Mortgage servicing turned more profitable during the second quarter of 2011, according to a new analysis by Inside Mortgage Trends. The story is less clear on the production side of the business because of the mammoth loss reported by Bank of America. Net servicing profits for a group of nine major lenders rose 20.2 percent from the first quarter, reaching $2.08 billion. While that was a significant improvement over the $1.73 billion they earned on servicing in the first three months of the year, it was the second ... [contains one data chart]

Wells Fargo Bank and Bank of America dominated the FHA jumbo market during the first six months of 2011, accounting for a third of total jumbo loan originations during the period, according to Inside FHA Lending’s latest analysis of the sector. The two financial institutions outdistanced their competitors by producing a total of $3.04 billion in FHA-insured mortgage loans, nearly a third of the $10.2 billion of government-insured jumbo loans originated during the first half of the year. Top-ranked Wells Fargo generated $1.90 billion in FHA loans exceeding $417,000 for an 18.7 percent market share, while BofA claimed... [Includes two data charts]

Bank of America is currently sitting on $1.4 billion of real estate it acquired upon foreclosure of delinquent FHA-insured loans. The properties are not included in BofA’s inventory of foreclosed properties at June 30, 2011, but remain on the bank’s balance sheet until they are conveyed to the FHA, the bank disclosed in its 2Q11 filings. BofA expects to be reimbursed once the properties are transferred to the FHA for principal and, up to a certain limit, costs incurred during the foreclosure process and interest incurred during the holding period. The bank suspended its foreclosure activities in October 2010 as it began a...

A second round of mortgage banking earnings reports over the past two weeks suggests that the industry managed to churn out fairly stable profits despite a sharp decline in production during the second quarter of 2011. A group of 11 mortgage lenders over the past two weeks reported a combined $183.3 million in net earnings from their mortgage banking operations during the second quarter. That was down 48.7 percent from the group’s earnings for the first three months of the year. As was the case with the first round of earnings reports, the group’s combined results were heavily weighted by a substantial loss reported by one company. PHH Mortgage reported... [Includes one data chart]

MetLife isn’t getting enough bang for its buck out of its depository banking business to justify the amount of regulatory oversight it has to contend with in a highly competitive market. Facing the prospect of even more intensive regulation ahead, the company has decided to look for a purchaser for that line of its operations. But the insurance industry giant plans to keep its mortgage banking business, MetLife Home Loans, most of which was acquired from First Horizon in 2008. The company also picked up EverBank’s reverse mortgage business. Given MetLife’s focus as a global insurance and employee benefits player, the company has decided that...

Bank of America’s staggering $13.2 billion net loss on its mortgage banking operations overwhelmed fairly stable performance by the rest of the industry during the second quarter, according to a new analysis of earnings reports from 13 lenders by Inside Mortgage Trends. Including BofA’s huge loss, the group posted an aggregate loss of $9.8 billion for the second quarter, drowning out a modest $2.9 billion profit during the first three months of the year. The landmine in BofA’s second quarter results was a $14.0 billion provision for ... [includes one data chart and one graph]

Closing and origination costs on a sample $200,000 purchase mortgage rose by almost 9 percent in 2011 nationwide, according to a survey by Bankrate, an online aggregator of financial rate information. In its annual closing cost survey, the group found that nationwide closing costs averaged $4,070, up from $3,741 last year. New York’s closing costs were highest at $6,183, followed by Texas at $4,944 and Utah at $4,906 on the same size mortgage. Arkansas had the lowest closing costs with $3,378, followed by ...

JPMorgan Chase officials say they plan to liquidate the company’s giant $154 billion mortgage portfolio to “close to zero” as it works through the bank’s mortgage losses and litigation of loan-servicing and foreclosure practices. During the company’s earnings conference call with analysts, JPMorgan CEO Jamie Dimon noted that the company will continue to reduce its mortgage holdings by 10 percent to 15 percent a year “forever.” Last year, the company reduced its mortgage holdings by $19.3 billion. JPMorgan reported earnings of ...

The dramatic slowdown in mortgage lending activity during the second quarter of 2011 led to significant declines in virtually all states, according to a new analysis of agency securitization data by Inside Mortgage Trends. Fannie Mae, Freddie Mac and Ginnie Mae securitized a total of $565.5 billion of single-family mortgages during the first six months of 2011, but much of that activity was front-loaded in the first quarter. Agency mortgage-backed securities production declined 33.7 percent from the ... [includes one data chart]

Bank of America said it will spend $400 million just to implement the servicing changes it agreed to in a controversial proposed settlement with a group of investors in non-agency mortgage-backed securities issued by Countrywide Financial. The proposed settlement itself would cost the bank $8.5 billion, and BofA set aside another $5.5 billion to cover other possible buyback demands. Reckoning the cost of upgrading servicing systems has been a common theme in an industry that faces even bigger expenses from punitive charges. Ally Financial this week said it will cost the company ...