The recent shift in direct mortgage sales by smaller and nonbank lenders has reduced Fannie Mae’s and Freddie Mac’s concentration risks, but the trend has led to an increase in counterparty credit risk, according to the Federal Housing Finance Agency’s official watchdog. The evaluation report issued this week by the FHFA’s Office of Inspector General said the regulator of the two government-sponsored enterprises needs to monitor Fannie’s and Freddie’s risk-management controls regarding smaller lenders and nonbanks. According to Inside Mortgage Trends, an affiliated newsletter, nonbank sellers accounted...
While legal attempts by city governments to force large banks to pay for the high cost of foreclosure have failed, efforts to resolve the problem in state legislatures appear to be making headway. The City of Miami suffered consecutive defeats in three of the four lawsuits it filed against major banks after a federal district court judge dismissed all three because of the city’s lack of standing to bring suit under the federal Fair Housing Act. U.S. District Court Judge William Dimitrouleas dismissed...
“In essence, defendant asserts that the court should merely take its word that the documents – some of which defendant itself has not reviewed – are privileged,” wrote Sweeney. “This suggestion runs contrary to law.”
The American Bankers Association said its members were not able to clearly identify instances where a DTI cure mechanism would be useful in the normal course of bank operations.
So far, the only notable skunk at the second quarter origination party has been JPMorgan Chase which reported a 1 percent decline in fundings compared to the first quarter.
According to an Inside Mortgage Finance analysis of loan-level data on mortgage-backed securities from the GSEs, underwriting standards on mortgages have loosened only slightly over the past year.
The nation’s megabanks reported fairly strong mortgage earnings during the second quarter thanks to a jump in new originations, robust servicing revenue and expense cuts. If the results reported by Wells Fargo, JPMorgan Chase, Bank of America and Citigroup are any indication, the industry may be rebounding from a rough stretch in late 2013 and early 2014. But the first quarter of this year was so bad – and originations so weak – that lenders had no place to go but up. Larry Charbonneau, a warehouse lending analyst, said...
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