The mortgage banking industry’s record level of profitability may have peaked, as gain-on-sale margins have already begun to slip and more dark clouds appear on the horizon, according to industry analysts.

Lenders One, the nation’s largest mortgage cooperative, is telling its members they need to get their Fannie Mae servicing approvals by the end of January to be eligible for discounts under an affinity deal it has with the GSE.

The Federal Housing Finance Agency said it has settled one of its numerous lawsuits against non-agency mortgage-backed securities issuers for misrepresenting deals that were sold to Fannie Mae and Freddie Mac before the mortgage market collapse.

The government-sponsored enterprises are working several different risk-transfer pilots and will soon issue the securities, according to officials at the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. Non-agency MBS investors appear eager for the securities, though a number of regulatory concerns remain, including complications with the Commodity Futures Trading Commission. Patrick Lawler, chief economist at the FHFA, said a risk-sharing transaction will hopefully be issued in the “not too distant future.” Speaking at the American Securitization Forum’s ASF 2013 conference this week in Las Vegas, Lawler and other officials with the FHFA and GSEs said risk-sharing transactions are a high priority this year. “The commitment is...

Relatively new players to the world of Fannie Mae approvals are starting to gripe a little more about the “volume curbs” that the GSE is placing on its “newbie” customers. One mortgage banker, who spoke under the condition his name not be used, told Inside Mortgage Finance ...

Secondary market investors interested in branching out beyond plain vanilla mortgage products are not going to have much to get excited about once the Consumer Financial Protection Bureau’s new ability-to-repay rule kicks in next year, top legal experts suggested this week. “Will lenders make rebuttable presumption qualified mortgages? Remember, [lenders] are free to make loans that generally satisfy the ATR standard. We don’t think those are going to be very common. We don’t think they are going to be saleable in the secondary market at this point in time from what we know today,” Donald Lampe, leader of the financial services regulatory and compliance practice with the Dykema law firm, told participants in a webinar hosted by Inside Mortgage Finance, an affiliated newsletter. As he sees it, the real issue boils down...

With state and local lawsuits against Fannie Mae and Freddie Mac seeking payment for real estate transfer taxes from which the GSEs assert they are exempt, an industry attorney says the endgame for enterprise and municipality alike won’t come from the courts but from the other two branches of government at the highest level. Last month, Spokane, WA, and Montgomery County, MD, joined a growing list of local governments to file suit against the two GSEs for unpaid taxes, challenging Fannie’s and Freddie’s claim that the firms are exempt under their federal charter from transfer taxes in connection with the recording of deeds upon transfer of property by sale or foreclosure.

Cooperatives or “affinity groups” are keeping quiet on what effect recent changes made by Fannie Mae regarding volume discounts will have on their businesses. To date, the three most widely recognized lender co-ops – Capital Markets Cooperative, Lenders One, and America’s Mortgage Cooperative – have said little or nothing on the situation, at least publicly. However, mortgage bankers close to the issue say it could affect Lenders One the most since the company once promoted a pricing advantage it enjoyed as a marketing tool. Some cooperatives charge members for their services upfront, while others only receive a percentage of the value derived from each secondary market transaction.

A large and potentially lucrative “request for proposal” issued several months ago that requires outside vendors to aid the Federal Housing Finance Agency in carrying out its “Strategic Plan” for taking the GSEs to the next stage in their evolution has yet to be awarded. According to a copy of the RFP obtained by Inside The GSEs, work on the contract was slated to start January 28. Potentially, the contract runs through January 2018. A spokeswoman for the agency said FHFA is “still in the process of evaluating” the situation.

Fannie Mae and Freddie Mac have taken different positions on how to deal with new seller/servicers that haven’t been approved for very long. While Fannie has set purchase limits on how much production newly approved seller/servicers can sell to the GSE, Freddie Mac has shied away from such caps. A spokesman for Freddie told Inside The GSEs that it treats all its customers equally. “We don’t have a limit on new customers,” he clarified. Lenders must meet the net worth minimum, which is roughly $2.5 million. Fannie Mae, on the other hand, is tying loan sale volume to net worth. The lower a lender’s net worth, the less it can sell to Fannie. According to a recent message posted to Fannie’s website by executive vice president and chief risk officer John Nichols, Fannie placed limits on new customers –primarily nonbanks – because the company saw what it called a “significant shift in the composition of our customer base and the emergence of many new originating institutions with whom we have done little or no business.”