The Civil Division of the U.S. Attorney's Office for the Eastern District of New York is investigating Bank of America's compliance with the requirements of the FHA's Lender Direct Endorsement program. BofA disclosed the investigation in its recent filing with the Securities and Exchange Commission but withheld details. Department of Justice investigations of FHA-related fraud are based typically upon an alleged violation of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and/or the False Claims Act (FCA). Civil monetary penalties under FIRREA could go as high as $1.1 million per violation while treble damages are potentially available for FCA claims. Both laws have a 10-year statute of limitation. As a direct endorsement lender, BofA is authorized to originate, underwrite and certify loans for mortgage insurance without further reviews by the FHA or the Department of Housing and Urban Development. If the loan defaults, the holder of the loan may ...

With the Federal Reserve acquiring a significant portion of new agency MBS issuance, the aggregate MBS holdings of banks and thrifts continued to decline in late 2013, according to a new ranking and analysis by Inside MBS & ABS. Commercial banks and savings institutions held a total of $1.507 trillion of residential MBS in portfolio as of the end of last year, newly-released call-report data reveal. That was down 0.4 percent from the end of the third quarter and marked the industry’s fifth consecutive quarterly decline. Bank and thrift MBS holdings fell...[Includes two data charts]

Banks and thrifts earned a hefty $5.292 billion on their mortgage-banking activities during the fourth quarter of 2013, boosting the year to one of the industry’s best in recent memory. Mortgage banking income reported by banks and thrifts rose 12.7 percent from the third to the fourth quarter of last year, according to a new analysis of call-report data by Inside Mortgage Trends. The fourth-quarter surge brought annual earnings from mortgage banking to $25.857 billion in 2013 ... [Includes one data chart]

Fannie Mae reported net earnings of $6.5 billion in the fourth quarter late this week, revealing that the company’s total dividend payments to the U.S. Treasury will exceed the $116.1 billion that the GSE has drawn since being put into conservatorship in late 2008. The company will pay the Treasury $7.2 billion in dividends in March. With the March dividend payment, Fannie will have paid a total of $121.1 billion in dividends to the Treasury – the equivalent amount of its entire draw plus an additional $5.0 billion.

A recently unearthed Treasury Department “action memorandum” from 2010 makes clear the White House’s commitment to ensuring that common shareholders in Fannie Mae and Freddie Mac should never have access “to any positive earnings from the GSEs in the future.” The memo, approved by then-Secretary Timothy Geithner, asks that Treasury waive the GSEs’ periodic commitment fee for 2011.

Mortgage servicing helped lenders increase their mortgage-banking income during the fourth quarter of 2013, according to an Inside Mortgage Trends analysis of earnings reports from 10 major lenders, including the top three in the industry. The 10 companies reported a combined $2.193 billion in servicing-related income during the fourth quarter, up 19.8 percent from the previous period. That was considerably more than the $1.324 billion the lenders reported on production-related income ...

Declining loan production could lead to rampant consolidation among mortgage vendors this year, particularly technology firms, according to interviews conducted by Inside Mortgage Trends. “Revenues at some of these firms are going to take a nosedive over the next year or so,” said Anthony Garritano, founder of the Progress in Lending Association, an industry think-tank that focuses on the tech sector. “The drop in production volume in the fourth quarter was more than most anticipated ...

State regulators are trying to take the National Mortgage Licensing System mortgage call report to the next level in terms of analytical capability. If the vendor side of the industry has its way, this will be accomplished in a manner that relies on the latest in technology to make the compliance process easier for lenders and report users. As the annual NMLS conference in Miami was winding down late this week, the Conference of State Bank Supervisors was, as of press time, set to convene a panel of ...

Nearly half of all mortgage borrowers did not refinance their home loan during the period between 2009 and 2012, when mortgage interest rates declined steadily, according to a Fannie Mae survey. The government-sponsored enterprise found that 40 percent to 50 percent of borrowers, for some reason, did not take advantage of low interest rates to reduce their monthly mortgage payments through refinancing. To try to get at why borrowers don’t refinance when the opportunity seems ripe, Fannie economist ...

Firms that evaluate mortgage servicing rights and facilitate their sales had a record year in 2013 in transaction volume, according to interviews conducted by Inside Mortgage Finance. And although many are expecting a strong year in 2014, the deal volume likely will subside. Still, Interactive Mortgage Advisors, MountainView Servicing Group and Phoenix Capital – among others MSR brokers – are making hay while the sun shines. Combined, the three sold or bought...