The amount of subprime mortgages outstanding as of the second quarter of 2011 has declined by nearly 50 percent compared with the market’s peak of $1.0 trillion in the second quarter of 2007, according to an analysis by Inside Nonconforming Markets. However, subprime servicers have reasons to be optimistic, according to industry analysts.Subprime mortgage delinquencies increased in the first and second quarters of 2011 after declining throughout 2010 ... [includes one data chart]

Walter Investment Management is looking to capitalize on its recent acquisition of special servicer Green Tree and continue to grow. Officials with Walter said the company currently services a $40 billion portfolio and is on pace for a servicing portfolio of at least $60 billion by the end of this year. “We feel very good about our ability to get our fair share and more of what’s available in the market,” said Denmar Dixon, vice chairman of the board and executive vice president at Walter. ...

One of PennyMac Mortgage Investment Trust's primary goals is to increase jumbo correspondent lending activity, according to David Spector, president and COO of the real estate investment trust. Stanford Kurland, chairman and CEO of PennyMac, noted that banks have reduced correspondent activity due to impending risk-retention rules and other regulatory issues. “PennyMac has great potential to bridge the significant gap that exists in the origination market, which will likely grow with the expansion of the prime non-agency market as the agencies’ conforming loan limits are reduced,” Kurland said this month. ...

The massive losses taken by the government-sponsored enterprises on their non-prime holdings are not over yet. Fannie Mae and Freddie Mac warned this month that they expect greater credit losses for 2011 than the hits they took last year, largely due to the continued poor performance of legacy non-prime acquisitions. The GSEs had a combined $430.51 billion in non-prime holdings as of the second quarter of 2011, according to a new ranking and analysis by Inside Nonconforming Markets. ... [includes one data chart]

The Department of Housing and Urban Development’s Office of the Inspector General called for improvements in the servicing of Home Equity Conversion Mortgage loans, particularly in detecting and reporting fraud, after auditors discovered certain advance payments that were made after the borrowers were reported to have died. Although most of the suspicious payments were due to posting errors, some transactions raised red flags, the IG report said. There was no evidence that servicers had sent those potentially fraudulent cases to HUD for further action, it added. The anomalies were found during a routine OIG audit of the HECM program, which insures ...

Preparations for a hoped-for return of non-agency jumbo origination and securitization have taken a financial toll on Redwood Trust, according to officials at the real-estate investment trust. “We have built our origination businesses for more volume than is currently available on the right terms,” Redwood officials said last week as part of their earnings release for the second quarter of 2011. “We believe our scale will ultimately pay off. For now, however, our operating costs are high relative to the net revenues we can earn off our invested capital without taking ...

Carrington Mortgage Services announced last week that it is expanding into nonconforming wholesale lending with the acquisition of certain assets of American Home Equity Corp. Carrington and AHE each offer a variety of agency and non-agency mortgages, including jumbos of up to $1 million. “This addition will provide Carrington with an immediate proven foundation to launch our wholesale origination model on a nationwide basis,” said Steve Patton, executive vice president of mortgage lending at Carrington. AHE was founded in 2001 and originated more than ...

Rules proposed by federal regulators to establish “qualified mortgage” and ability-to-repay standards would severely limit the originations of alternative mortgages, including certain ARMs, according to lenders. Consumer advocates, meanwhile, are calling for even more restrictive underwriting standards than those proposed by the Federal Reserve. In April, the Fed proposed strong ability-to-repay requirements that expand upon existing rules for higher-priced mortgages, include stringent penalties for violations, and would apply to ...

Wells Fargo Bank and Bank of America dominated the FHA jumbo market during the first six months of 2011, accounting for a third of total jumbo loan originations during the period, according to Inside FHA Lending’s latest analysis of the sector. The two financial institutions outdistanced their competitors by producing a total of $3.04 billion in FHA-insured mortgage loans, nearly a third of the $10.2 billion of government-insured jumbo loans originated during the first half of the year. Top-ranked Wells Fargo generated $1.90 billion in FHA loans exceeding $417,000 for an 18.7 percent market share, while BofA claimed... [Includes two data charts]

The Department of Housing and Urban Development said it expects to issue guidance by the end of the month clarifying which mortgage loans would qualify for the higher loan limits. A department spokesman said the guidance is in its last phase of departmental clearance and contains detailed information on which loans are eligible for the higher loan limits as well as additional requirements for using the higher loan limits. Unless Congress intervenes, the current high-cost area loan limit, which is set temporarily at 125 percent of the median house price in each area up to a maximum of $729,750, will be replaced on Oct. 1 by a...