Competition for non-agency jumbo originations is increasing, according to industry participants. The interest, largely from big banks looking to hold jumbos in portfolio and real estate investment trusts looking to securitize the assets, has led to a decline in interest rates.“All of a sudden it’s the asset of choice because big banks are uncomfortable with other assets, so they’re coming at jumbo home mortgages,” Jim Herbert, CEO of First Republic Bank, a lender that has long-focused on jumbos, said ... [Includes one data chart]

Abacus Federal Savings Bank, a small bank that provides loans and other banking services in New York City’s Chinatown, was indicted along with 11 of its former employees for allegedly originating and selling fraudulent mortgage loans to Fannie Mae over a five-year period. An additional eight ex-employees agreed to waive indictment and admitted their guilt in connection with the alleged conspiracy, according to Manhattan District Attorney Cyrus Vance, who brought the 184 indictment charges last week. The indictment came after a two-year investigation of Abacus, its employees and managers, who allegedly...

Banking regulators confirmed this week that the controversial risk-retention rule for mortgage securitization won’t be finalized until after an equally controversial rule on qualified mortgages is completed by the Consumer Financial Protection Bureau. CFPB Director Richard Cordray said during a hearing before the Senate Banking, Housing and Urban Affairs Committee that his agency still intends to make the Jan. 13, 2013, deadline set by Congress for issuing a final “ability-to-repay” rule required by the Dodd-Frank Act. Cordray said that the bureau would not submit the ability-to-repay rule to...

SunTrust Mortgage has agreed to pay $21 million to the federal government to resolve a lawsuit alleging pricing discrimination against minority borrowers over a period of four years. The Department of Justice, which brought the pricing lawsuit, said the settlement also requires that SunTrust continue the anti-discrimination policies and practices it had adopted prior to the settlement. The mortgage lender agreed to the settlement voluntarily without admitting to any wrongdoing and without any factual findings, adjudications or litigation. Filed in U.S. District Court in Richmond, VA, the...

Although it has taken steps to mitigate risk related to advances and collateral at the 12 Federal Home Loan Banks, the Federal Housing Finance Agency needs to do more to strengthen its supervisory framework for the FHLBanks' risk management practices, according to a new report by the FHFA’s official watchdog. The FHFA Office of Inspector General found in an audit released late last week that the agency has not implemented a majority of its own examiners’ recommendations to effectively manage advances and collateral risks within the FHLBank system. “Although preliminary evidence suggests...

Fannie Mae this week tapped its chief administrative officer and general counsel to replace the company’s outgoing chief executive even as a bipartisan group of senators say they “remain deeply concerned” about “excessive” executive compensation at both government-sponsored enterprises. Fannie’s board of directors announced, with the Federal Housing Finance Agency’s consent, the appointment of Timothy Mayopoulos as president and CEO and elected him a member of the board. Mayopoulos, 53, currently holds the title of executive vice president but has managed several critical functions since he joined Fannie...

The rule from Dodd-Frank with the largest ramifications for mortgage banking was reopened for comment late last week, and industry players are pleased that the Consumer Financial Protection Bureau is trying to get the definition of “qualified mortgage” right. “The reason things have slowed down is that the bureau learned more and realized what the impact of this rule is,” said Bob Davis, executive vice president at the American Bankers Association. “They have responded prudently and wisely by reopening the comments.” The qualified mortgage definition will outline a set of standards for what will become the new...

Despite the sharp increase in production under the Home Affordable Refinance Program, the overwhelming majority of refinance mortgages financed by Fannie Mae and Freddie Mac are well below current property values with substantial borrower equity. According to official data released late last week by the Federal Housing Finance Agency, HARP production jumped a whopping 93.4 percent in the first quarter of 2012, hitting a record 180,185 loans. HARP volume at Freddie was up more than double from the fourth quarter, while Fannie production jumped 79.8 percent. The first...(Includes three data charts)

Nearly one-third of homeowners are underwater on their mortgages, Zillow reported last week, a significantly higher number than other analysts have estimated. Zillow, a real estate information company, said nearly 16 million homeowners, or 31.4 percent, owe more than their house is worth. The company partnered with credit agency TransUnion to take into account second mortgages to calculate total loan-to-value ratios. In its most recent report, CoreLogic said 11.1 million homeowners were in a negative equity situation in March. CoreLogic relies on public data and bases its estimates on the...

Special servicer Homeward Residential is stepping up in the market with diversified product offerings supported by a new brand and identity, and upgraded servicer ratings. Formerly American Home Mortgage Servicing, Homeward Residential is now a full-service mortgage banking operation with a full suite of services, including correspondent and warehouse lending, residential loan servicing (including subservicing and special servicing), and loan settlement services. The company ranked as the 15th largest wholesale lender in the first quarter of 2012 after just venturing into mortgage...