New federal restrictions on mortgage broker compensation will likely add momentum to the shift away from wholesale mortgage production programs and ultimately dampen MBS prepayment speeds, according to an analysis by Barclays Capital. Most major primary market lenders have been moving away from the broker market since the housing sector began to crumble in 2007. According to Inside Mortgage Finance, an affiliated newslet-ter, the broker share of new mortgage originations peaked in 2005 at 31.3 percent of primary market lending. Between 2005 and 2007, brokers accounted...

More than two years after being placed into government conservatorship, Fannie Mae and Freddie Mac remain “critical supervisory concerns” as “key challenges” at both government-sponsored enterprises continue to compel the GSEs to rely on federal funding to stay afloat, according to the Federal Housing Finance Agency. FHFA’s annual report to Congress this week noted losses from mortgages originated from 2005 through 2008, as well as forecasted losses from that same pre-conservatorship period, remain a continuing source of...

The supply of home mortgage debt fell again in the first quarter of 2011 despite an increase in agency servicing, according to an Inside Mortgage Finance analysis of new data released by the Federal Reserve. Outstanding home mortgage debt declined to $10.458 trillion as of the end of March, down 0.7 percent from the end of 2010. That marked the 12th consecutive quarterly decline in the supply of mortgage servicing and took the market back to a level not seen since the end of 2006. Since peaking in the first quarter of 2008, the volume of home mortgage debt outstanding has...[includes two data charts]

Commercial banks reported a measurable increase in earnings from their mortgage banking activities during the first quarter of 2011, but production volume is slowing and the industry continues to bear a significant burden from repurchase demands. Banks reported a combined $4.21 billion in mortgage banking income during the first quarter, according to an analysis of call report data by Inside Mortgage Trends, an affiliated newsletter. That was up a healthy 20.8 percent from the last four months of 2010, though it trailed the industry’s mortgage...[includes one data chart]

Top servicers flagged for their faulty foreclosure practices will have an extra month to submit their mitigation plans, although federal regulators continue to bear down on the industry and are starting to withhold loss mitigation incentive payments from some companies. The Office of the Comptroller of the Currency and the Office of Thrift Supervision this week said they will give 12 servicers subject to consent orders extra time to submit “comprehensive action plans” that detail the financial resources the bank will commit to...

Mortgage compliance experts are bracing for up to 10,000 pages of new Dodd-Frank Act regulations that will make mortgage lending exponentially more difficult, according to industry officials at this week’s regulatory compliance conference sponsored by the American Bankers Association. “Dodd-Frank is going to increase the compliance burden, the risk of non-compliance and the cost of mortgage lending,” said David Kelly, executive vice president in charge of loan operations for FirstBank Data Corp. The new regulatory environment will feature...

A court ruling made late last month in a Michigan Court of Appeals decision further muddies the ability of Mortgage Electronic Registration Systems to initiate a foreclosure. In a split decision, the judges ruled 2-1 in favor of borrowers whose homes were foreclosed on. MERS, as mortgagee, held an interest in...

House Republicans pushed ahead this week with legislation to bring the Consumer Financial Protection Bureau, a potential nemesis, under more control and oversight, although prospects in the Senate do not look strong. The House Financial Services Subcommittee on Financial Institutions and Consumer Credit this week approved...

The Department of Justice and the Department of Housing and Urban Development this week announced a civil lawsuit against Deutsche Bank and its mortgage unit for allegedly fraudulent mortgage practices that cost the FHA millions of dollars in insurance claims and related costs. Filed in U.S. District Court for...

Although community banks appeared to have fewer foreclosure processing problems and lower overall mortgage default rates, they should look at recent consent orders signed by 14 large servicers for best practices, according to a new Federal Deposit Insurance Corp. report. “Community banks fared far better than...