Fannie Mae, Freddie Mac and their federal regulator are facing considerable negative pushback from the mortgage industry about their controversial plan to change the economics of the mortgage servicing industry. The Federal Housing Finance Agency and the government-sponsored enterprises are trying to come up with a system that will provide more resources for servicing distressed loans and reduce the volatility lenders face as a result of carrying mortgage servicing right assets on their books. In addition to ultimately improving servicing quality for GSE loans and reducing default losses, the agencies appear to...

Raj Date, special adviser to the Treasury and the acting head of the Consumer Financial Protection Bureau, ran headlong into considerable resistance from Republicans on a House subcommittee this week over the scope of the bureau’s authority and its effectiveness, especially in relation to the mortgage lending activities of community banks. Date was the sole witness to appear before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit this week as it reviewed the first 100 days of the CFPB. Rep. Donald Manzullo, R-IL, put it most forcefully for the GOP opposition when he...

Old Republic International Corp. intends to re-enter the mortgage insurance business with a revamped business risk model, fresh capital and a new subsidiary if it obtains approval from state regulators and its two major policyholders, Fannie Mae and Freddie Mac. The Chicago-based company, which also operates general and title insurance segments, still maintains a long-term strategic interest in mortgage insurance despite the negative trends in the sector, according to company executives during a recent conference call with analysts and investors. “But at this point, we have little, if any, idea as to the...

Even though the home-purchase mortgage market remains on life support, this important sector of the mortgage industry got a little bit of good news in September – namely, that the share of home purchases involving all cash transactions actually dipped to the lowest level seen in 2011. According to the results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, cash transactions accounted for 29.5 percent of home-purchase transactions tracked in September. While that still represented the most popular method for purchasing a home in the U.S., it was...(Includes one data graph)

Industry observers are warily eying the potential impact of a bill unveiled last week by a senior House Republican that aims to encourage private capital into the residential mortgage secondary market without the need for Fannie Mae or Freddie Mac. The Private Mortgage Market Investment Act, drafted by Rep. Scott Garrett, R-NJ, would create a heavily regulated mortgage-backed securities market made up solely of private entities that would function with no federal guarantee at all. Garrett, who chairs the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, said his proposal will...

With home sales slow, house prices still floundering and little lender appetite for cash-out refinancing, the mortgage servicing business may be another year or more away from reversing the historic contraction that’s been underway since early 2008. But a new servicing ranking by Inside Mortgage Finance reveals that some companies have managed to grow their business. Servicing remains a top-heavy industry dominated by three companies that collectively held 47.8 percent of the market as of the end of September. But only one of those firms – second-ranked Wells Fargo – has seen its servicing portfolio...(Includes one data chart)

Federal prosecutors this week sued an FHA lender to recover hundreds of millions of dollars in paid claims in connection with mortgage loans originated through branches that were not approved by the Department of Housing and Urban Development. A lawsuit filed by the U.S. Attorney in Manhattan district court this week alleged that Allied Home Mortgage Corp., President and CEO Jim Hodge and Executive Vice President Jeanne Stell engaged in reckless mortgage lending, flouted FHA mortgage insurance requirements and repeatedly lied about compliance. Such actions, the suit alleged, subsequently led to...

With the clock running down on the Home Affordable Modification Program and disappointing results so far, a new government watchdog report urges the Treasury Department to put more pressure on mortgage servicers. Only 5.4 percent of the $45.6 billion set aside for HAMP has been spent so far, said a new report by the Special Inspector General for the Troubled Asset Relief Program. With less than a year left until HAMP expires, the program has helped approximately 25,000 to 30,000 homeowners a month with new permanent mortgage modifications. Treasury estimated that nearly 1 million homeowners are still...

Now that the long-awaited revision of the Home Affordable Refinance Program is out of the way, look for the Federal Housing Finance Agency to redouble its efforts to discharge the government’s backlog of real estate owned properties with all deliberate speed. During an interview on C-SPAN’s “Newsmakers” program last weekend, FHFA Acting Director Edward DeMarco said the agencies are sifting through over 4,000 comment letters on the proposed REO bulk sales program. “Now that we have the HARP announcement out, we are turning to this as the next priority,” said DeMarco. “We do think we will have some good...

Fannie Mae and Freddie Mac’s total taxpayer cash infusion could top as much as $311 billion by the end of 2014 – a “savings” of some $52 billion from similar projections one year ago, according to the Federal Housing Finance Agency.The FHFA this week released its updated projections of the financial performance of the two GSEs, including potential draws under the Senior Preferred Stock Purchase Agreements with the Treasury Department. "The projections have been updated to reflect the current outlook for house prices, interest rates, and recent trends toward borrower behavior,” explained the FHFA.