under the new guidelines, which were announced last month, servicers will be able to accelerate their processing of a short sale for borrowers with eligible hardships without any additional approval from either of the government-sponsored enterprises. This will ...

Excess servicing spreads qualify as real-estate related investments for real estate investment trusts, according to a new ruling by the IRS. The private-letter ruling issued in August allows an un-named REIT to invest in the assets, with others exploring the possibility, according to industry analysts. “In anticipation of new financial industry regulations and in order to improve their liquidity and capital positions, many servicers have begun selling their excess servicing spreads to passive ...

Two years after the enactment of the Dodd-Frank Act, banks with mortgage operations are faced with the question of whether to build up or scale back their mortgage lending operations, or simply divest and wait for a more favorable regulatory environment. Financial institutions are beginning to feel the impact of Dodd-Frank as the Consumer Financial Protection Bureau carries out its mandate to write rules based on the law’s goal of targeting systemic risk and protecting consumers. But while ...

New issuance of single-family agency MBS pass-through securities increased by 12.2 percent from July to August, pushing the market over the $1 trillion mark for the year with plenty of gas still in the tank. A new Inside MBS & ABS ranking and analysis reveals that all three agencies saw solid gains in MBS issuance last month, largely based on increased refinance activity. Agency MBS production climbed to $149.2 billion in August, the highest monthly production level since March. Ginnie Mae posted the biggest gain, a 15.1 percent increase from July levels, but Freddie Mac (13.5 percent) and Fannie Mae (10.3 percent) also saw healthy increases in production volume. Total agency issuance for the first eight months of 2012 was...[Includes one data chart]

The Securities and Exchange Commission revealed details last week on its battle for due diligence reports on non-agency MBS issued by Ally Financial’s Residential Capital. A number of other ongoing non-agency MBS lawsuits and SEC investigations have been based on information included in due diligence reports. The SEC is seeking due diligence reports prepared by Office Tiger Global Real Estate Services, a wholly-owned subsidiary of Donnelly, on behalf of investment banks that underwrote 17 non-agency MBS issued by ResCap. The SEC said it is investigating possible fraud in the offering and sale of residential MBS by ResCap. “The information in Donnelley’s possession is...

Last month’s surprise move by the Treasury Department to revise the preferred stock purchase agreements with Fannie Mae and Freddie Mac definitively settles the question of “when” not “if” the two government-sponsored enterprises are to be wound down but it also removes any remaining sense of urgency to push a legislative solution to GSE reform, according to industry analysts. On Aug. 17, Treasury announced it will require Fannie and Freddie to turn over any profits they earn to the government. Rather than continue to borrow from the Treasury to make a 10 percent dividend payment to the Treasury, the revised PSPA implements a “full income sweep” of GSE profits. Additionally, Treasury’s announcement calls...