Unreasonably tight mortgage lending standards, fueled by lenders’ and regulators’ extreme distaste for risk, are dampening home sales and some flexibility is needed to drive home sales and job creation, according to a new survey by the National Association of Realtors. The survey analyzed credit scores and loan performance for both conventional conforming and FHA-VA loans and suggested returning to reasonably safe and sound lending standards to give home sales a much-needed jolt. Existing home sales should ...

United Shore Financial Services in Birmingham, MI, is on course to a record-breaking $7 billion in residential mortgage originations in 2012, thanks to a robust wholesale lending operation and excellent relationships with mortgage brokers. Great customer service, a strong broker-support system, capable and efficient technology and strong management are the big factors for United Shore’s rapid growth, said Mat Ishbia, president of United Wholesale Mortgage, USFS’s wholesale arm. United Shore originates loans ...

Servicers take lower losses and area home prices take less of a hit when real estate owned properties are quickly liquidated, according to new research by analysts at the Federal Reserve and Fannie Mae. “Our results suggest that the key to minimizing the costs of foreclosure is to minimize the time that properties spend in serious delinquency and in REO,” the authors said in “Foreclosure Externalities: Some New Evidence,” a working paper published this month by the National Bureau of Economic Research ...

Cash flow from FHA’s business operations funded almost 70 percent of net claims losses over the last year, according to the Department of Housing and Urban Development’s quarterly report on the FHA Mutual Mortgage Insurance Fund programs. HUD paid $5.4 billion in claims in the second quarter of 2012, more than twice the amount of premiums collected during the period. As a result, net cash flows from business operations were negative $1.7 billion during the quarter. Premium collections contributed $8.1 billion over the last four quarters even as paid claims totaled $17.2 billion over the same period. This indicates that ...

Legislation was introduced this week in the House of Representatives that would effectively neutralize a proposal for local governments to use “eminent domain” powers to seize underwater mortgage loans and perform controversial modifications. Rep. John Campbell, R-CA, has introduced The Defending American Taxpayers from Abusive Government Takings Act, which would prohibit the FHA and VA from originating, insuring or guaranteeing a mortgage loan in jurisdictions that have invoked the power of eminent domain to seize a loan within the last 10 years. Fannie Mae and Freddie would be subjected to ...

Banks and thrifts reported a substantial decline in the volume of mortgages they repurchased during the second quarter of 2012, according to a new Inside Mortgage Trends analysis of call-report data. The financial institutions reported a total of $3.86 billion in mortgage repurchases and indemnifications during the second quarter, down 6.1 percent from the first three months of the year. It marked the lowest quarterly repurchase volume since the final three months of 2008, when banks reported ... [Includes one data chart]

The average mortgage banking business earned a tidy $2.94 million in after-tax income during the second quarter of 2012, up 44.9 percent from the first three months of the year, according to the Mortgage Bankers Association’s latest performance report. Midway through the year, average after-tax income was $4.97 million for the 300-odd companies that participate in the MBA survey. That was up more than five-fold from the first half of last year. The stronger earnings resulted from increased profitability ...

The Federal Housing Finance Agency’s streamlined short sale guidelines set to kick in Nov. 1 could increase losses on certain home-equity loans and second liens held in bank portfolios, according to a recent analysis by Fitch Ratings. Under the new guidelines, which were announced last month, servicers will be able to accelerate their processing of a short sale for borrowers with eligible hardships without any additional approval from either of the government-sponsored enterprises. This will ...

$7.5 Million FHA Mortgage Fraud Scheme. The Department of Justice has filed charges against top executives of a real estate brokerage for their participation in a mortgage fraud scheme that may cost the FHA $7.5 million in losses. Indictments were unsealed earlier this month in Manhattan federal court charging Mitchell Cohen and Erin Davis, the owner and sales manager, respectively, of Buy-A-Home, a real estate brokerage business in Queens, NY. The criminal charges follow a civil fraud lawsuit filed by the U.S. Attorney’s Office for the Southern District of New York last December against ...

The five servicers participating in the $25.0 billion national servicing settlement have taken vastly different approaches to loss mitigation, according to a report released this week by the Office of Mortgage Settlement Oversight. Short sales dominated early activity and Bank of America, the servicer with the largest obligations under the settlement, accounted for a small amount of initial loan modifications completed by the servicers. Combined, the five servicers granted non-agency borrowers ... [Includes one chart]