The steady decline in home loans outstanding in the market continued for a fourth straight year in 2011, with the total servicing market shrinking to $10.291 trillion. That was down 2.2 percent from the previous year. The only sector that has seen any growth was Ginnie Mae servicing, which increased 14.4 percent last year even though FHA lending has begun to taper off. The total supply of Fannie and Freddie servicing was down 1.1 percent and 4.0 percent, respectively, though they still account for the two largest components in the market, 27.9 and 17.3 percent of the amount...(Includes two data charts)

Lenders, home builders and affiliated settlement service companies are lobbying the Consumer Financial Protection Bureau to preserve the ability of affiliated settlement service providers to do business with one another under the final ability-to-repay/qualified mortgage rule the agency is charged with writing. “We strongly support a competitive mortgage market where builders and lenders large and small, unaffiliated and affiliated, as well as other settlement service providers actively compete to provide sound mortgage products and ancillary settlement services to consumers,” said the Leading...

The mortgage industry told the Consumer Financial Protection Bureau that the recent state attorneys general settlement contains a robust set of consumer protections that ought to be used as the framework for developing national servicing standards. However, industry representatives expressed concern that such an initiative could create additional barriers to entry to the servicing business. “First and foremost, the AG settlement will provide substantial relief to homeowners and will establish significant new homeowner protections for the future,” the Mortgage Bankers Association said in a recent...

Banks will receive some release from liability for loan originations in the $25 billion mortgage settlement involving the industry’s five largest servicers, state attorneys general and the federal government, according to experts participating in an Inside Mortgage Finance webinar this week. While the settlement is often described as “landmark,” industry experts note that major components were drawn from a hodgepodge of federal and state initiatives. The detailed servicing standards, for example, are a “synthesized cut-and-paste” from sources including Office of the Comptroller of the Currency...

The Federal Housing Finance Agency is running the numbers again on principal reduction for Fannie Mae and Freddie Mac loans to factor in the Obama administration’s offer to pay investor incentives to the government-sponsored enterprises. According to reports, Fannie and Freddie are more open to the idea of writedowns. For months, FHFA Acting Director Edward DeMarco has maintained that principal forbearance is a more effective way to help underwater GSE borrowers while protecting the financial interests of the GSEs and the Treasury Department. DeMarco acknowledged that the agency is “having...

The FHA’s total capital resources fell slightly during the fourth quarter of 2011, even while the rate of serious delinquencies edged higher, according to a quarterly report released this week. The FHA Mutual Mortgage Insurance Fund had $33.3 billion in total capital resources as of the end of December, down from $33.7 billion at the end of September. While the report does not cover the program’s capital ratio – a minimum level of reserves set by Congress that the program has failed to reach over the past two fiscal years – it’s likely that the FHA may have slipped further behind. The agency...

The House Financial Services Committee this week approved by voice vote a bill that would provide flexibility to adjust FHA premiums and pursue lender indemnifications more aggressively. H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, differed slightly from the controversial initial draft the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity passed on Feb. 7, according to the bill’s author, Rep. Judy Biggert, R-IL. The modified bill, she said, includes the tools the administration needs to ensure the FHA’s financial soundness and lower taxpayer liability. The...

The recent Servicing Resolution Agreements signed by the nation’s top five mortgage servicers with the federal government and state attorneys general may have been clear on the cost of their key provisions but it is the enormous hidden costs of compliance that could bite the financial institutions in the long run, according to compliance experts. Following the recent announcement of the national servicing settlement, it is impossible to put an accurate dollar amount on the myriad things servicers need to do in order to comply, but experts agree that staffing, training, technological upgrades...

The expanded Home Affordable Refinance Program barely got off the launch pad in December, but more recent data and anecdotal reports suggest that the revamped mission to help underwater Fannie and Freddie borrowers is flying higher in early 2012. Even as the government-sponsored enterprises were reporting a 5.0 percent increase in refinance activity in December, the number of new HARP loans declined by a whopping 35.8 percent from the previous month. HARP activity increased by 3.3 percent from the third to the fourth quarter of last year, but that was significantly...(Includes two data charts)

A conservative, non-partisan public interest group has filed suit against the Federal Housing Finance Agency, claiming the FHFA has improperly denied the group’s request for documents relating to the Finance Agency’s decision to sue 17 financial institutions last fall on behalf of Fannie Mae and Freddie Mac over alleged misrepresentations of mortgage-backed securities.Last week, Judicial Watch filed its lawsuit in the U.S. District Court for the District of Columbia after the FHFA denied the group’s Freedom of Information Act request for documents related to the agency’s litigation. The Finance Agency argued that as private companies, FOIA requests do not apply to Fannie and Freddie.