A survey finds that more lenders are mulling a change to their loan origination system. The percentage of mortgage lenders considering changing their current loan origination system (LOS) in the next 12 months has increased to 18.7 percent in 2012 from 17.75 percent last year, according to QuestSoft, a provider of lender compliance software. According to QuestSoft’s latest survey of 461 lenders nationwide, nearly one in five mortgage lenders is seeking new LOS, which is the highest percentage looking to switch in the six years QuestSoft has been conducting the annual survey. Since the survey...

The four major banks reclassified $6.0 billion in home-equity loans to nonperforming status this month due to guidance from federal regulators. While the holdings have been seen as an impediment to loss mitigation efforts, the banks said the accounting change was essentially cosmetic. Bank of America classified $4.36 billion in HELs as nonperforming as of the end of the first quarter of 2012, up from $2.45 billion at the end of 2011. The increase was due to ...

Invesco liquidated its fund in the Public-Private Investment Program this month, earning a strong 18.2 percent cumulative net internal rate of return on $2.3 billion in capital. “The PPIP program has resuscitated the private-label mortgage-backed securities market and, at least in our case, resulted in a handsome profit to the Treasury Department,” said Wilbur Ross, chairman of the Investment Committee of the fund and chairman and CEO of WL Ross & Co. “We are proud to have participated in it.” Among the seven non-agency public-private investment funds that were participating in the PPIP ... [Includes one data chart]

Repurchase requests on mortgages in non-agency mortgage-backed securities increased for major banks during the first quarter of 2012 compared with the end of 2011, according to a new analysis by Inside Nonconforming Markets. However, the lenders have challenged the vast majority of the claims and a significant court decision appears to be heading toward ...

Continuing financial problems at Ally Financial’s Residential Capital have prompted speculation among industry analysts that Ally will agree to sell at least a portion of ResCap’s $10.9 billion legacy portfolio within the next two months. Nationstar Mortgage has been mentioned as a front-runner to acquire ResCap’s non-agency mortgage servicing rights, although other servicers have also considered the acquisition. “In light of ResCap’s liquidity and capital needs combined with volatile conditions in the marketplace, there is substantial doubt about ...

The company formerly known as Option One reached a $28.2 million settlement with the Securities and Exchange Commission this week regarding issuance of subprime mortgage-backed securities in early 2007. The SEC said Option One’s MBS “operated as a fraud or deceit” against non-agency MBS investors. “The offering documents misled investors about Option One’s precarious financial condition and, hence, its inability to fulfill its obligations on its own to repurchase ...

Combined servicing volume for the top 50 Ginnie Mae MBS servicers jumped to $1.23 billion in the first quarter of 2012 from $1.11 billion during the same period a year ago – an 11.2 percent increase on a year-over-year basis, according to the Inside Mortgage Finance MBS Database. The quarterly change was a modest 1.7 percent increase from $1.21 billion in the fourth quarter of 2011, data showed. Wells Fargo and Bank of America accounted for 53.5 percent of total Ginnie Mae servicing in the first quarter, with $361.1 million and $302.1 million, respectively. Year-over-year, top-ranked Wells Fargo (29.1 percent market share) saw a ... (1 chart)

A data and analytics firm has developed a method to hedge exposure to the underlying risk associated with fluctuating real estate values. The Chicago Board Options Exchange has approved the RPX Futures for its futures exchange. The RPX Composite Index, designed by Radar Logic, calculates the daily value of home prices by determining the price of housing per square foot. “The RPX is a translation of price per square foot gathered from public source records,” explained Michael Feder, CEO of Radar Logic. “We look at all closing transactions with enough information to observe.” The index numbers...

Lack of procedures for resolving repurchase conflicts between non-agency MBS investors and providers of representations and warranties could negatively affect the rating for any newly issued residential MBS, according to a new analysis by Moody’s Investors Service. The volume of unresolved repurchase conflicts between MBS investors and reps and warranties providers can be gauged by the number of lawsuits and the growing dollar value of settlements, said Moody’s analyst Kathryn Kelbaugh. The issue was thrust into the spotlight recently because 82 percent of the loans backing the $746 million non-agency...

MBS Business Surges in 1Q 2012 Due to RefiGSE single-family securitizations leapt 16.2 percent during the first three months of 2012 compared to the previous quarter as mortgage lenders delivered some $303.9 billion in home loans to Fannie Mae and Freddie Mac’s securitization programs, according to an Inside The GSEs analysis. The first quarter’s flood of new business marked the fourth straight quarterly increase in production of GSE mortgage-backed securities after the market tanked in the second quarter of 2011.