Partly to comply with liquidity cover ratio requirements imposed in the wake of the financial crisis, U.S. banks ramped up their holdings of high-quality liquid assets. But once they got compliant, many of them shifted their asset allocations more to agency MBS and U.S. Treasuries, according to researchers at the Federal Reserve. This could have implications for the U.S. central bank’s massive balance sheet over the long haul, they added. As of Jan. 1, 2015, large banks in the U.S. have needed...
A handful of large banks continued to retreat from the business of servicing home loans for other investors during the second quarter of 2017, according to a new Inside Mortgage Trends analysis of call reports. Commercial banks and savings institutions reported that they serviced $3.627 trillion of residential mortgages for other investors, typically mortgage-backed securities trusts, as of the end of June. That was down just 0.4 percent from the previous period ... [Includes one data chart]
Mortgage-banking profits improved dramatically during the second quarter as production volume surged and servicing held its own, according to data reported by the Mortgage Bankers Association. Participants in the group’s quarterly mortgage-banking performance study reported average pretax income of $2.12 million for the second quarter. That was up handsomely from the average $886,000 companies earned in the first three months of the year. Profits weren’t as strong as they were ...
Interest rates offered for mortgages generally track with pricing for the loans in the secondary market. However, new research published by the National Bureau of Economic Research suggests that lenders offer worse pricing to borrowers when demand for loans is relatively strong. The findings were detailed in a working paper authored by Andreas Fuster, Stephanie Lo and Paul Willen. Fuster and Willen are in research departments at Fed banks, while Lo is currently a ...
Over the past few weeks, two $100 million-plus transactions involving mortgage technology companies have been announced, signaling that more activity may be ahead in the space as residential finance moves toward the digital age. “This is an interesting time,” said consultant Jeff Lebowitz, a former Fannie Mae executive who has been tracking tech changes for two-plus decades. “There’s a paradigm shift going on. Outside guys are coming in, thinking there’s big changes ahead for ...
Independent mortgage bankers are leading all other lenders in providing mortgage loans to first-time homebuyers, minorities, lower-income borrowers and rural areas, and yet they are more regulated than banks, according to a new industry report. The report from the Community Home Lenders Association underscores the fact that IMBs are small businesses that don’t have access to federally insured deposits. It claims that IMBs have done a better job of servicing home loans ...
The latest mortgage lender sentiment survey from Fannie Mae finds that industry leaders are paying increasing attention to enhancing the borrower experience, thanks to competitive market pressures. To what degree they can actually pull that off remains to be seen. Doug Duncan, senior vice president and chief economist for the government-sponsored enterprise, noted in an online post that the company’s previous survey found that senior mortgage executives were worried ...
Changing demographics will be the private mortgage insurance industry’s most powerful growth engine over the next 20 years, predicts an industry report published by the Urban Institute’s Housing Finance Policy Center. The new report cited U.S. census data showing a 10 percent increase in the share of minority households in U.S. homeownership over the last two decades. It forecasts the share will increase to 38 percent by 2030. Demographic shifts, growth of minority households ...
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