The market share for higher priced mortgages doubled in 2011 compared with the previous year, according to an Inside Nonconforming Markets analysis of Home Mortgage Disclosure Act data released last week. However, the market share for the proxy for subprime mortgages used by federal regulators remained tiny at 1.2 percent of the dollar volume of originations reported in 2011. Some $12.38 billion in higher priced mortgages were sold in 2011, up ... [Includes one data chart]

Thomas Hoenig, a director at the Federal Deposit Insurance Corp., last week called for changes to impending Basel III capital standards. Industry analysts have warned that the rules will discourage origination of nontraditional mortgages. “In private discussions I find a good deal of uneasiness about Basel III’s ability to be more effective than previous Basel efforts; however, there is a sense that we cannot go back,” Hoenig said in a speech. “I suggest that we not only can go back, we must.” ...

The Consumer Financial Protection Bureau is pushing full-speed ahead with its probe of the mortgage industry’s use of captive reinsurance by directing PHH Corp. to comply with an earlier civil investigative demand – the functional equivalent of a subpoena – within three weeks, brushing aside the company’s numerous objections. “PHH’s petition to modify or set aside the CID in this matter is denied,” CFPB Director Richard Cordray ruled last week. “Within 21 days of this decision and order, PHH is directed to produce all responsive documents, items and information within its possession, custody or control that are covered by the CID.” Cordray added that PHH is...

The single-family mortgage market continued to shrink during the first half of 2012, registering the 13th consecutive quarterly decline in mortgage debt outstanding since early 2008. The Federal Reserve reported late last week that there were $10.028 trillion of single-family mortgages outstanding at the end of June. That was down 0.5 percent from the previous quarter and represented a cumulative 10.3 percent drop since March 2008. The supply of home mortgage debt fell to its lowest level since the midway point in 2006. There are two growth sectors, however. The supply of Ginnie Mae single-family servicing surged...[Includes one data chart]

Bank of America and its home loan servicing unit were accused of maintaining and marketing foreclosed homes in white neighborhoods in a much better manner than in African-American and Latino neighborhoods, in a complaint filed this week by the National Fair Housing Alliance. The investigation of 373 foreclosed homes owned or managed by BofA found the company “has engaged in a systemic practice of maintaining and marketing its foreclosed, bank-owned properties in a state of disrepair in communities of color while maintaining and marketing REO properties in predominantly white communities in a far superior manner,” the NFHA said. The complaint was filed with the Department of Housing and Urban Development by the NFHA and five other groups. The housing advocacy groups reviewed...

The Federal Reserve’s plan to purchase an additional $40 billion in agency MBS per month, above and beyond the $25 billion to $30 billion the Fed has been buying, will primarily benefit the agency MBS sector but could also spur revitalization of the non-agency market, analysts say. The open-ended plan, in effect until the U.S. economy and employment picture show significant improvement, adds some $480 billion in annual demand for agency MBS, a market that is on track to produce about $1.5 trillion in gross issuance. “The pressure on asset values to richen further will be substantial,” said analysts at Bank of America/Merrill Lynch. The additional MBS purchases and ongoing principal investments will...

Fannie Mae and Freddie Mac support the Consumer Financial Protection Bureau’s proposal to institute a higher “all in” annual percentage rate calculation that would incorporate additional fees and charges – one aspect of the larger proposed rule to combine and simplify the consumer mortgage disclosure under the Truth in Lending Act and the Real Estate Settlement Procedures Act. “Fannie Mae and Freddie Mac support the bureau’s proposal to expand the finance charge for several reasons,” the two government-sponsored enterprises said. “First, it will make comparison shopping easier for consumers by eliminating the lack of clarity that now leads creditors to treat identical fees differently.” Second, a more inclusive finance charge will eliminate...

Mortgage originations reported under the Home Mortgage Disclosure Act declined by 11.2 percent from 2010 to 2011, according to an Inside Mortgage Finance analysis of HMDA data released this week by federal regulators. A total of $1.399 trillion of purchase and refinance mortgage originations were reported under HMDA for last year, as well as $26.0 billion of home-improvement loans. The dollar volume of loan applications was down slightly more, falling 11.4 percent from 2010, and the loan denial rate drifted slightly lower, to 17.7 percent. African-Americans and Hispanic loan applicants continued to have higher loan rejection rates, although both groups followed the overall trend toward lower denial rates. The most common reason cited for rejecting a loan application was...[Includes one data chart]

The Treasury Department acknowledged “considerable improvement” among Home Affordable Modification Program servicers last week while also prodding most companies to do better. Meanwhile, researchers suggest that operational issues at a few large servicers significantly reduced the total number of loan modifications that will be completed via HAMP. “While the servicers have improved their performance, they still have more progress to make,” Treasury said. Seven of the nine graded HAMP servicers needed “moderate” improvement as of the end of the second quarter of 2012. Among the major servicers, only OneWest Bank and Select Portfolio Servicing met all seven benchmarks set by Treasury. CitiMortgage was...

A ranking Republican on the House Financial Services Committee this week gave notice that GOP lawmakers will be looking to rein in the Federal Reserve’s “radical” and unfettered influence and authority over the nation’s financial system during the 113th Congress next year. Rep. Scott Garrett, R-NJ, chairman of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, outlined his two top priorities for Congress in 2013 just as the Federal Open Market Committee announced plans to add about $40 billion a month to its massive agency MBS portfolio. Garrett said the committee’s first priority will be...