Mortgage lenders faced a rising tide of repurchase requests from the secondary market during the second quarter of 2011, according to an Inside Mortgage Finance analysis of earnings reports from Fannie Mae and Freddie Mac. The two government-sponsored enterprises said they realized $4.1 billion in repurchases and indemnifications during the second quarter, up 46 percent from the first three months of the year. It was the second largest repurchase binge on record, trailing only the $5.9 billion reported for the fourth quarter of 2010. Most of the damage was done by ... [contains one data chart]

Production of agency MBS in July slipped to its lowest monthly level since early 2009, according to a new analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae issued a total of just $70.34 billion of single-family MBS during July, down 3.4 percent from the previous month. It was the lowest one-month production level since January 2009 and left year-to-date issuance down 4.3 percent from the first seven months of 2010. Ginnie production was actually up slightly from June levels, but both Fannie and Freddie posted significant slowdowns. Freddie issuance dropped 15.5 percent from the previous month and accounted for [Includes one data chart]

Nationally recognized statistical rating organization Kroll Bond Rating Agency demonstrated its optimism in the non-agency market by requesting public comment this week on its rating methodology for evaluating residential MBS. “By providing complete transparency into our approach and processes, we aim to instill trust in the market and to raise the bar on ratings accuracy,” said James Nadler, Kroll’s president, in a statement. “These [publications on our proposed rating process] demonstrate our strong commitment to serving the market through a rigorous evaluation of the collateral as well as key parties in an RMBS, and combine all aspects of...

Wall Street and the Chicago City Council are at loggerheads over a revised ordinance establishing mortgage lender liability for vacant and abandoned buildings caught in the foreclosure process. Tentatively set to take effect Sept. 18, the ordinance addresses the issue of vacant and abandoned foreclosed properties for which ownership is unclear. It holds banks responsible for the upkeep and security of such properties even before they assume title to those properties. In a recent analysis, Moody’s Investors Service warned that such lender liability laws increase mortgage lending transaction costs, which will worsen if...

Two Harbors Investment Corp. said this week it is “impressed with the investment opportunities” in the non-agency MBS sector, particularly over the next year and beyond and is pushing forward with its plans to begin a securitization program. Thomas Siering, president and CEO of the New York-based real estate investment trust, said during a conference call to discuss the firm’s second quarter earnings that despite the “challenging” non-agency environment in June, there is tremendous opportunity to profit from non-agency MBS issuance throughout the rest of this year into 2012. “The recent pullback in the non-agency market has created...

A second round of mortgage banking earnings reports over the past two weeks suggests that the industry managed to churn out fairly stable profits despite a sharp decline in production during the second quarter of 2011. A group of 11 mortgage lenders over the past two weeks reported a combined $183.3 million in net earnings from their mortgage banking operations during the second quarter. That was down 48.7 percent from the group’s earnings for the first three months of the year. As was the case with the first round of earnings reports, the group’s combined results were heavily weighted by a substantial loss reported by one company. PHH Mortgage reported... [Includes one data chart]

MetLife isn’t getting enough bang for its buck out of its depository banking business to justify the amount of regulatory oversight it has to contend with in a highly competitive market. Facing the prospect of even more intensive regulation ahead, the company has decided to look for a purchaser for that line of its operations. But the insurance industry giant plans to keep its mortgage banking business, MetLife Home Loans, most of which was acquired from First Horizon in 2008. The company also picked up EverBank’s reverse mortgage business. Given MetLife’s focus as a global insurance and employee benefits player, the company has decided that...

Pound for pound, mortgage loan officers licensed to do business in California appear to generate a lot more business than their counterparts elsewhere around the country. A new analysis of state mortgage licensing data by Inside Mortgage Trends found that California had a relatively small number of registered mortgage loan officers, or MLOs, compared to the size of the state’s mortgage market. California typically accounts for 20 percent or more of U.S. residential mortgage activity, but its 3,519 registered MLOs represented just 3.5 percent of these individuals tracked in the National Mortgage Licensing System. That appears likely to... [Includes one data chart]

The Mortgage Bankers Association urged the Federal Housing Finance Agency to include other fee structures and not just seek public comment on one servicing fee structure in a forthcoming proposal. The FHFA has been working behind closed doors with Fannie Mae, Freddie Mac and Ginnie Mae to devise a new servicing compensation structure for mortgages securitized by the agencies, which account for over 90 percent of new lending. Industry groups and others have been consulted during the process, which is expected to result in an exposure document subject to public comment. The MBA cautioned the FHFA against showing preference for any...

In the 18 states that have loan limits scheduled to expire come October, the impact on borrowers will be minimal, according to a recent report released by economists at the Federal Housing Finance Agency. The National Association of Realtors, the Mortgage Bankers Association and the National Association of Home Builders have been lobbying to extend current high-cost loan limits that are scheduled to decline from a maximum of $729,750 to $650,500 on Oct. 1, claiming that the market isn’t stable enough to stand up without them. Sens. Robert Menendez, D-NJ, and Johnny Isakson, R-GA, this week introduced S. 1508, the Homeownership Affordability Act of 2011, to allow...