Earnings from production-related activity and servicing fell modestly in the fourth quarter, according to a new Inside Mortgage Trends analysis of earnings reports filed by a dozen top publicly traded companies. The 12 lenders reported a combined $1.125 billion in income from loan originations and secondary market sales during the fourth quarter. That was down 9.0 percent from the previous period. Some of the earnings decline resulted from a slowdown ... [Includes one data chart]

The Department of Housing and Urban Development and the Federal Deposit Insurance Corp. have announced offerings of multiple residential reverse mortgage pools for sale to investors. The HUD pools are comprised of approximately 650 reverse mortgage notes with a total loan balance of about $136 million. The sale consists of due and payable first-lien reverse mortgages secured by single-family, vacant residential properties where all borrowers are deceased and none is survived by a non-borrowing spouse. The reverse-mortgage sale is the third offering of its type. As with past offerings, the sale will be by competitive bidding on April 11, 2018. The loans will be sold without FHA insurance and with servicing released. The loans are expected to be offered in regional pools. Meanwhile, the FDIC will unload in open auction 3,280 FHA-insured reverse-mortgage loans from the ...

Accounting firm Deloitte & Touche has agreed to pay the federal government $149.5 million to settle False Claims Act liabilities arising from its audits of failed FHA lender Taylor, Bean &Whitaker Mortgage Corp.Deloitte was TBW’s independent outside auditor from 2002 through 2008, when the subprime mortgage market unraveled, triggering a financial and housing crisis. The Department of Justice alleged that, during the period in question, TBW had been running a fraudulent scheme involving the purported sale of fictitious or double-pledged mortgages. According to court documents, Lee Bentley Farkas, former chairman of TBW, and six other banking executives engaged in a more than $2.9 billion fraud scheme that contributed to the failures of Colonial Bank and TBW. Farkas and his crew allegedly misappropriated in excess of $1.4 billion from Colonial Bank’s warehouse lending division in Orlando, FL, and approximately $1.5 billion from Ocala Funding, a mortgage-lending facility controlled by TBW.

The reverse-mortgage industry is in an uncomfortable place in the first quarter of 2018 due to lower volumes, higher costs and lower margins – the same issues that ail the traditional forward-lending business currently, says a new analysis by the Stratmor Group. Applications and counseling requests are down more than expected for this time of the year despite the recent rule changes implemented by the Department of Housing and Urban Development to ensure the long-term viability of the Home Equity Conversion Mortgage program. Stratmor projects HECM volume at $1.6 billion in 2018, down from approximately $2.0 billion in 2017, due mainly to dwindling refinances. “Given the reduction in the interest-rate floor, it is reasonable to expect that gain-on-sale margins will decline, but just how far, who knows,” said Jim Cameron, a senior partner at Stratmor. “The reduction in unit ...

Banks and thrifts increased their first-lien holdings by 4.1 percent in 2017, according to a new ranking and analysis by Inside Nonconforming Markets. Big banks continue to retain jumbo mortgages in portfolio along with some loans eligible for sale to the government-sponsored enterprises. A total of $2.01 trillion in first-lien mortgages were held by banks and thrifts as of the end of 2017, up 1.2 percent from the end of September. Adjustable-rate mortgages ... [Includes one data chart]

The Senate started consideration this week of a regulatory reform bill that includes a provision to expand the definition of qualified mortgages. The bill has some bipartisan support and could pass the Senate, with companion legislation potentially approved by the House later this year, according to industry analysts. The Senate next week is scheduled to resume consideration of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, which would loosen ...

Ginnie Mae is considering a risk-sharing pilot that would have private capital absorb some of the potential losses on FHA loans securitized through the agency. In remarks at the Structured Finance Industry Group conference in Las Vegas recently, Michael Bright, executive vice president and chief operating officer with Ginnie, said no decision has been made on any credit-enhancement structure, as consultations with stakeholders are still ongoing. “We are actively looking at structures we can put in place where we bring in private capital to provide a [partial] guarantee,” explained Bright, Ginnie’s acting president. “The FHA is going be involved in a lot of them.” A risk-share partnership between FHA and private credit enhancers not only would protect the Mutual Mortgage Insurance Fund but reduce taxpayer risk as well, observers said. The risk-sharing concept would have private mortgage insurers assuming ...

Ginnie Mae is considering changes to the existing pledge agreement that allows mortgage-backed securities issuers to borrow against servicing rights. Revising the acknowledgement agreement between Ginnie, issuers and third-party creditors would ensure that nonbank participants would have sufficient liquidity to make timely payments to investors, said Michael Bright, executive vice president and chief financial officer of Ginnie Mae. In remarks at the recent Structured Finance Industry Group conference in Las Vegas, Bright said the change aims to strengthen Ginnie’s ability to oversee its issuer base, which has shifted from large regulated banks to mostly unregulated nonbanks. Nonbanks filled the void after a contingent of large banks exited the FHA market due to concern about the government’s use of the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act in ...

Private MIs seized a bigger share of the market in 2017, even as VA rebounded strongly in the fourth quarter, an Inside Mortgage Finance analysis of the primary MI market found. Private MIs wrote $69.9 billion in new flow business in the fourth quarter, down 9.7 percent from the previous quarter. Private MI business accounted for 39.2 percent of total primary MI written in the quarter while FHA lost ground after business dropped 10.9 percent, leaving it with a reduced 33.3 percent market share for the period. After having a stellar year in 2016, VA lending eased to 24.1 percent of the primary MI market last year – still its third-best year since the financial crisis. The tiger in VA’s tank was refinance, which accounted for 44.1 percent of the agency’s lending, compared to just 9.8 percent of private ...

The volume of FHA and VA loans securitized in Ginnie Mae pools in 2017 declined from the previous year, according to an analysis of agency data. FHA loans delivered into Ginnie mortgage-backed securities last year totaled $250.5 billion, down 8.7 percent from 2016. Purchase loans comprised 69.6 percent of Ginnie MBS issuances backed by FHA loans over the 12- month period, while refinances accounted for 24.8 percent. FHA borrowers had an average FICO score of 675.3, suggesting a more traditional borrower base of first-time homebuyers and borrowers with credit issues. The FHA loans that were securitized had an average loan-to-value ratio of 92.8 percent and a debt-to-income ratio of 41.3 percent. California led all states in FHA mortgage securitization, with $39.0 billion for all of last year. FHA originations, however, dropped 16.6 percent year-over-year. The other top states in terms of ... [ charts ]