Mortgage banking profitability soared to record levels in the third quarter, but some industry analysts say the boom may begin to taper off in 2013.The surge in mortgage banking income during 2012 came from increased secondary marketing gains as the spread between primary market rates and yields on agency mortgage-backed securities widened to historic levels.

Most consumers have a favorable view of debt protection services for their mortgage and credit card debt obligations, despite the occasional news report of abuses in the sector, according to a new study from officials at the Federal Reserve, based on data from the Consumer Credit Industry Association.“Consumer attitudes among purchasers have not changed from the high levels of favorable views of users in the past,” said the study, which was authored by Thomas Durkin and Gregory Elliehausen...

Technology advances have helped most credit unions improve productivity in their mortgage origination processes, but there are significant differences among institutions and the industry as a whole could do a better job in managing the pipeline, according to an analysis by Mortgage Cadence. “While some credit unions post remarkably high productivity and correspondingly low costs to close, there is significant room for improvement,” said Mortgage Cadence, which offers an integrated loan origination system.

A foreclosure in a neighborhood causes the price of nearby homes to drop, not because of property neglect or abandonment, but because it increases the housing supply, a new Federal Reserve Board study concludes. Consistent with the finding that a foreclosed home simply increases inventory, new listings of foreclosed homes and non-foreclosed homes each lower home-sale prices by 1.0 percent within 0.1 miles of the listing, according to the study.

Principal reduction is on the rise. Sixty-six percent of Home Affordable Modification Program mods made by banks on mortgages in their own portfolios included principal reduction in the third quarter, according to the Office of the Comptroller of the Currency.This compares with 57.7 percent for the second quarter of 2012.Overall, there were 136,316 new loan mods made during the third quarter, with servicers reducing interest rates in 77.2 percent of cases. Term extensions were used in ...

Bank and thrift holdings of first-lien mortgages increased by 3.6 percent in the third quarter of 2012 compared with the third quarter of 2011, according to a new ranking and analysis by Inside Nonconforming Markets. The growth, outpacing portfolio runoff and an overall decline in mortgage debt outstanding, is tied to non-agency mortgages as well as agency-eligible loans being retained by banks. Industry participants are divided on whether the first-lien holdings will ... [Includes one data chart]

The FHA this week announced additional measures to restore the financial health of its insurance fund and better protect consumers, including tighter underwriting on new FHA loans and elimination of a widely used standard fixed-rate reverse mortgage product. Acting FHA Commissioner Carol Galante unveiled the latest structural reforms in a Dec. 18 letter to Sen. Bob Corker, R-TN, who has repeatedly expressed concerns over the slow pace of reforms at FHA. The reforms address issues the senator raised with Department of Housing and Urban Development Secretary Shaun Donovan at a Dec. 6 Senate Banking, Housing and Urban Affairs Committee hearing on ...

A Senate vote on FHA reform legislation appears unlikely unless Senate Majority Leader Harry Reid, D-NV, and Senate Banking Committee Chairman Tim Johnson, D-SD, find a way to persuade Republican lawmakers to sign off on a House-approved bill before the end of the year, industry sources say. Senate Republicans are poring over the bill, H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, which the House passed overwhelmingly 402-7. It is unclear how much Republican support the bill would have if – and when – it is taken to the Senate floor, said one trade group executive. The bill would strengthen the ...

The FHA and VA have announced loan limit adjustments in many counties even as disparities with conventional loan limits persist in 2013, according to a new analysis by Inside FHA Lending. FHA loan limits for forward mortgages will increase in 2013 for 19 counties, 10 of which are part of the Houston metropolitan area. In those counties, the one-unit limit is going up just $1,500 to $272,550. The remaining counties are in Alaska. Congress authorized the “emergency” loan limits for high-costs markets – still $729,750 for FHA and $625,500 for Fannie Mae and Freddie Mac –to run through Dec. 31, 2013. The base loan limit nationwide and in ...

The Department of Housing and Urban Development reported strong note sales of more than $1.7 billion under the expanded Distressed Asset Stabilization Program (DASP) and announced another big sale in the first quarter of 2013. Preliminary results from the sale in September showed record participation among interested bidders on 13 pools. In total, the 13 pools went to 10 different entities, among them nonprofit and community-based organizations, according to HUD. While still in the process of settling the transactions, the FHA said it is very ...