Banks large and small varied their portfolio lending tactics in 2012, with some increasing first-lien originations for portfolio and others allowing runoff and even selling some of their holdings. Overall, bank and thrift first-lien portfolio holdings increased in 2012 compared with the previous year, with originations outpacing prepayments and sales. Banks and thrifts held $1.80 trillion in first-lien mortgages in portfolio at the end of 2012, up 2.3 percent from the end of 2011, according to ... [Includes one data chart]

Interest-only mortgage lending increased significantly in 2012, led by originators willing to portfolio the loans. Lenders expect the originations to remain strong even though the products were singled out in the Dodd-Frank Act and subsequent ability-to-repay rule from the Consumer Financial Protection Bureau. Some $22.94 billion in IOs were originated in 2012 by 15 lenders tracked by Inside Nonconforming Markets. The lenders’ IO production increased by 19.9 percent compared with 2011 ... [Includes one data chart]

Officials at EverBank Financial said demand for non-agency jumbo mortgages is strong from borrowers and investors. The bank has increased its jumbo originations and is in the process of issuing its first non-agency mortgage-backed security. “We see strong demand for the high-quality preferred jumbo product we originate,” Rob Clements, chairman and CEO of EverBank, said this month during an investor presentation. The bank originated $397.5 million in non-agency jumbos during the fourth quarter of 2012 ...

Nonprime industry veteran Jon Daurio said he has lined up “soft” commitments of roughly $100 million to start a new non-agency mortgage banking firm. Daurio told Inside Nonconforming Markets that the “softness” or “hardness” of the commitments “is dependent on the final terms that I eventually negotiate with a lead investor.” He said the funding will come from private-equity sources. Daurio, who left Kondaur Capital about two years ago, said he could not comment further at this time. He has been ...

Nationstar Mortgage and Walter Investment Management have focused most of their recent efforts on acquiring agency mortgages and increasing originations of such loans. The shift is due to increased competition for nonperforming mortgages along with the small amount of non-agency mortgages originated since 2008. In January, Walter acquired Fannie Mae mortgage servicing rights with an unpaid principal balance of $128.0 billion from Bank of America and Residential Capital. The servicer said it is handling ...

Two differing notions have emerged during a recent hearing in the House Financial Services Subcommittee on Housing and Insurance regarding the rapidly changing relationship between private mortgage insurance and the FHA single-family mortgage insurance program. One view is that FHA’s existing policies either ignore or violate basic regulatory principles and continue to crowd out private capital. Compared to state-regulated private MIs, the FHA has far less stringent standards and enforcement from a regulatory perspective has been disappointing. Proponents of this view say that ...

The FHA’s subsidy rate for its single-family mortgage insurance program is expected to remain negative and adjust significantly in the coming years along with other guarantees of new residential mortgages, according to the Congressional Budget Office. The CBO’s baseline estimates show the subsidy rate for the FHA Mutual Mortgage Insurance Fund at negative 6.0 percent in 2013 and eventually dropping to negative 1.2 percent in 2023, in line with a parallel decline in FHA’s share of loans with guarantees that will drop from 13.0 percent to 7.5 percent over the 10-year period. According to the Department of Housing and Urban Development’s FY 2012 third-quarter report to Congress, the FHA subsidy rate changed ...

The Internal Revenue Service is preparing to launch an industry-wide review of housing counseling agencies, including those approved by the Department of Housing and Urban Development, as well as other tax-exempt entities that provide mortgage foreclosure assistance, compliance experts warned. In fact, the IRS has started looking at providers that have applied for tax-exempt status in recent months and has denied three organizations in February 2013 alone, according to attorneys with the Washington, DC, law firm Venable. Housing counseling agencies can use the issues raised in the “private letter” rulings as a ...

A federal employee union and the Department of Housing and Urban Development have agreed to implement a seven-day employee furlough because of a severe mandatory reduction in HUD’s budget in FY 2013. The seven furlough days, which also will affect FHA operations, will apply to HUD’s entire 9,100-person work force and will be spread out to one for each pay period beginning May 24. HUD initially proposed a 13-day furlough plan, which was to start May 10, but agreed to reduce it to seven days and to move the start date to May 24. Under an agreement between HUD and the American Federation of Government Employees Council 222, furlough days will occur on ...

Legislation that would provide the FHA with tools to strengthen its finances and ensure its long-term solvency has been reintroduced in the House of Representatives. It is uncertain whether Republican leaders, given their concerns, would be willing to take up the Democrat-sponsored bill. The bill, the FHA Emergency Fiscal Solvency Act, would give the FHA more flexibility to take action against lenders that show excessive early default and claims rates. It would also authorize the FHA to require a mortgagee to indemnify the agency for improperly written loans. The bill’s co-sponsors, Rep. Maxine Waters, D-CA, and Rep. Michael Capuano, D-MA, hope for ...