Subprime originations remain subdued. The Federal Reserve’s senior loan officer opinion survey for the third quarter included 68 lenders that originate prime mortgages. However, less than four said they offer subprime mortgages. And nonprime borrowers accounted for 5.82 percent of mortgages originated in the second quarter of 2013, Transunion said this week. Ocwen Financial said a settlement with state attorneys general is still in the works. “In light of the substantial ... [Includes three briefs]

The FHA is working to create a quality-assurance framework with enhanced reporting built around QA results as well as a refined approach to identifying underwriting defects, according to a top agency official. There is much uncertainty in the mortgage market today and one way to address that is to create a clear framework for lenders explaining FHA’s view of underwriting defects, how they are defined as well as their consequences, said Charles Coulter, deputy assistant secretary for housing with the Department of Housing and Urban Development. Speaking at the recent Mortgage Bankers Association annual convention, Coulter said the ...

A looser version of Home Affordable Modification Program loan modifications launched last year is increasing in popularity with non-agency servicers. HAMP Tier 2 allows mods with a broad range of debt-to-income ratios along with rental properties and even vacant homes. Some 11,338 permanent Tier 2 non-agency mods were initiated during the third quarter of 2013, according to the Special Inspector General for the Troubled Asset Relief Program, compared with 10,215 traditional non-agency HAMP mods ... [Includes one data chart]

One last thought on Berkowitz and Fairholme: To get Congress to listen to your ideas you have to donate money. Berkowitz can check that box off his to-do list. He has been a generous donor to Republicans and Democrats alike over the past two election cycles.

Servicing of subprime mortgages almost appears to be on autopilot as performance improves and the amount of mortgages outstanding dwindles. Servicers that once competed to handle subprime mortgages have focused their pursuits on other assets, including agency mortgages and other unspecified financial services sectors. An estimated $418.0 billion of subprime mortgages were outstanding as of the end of the third quarter of 2013, according to a ranking by Inside Nonconforming Markets ... [Includes one data chart]

While many lenders say they intend to stick to originating safe-harbor qualified mortgages, some are taking a long look at the non-QM market or even building their strategy on it. Attorneys speaking at the recent annual convention of the Mortgage Bankers Association said rigorous underwriting, documentation and a solid track-record are prerequisites to competing safely in the non-QM space. And though the challenges are substantial, so are the potential rewards. A number of lenders are likely to test the water ...

With qualified-mortgage underwriting requirements set to take effect Jan. 10, the rating services are beginning to detail the role QM status will play in ratings for non-agency mortgage-backed securities. Fitch Ratings appears to be the furthest along in adjusting its ratings process to account for the Consumer Financial Protection Bureau’s ability-to-repay rule and QM standards. The rating service this week released its initial perspective for rating non-agency MBS with loans originated in a QM world ...

It was the now-senior Democrat senator from Massachusetts, Elizabeth Warren, who faulted the Fed for enabling the financial crisis that prompted such an unconventional accommodative response in the first place.

The Center for American Progress called on FHFA to keep g-fees at current levels “until there is reliable evidence” to suggest that the government needs more revenue to cover the cost of the guaranty.

Fannie Mae and Freddie Mac picked the low-hanging fruit first and sold large chunks of their most liquid “less-liquid” assets during the third quarter of 2013 as the government-sponsored enterprises continued to shift their business away from retained investments. The GSEs reduced their combined holdings of commercial MBS by 32.1 percent during the third quarter, according to a new Inside MBS & ABS analysis of their retained portfolios. The Federal Housing Finance Agency has directed the two companies to accelerate their portfolio trimming by focusing on “less-liquid” assets other than their own MBS. The commercial MBS market has been...[Includes one data chart]