Mortgage lenders large and small continued to report strong earnings on their mortgage banking operations during the fourth quarter of 2012, but the year that likely will go down as the most profitable in the industry’s history ended on a downslope. A new Inside Mortgage Trends analysis of year-end earnings reports from 23 lenders reveals a staggering combined earnings of $32.74 billion for the full year of 2012. The same group posted an aggregate net income of $5.35 billion, a total ... [Includes one data chart]

There is reason to believe the mortgage banking industry’s record level of profitability may have peaked, as gain-on-sale margins have already begun to slip and more dark clouds appear on the horizon. “Mortgage banks have enjoyed record high gain-on-sale margins over the past several quarters,” analysts at Compass Point Research and Trading noted in a recent market review. They attributed this trend mostly to two primary factors: limited capacity in the mortgage market to handle increased demand and ...

One after another, it appears that residential lenders are dipping their toes back into the correspondent lending channel, thanks in part to the fat profit margins tied to securitization and retaining the underlying servicing rights. Over the past few weeks, a handful of lenders announced their intention to either launch a correspondent lending division or jumbo conduit. Firms entering the correspondent space include Envoy Mortgage and Real Estate Mortgage Network. The conduit ... [Includes one data chart]

The government-sponsored enterprises’ share of purchase-mortgage originations has increased each of the last two years, according to a new analysis by Inside Mortgage Trends. The shift in market share includes decreased purchase-mortgage originations for the FHA and a lack of housing inventory, prompting increased home prices. Some $377.2 billion in agency purchase mortgages were originated in 2012, with a 66.5 percent share for Fannie Mae and Freddie Mac combined. In 2010, the GSEs ... [Includes one data chart]

The new ability-to-repay (ATR) rule and the “qualified mortgage” definition will result in more predictable, less costly servicing for prime QMs and increased complexity for subprime and non-QMs, according to an analysis by Deloitte Touche. The ATR rule defines an ability-to-repay standard for mortgages, including eight borrower characteristics to be considered in the lending decision. It also creates a QM definition that clarifies compliance with the ATR standard for loans with certain features and ...

Final rules establishing national mortgage servicing standards may reduce the incentives for states to adopt their own varied, unique versions, thus reducing the patchwork of state mortgage servicing laws. At the same time, however, the final rules are a floor and states – and the government-sponsored enterprises – may adopt more stringent consumer protections, cautioned attorneys with SNR Denton. An analysis by the Washington, DC, law firm said the final rule issued by the Consumer Financial Protection Bureau ...

Mortgage lenders funded $232.69 billion worth of FHA loans in 2012, a 22 percent jump from the year prior, according to exclusive loan-level data compiled by Inside FHA Lending.

Roosevelt Management Co. was the winning bidder on Arch Bay Capital’s nonperforming loan portfolio, which includes roughly 4,000 distressed loans.

Nationstar Mortgage priced $300 million of asset-backed term notes, saying the deal marks the first ever “agency servicer advance securitization.

A large and potentially lucrative RFP issued several months ago by FHFA regarding its strategic plan for taking the GSEs to the next stage in their evolution has yet to be awarded.