Despite a solid increase in mortgage originations and stable conditions for hedging, commercial banks and savings institutions reported generally lackluster earnings on their mortgage banking operations in the second quarter. A new Inside Mortgage Trends analysis of earnings reports from 24 banking organizations tallied $1.98 billion in mortgage banking income for the second quarter. That was down 12.3 percent from the first three months of ... [Includes one data chart]

With originations tepid of late, mortgage banking firms have been holding their payrolls steady, careful not to add overhead in what might prove to be a challenging market for the remainder of 2018. According to figures compiled by the U.S. Bureau of Labor Statistics, mortgage banking firms employed 251,600 workers at the end of June, flat compared to the prior month. Companies that fall into the loan brokerage category employed 91,400 full timers at June 30, down 400 positions from May ...

The Mortgage Bankers Association recently asked the federal banking agencies to provide an update on a proposal to increase the amount of mortgage servicing assets that a bank may count to-wards Tier 1 capital. In a letter to the Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and the Federal Reserve, the MBA reiterated its support for the agencies’ proposal to raise a recommended 25 percent cap on the amount of mortgage servicing assets that may be ...

All five of the top players in the single-family mortgage servicing business reported slight de-clines in their portfolios during the second quarter, according to an exclusive Inside Mortgage Finance ranking and market analysis. As a group, the top five participants reported $3.661 trillion in mortgage servicing at the end of June, an 0.7 percent decline from the previous quarter. Although the Federal Reserve’s official tally of home mortgage debt outstanding ... [Includes two data charts]

Fannie Mae and Freddie Mac generated a combined $6.96 billion in net income during the second quarter of 2018, down from $7.19 billion in the first three months of the year. While Fannie posted a solid 4.6 percent quarterly increase, hitting $4.46 billion in the most recent period, Freddie’s net income was down 14.5 percent from the first quarter. At the midway point in 2018, both government-sponsored enterprises were way ahead of where they were in the first six months of last year ...

Lenders will be asking the Department of Housing and Urban Development to clarify the eligibility of borrowers with deferred immigration status for an FHA-insured loan. A mortgage industry trade group is currently drafting a letter on “a series of technical FHA handbook recommendations,” including greater clarity on loan applications submitted by borrowers registered under the government’s Deferred Action for Childhood Arrivals (DACA) program. DACA status was offered to children who were brought illegally into the U.S. by their parents or guardians but have been in the country for most of their lives. The program was created by the Obama administration as a way for recipients to work legally in the country while Congress could agree on what to do with them. The program faces uncertainty after President Trump rescinded it in September last year as part of his administration’s zero-tolerance immigration ...

More than half of FHA-insured loans analyzed for material defects have been mitigated over a 12-month period, according to the Department of Housing and Urban Development’s latest quarterly loan-review analysis. Approximately 31,396 loans were analyzed over four quarters for possible defects, beginning in the third quarter of 2017 and ending the second quarter of 2018. Approximately 59.8 percent of the reviewed loans were initially deemed unacceptable. HUD data showed that most, 54.1 percent, of the loans reviewed have been successfully mitigated. The report provides a quarter-by-quarter snapshot of the FHA’s Loan Review System results. Net defects represent outcomes after lenders have implemented methods and techniques to mitigate or remediate the initial findings. Of the reviewed loans, 24.7 percent were conforming while 15.5 percent were found to be deficient. About 0.2 percent of loans were ...

The U.S. District Court for the Southern District of Iowa earlier this month granted preliminary approval of an $11.2 million settlement in a proposed class-action against national bank JPMorgan Chase. According to the complaint filed in 2016, Chase charged and collected interest on FHA-insured loans that paid off early. Chase was either the lender or the servicer of the loans. The lawsuit, Audino et al. v. JPMorgan Chase Bank, alleges that the bank breached the promissory notes underlying the class’s FHA-insured home loans when it collected post-payment interest without providing disclosures to borrowers who made a prepayment inquiry, request for payoff figures, or tender of prepayment. Plaintiffs allege that the bank did not use the proper FHA form to provide the disclosures to consumers. Chase denies any wrongdoing and neither admits nor concedes any actual or potential fault or liability. The bank also denies it was ...

Fannie Mae and Freddie Mac in a few days are expected to report second-quarter results that likely will top earnings of the prior period when they posted a combined net profit of $6.5 billion, according to an analysis by Inside MBS & ABS.

In a potentially significant shift, Wells Fargo has set aside $507.0 million in mortgages for inclusion in a non-agency mortgage-backed security. Wells is the top jumbo lender and some industry analysts suggest that the jumbo MBS market won’t rebound until banks like Wells stop retaining production in portfolio. Wells said loans designated as held-for-sale for a future MBS are nonconforming mortgages that would have otherwise been stored in its portfolio. Although no other details about ...