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Inside Mortgage Trends

November 2, 2012

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Refi Surge, Hefty Margins Push Industry To Record Mortgage Banking Profits

With most precincts now having reported third-quarter earnings, the outcome is clear: mortgage banking was hugely profitable during the third quarter of 2012. A new Inside Mortgage Trends analysis of earnings reports from 25 public companies reveals record mortgage banking income of $9.903 billion during the third quarter. That was a huge 19.2 percent increase over the hefty $8.311 billion these companies earned from their mortgage banking activities during the second quarter ... [Includes one data chart] Read More

Ocwen, Walter Tap Financing for ResCap MSRs

An entity affiliated with Ocwen Financial and Walter Investment Management separately initiated financing schemes around the time the two companies joined to bid on the mortgage assets of the bankrupt Residential Capital. Ocwen and Walter last week won a ResCap auction with a joint bid of $3.0 billion, including $540.0 million from Walter. The companies noted that ResCap was servicing $374 billion in unpaid principal balance as of the end of the first quarter of 2012, including a significant amount of ... Read More

Wholesale Market Flourishing With Quality Focus

Mortgage brokers have made a comeback and a number of new buyers have stepped into the correspondent market – with the common theme of a stronger focus on loan quality. Wholesale lenders have become more selective, said Matthew Young, a senior vice president at Genworth Mortgage Insurance, during a panel session at the Mortgage Bankers Association annual convention in Chicago last week. Buyer attitudes in the correspondent market have been shaped by the risk of mortgage buybacks, which have led to ... Read More

Banks Missing Out on Boom in Mortgage Lending

It looks like many banks may have been too distracted with loan modifications, foreclosures and regulatory compliance issues over the last few years to notice a potentially vast untapped well of profit in their own back yards. A new consumer mortgage study finds that banks are passing by an opportunity to increase their mortgage business by a whopping 79 percent with their existing customer base. “Thirty-nine percent of survey respondents have their mortgage with their primary bank, the bank with which they do ... Read More

DFA, Basel III Would Cut Originations 20%

Regulations arising from the Dodd-Frank Act and Basel III capital standards would result in fewer mortgage loans made, tighter lending standards, reduced home sales, fewer jobs and slower economic growth, warned a new study from the American Action Forum, a policy think tank in Washington, DC. In particular, the AAF said that taken as a whole, the finalized rules on qualified mortgages and qualified residential mortgages,as well as Basel provisions requiring banks to hold more capital for certain risk-weighted ... Read More

Basel III Would Crimp Warehouse Funding

Independent mortgage companies could lose access to warehouse funding or at least face significantly higher costs if Basel III capital requirements are implemented as proposed, according to the Mortgage Bankers Association. The capital requirements proposed by federal regulators would change the definition of “financial collateral” included in proposed standardized approach rules by excluding conforming residential mortgages. “This change would significantly reduce the amount of funding available to non-depository mortgage bankers since the warehouse lines ... Read More

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