Bank of America escaped having to pay $1.2 billion in penalties when a federal appeals court dismissed the Federal Housing Finance Agency’s allegations of fraud this week. The appeal stemmed from a 2013 verdict stating that Countrywide Home Loans, a subsidiary of BofA, was liable for damages caused by selling bad loans to Fannie Mae and Freddie Mac during the financial crisis. Whether or not a breach of contract can also support a claim for fraud was the argument and primary factor in the judge’s decision. It seems that even if a loan seller is guilty of an intentional breach of contract, it’s not considered fraud.

Top single-family executives at Fannie Mae and Freddie Mac described new technology upgrades and the success of their credit-risk transfer programs during remarks at last week’s secondary market conference sponsored by the Mortgage Bankers Association. Andrew Bon Salle, executive vice-president for single-family business at Fannie, said the GSE is working to enhance the customer experience and make doing business with the company simpler and more certain. He said customers are reporting sharp gains in efficiency from Fannie’s collateral underwriting tool, and a new version of Desktop Underwriter will be rolled out next month. A key feature in version 10.0 of DU is the inclusion of trended credit data.

Wells Fargo partnered with Fannie Mae to roll out a new 3 percent down loan program with easier qualifying guidelines catered to first-time homebuyers and low- to moderate-income borrowers. Wells Executive Vice President Brad Blackwell told Inside The GSEs that yourFirstMortgage will replace three other high-LTV GSE programs it offers. “We’ve created a single, hybrid product,” he said. In addition to a high loan-to-value ratio, the program allows downpayment and closing costs to come from gifts and downpayment assistance programs. It also offers expanded income and credit guidelines. The need to expand access to credit has been a reoccurring theme in the industry, and Wells said it’s doing just that by considering FICO scores as low...

An issue over whether the government had the right to use executive privilege to keep thousands of documents from disclosure is the centerpiece of GSE lawsuits by investors.Fifty-three documents were made public last week and helps solidify their argument that there was no need to bail out Fannie Mae and Freddie because they had more than enough capital to weather the financial crisis. The Treasury Department provided the documents to plaintiffs last week as part of a court case in Kentucky and some are calling the release a game-changer in terms of the anticipation of more documents being released. One of those high-ranking officials is Jim Parrott, former White House housing finance executive and now a fellow at the Urban Institute.

The whole-loan trading market has become more dynamic as more loan originators get approval to sell directly to the agencies while still having the option to deal with aggregators, industry insiders said during a panel at the recent secondary market conference sponsored by the Mortgage Bankers Association. “It’s an over-saturated market for correspondent buyers,” said Michael Quinn, executive vice president for correspondent products at PennyMac Financial. There are about ...

Large losses suffered by nonbank mortgage companies in the first quarter of 2016 have contributed to concerns about the companies’ ability to fund their operations. In a report published last week, analysts at Bank of America Merrill Lynch noted that mortgage servicing rights are the primary assets for nonbank servicers. Low interest rates have prompted markdowns to MSRs under generally accepted accounting principles. “Lower MSR valuations ... [Includes one data chart]

Commercial banks and savings institutions reported a sharp decline in mortgage-banking income during the first quarter of 2016, according to a new analysis of call-report data by Inside Mortgage Trends. In aggregate, banks earned $3.31 billion on mortgage banking during the first quarter. That was down 26.8 percent from the previous period and it marked the lowest quarterly profit in nearly five years. Back in the second quarter of 2011 ... [Includes one data chart]

Private investors – and even some public ones – are maintaining a strong interest in nonagency/nonprime lenders as well as “fix-and-flip” financers, but that doesn’t always mean raising capital is easy. California Capital Real Estate Advisors, or CALCAP, has been trying to raise $100 million since late last year, but recently ended talks with an investor based in San Francisco, said company principal Mark Mozilo. Mozilo, though, hardly seems worried, telling Inside Mortgage Trends ...

Battered by a landslide of new regulations and the aftermath of an historic meltdown in the housing market, the mortgage industry also faces a dramatic shift in market demand from demographic changes and new generational attitudes. Although the overall U.S. homeownership rate has been sinking, the ownership rate for Hispanics actually went up in the fourth quarter of last year, said Marisa Calderon, executive director of the National Association of Hispanic Real Estate Professionals ...

A recent closing survey of homebuyers, title agents, real estate attorneys and escrow agents by the American Land Title Association found that an increasing number of borrowers are reviewing their mortgage documents before they close on their new home under the integrated disclosure rule known as TRID. Among the findings, 92 percent of surveyed homebuyers are taking time to review their mortgage documents before the closing. “This compares to only 74 percent of ...