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Inside Mortgage Trends

May 26, 2006

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Loan Production Earnings Bounce Back in Early 2006, But Servicing Profits Weaken

Despite slowing origination volume and continuing pricing pressure, the profits on mortgage production activity rebounded strongly in early 2006, according to a new analysis by Inside Mortgage Profitability. A group of nine leading mortgage lenders reported combined loan production earnings of $1.37 billion in the first three months of this year, a gain of 21 percent from the previous quarter. The improvement came despite the fact that origination volume for the nine companies slumped 17.8… [One data table included] Read More

Merger Mania Strikes as Aames Finds a Buyer And Birmingham Banking Rivals Tie the Knot

Mergers are “in vogue” now, declared one analyst at a recent conference. But that was an easy observation to make considering the flurry of mergers and joint ventures over the past six weeks. Most recently, real estate investment trust Aames Investment found its savior in Accredited Home Lenders, which will spend $340 million for the troubled lender. … Read More

The Wait for New Guidance on Nontraditional Products is Nearly Over, Regulators Say

Fearing the exotic mortgage market was getting out of hand, banking regulators from five agencies in mid-2005 launched the Mortgage Guidance Project. After a lot of industry debate, it is possible lenders could see the final guidance before the end of June, although Mike Martin, national bank examiner with the Office of the Comptroller of the Currency, thinks it is more likely the new rules will be issued at summer’s end. He made the… Read More

Trends in the Market Point to Even Slower Prepay Speeds, Increasing Losses on Products

How slow can prepayment speeds go? No one knows for sure, but that question was the side buzz at the PricewaterhouseCoopers mortgage servicing rights conference held recently in McLean, VA. Many lenders are reporting slowing speeds, which is no surprise given the higher interest rate environment. Slowing prepays can hit the bottom line negatively since some lenders count on collecting prepay penalties, such as Saxon Capital, which reported less prepay income in the first… Read More

Prime Credit Quality Anchors Thornburg Mortgage, American Home Growth Strategy in Today’s Market

Two growing mortgage lenders owe much of their success to prime credit quality borrowers, and it looks like they don’t plan to fix an approach that’s working in a market heading south for other players. Take the case of Santa Fe-based Thornburg Mortgage, a “fully integrated mortgage originator and portfolio lender with a niche focus on jumbo adjustable rate mortgages for clients with complex financial profiles,” the company advertises on its Web site. The company… Read More

Residential Capital Corp. Concludes Received European Bond Sale and Pays off GMAC Early

Residential Capital Corp. has paid back the entire $11 billion it owed parent General Motors Acceptance Corp., which in turn GMAC owes to corporate parent, General Motors. The lender was able to sell a two-part bond (in euros and pounds) in the European bond markets that raised about $1.0 billion, which was the remaining amount needed to satisfy its loan obligations. … Read More

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