Freddie Mac earned just $227 million in the fourth quarter, blaming the 90 percent sequential decline in profits on derivative losses of $3.4 billion. In a briefing with the media, Freddie CEO Don Layton went out of his way to explain that when interest rates eventually rise, the government-sponsored enterprise could benefit greatly. “I wish that accounting was more tied to economics but it’s not,” he said. Layton stressed...

Having a busy correspondent program helped many of the top agency mortgage sellers cultivate purchase-mortgage business in 2014, according to a new Inside Mortgage Trends analysis of loan-level data on loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae. Mortgages originated by loan correspondents accounted for 35.3 percent of single-family loans securitized by the agencies last year. Retail originations were the ... [Includes two data charts]

Mortgage loan officers are a hot commodity these days, but recruiting top producers is becoming problematic thanks to low interest rates and swelling pipelines. In short, many LOs are reluctant to accept an enticing new salary and bonus because they don’t want to leave money on the table when they depart. “It’s a trend that’s happening now,” said Chris George, president of CMG Mortgage, one of California’s largest privately held nonbanks ...

Industry economists expect modest gains in home sales and a spurt in single-family housing starts in 2015, but the market likely won’t reach full strength until next year. Fannie Mae is forecasting a 5.8 percent increase in total home sales from 2014 levels, with most of the increase coming in the smaller new-home category. The near-term outlook for sales is soft, the government-sponsored enterprise said in a new outlook, based on recent indicators such as ...

Cash-out refinance mortgages accounted for a slightly larger share of the conventional refi market in 2014, according to Freddie Mac’s annual refinance report. The government-sponsored enterprise estimated that cash-out deals accounted for 6.8 percent of total refinance lending last year, up from 3.7 percent in 2013. It was the highest cash-out share since 2009. During the go-go years of 2005-2007, cash-out transactions accounted for more than ...

A few months, back there was scattered talk in the market that a wave of consolidation might hit publicly traded real estate investment trusts that specialize in agency MBS. But thanks to continued low interest rates and the fact that mortgage REITs continue to trade below book value, such a rollup is looking highly unlikely. “I don’t see it happening,” said Credit Suisse analyst Doug Harter. “Why would you sell for below book value when you can just liquidate?” Jason Stewart, an analyst at Compass Point Research & Trading, agrees...

First Republic Bank was the top contributor to jumbo MBS issued in 2014, according to a new ranking and analysis by Inside Nonconforming Markets. Officials at First Republic note that the bank tends to sell its originations of fixed-rate mortgages while adjustable-rate mortgages make for better portfolio holdings. However, the secondary market bid was strong enough for First Republic to sell some jumbo ARMs during the year, including a ... [Includes one data chart]

Federal housing regulators once again sought authority from Congress to impose an administrative fee on lenders to support information technology improvements and administrative functions at the FHA – a bid Congress rejected last year. As part of President Obama’s FY 2016 budget, the Department of Housing and Urban Development is proposing to charge lenders up to $30 million in fees to cover FHA salaries and expenses and information technology upgrades. The IT component will focus on strengthening FHA’s risk-management efforts through expanded quality-control reviews, enhanced tools and other risk-management initiatives. Separately, the president requests an appropriation of $174 million in administrative costs to enable the FHA to implement a risk management and program-support process – both critical for FHA’s oversight of ...

Reverse mortgage lenders now have the option to delay calling a Home Equity Conversion Mortgage due and payable where there is an eligible non-borrowing spouse and a case number assigned prior to Aug. 4, 2014. A delay would postpone foreclosure triggered by the death of the HECM borrower or the last surviving borrower and allow the qualified, non-borrowing spouse to stay in the house for a certain period until the HECM is resolved. Under revised FHA guidance, reverse mortgage lenders are allowed to assign eligible HECMs to the Department of Housing and Urban Development upon the death of the borrower. They have the option of foreclosing in accordance with the contract as endorsed or choose the “mortgagee optional election assignment (MOE).” MOE means the optional assignment selected by a lender for a HECM loan with an assigned FHA case number prior to ...