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Inside Mortgage Trends

October 25, 2013

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Mortgage Banking Profits Tumbled In 3Q13 as Loan Originations Slump

Banks of all sizes reported sharp declines in their mortgage banking earnings during the third quarter of 2013, according to a new analysis by Inside Mortgage Trends. The refrain from bank management was virtually unanimous: mortgage production dropped significantly and gain-on-sale margins narrowed. Although mortgage servicing right values continued to climb, that doesn’t always translate into improved earnings on that side of the business. A diverse group of 19 lenders – including all ... [Includes one data chart] Read More

Flurry of Servicing Sales Expected by Year-end

The market for servicing sales has been strong for most of 2013, but could get even better between now and year-end as the megabanks look to dump their “legacy” problems and small shops sell mortgage servicing rights to boost earnings in a weak origination market. “It used to be that Bank of America, Wells, and JPM were the buyers [of servicing],” said Tom Piercy, managing member of Interactive Mortgage Advisors, Denver. “Now they’re the sellers. It’s a totally different environment now.” A year ago ... Read More

20 Pct of Mortgages May Fail QM Safe Harbor

The ability-to-repay rule issued by the Consumer Financial Protection Bureau in January would exclude more than one in five loans originated today from the full “safe harbor” legal protections for so-called qualified mortgages. That’s the chief finding of an analysis of August and September 2013 originations by ComplianceEase, a provider of risk management solutions based in Burlingame, CA. ComplianceAnalyzer, the firm’s patented automated compliance solution, is now capable of auditing loans for ... Read More

BOK Enters the Online Mortgage Channel

BOK Financial is jumping into the online mortgage origination channel with the launch of HomeDirect Mortgage to serve consumers who are increasingly going to the Internet to shop for mortgages. The Tulsa-based company said the new channel complements BOK’s mortgage operation, which originated an estimated $4 billion in loans through its retail channel in 2012. As a “direct” lender with an automated online application system, HomeDirect is aiming for homebuyers who are computer savvy and searching ... Read More

Lenders Wait for IRS to Resolve 4506-T Backlog

In the aftermath of the 16-day partial government shutdown, mortgage lenders have decided to continue suspension of the tax transcript requirement for borrower income verification until the Internal Revenue Service has caught up with the backlog of requests for the transcripts. According to lenders, even though normal operations have resumed at federal agencies, the IRS has fallen behind on processing lender requests for the 4506-T Form, which is a borrower’s transcript of tax return provided by the ... Read More

Leads, Value-Added Service Key to Purchase Loans

With the era of “easy refinances” in the past, lenders are working to increase their purchase-mortgage originations. Industry consultants suggest focusing on lead-generation and providing value to potential borrowers as opposed to competing with other lenders based solely on interest rates. Garth Graham, head of Stratmor Group’s marketing strategy and execution practice, said lenders should use the leads and data they already have to increase purchase-mortgage originations. He noted that ... Read More

Community Banks Fill Void Left by Nonbanks

Community banks in several states are working to increase their market share of mortgage originations as nonbanks have exited their markets, according to the Conference of State Bank Supervisors. However, credit unions have also gotten more aggressive with their lending, posing a threat to community banks. Charles Vice, chairman of the CSBS and commissioner of the Kentucky Department of Financial Institutions, said regulators in 28 states held more than 50 town hall meetings this year with community banks ... Read More

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