Pound for pound, mortgage loan officers licensed to do business in California appear to generate a lot more business than their counterparts elsewhere around the country. A new analysis of state mortgage licensing data by Inside Mortgage Trends found that California had a relatively small number of registered mortgage loan officers, or MLOs, compared to the size of the state’s mortgage market. California typically accounts for 20 percent or more of U.S. residential mortgage activity, but its 3,519 registered MLOs represented just 3.5 percent of these individuals tracked in the National Mortgage Licensing System. That appears likely to... [Includes one data chart]

MetLife isn’t getting enough bang for its buck out of its depository banking business to justify the amount of regulatory oversight it has to contend with in a highly competitive market. Facing the prospect of even more intensive regulation ahead, the company has decided to look for a purchaser for that line of its operations. But the insurance industry giant plans to keep its mortgage banking business, MetLife Home Loans, most of which was acquired from First Horizon in 2008. The company also picked up EverBank’s reverse mortgage business. Given MetLife’s focus as a global insurance and employee benefits player, the company has decided that...

A second round of mortgage banking earnings reports over the past two weeks suggests that the industry managed to churn out fairly stable profits despite a sharp decline in production during the second quarter of 2011. A group of 11 mortgage lenders over the past two weeks reported a combined $183.3 million in net earnings from their mortgage banking operations during the second quarter. That was down 48.7 percent from the group’s earnings for the first three months of the year. As was the case with the first round of earnings reports, the group’s combined results were heavily weighted by a substantial loss reported by one company. PHH Mortgage reported... [Includes one data chart]

Two Harbors Investment Corp. said this week it is “impressed with the investment opportunities” in the non-agency MBS sector, particularly over the next year and beyond and is pushing forward with its plans to begin a securitization program. Thomas Siering, president and CEO of the New York-based real estate investment trust, said during a conference call to discuss the firm’s second quarter earnings that despite the “challenging” non-agency environment in June, there is tremendous opportunity to profit from non-agency MBS issuance throughout the rest of this year into 2012. “The recent pullback in the non-agency market has created...

Wall Street and the Chicago City Council are at loggerheads over a revised ordinance establishing mortgage lender liability for vacant and abandoned buildings caught in the foreclosure process. Tentatively set to take effect Sept. 18, the ordinance addresses the issue of vacant and abandoned foreclosed properties for which ownership is unclear. It holds banks responsible for the upkeep and security of such properties even before they assume title to those properties. In a recent analysis, Moody’s Investors Service warned that such lender liability laws increase mortgage lending transaction costs, which will worsen if...

Issuers of ABS backed by vehicle loans urged federal regulators to adopt a pool-level approach to determine new risk-retention requirements rather than the all-or-nothing standard proposed earlier this year that featured a narrowly drawn definition of “qualified auto loans. ”Like the more widely discussed provisions on non-agency MBS securitization, the interagency proposed rule carved out an exemption from the 5 percent risk-retention requirement for auto ABS that are backed exclusively by qualified auto loans. But issuer members of the American Securitization Forum said the proposed definition of qualified auto loans features...

Major MBS issuers are concerned about the potential harm evolving risk-retention regulations could have on securitization structures, regardless of which structure issuers decide to use. In response to the interagency proposed rule on credit risk retention, Citigroup said the public interest is not served by requiring securitizers to hold positions that are designed to take losses. “For example, all deal parties, the rating agencies and the investors are fully aware that the lowest tranche, sometimes referred to as a ‘first loss’ tranche, may take losses and no representation is made that such tranche is either investment grade or will receive...

Officials testifying before a Senate Banking, Housing and Urban Affairs Committee hearing this week came out in strong opposition to eliminating a government guarantee in the MBS market of the future, claiming that such measures would have a significant impact on borrowers’ ability to obtain plain vanilla 30-year fixed-rate mortgages. “Many large investors utilize the MBS market to execute trades driven by macroeconomic views and would not utilize a market which combines credit risk with interest rate risk,” said Andrew Davidson, president of Andrew Davidson & Co., an analytics and consulting firm. “With a smaller investor base, liquidity would be...

Wells Fargo and Bank of America continued to pull ahead of the field, adding Ginnie Mae servicing to their portfolios faster than the overall market grew during the second quarter of 2011. A new Inside Mortgage Finance analysis found the two companies holding 54.9 percent of Ginnie servicing outstanding at the end of June. Third-place JPMorgan Chase trailed overall growth in the market, while CitiMortgage and PNC Bank actually [includes one data chart]

Faced with the daunting task of identifying $1.5 trillion in budget savings, lawmakers on Capitol Hill are likely to take a close look at sacred cows like the home mortgage interest tax deduction. The mortgage interest deduction is projected to cost the U.S. just shy of $100 billion this year, does little to incentivize buying homes and is in need of reform, according to experts on a panel sponsored by the Urban Institute and Brookings Institution. “The mortgage interest reduction is one of the very, very biggest and certainly the most ...