More than 40 percent of mortgage industry quality control problems occur because of missing documentation and questionable data integrity. According to Interthinx, a risk mitigation solutions company, 40.9 percent of issues that plague quality control were related to missing docs and data integrity in 2011. This is a stark departure from years past. Missing documentation, for instance, accounted for only 7.1 percent of problems from 2006 to 2009. During those years, eligibility and credit issues were more of an industry scourge. In 2011, tougher underwriting standards have brought that...

Originations of 1-4 family residential mortgages rose by a substantial 19.4 percent at the end of last year, but 2011 still ranked as the worst year for new production activity since year 2000. Mortgage lenders produced an estimated $1.35 trillion of home loans last year, down 17.2 percent from the total in 2010, according to Inside Mortgage Finance. Production hit a low spot during the second quarter, when just $280.0 billion in new mortgages were originated – the weakest quarter since financial markets seized up at the end of 2008. New record lows in mortgage interest...(Includes two data charts)

The Department of Housing and Urban Development rejected a number of industry recommendations to ease the impact of new lender indemnification regulations. The final rule imposes indemnification provisions on all FHA lenders with Lender Insurance authority and revises the methods determining an acceptable claim and default rate. It also amends the two-year performance requirements for considering mortgagees for Lender Insurance (LI) authority in connection with a merger, acquisition or reorganization. The primary change under the new rule is that all direct endorsement lenders with LI authority...

Regulatory burden will be the biggest issue for mortgage originators in 2012, according to recruiting firm Hammerhouse’s second annual survey of originator opinions. of the 400 active mortgage loan originators surveyed, 51 percent cited further oversight and regulation as a top concern for originators in 2012. Twenty-nine percent said that finding a committed and stable mortgage lender to work with is still one of the areas of utmost concern. Product flexibility and raising interest rates were identified as top concerns by 12 percent and 8 percent, respectively ...

The non-agency MBS market sank to a record low in 2011, with just $27.59 billion in total issuance, although performance has steadied in the dwindling supply of outstanding deals. New issuance of non-agency MBS was down 56.6 percent from the level reached in 2010, ending a three-year string of modest gains. As has been the case since 2008, the vast preponderance of new issuance involved seasoned collateral – either whole loans or repackaged MBS. Over half (52.3 percent) of non-agency MBS issued in 2011 were re-securitizations, yet the volume of such deals was down 75.2 percent from...(Includes two data charts)

Well-known jumbo originators contributed most of the collateral for Redwood Trust’s pending $415.73 million non-agency mortgage-backed security, but a handful of smaller lenders also benefitted from Redwood’s jumbo correspondent program. These lenders have little securitization experience but received strong endorsements from rating services and due-diligence firms. Redwood purchased most of the loans to be included in Sequoia Mortgage Trust 2012-1 on a flow basis, according to Kroll Bond Rating Agency. Flagstar Bank led the smaller originators, with $31.84 million of its loans included in the security ...

Early indicators suggest that mortgage origination volume was up significantly during the fourth quarter of 2011, but momentum heading into the new year was relatively weak. In earnings reports, eight top lenders have reported solid increases in production levels over the previous quarter, and as a group they posted their best three-month volume of the year. Wells Fargo, U.S. Bank and BB&T reported hefty increases in production during the fourth quarter, with Citi, PHH Mortgage and PNC also putting up big numbers. Chase managed a much smaller increase than its peers, while...(Includes two data charts)

Shaun Donovan, secretary of the Department of Housing and Urban Development, this week said the multistate foreclosure settlement is “very close” to reaching its conclusion, during a speech at the U.S. Conference of Mayors. However, a meeting last week among more than a dozen state attorneys general to discuss alternatives and to air grievances suggests there is still a lot of work to do. Some of the state AGs attending the meeting have been outspoken regarding their frustrations with the process. They included Kamala Harris of California and Eric Schneiderman of New York, who are not currently...

Banks reported a solid 9.6 percent increase in the volume of home loans sold by their mortgage banking operations during the third quarter, but activity remained at its lowest level since the financial crisis of late 2008. A new Inside Mortgage Trends analysis of call report data reveals that banks sold $248.8 billion of loans through their mortgage banking businesses during the third quarter, rebounding from an especially slow three-month period ending in June. Even with the gain in sales, the third quarter was the second-lowest three-month total since the end of 2008. On a year-to-date basis...

PHH Corp. over the last month has felt the pinch of being the largest mortgage banking business not associated with a depository institution as it faced some setbacks in lining up financing for its operations. The company this week priced a $220 million offering of 6.00 percent convertible senior notes that is being co-managed by JPMorgan Securities and BofA Merrill Lynch. That was up from the $150 million offering originally announced, and PHH gave the underwriters the option to purchase an additional $30 million. PHH will use the money to pay off $250 million of 4.00 percent convertible senior...