Hefty secondary marketing margins continued to boost mortgage banking income at a faster pace than total sales activity during the third quarter of 2012, according to a new Inside Mortgage Trends analysis of bank call report data. Banks and thrifts reported a total of $401.6 billion in sales of single-family mortgages during the third quarter, a hefty 11.5 percent increase from the previous three-month period. But mortgage banking income – which is derived largely from ... [Includes one data chart]

Much attention over the last few years has centered on how best to help revive non-agency mortgage securitization. But recent advances in technology have enabled whole loan trading to emerge as a viable alternative that is filling some of the void left in the marketplace by less securitization. “At least in the U.S. residential debt market, we are seeing a much larger market for the trading of whole loans,” said Wyck Brown, president of Denver-based BlackBox Logic, a provider of loan-level data aggregation, analytics and consulting services. “Large whole loan blocks can ...

Last week’s $10 billion settlement between Fannie Mae and Bank of America over outstanding and potential repurchase claims is at least a truce in the bitter battle between the GSE and the bank that has simmered since the housing bubble burst. But the jury is still out as to how much business the two companies will do again going forward. Under the agreement, BofA will pay Fannie $3.55 billion cash and spend $6.75 billion to buy back some 30,000 loans sold by Countrywide Financial to the GSE. The “comprehensive solution” between the firms covers current and future repurchase obligations related to loans with an outstanding balance of $297 billion as of Nov. 30, 2012, that were originated and sold directly to Fannie from 2000 through 2008. The bank will also pay Fannie $1.3 billion in “compensatory fee obligations” for taking too long to address foreclosures.

A few weeks ago, ES Appraisal Services, Jacksonville, FL, closed its doors, the second national appraisal management company to go bust in the past year. The other was Appraisal Loft. ES Appraisal’s demise was a hardly a surprise. For months, industry message boards were full of comments from independent appraisers who worked as contractors for the firm, complaining about unpaid invoices. In December, the company sent an email to appraisers confirming the news. At one point the firm employed, on a contractual basis ...

Newcastle Investment announced last week that it will spin off all of its excess mortgage servicing rights and certain other residential assets as part of a new real estate investment trust. The company also participated in another significant servicing transaction with Nationstar Mortgage. The publicly traded REIT spin-off is set to be completed during the first quarter of 2013 and will be known as New Residential Investment. “We believe the separation of Newcastle and New Residential will ...

Home Loan Servicing Solutions – an affiliate of Ocwen Financial – made some significant moves recently with an acquisition of rights to receive servicing fees on $34.6 billion in unpaid principal balance handled by Ocwen. And the company is set to issue a $750.0 million securitization backed by servicer advances. Near the end of December, HLSS announced that it acquired rights to receive servicing fees on nonprime mortgages. Ocwen will continue to service the mortgages, receive a monthly base fee ...

It’s no secret that Fannie Mae and Freddie Mac are back in the black when it comes to earnings, but in the quarters ahead the two are likely to perform even better as delinquencies and foreclosures continue to wane, and they move to recapture some of their massive loss reserves. But another factor could bolster their earnings as well: large legal settlements with the nation’s megabanks, which will go straight to their bottom line, according to an analysis done by Inside The GSEs. As part of Fannie’s buyback settlement with Bank of America (see related story on page 1), Fannie will receive some $3.6 billion in cash from the bank, plus BofA is repurchasing almost $7 billion in legacy loans.

Interest rates on adjustable-rate mortgages fell to their lowest level ever early this year, but consumers continue to prefer fixed-rate products. Freddie Mac reported that the average initial rate for one-year ARMs offered in early January was just 2.56 percent, the lowest ever recorded in its 29-year-old survey. Fewer than half the participating lenders offer one-year ARMs, but initial rates on the more common three-year and five-year hybrids were 2.72 percent and ... [Includes one data chart]

New Fannie Mae and Freddie Mac buyback policies, advanced at the behest of the Federal Housing Finance Agency, could lead to a secondary mortgage market with fewer products and less competition from credit unions and smaller lenders, according to a trade group representing CUs. In a comment letter to the FHFA this week, the National Association of Federal Credit Unions said any new buyback requirement by the two government-sponsored enterprises could hurt CUs and other small lenders disproportionately because they lack the volume of loans or the capital needed to support a buyback program. “This would be...

Paul Muolo, a veteran mortgage industry reporter and editor for more than 25 years and the co-author of a recent book on the mortgage crisis, has been hired as the new managing editor at Inside Mortgage Finance Publications, it was announced this week. At IMFP, Muolo already has left his mark by re-launching IMFnews as a free daily news service with comprehensive coverage of breaking mortgage-related news. As managing editor, he will contribute stories to the weekly Inside Mortgage Finance and Inside MBS &ABS newsletters as well as work with the four other reporters/editors at the company. “We are very pleased...