For a company that’s coming off two back-to-back quarters of strong earnings, Texas Capital Bancshares, Dallas, is in a curious place: Its stock value continues to suffer mightily and its competitors in the warehouse sector believe its pricing is just too cutthroat to make sense. As Inside Mortgage Trends went to press late this week, TCBI’s common was trading at $50.17, a nick above its recent 52-week low of $49.34. Its high for the year is $103.05, which translates into a discount from ...

Commercial banks and savings institutions reported a total of $71.41 billion in home loan originations through their retail mortgage banking platforms during the third quarter of 2018, according to an Inside Mortgage Trends analysis of call report data. Retail mortgage production was down 5.1 percent from the second quarter and left year-to-date originations 13.6 percent below the amount reported during the first nine months of last year. The figures ... [Includes one data chart]

The adjustable-rate mortgage share of total originations declined in the third quarter of 2018, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $50.0 billion of ARMs were originated in the third quarter, accounting for 11.5 percent of total originations. In the previous quarter, an estimated $55.0 billion of ARMs were originated, making up 12.4 percent of the market. ARM volume was also down from ... [Includes one data chart]

Holdings of first-lien mortgages by banks and thrifts increased in the third quarter, according to an Inside Nonconforming Markets analysis of call reports. Banks and thrifts held $2.07 trillion of first liens in their portfolios at the end of September, up 1.2 percent from June and 4.3 percent from a year ago. The holdings have largely been boosted by jumbo mortgages along with loans eligible for sale to the government-sponsored enterprises ... [Includes one data chart]

An increase in asset-based underwriting by banks prompted warnings from the Office of the Comptroller of the Currency last week. The OCC said its examiners have seen greater use of asset dissipation underwriting, a practice used to qualify borrowers using a hypothetical income stream from their asset liquidation rather than debt-to-income ratios. Banks are increasingly using asset dissipation or asset depletion as a response to “intense competition” from nonbanks, among other ...

The outstanding volume of mortgages serviced for other investors by banks and thrifts has been falling almost constantly in the aftermath of the financial crisis, but the third quarter of 2018 saw a relatively rare increase. Banks and thrifts serviced $3.627 trillion of residential mortgages for other investors – typically mortgage-backed securities trusts – at the end of September, according to a new Inside Mortgage Trends analysis of call-report data ... [Includes one data chart]

Two federal banking regulators have raised concerns about risks associated with nonbanks gaining market share in the mortgage industry. In a report published this week, the Office of the Comptroller of the Currency said banks are loosening mortgage underwriting standards in response to “intense competition” from nonbanks. The OCC cited higher thresholds for back-end debt-to-income ratios, higher acceptable loan-to-value ratios and lower downpayment requirements. The trends were ...

Thanksgiving to early spring is known as “LO recruiting season” in some corners of the industry. And in a softer origination market, that theoretically means mortgage executives can reduce compensation packages for loan originator sales staff. Not necessarily. Yes, originations are on a downward trend, but some entrepreneurial-minded CEOs might argue that in a tough market top-performing loan officers are worth their weight in gold. Included in that camp is Paul Rozo, CEO of ...

Mortgage banking profits eroded during the third quarter of 2018 as the industry continued to wrestle with overcapacity and sluggish origination volume. According to the Mortgage Bankers Association’s latest quarterly performance report, the average mortgage banking operation generated $946,000 in pretax income during the July-September cycle, a 31.6 percent decline from the previous quarter. Third-quarter profits were still somewhat stronger than those earned in late 2017 and early this year ...

Federal regulators last week proposed a significant expansion in the number of non-agency mortgages that will not need a full appraisal. Currently, non-agency mortgages with loan balances of less than $250,000 don’t need an appraisal if originated by a bank. The regulators proposed increasing the threshold to $400,000. Mortgages below the appraisal threshold still require an evaluation, just not a full appraisal. Banking regulators said the proposal is an effort to reduce ...