Nonprime lender Citadel Loan Servicing increased its maximum loan size this week to $1.5 million from $1.0 million. Dan Perl, Citadel’s CEO, said the lender is on track to close $14 million in originations in May and $15 million in June. He added that Citadel is close to entering the non-agency mortgage-backed security market. Walter Investment Management revived Ditech Mortgage and the lender will offer jumbos, among other products ... [Includes four briefs]

Servicing problems are being addressed “quickly and effectively” by the servicers subject to the $25 billion national servicing settlement, save for Walter Investment Management’s Green Tree Servicing, according to Joseph Smith, the settlement’s monitor. In a report released last week, Smith said Green Tree failed eight metrics tested in the second half of 2013, while Bank of America, Citi, JPMorgan Chase, Ocwen and Wells Fargo passed all of their settlement tests ...

More than two out of three non-agency loan modifications started under the Home Affordable Modification Program eligible for principal reduction have received principal reduction in recent years, according to the Treasury Department. Principal reduction for non-agency mortgages under HAMP is not required, but loan owners receive incentives for allowing principal reduction. HAMP servicers handling non-agency mortgages are required to evaluate ... [Includes one data chart]

Here’s what the current state of mortgage banking boils down to: Can the industry survive on $1 trillion to $1.2 trillion in production a year through 2015?

Originations that don’t meet standards for qualified mortgages have largely been held in bank portfolios in the months since the Consumer Financial Protection Bureau’s ability-to-repay rule took effect. However, nonbanks are also eyeing the products, and industry participants suggest that non-QMs will eventually be included in non-agency mortgage-backed securities. Laurence Platt, a partner at the law firm of K&L Gates, said a number of hedge funds and investment banks are ...

Legislation to reform the government-sponsored enterprises moved forward in the Senate last week, but industry analysts suggest that complete action by Congress to reform the housing finance system is unlikely until 2017 at the earliest. The Senate Committee on Banking, Housing and Urban Affairs approved S. 1217, the Housing Finance Reform and Taxpayer Protection Act, on a 13-9 vote. The bill pushed by the committee’s leaders, Sens. Tim Johnson, D-SD, and ...

The amount of subprime mortgages outstanding continues to decline, with servicers in the sector focusing on loan modifications. An estimated $380 billion of subprime mortgages were outstanding as of the end of the first quarter of 2014, according to a new ranking by Inside Nonconforming Markets. With few subprime originations in recent years, the amount of subprime mortgages outstanding fell by 17.2 percent compared with the first quarter of 2013 ... [Includes one data chart]

Among the largest servicers, Ocwen Financial Corp. and RoundPoint Mortgage had the highest overall delinquency rates during the first quarter. However, both firms specialize in “high touch” product.

Marc Savitt, who runs The Mortgage Center in West Virginia, said he recently worked on a mortgage that had 4.5 points of LLPAs. “It was a cash-out refi,” he noted.

Fannie Mae this week priced its second credit risk-sharing deal of 2014. The $1.6 billion note is the government-sponsored enterprise’s third and largest transaction under its Connecticut Avenue Securities series since the Federal Housing Finance Agency ordered both Fannie and Freddie Mac to shrink the GSEs’ role in the U.S. housing market last year. In its latest offering – Series 2014-C02 – Fannie said it included reference loans with original loan-to-value ratios of up to 97 percent. Previous C-deal offerings included reference loans with up to 80 percent original LTV ratios. “As the market moves from a refinance market to a purchase-money market, it is...