Freddie Mac’s “account balance” with the U.S. Treasury will go into the black by yearend – thanks to stellar third-quarter earnings – and Fannie Mae likely will accomplish the same by the end of March 2014. But mortgage bankers shouldn’t pop any champagne. That’s the view of Dave Stevens, president of the Mortgage Bankers Association who worked at Freddie once and also served as FHA commissioner. Stevens believes that despite their strong performance in the third quarter and beyond, both are just “insurance brokers” that have benefitted from the Federal Reserve buying their mortgage-backed securities. [Includes one data chart.]

Fannie Mae and Freddie Mac this week reported a combined $3.53 billion of mortgage repurchases and other buyback resolutions during the third quarter of 2013, the lowest quarterly amount in three years, according to a new analysis by Inside Mortgage Trends. Buyback resolutions declined by 28.2 percent from the second quarter, even as the government-sponsored enterprises wrapped up large-scale settlements with a handful of their largest sellers. Fannie and Freddie so far this year ... [Includes one data chart]

Three major special servicers are grappling with growth issues as they compete for servicing portfolios and work to establish origination platforms. Nationstar Mortgage, Ocwen Financial and Walter Investment Management all posted lower income in the third quarter of 2013 compared with the previous quarter. Nationstar announced this week that it is downsizing its servicing sites and plans to sell its non-core broker and distributed retail origination channels to Stonegate Mortgage ... [Includes one data chart]

More players are entering the mortgage servicing market even with all the challenges besetting the sector, from the new national servicing standards to Basel III capital requirements, according to industry experts. With megabanks shrinking their mortgage businesses and servicing portfolios, small to medium-sized firms are stepping in to fill the gap, panelists observed during the recent Mortgage Bankers Association annual convention. Purchasers of mortgage servicing rights are mostly nonbanks with no ...

Although the overall U.S. economy added jobs this fall, mortgage banking and brokerage firms continued to shed workers, a trend that is likely to continue until lenders, servicers and others “right size” their companies for declining refinance volume. According to figures compiled by the Bureau of Labor Statistics, the mortgage banking and brokerage sectors shed 6,000 jobs in September. The mortgage brokerage industry shed 2,200 jobs during the month, bankers 3,800, according to an analysis from Inside Mortgage Trends ...

A number of lenders report that they will record their interactions with borrowers – even face-to-face meetings – in an effort to avoid liability under qualified mortgage requirements, according to Standard & Poor’s. Lenders suggest that they are largely in compliance with the Consumer Financial Protection Bureau’s ability-to-repay rule, which establishes QM requirements on Jan. 10, but documentation is key. Borrowers that go into default can seek to prove that lenders didn’t meet the ATR requirements, even if ...

Shrinking default rates and lower refinance volumes have forced a shift in the mortgage industry’s focus to the purchase market, but lenders must beware that the current business environment is vastly different than yesterday’s purchase market, experts said at the Mortgage Bankers Association’s annual convention last week. Matthew Vernon, a home loan sales executive at Bank of America, told attendees that a small but critical distinction to remember is that lenders aren’t going into a purchase market ...

Financial industry trade groups want all Title II forward mortgage loans that meet FHA requirements to be treated as “safe harbor” qualified mortgage loans instead of being lumped in either of two QM buckets as proposed by the Department of Housing and Urban Development. Commenting on HUD’s proposed definition of a “qualified mortgage,” the industry groups – Mortgage Bankers Association, Consumer Bankers Association, Consumer Mortgage Coalition, American Bankers Association, and the Independent Community Bankers of America – urged HUD to ...

Establishing a higher, mandatory capital reserve requirement for the FHA under the Protecting American Taxpayers and Homeowners Act, or PATH Act, would help reduce discretionary spending over 10 years, according to the Congressional Budget Office. According to CBO estimates, implementing the legislation would result in a net decrease in discretionary spending of $41.2 billion over the 2014-2023 period. This assumes future appropriations laws are enacted to implement the act’s provisions. The potential reduction in government spending would stem from ...

FHA jumbo loan originations continued their quarterly fluctuations as production in the second quarter of 2013 slipped after a good run in the previous quarter, according to Inside FHA Lending’s analysis of FHA data. Volume fell 1.5 percent from the first quarter, during which the FHA posted $5.36 billion in jumbo mortgage originations. The first quarter number broke a declining production trend that began in the second quarter of last year when FHA reported $6.27 billion in jumbo lending. FHA lenders produced a total of $10.8 billion in new jumbo loans in the first half of 2013, down 2.7 percent from ... [2 charts]