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Inside Mortgage Trends

February 15, 2013

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Mortgage Bankers Post Huge Profit Gains on Both Sides of the Business

Although it’s well known that mortgage bankers earned record profits on loan production and secondary marketing last year, a new analysis by Inside Mortgage Trends reveals that mortgage servicing was also highly profitable for the industry’s top lenders. A diverse group of 10 top lenders reported a whopping $16.98 billion in net income from mortgage production and secondary marketing last year, after posting a combined loss of $5.79 billion in 2011. Massive repurchase expenses reported by ... [Includes one data chart] Read More

Mortgage IPOs Suddenly Gaining Favor

It was thought that after the financial shellacking it took by purchasing GMAC Mortgage, that hedge fund giant Cerberus might avoid the residential finance industry entirely. But perish the thought. Cerberus this month filed with the Securities and Exchange Commission for an initial public offering for Cerberus Mortgage Capital, a real estate investment trust that hopes to raise at least $150 million. Its goal: to use the money to buy a “broad range” of residential-related assets including ... Read More

Agency REITs Receive Fed Scrutiny

Real estate investment trusts focused on investing in agency mortgage-backed securities were called out last week by Federal Reserve Governor Jeremy Stein. Industry participants acknowledge the Fed’s concerns and suggest that agency REIT investment strategies will naturally shift as yields on the products have declined, among other factors. Stein warned of “overheating” markets and pointed to agency-focused mortgage REITs. “When I say that the market for a particular class of credit instruments ... Read More

Lenders Eye Residential Mortgage Participations

Low interest rates and improving fundamentals in the nation’s housing market appear to be driving renewed investor interest in residential mortgage loan participations, according to a market participant. Jim Cutillo, chief executive officer of Stonegate Mortgage, said the market for loan participations has grown so strong in the last few months that banks – Wall Street financial institutions as well as small and regional banks – are pursuing investment opportunities in the sector. “I think a lot ... Read More

Easier Implementation Ahead for Servicers?

The ink is hardly dry on the final residential servicing regulations promulgated by the Consumer Financial Protection Bureau, but mortgage bankers are already worrying about meeting the implementation date, which is less than 11 months away. But there is some good news. According to panelists speaking during an Inside Mortgage Finance webinar this week, it’s likely that the agency will extend the deadline beyond January 2014. Larry Platt, of K&L Gates, and Michael Waldron, of Ballard Spahr ... Read More

Are You Ready for the Threat of HOA Liens

Officials in the financial services sector are making a fresh push to alert the mortgage and residential mortgage-backed securities industries to the potential pitfalls that delinquent homeowner association accounts pose for them. “The securitization industry has little understanding” of homeowner and other types of community associations, collectively referred to as HOAs, said Jason Serrano, co-head of structured products and managing director for securities at Oak Hill Advisors ... Read More

GSE Market Turns Slightly More Conservative

Average loan-to-value ratios and debt-to-income ratios on loans securitized by Fannie Mae and Freddie Mac were slightly lower – and credit scores edged slightly higher – during the fourth quarter, according to a new Inside Mortgage Trends analysis. The average LTV ratio edged down from 78.53 percent in the third quarter to 77.54 percent in the final three months of 2012. The average DTI ratio declined slightly, from 31.92 percent to 31.88 percent, while the average ... [Includes one data chart] Read More

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