The cost to close on a mortgage has dropped seven percent to an average $3,754 in the past year, according to the eighth annual closing costs survey from Bankrate.com. Title insurance and other third-party fees fell 12 percent from last year’s levels, while origination fees dipped a slight one percent. “This is the second year in which lenders are required...

Ocwen Financial is set to reduce its effective tax rate by more than half due to the recent formation of a subsidiary corporation in the U.S. Virgin Islands. The federal corporate income tax rate in the U.S. is 35.0 percent and Ocwen had an effective tax rate of 36.0 percent through two quarters in 2012. “We believe [Ocwen’s effective tax rate] will be mid-to-high single digits,” said Bill Erbey, executive chairman of the servicer, during an earnings presentation last week. He said the lower tax rate could take effect...

Confidence in homeownership is shifting among consumers in the wake of the 2008 collapse of the housing market, but it’s mostly younger homeowners whose faith has been rattled the most, according to some new research. Economists at the Boston Federal Reserve Bank recently surveyed individuals about their attitudes toward renting versus buying a home, about commuting, and about how much to spend on a mortgage. They found that younger respondents are relatively less confident about homeownership after larger price declines, while older respondents are relatively more confident. “People who in 2008 lived in ZIP codes that were hardest hit by the crash in housing prices – as compared to those who resided in areas that were least severely affected – are...

Mortgage insurance activity increased dramatically during the second quarter of 2012, with private MIs gaining ground on the government-insurance programs, according to a new ranking and analysis by Inside Mortgage Finance. A total of $133.22 billion of home mortgages were originated with some form of primary MI coverage during the second quarter, up 22.9 percent from the first three months of the year. It was the biggest quarterly output of primary MI since the middle of 2009, and it lifted insured mortgage originations to $241.64 billion in the first half of the year, up 36.1 percent. Despite a relentless assault on their financial health that has driven three companies into runoff mode, private MIs racked up...[Includes three data charts]

The private mortgage insurance industry is now officially under the microscope of the Consumer Financial Protection Bureau over its captive mortgage reinsurance premium ceding practices for possible violations of key federal statutes, including the Real Estate Settlement Procedures Act. The CFPB is carrying forward a number of investigations it inherited from the Department of Housing and Urban Development after passage of the Dodd-Frank Act. Critics contend that captive reinsurance programs violate RESPA’s prohibition by collecting insurance premiums without providing any real service or value to the transaction. Civil investigative demands, or CIDs, sent to several private MIs “mean...[Includes one data chart]

Fannie Mae and Freddie Mac this week both celebrated large second-quarter profits that easily exceeded their installment payments to the U.S. Treasury as the price of government conservatorship, but buried in their earnings report was the hard truth lenders know too well: contentious buyback demands showed no sign of letting up. “Our expectation [is] that the amount of our outstanding repurchase requests to seller/servicers will remain high and that we may be unable to recover on all outstanding loan repurchase obligations resulting from seller/servicers’ breaches of contractual obligations,” Fannie said. As of the end of June, the two government-sponsored enterprises had...[Includes one data chart]

Hardball conditions imposed by Freddie Mac in order to permit lenders to continue selling loans insured by Mortgage Guaranty Insurance Corp., over the objections of state regulators, has cast a cloud over MGIC’s already uncertain prospects. Fannie Mae has approved a new MGIC insurance entity that also has the backing of the insurance company’s home state regulator, the Office of the Commissioner of Wisconsin. But MGIC warned investors last week that Freddie’s Aug. 1 approval of the new unit is conditional and could be withdrawn at any time and ends Dec. 31, 2012. Freddie says it can and will pull...

The Office of the Comptroller of the Currency and the Federal Reserve are implementing third-party recommendations to improve borrower outreach and provide more opportunity for borrowers to request an independent foreclosure review (IFR), and giving consumers more time to ask for a review. Borrowers can request a review if they believe they have suffered financial injury from improper foreclosure actions in 2009 and 2010. The IFR process is being conducted by 14 mortgage servicers that are subject to the consent orders issued by the OCC and the Fed in April 2011. The orders required servicers to take steps to establish strong and comprehensive standards for mortgage servicing and foreclosure processing and to carry out...

Home Affordable Modification activity in the second quarter of 2012 was well below HAMP activity in the second quarter of 2011, according to an Inside Mortgage Finance analysis of reports from the Special Inspector General for the Troubled Asset Relief Program and Treasury Department. The number of permanent HAMP mods outstanding hit 818,803 at the end of the second quarter of 2012, an increase of 24,055 compared with the previous quarter. But activity in the second quarter of 2012 was down 65.7 percent compared with activity a year ago. HAMP activity spiked in the second quarter of 2011 and has declined each quarter since. A recent audit completed by the SIGTARP suggested that activity has been limited...

Mortgage lenders and appraisers widely agree that the appraisal process needs to be improved, as the industry faces a fresh wave of new federal regulations. During a conference sponsored this week by the Collateral Risk Network and the American Enterprise Institute, John Brenan, director of appraisal issues at The Appraisal Foundation, suggested that lenders have stymied appraiser efforts to change the process. “You can’t ignore the fact that the banking lobby is one of the strongest in the country,” he said. Penny Reed, a vice president of strategic partner management at Wells Fargo Home Mortgage, acknowledged...