A sharp drop in net income from servicing operations during the third quarter was the key factor in a decline in overall mortgage-banking profitability for a group of major lenders, according to a new analysis by Inside Mortgage Trends. The 11 publicly traded companies, which include most of the top originators and servicers in the industry, reported a combined $1.25 billion in net income from servicing, including the gains or losses from hedging their mortgage servicing rights. That was down 43.8 percent from the second quarter and was the lowest net income from servicing for the group since the third quarter of last year.Two of the companies reported increased servicing revenue. At Huntington Bank, net servicing income nearly tripled ...

Both Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, last week rolled out changes to their selling representation-and-warranty frameworks in an effort to reduce lenders’ concerns about when they might be asked to repurchase a loan. The GSEs noted that some lenders were concerned about repurchase risk and other market factors causing an increase in credit overlays, which has limited access to credit for potential creditworthy borrowers.

Fannie Mae and Freddie Mac guarantee fee pricing disparities were dramatically leveled out in 2013, according to data released by the Federal Housing Finance Agency. In 2010 and 2011, small lenders typically paid about 10 basis points more in g-fees to the government-sponsored enterprises than did the five largest lenders in the market, the report shows. In 2012, the disparity fell to about 6 bps. Last year, it was down to 2 bps. Small lenders – defined as those that ranked outside the top 100 GSE sellers – paid an average of 53 bps, while the top five sellers paid 51 bps. Three more lender groups based on size that fell between the two extremes paid average fees of 51 or 52 bps....

The majority of mortgage industry executives believe a proposal to raise Fannie Mae and Freddie Mac guaranty fees will hurt lenders, raise origination costs and lead to fewer loans being made, according to a survey by Genworth U.S. Mortgage Insurance. “The survey findings were in line with expectations and highlight the need for continued dialog on regulatory reform and credit access,” said Rohit Gupta, president/CEO of the company. An estimated 53 percent of executives believe raising the g-fees would result in fewer loans being closed. And 23 percent of executives said higher fees for the government-sponsored enterprises would increase demand for FHA loans. While 13 percent said an increase would limit industry competition, 11 percent said it would stoke competition. ...

With just over four weeks left in 2014, investment bankers expect a flurry of bulk deals to hit the market. But whether they close or not is a different matter. “There are definitely several deals – both large and small – that are being considered,” said Tom Piercy, managing member of Interactive Mortgage Advisors. “We are working on four or five deals totaling $10 billion.” Piercy said he wasn’t at liberty to provide details about the transactions since some have yet to be finalized. In two recently announced auctions, IMA is selling a $3.2 billion package of Fannie Mae/Freddie Mac mortgage servicing rights and a $1.6 billion pool.The brokerage firm also is in the process of selling a New York-based mortgage ...

Fannie Mae and Freddie Mac are testing parts of the new common securitization platform and are expected to have the system largely built in 2015. But the GSEs have a lot of work to do building interfaces for their systems to work with the new platform while the joint venture that’s running the CSP won’t be functional for several years, according to two recent Federal Housing Finance Agency reports.

Banks are lagging behind consumer expectations when it comes to digital technologies, especially as far as younger, more elusive borrowers are concerned. But for those institutions that get with the program, they can boost their market share and their bottom line, a new study from Cisco Consulting Services suggests. For mortgage lenders, making an obvious move in a digital direction, such as offering a remote “video mortgage,” could increase profits by as much as $134 million for a financial institution with $10 billion in annual revenue, according to the study. There appears to be strong market interest in such services. Fifty-four percent of U.S. respondents surveyed were interested in the mortgage advisor concept, and 42 percent would likely choose a ...

Fannie Mae has priced its final risk-sharing transaction of the year, a nearly $1.5 billion offering that priced wider than previous deals, the GSE announced last week. The $1.49 billion note is the GSE’s fourth transaction under its Connecticut Avenue Securities series of 2014. Last year, the Federal Housing Finance Agency ordered both Fannie Mae and Freddie Mac to shrink the GSEs’ role in the U.S. housing market.

Fixed-rate mortgages with 15-year terms are good products for low- and middle-income borrowers or have limited appeal for such borrowers as well as for lenders, according to competing think tanks.Co-directors of the American Enterprise Institute’s International Center on Housing Risk developed the Wealth Building Home Loan that Bank of America started offering in September. Edward Pinto, one of the co-directors of the AEI’s center, said the 15-year fixed-rate WBHL requires little or no downpayment, due in part to BofA’s partnership with the Neighborhood Assistance Corp. BofA will also provide a subsidy to decrease the interest rate on the loans. Pinto said the loan has much less foreclosure risk than a 30-year fixed-rate FHA mortgage due to the equity building ...

A recent independent survey commissioned by Discover Home Loans found that most homebuyers believe online technology improves their search and purchasing ability. According to the results, 89 percent of homebuyers used some form of online technology to help them with the home purchase process. Almost half of all homebuyers, 47 percent, said technology saved them money while 92 percent said it saved them time. Specifically, 83 percent of the group looked at real estate listings or applications like Trulia or Zillow, while 72 percent used online maps or map apps to explore potential neighborhoods. Approximately 55 percent researched a neighborhood using local websites. The majority of respondents, 90 percent, said using technology was a “positive experience.” Two-thirds of this group ...