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Inside Mortgage Trends

September 4, 2009

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Production Margins Shrink in 2Q09, But Servicing Sector Sees Bigger Downturn

With a solid increase in loan production volume during the second quarter of 2009, profits on the origination side of the business improved modestly from the first three months of the year, according to a new Inside Mortgage Profitability analysis. At the same time, however, earnings on the servicing side of the business were down from... [Includes one chart and one graph] Read More

New Firm Tries ‘Investor-Focused’ Approach

Starting with a clean slate may position new players in the mortgage servicing business to take advantage of the Obama administration’s Legacy Loan Program to attract new capital to a banking industry saddled with underperforming mortgage loans. Integrated Asset Services, a specialist in default management and residential collateral valuation, last month launched a new servicing company... Read More

Servicers Take to Securitization

Servicing-advance transactions, in which servicers securitize their rights to reimbursement for advances made to mortgage-backed securities trusts, are becoming a more common financing type, according to a recent market update from DBRS. The DBRS report, written by senior vice presidents Quincy Tang and Kathleen Tilwitz, said the increased use of servicing advances partly reflects... Read More

FDIC Sets Standard Leverage Ratio for Investors in Failed Depository Institutions

Investors that acquire or invest in failed insured depository institutions must maintain a ratio of Tier 1 common equity-to-total assets of at least 10 percent for three years from the time of acquisition, according to a final policy statement issued by the Federal Deposit Insurance Corp. Published in the Sept. 2 Federal Register, the policy statement warned that failure to maintain... Read More

Comments Sought on Impact of FAS 166, 167 on Consolidation of VIEs, Securitization, Capital

Federal thrift and banking regulators are seeking comment on a proposal to better align regulatory capital requirements with the actual risk of certain exposures, as well as the effect of implementation of certain new accounting standards on regulatory capital and securitization reform programs. Specifically, the agencies believe that the broader accounting consolidation... Read More

Servicers Innovating to Cope With Troubled Loans

Servicers are increasingly competing for outside resources to help them cope with rising delinquencies and loan defaults, Standard & Poor’s said in its latest Servicer Spotlight Report. The report, which is made up of data from 35 servicers representing an 85 percent market share for prime loans, looked at the trends in mortgage servicing through the first half of 2009. Increasing focus... Read More

Technology Briefs

Lender Processing Services Inc. has developed a new, Web-based, Home Affordable Modification Program Reporting.... A new Base NPV Model v3.0 and new Base NPV Model spreadsheet tool became available this week in the Participating... Lenders now can have their verification of employment (VOE), verification of income (VOI) and Internal Revenue... Read More

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