Although it questions the appropriateness of Fannie Mae and Freddie Mac funding charitable activities while the two companies remain under government conservatorship, the Federal Housing Finance Agency’s official watchdog has concluded that the FHFA has the dissolution of the GSEs’ charity funds in hand. The recent report by the FHFA’s Office of Inspector General noted that at the time the conservatorships were established 3½ years ago, both companies had long-standing mechanisms in place to make “substantial contributions” to charitable organizations. In 2008, both GSEs’ charitable giving totaled $73 million.

Mortgages modified by Freddie Mac performed slightly better than Fannie Mae loans in the short term while the performance gap between the two GSEs widened further one year after modification, according to the Office of the Comptroller of the Currency.OCC’s latest Mortgage Metrics Report noted that Freddie loans had an 11.3 percent re-default rate three months after modification, while Fannie mods saw an 11.7 percent rate. At the six-month mark, Freddie stood at 18.1 percent compared to Fannie’s 18.8 percent.

Roughly one out of every 14 banks in the country suffered significant investment losses following the September 2008 government takeover of Fannie Mae and Freddie Mac, according to a new Federal Reserve discussion paper. The paper, When Good Investments Go Bad: The Constriction in Community Bank Lending After the 2008 GSE Takeover, details how financial institutions took a bath when the two companies were placed into conservatorship and dividend payments on common and preferred shares were suspended.

Mortgage banking operations reported stronger earnings in both loan production and servicing operations during the fourth quarter of 2011, according to a new Inside Mortgage Trends analysis. A group of nine institutions reported a total of $2.73 billion in earnings from mortgage production activity during the fourth quarter. That was up 20.8 percent from the third quarter. All but one company in the group, which includes most of the top lenders in the industry, reported positive results on loan production activities, which typically include secondary marketing results. The...(Includes one data chart)

Mortgage bankers reported stronger corporate income during the fourth quarter of 2011, but profitability was generally lower on a per-loan basis, according to the most recent performance report released by the Mortgage Bankers Association this week. Based on a survey of some 310 mortgage bankers, the study found average pretax income of $1.51 million per company in the fourth quarter, up 34.8 percent from the third quarter of last year. That brought the average pretax income for the year to $3.69 million, down 14.2 percent from 2010. Average profits per loan were generally down in the fourth quarter, even...

The risk of fraud in property valuation, occupancy and identity has seen its highs and lows in 2011 but the rising trend of employment and income fraud in mortgage loan applications over the last two years is cause for concern, according to Interthinx’s 2011 Mortgage Fraud Risk Report. According to the annual report, the employment/income fraud risk index rose 14 percent in 2011 and has been on an upward trend for more than two years. Over that period, the index has increased more than 45 percent, it said. The report said the increase may have been the result of the larger decline in the income of working...

American International Group, which at times has seemed reluctant to admit that it owned a private mortgage insurance business, is now considering using the MI subsidiary to expand its footprint in the mortgage business. In an interview with the Financial Times, AIG Chief Executive Robert Benmosche said that the company is considering purchasing the mortgages it insures, though it is still working on hammering out the program’s details. Citing the fact that AIG is still in the planning stages, a company spokesperson declined to comment further on the program, specifically on what kind of loans AIG will...

If mortgage lending profitability was directly correlated to an ability to respond satisfactorily to borrower complaints, a lot of mortgage bankers might be looking for a new line of work. In 768 cases (46.7 percent) initially tracked by the Consumer Financial Protection Bureau, mortgage lenders reported they closed a consumer complaint without providing any relief whatsoever, according to the bureau’s first semi-annual report to Congress, submitted to the House Financial Services Committee last week. Credit card gripes, on the other hand, were closed without any reported relief in 27.7 percent of the...

A federal district court judge in Washington DC this week signed off on the proposed $25 billion settlement agreement between the federal government, state attorneys general and the top five mortgage servicers, putting in place a potential template for national standards for the mortgage servicing industry. On April 6, Judge Rosemary Collyer of the U.S. District Court for the District of Columbia entered the proposed consent judgments against Bank of America, Citigroup, Wells Fargo, JPMorgan Chase and Ally Financial, including a settlement term sheet and additional exhibits specific...

As the broadening of the government’s Home Affordable Modification Program is in the midst of implementation, servicers need to focus on executing new guidelines. To that end, PricewaterhouseCoopers released analysis on the way the administration’s modification program will impact servicers. Of the many programs and regulations in the works, including full-year forbearance, a homeowners’ bill of rights, real estate-owned rental programs and the joint investigation into mortgage-backed securities issues, the expanding HAMP eligibility is the only one considered “high impact” and in progress, making it...