Citigroup will not provide representations and warranties for fraud on the MBS and half of the mortgages were originated with stated- or no-documentation.

With the Federal Reserve acquiring a significant portion of new agency MBS issuance, the aggregate MBS holdings of banks and thrifts continued to decline in late 2013, according to a new ranking and analysis by Inside MBS & ABS. Commercial banks and savings institutions held a total of $1.507 trillion of residential MBS in portfolio as of the end of last year, newly-released call-report data reveal. That was down 0.4 percent from the end of the third quarter and marked the industry’s fifth consecutive quarterly decline. Bank and thrift MBS holdings fell...[Includes two data charts]

Banks and thrifts earned a hefty $5.292 billion on their mortgage-banking activities during the fourth quarter of 2013, boosting the year to one of the industry’s best in recent memory. Mortgage banking income reported by banks and thrifts rose 12.7 percent from the third to the fourth quarter of last year, according to a new analysis of call-report data by Inside Mortgage Trends. The fourth-quarter surge brought annual earnings from mortgage banking to $25.857 billion in 2013 ... [Includes one data chart]

Although some industry groups said it is too soon to get into another massive overhaul, others pointed to the forest of overlapping and confusing documents as a good place to start.

Fannie Mae reported net earnings of $6.5 billion in the fourth quarter late this week, revealing that the company’s total dividend payments to the U.S. Treasury will exceed the $116.1 billion that the GSE has drawn since being put into conservatorship in late 2008. The company will pay the Treasury $7.2 billion in dividends in March. With the March dividend payment, Fannie will have paid a total of $121.1 billion in dividends to the Treasury – the equivalent amount of its entire draw plus an additional $5.0 billion.

A recently unearthed Treasury Department “action memorandum” from 2010 makes clear the White House’s commitment to ensuring that common shareholders in Fannie Mae and Freddie Mac should never have access “to any positive earnings from the GSEs in the future.” The memo, approved by then-Secretary Timothy Geithner, asks that Treasury waive the GSEs’ periodic commitment fee for 2011.

Mortgage servicing helped lenders increase their mortgage-banking income during the fourth quarter of 2013, according to an Inside Mortgage Trends analysis of earnings reports from 10 major lenders, including the top three in the industry. The 10 companies reported a combined $2.193 billion in servicing-related income during the fourth quarter, up 19.8 percent from the previous period. That was considerably more than the $1.324 billion the lenders reported on production-related income ...

Officials at Two Harbors Investment are touting the real estate investment trust’s recent admission into the Federal Home Loan Bank system as a way to diversify funding options for originations of jumbo mortgages, although FHLBank financing may not play a major role in the REIT’s funding in the current environment. In December, TH Insurance Holdings, a wholly owned subsidiary of Two Harbors, was granted membership in the FHLBank of Des Moines. Two Harbors said it appears to be the first REIT to receive ...

Declining loan production could lead to rampant consolidation among mortgage vendors this year, particularly technology firms, according to interviews conducted by Inside Mortgage Trends. “Revenues at some of these firms are going to take a nosedive over the next year or so,” said Anthony Garritano, founder of the Progress in Lending Association, an industry think-tank that focuses on the tech sector. “The drop in production volume in the fourth quarter was more than most anticipated ...

Proprietary loan modifications, the dominant form of loss mitigation, have declined significantly in the past year, while activity in the Home Affordable Modification Program has remained relatively level, according to the Hope Now alliance. Some 137,879 loan mods were completed in the fourth quarter of 2013, down 24.0 percent from the previous quarter and a 44.0 percent decline from the fourth quarter of 2012. Eric Selk, executive director of Hope Now, said the decline in mods “closely tracks” with ...