Fairway Independent Mortgage, Madison, WI, has been quietly giving control of the company away to a group of investors who are key to its growth: its own employees. The nation’s 22nd largest lender – as ranked by Inside Mortgage Finance – has been issuing stock to some of its senior executives since late last year, but recently rolled out an employee stock ownership plan to anyone, provided they work there for at least a year. For employees, the best part is...

Banks reported a drop in mortgage-banking income during the second quarter of 2016, according to a new Inside Mortgage Trends analysis of earnings reports from 26 major public companies. But virtually all of the decline came from the four too-big-to-fail banks with over $1 trillion in assets, while regionals posted a substantial increase in mortgage-banking profits. As a group, the 26 banks earned $3.12 billion from mortgage banking during ... [Includes one data chart]

Officials at a number of lenders that have significantly increased their business in recent years point to efforts regarding corporate culture as a key factor in the companies’ success. Kurt Reisig, the founder of American Pacific Mortgage, a retail-only lender, said that since starting an effort to focus on corporate culture, APM has doubled its origination volume in the past two years and went from 800 employees to more than 2,000. “Culture eats strategy for lunch every day,” ...

In the next year or so, a changing environment will remain the norm in the mortgage industry, where participants can expect impending interest-rate increases, new product offerings, increasing competition, new servicing business models, and continued regulatory scrutiny, according to a new PricewaterhouseCoopers (PwC) study. To address flat production volume and shrinking margins, lenders will need to cross-sell products, and concentrate on reducing ...

In the second quarter, sharply lower interest rates continued to wreak havoc on the asset value of mortgage servicing rights, causing financial damage at banks and nonbanks alike, according to interviews and analysis by Inside Mortgage Finance. At June 30, Wells Fargo valued its residential MSR portfolio at 68 basis points, down from 77 bps a year ago. Bank of America cut its capitalized MSR from 78 bps in June 2015 to 51 bps at the midway point this year. And JPMorgan Chase lowered its MSR ratio to 81 bps at the end of June, compared to 105 bps a year ago. As Keefe Bruyette & Woods put it, “MSR interest rate marks were...

The second large prime non-agency mortgage-backed security from JPMorgan Chase will differ somewhat from the pioneering deal the bank priced in March. Among other changes, the Chase Mortgage Trust 2016-2 is larger than the previous MBS and includes a higher share of jumbos, according to presale reports. The MBS issued late this week totaled $2.65 billion, with mortgages eligible for sale to the government-sponsored enterprises accounting for 55.0 percent of ...

The securitization rate for adjustable-rate mortgages has declined significantly in the past year, according to an analysis by Inside Nonconforming Markets. Some 11.4 percent of ARMs originated in the first quarter of 2016 were included in mortgage-backed securities, down from 20.1 percent in the first quarter of 2015. When ARMs make it into MBS, it’s generally in securities from Fannie Mae, Freddie Mac and Ginnie Mae. The vast majority of non-agency ... [Includes two data charts]

Senate legislation that would make it easier to obtain FHA financing for condominium projects has been sent to the president for signature, though lenders seem to be more eager for long-anticipated condo reform guidelines from the Department of Housing and Urban Development. Senate lawmakers unanimously approved H.R. 3700, the “Housing Opportunity through Modernization Act,” before Congress retired for the August recess. The bill passed in the House of Representatives by a vote of 427-0 back in February. Industry observers said the bill would essentially codify FHA condo-financing guidelines, which HUD recently drafted and are currently undergoing clearance at the Office of Management and Budget. Under H.R. 3700, the FHA would be required to establish and implement a recertification process that is substantially less burdensome than the ...

CIT Group this week revealed that it was shoring up loss reserves tied to a reverse mortgage servicing operation it absorbed as part of its acquisition of OneWest Bank and its parent holding company, IMB HoldCo., last August. The loss of $167 million in discontinued operations relates to Financial Freedom, a reverse mortgage servicing subsidiary of OneWest Bank, which CIT shut down in December last year. In an earlier filing with the Securities and Exchange Commission, CIT management identified a material weakness in Financial Freedom related to estimates of the interest-curtailment reserve in its Home Equity Conversion Mortgage portfolio. The flawed estimates apparently have resulted in a material misstatement of CIT’s consolidated financial statements. Due to a change in estimates, and taking into consideration an investigation being conducted by the ...

USMI Names MGIC Chief as Chairman. U.S. Mortgage Insurance has tapped Patrick Sinks, chief executive of MGIC Investment Corp., to be the trade group’s new chairman. Sinks succeeds USMI Chairman Rohit Gupta, president and CEO of Genworth Mortgage Insurance. Sinks served previously as USMI’s vice chairman. Bradley Shuster, chairman/chief executive for NMI Holdings, will take overNew Reverse-Mortgage Product. California Mortgage Advisors has expanded its reverse-mortgage menu, with the addition of a non-FHA reverse mortgage option of up to $6 million for select clients. With the new product, CMA joins a handful of private reverse-mortgage lenders that will consider properties valued up to $6 million. Last year, American Advisors Group, the largest Home Equity Conversion Mortgage lender, announced its AAG Advantage lending program, which features the ...