A title insurance firm is taking a close look at due diligence provider Allonhill. Meanwhile, mergers and acquisitions in the residential finance industry could explode.

Fannie Mae has come up with a workaround for a computer software problem that erroneously reported short sales as foreclosures on consumer credit reports. “In an effort to assist borrowers in obtaining a new loan in an appropriate timeframe, [Desktop Underwriter] will be updated to disregard the foreclosure information on the credit report when instructed to do so by the lender on the online loan application,” Fannie explained in a recent updated notice.

The agency watchdog wants HUD to pursue civil remedies against The Lending Company and impose fines for incorrectly certifying that mortgages were eligible for FHA insurance.

Warehouse lending executives say they are seeing their nonbank clients earn less money this summer, but noted that profits are still strong by historical levels.

Commercial banks are earning a ton of dough on residential servicing fees, but nonbanks are seeing an erosion in profits.

With improving loan quality and mortgage repurchase reviews declining, due diligence firms have been under stress the past year.

Paul Rozo, CEO of Paramount Residential Mortgage Group, said his company’s application volume is down roughly 20 percent since rates jumped a few months back, but some of his competitors are seeing declines of up to 50 percent.

FHFA has been analyzing approaches for reducing Fannie Mae and Freddie Mac loan limits across the country, "and any such change would be announced with adequate advance notice for implementation on January 1, 2014" the regulator said.

The collateral backing the new Redwood bond is exclusively 30-year fixed-rate loans without interest-only terms.

The FDIC will raise the question of a 30 percent downpayment but don't expect to see it in the final QRM rule.