The market share for higher priced mortgages doubled in 2011 compared with the previous year, according to an Inside Nonconforming Markets analysis of Home Mortgage Disclosure Act data released last week. However, the market share for the proxy for subprime mortgages used by federal regulators remained tiny at 1.2 percent of the dollar volume of originations reported in 2011. Some $12.38 billion in higher priced mortgages were sold in 2011, up ... [Includes one data chart]

Lenders warn that the Consumer Financial Protection Bureau’s proposed changes to stringent rules for “high-cost” mortgages will dramatically restrict credit availability for borrowers. Consumer advocates counter that the CFPB’s proposal to expand coverage of the Home Ownership and Equity Protection Act is appropriate and they are concerned with potential evasion of the pending rule. “The high-cost proposal would inevitably result in the further tightening of credit, even for creditworthy applicants,” ...

Wells Fargo and Morgan Stanley last week received notices from non-agency mortgage-backed security investors represented by the law firm of Gibbs & Bruns, which helped negotiate the pending $8.5 billion non-agency MBS settlement with Bank of America. Industry analysts suggest that the notices of non-performance could prompt settlements from Wells and Morgan Stanley, though the circumstances differ from the BofA case. The notices identify covenants in pooling and servicing agreements that the servicers ...

Special servicers are set to receive more than $300.0 billion in distressed agency mortgages, according to industry analysts. The projections come after positive reviews of Fannie Mae’s controversial purchase and transfer of $73.0 billion in mortgage servicing rights from Bank of America in 2011. The Federal Housing Finance Agency and the FHFA Office of Inspector General each determined that Fannie paid a premium for BofA’s mortgage servicing rights, but significant savings will be recognized due ...

Researchers with the Federal Reserve Bank of New York have found additional evidence to support New York Fed President William Dudley’s call for an increase in streamlined refinances for current borrowers with agency mortgages. They suggest that further changes to the Home Affordable Refinance Program to prompt refis and prepayments are not a “zero sum game” between borrowers and agency MBS investors. In January, Dudley said obstacles have prevented...

First-lien mortgages held in bank and thrift portfolios increased by 4.1 percent at the end of the second quarter of 2012 compared with the same period in 2011, according to an Inside Nonconforming Markets analysis of bank call report data. The strong increase comes as banks actively sell poorly performing legacy mortgages and suggests that lenders have increased their non-agency portfolio originations. Of the 21 banks and thrifts with at least $10.0 billion in first-lien holdings as of the ... [Includes one data chart]

Gibbs & Bruns, the law firm representing non-agency MBS investors that reached a precedent-setting settlement with Bank of America, is now targeting Wells Fargo and Morgan Stanley. The law firm’s clients issued Wells and Morgan Stanley a notice of non-performance last week identifying covenants in pooling and servicing agreements that the servicers have allegedly failed to perform. “The holders’ notice alleges that each of these failures has materially affected the rights of the certificate holders and constitutes an ongoing event of default in the servicer’s performance under the relevant PSAs,” the law firm said. Bank of America received...

Bank of America and its home loan servicing unit were accused of maintaining and marketing foreclosed homes in white neighborhoods in a much better manner than in African-American and Latino neighborhoods, in a complaint filed this week by the National Fair Housing Alliance. The investigation of 373 foreclosed homes owned or managed by BofA found the company “has engaged in a systemic practice of maintaining and marketing its foreclosed, bank-owned properties in a state of disrepair in communities of color while maintaining and marketing REO properties in predominantly white communities in a far superior manner,” the NFHA said. The complaint was filed with the Department of Housing and Urban Development by the NFHA and five other groups. The housing advocacy groups reviewed...

Old Republic International Corp. is seeking state regulators’ approval of a revised run-off plan for its mortgage guaranty unit, Republic Mortgage Insurance Co., which proposes to pay 60 percent of all settled mortgage-insurance claims, up from 50 percent, and defer the remaining 40 percent until claim reserves are sufficient to pay the balance in full. The North Carolina Department of Insurance, RMIC’s primary regulator, is reviewing the so-called 60-40 corrective plan, which ORIC wants to remain in place at least through Dec. 31, 2021, while RMIC continues to operate under supervision of state regulators. The plan is designed...

The single-family mortgage market continued to shrink during the first half of 2012, registering the 13th consecutive quarterly decline in mortgage debt outstanding since early 2008. The Federal Reserve reported late last week that there were $10.028 trillion of single-family mortgages outstanding at the end of June. That was down 0.5 percent from the previous quarter and represented a cumulative 10.3 percent drop since March 2008. The supply of home mortgage debt fell to its lowest level since the midway point in 2006. There are two growth sectors, however. The supply of Ginnie Mae single-family servicing surged...[Includes one data chart]