Flagstar Bancorp completed two acquisitions this year that officials said were aimed at maintaining mortgage-related revenues even as industry-wide originations are expected to decline. In April, Flagstar acquired assets of Opes Advisors. In February, the bank acquired Stearns Lending’s delegated correspondent platform. During Flagstar’s recent annual shareholder meeting, Alessandro DiNello, president and CEO, said the acquisitions won’t necessarily ...

The next generation of technology improvements to the mortgage industry could include digital robots, according to analysts at PwC. The consumer finance division of the professional services firm recently published a paper on robotics and “digital labor” options for mortgage lending and servicing. The firm estimates that by the early 2030s, up to 38 percent of existing U.S. jobs will be susceptible to automation from robotics and artificial intelligence. PwC said the mortgage industry is ...

Nonbanks and fintech firms have made major in-roads in mortgage originations and now account for a significant chunk of the market and are continuing to expand through regulatory arbitrage, according to analysts at Keefe, Bruyette & Woods. Discussing the so-called disruptors in the mortgage market during a recent podcast, Bose George, chief of mortgage research at KBW, and Brian Gardner, KBW’s senior policy analyst, reported that nonbanks now originate 38 percent of all ...

Wells Fargo is planning to issue non-agency mortgage-backed securities backed by new originations this year, according to an official at the bank. The company was one of the top issuers of non-agency MBS before the financial crisis, but like most big banks, Wells has opted to retain its jumbo production in portfolio. “This year, one of our aspirations is to come back to the market with a couple of deals,” said Franklin Codel, senior executive vice president of consumer lending ...

VA originations saw a significant drop during the first three months of 2017 as refinancing continued to slow, according to an Inside FHA/VA Lending analysis of agency data. Lenders closed $42.9 billion of VA loans in the first quarter, down 28.1 percent from the previous quarter The numbers show purchase mortgages continued to drive VA originations. A slowdown in VA refinancing appears to be the key factor in the decline. Refis accounted for 27.7 percent of total VA production, down from the fourth quarter of 2016. A change in Ginnie Mae’s pooling rules aimed at discouraging churning has taken much of the steam out of the once-booming VA refi segment. The steep drop in volume ended an upward quarter-to-quarter trend in VA originations last year. Eight of the top 10 VA lenders saw huge quarter-over-quarter declines in their VA lending, with top-ranked Freedom Mortgage posting the largest ... [ Charts ]

The Financial Services Roundtable called for changes to FHA’s legal liability standards to encourage banks to make more FHA loans. Increased risks of False Claims Act enforcement and concerns about multi-million dollar penalties even for the slightest underwriting errors have forced banks to restrict their FHA lending. The top 10 FHA lenders, once dominated by banks, are now nondepository institutions, which accounted for 83 percent of FHA forward originations in the first quarter of 2017. Wells Fargo, once the leader in FHA lending, has dropped to a woeful 20th place in the rankings. “Some federal officials have expressed concern about the capacity of the government to evaluate the qualifications of lenders that are not subject to regulation by federal agencies,” the FSR said. The group also noted the credit overlays many FHA lenders have added to the loans due to ...

False Claims Act enforcement against FHA lenders appears to have slowed with no new cases being filed by the Department of Justice or referred by the Department of Housing and Urban Development’s inspector general for nearly a year. Neither agency has gone after any lender for alleged False Claims Act violations since May of last year when the Department of Justice intervened in an FCA case brought by a whistleblower against Guild Mortgage, an FHA direct endorsement lender. The complaint alleged that San Diego-based Guild Mortgage knowingly approved loans that violated FHA rules while falsely certifying compliance with those rules. The alleged violations occurred between 2006 and 2011, resulting in “tens of millions of dollars” in losses to HUD. The case is pending in federal district court in Washington, DC. Indications are the FCA cases involving FHA lenders have ...

Loan processing for incompetent veterans presents significant challenges to VA lenders, requiring strict compliance with special guidance on top of the basic VA underwriting rules. One challenge is dealing with legal appointees who assist and represent veterans in legal transactions, such as applying for a mortgage loan. There are ways to determine whether a veteran is incompetent, said Mark Jamison, loan production officer (LPO) with the VA Cleveland Regional Center, during the VA Lender Conference in Kansas City, MO, last month. The Department of Veterans Affairs or a probate court can deem a veteran incompetent due to severe injury, medical conditions, mental disorders, and financial instability, he said. A mortgage lender could make a determination of incompetency if the initial purchase contract documents were signed by an attorney-in-fact, the veteran divulged the incompetency, or the ...

Warehouse lenders ended the first quarter of 2017 with an estimated $59.0 billion of commitments on their books, a 4.8 percent sequential decline, according to exclusive survey figures compiled by Inside Mortgage Finance. Compared to a year ago, commitments were up 13.5 percent. However, many nonbanks sign commitment deals but don’t always draw on the lines very heavily. A case in point was the first quarter: the drop in commitments was benign compared to the overall decline in originations. Industrywide, residential lending fell by 33.6 percent from the fourth quarter. The good news for the warehouse sector is...[Includes one data table]

Publicly traded nonbank mortgage lenders and servicers reported weak earnings during the first quarter of 2017, according to an Inside Mortgage Trends summary. The nine nonbank lenders posted a combined profit of $116.69 million for the first three months of the year. That was down 79.4 percent from the fourth quarter, although it represented a huge improvement from the $509.68 million loss the group recorded in the first three months of 2016 ... [Includes one data chart]