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Inside Mortgage Trends

March 7, 2014

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GSEs Resolved Huge Portion of Buyback Disputes in 2013, Servicing More in Focus

Fannie Mae and Freddie Mac last year wrapped up most of the massive amount of repurchase demands they made on legacy loans originated before 2008, but the government-sponsored enterprises are looking more closely at new production and, increasingly, servicer performance. Together, Fannie and Freddie reported a total of $37.87 billion in mortgage repurchases and other settlements of buyback claims, which typically means ... [Includes one data chart] Read More

Bank Repurchase Volume Hits 5-Year Low

Commercial banks and savings institutions made $1.447 billion in mortgage repurchases and other indemnifications during the fourth quarter of 2013, according to a new Inside Mortgage Trends analysis of call-report data. Repurchase totals for the final three months of last year were the lowest quarterly volume since the second quarter of 2008, when the industry made $1.533 billion in mortgage repurchases and indemnifications. The fourth-quarter ... [Includes one data chart] Read More

Buyers Still Show Strong Interest in Mortgage Sector

When the going gets tough in the mortgage industry, nonbank lending firms start pondering the once unthinkable: selling their franchises, hoping the cash will tide them over until the next upswing in the cycle. The situation is no different this time around. Investment banking advisors say there are plenty of potential acquirers – all hunting for bargains – but sellers are picky. “Cheap is the goal now,” said Chuck Klein, a managing partner at Mortgage Banking Solutions ... Read More

OCC Warns of Volatility in Mortgage Profits

In new guidance to examiners and bankers, the Office of the Comptroller of the Currency is stressing the risks posed by mortgage banking, particularly for banks that rely heavily on the mortgage industry to turn a profit. “A mortgage banking operation’s income and expense components can change at significantly different rates and in different directions over time, resulting in substantial shifts in profitability,” the OCC said in its new handbook on mortgage banking ... Read More

Nonbank Servicers Try to Goose Originations

Officials at nonbank special servicers said they will continue to work to acquire servicing from banks, but they prefer to generate their own servicing via originations. Officials at Nationstar Mortgage, Ocwen Financial and Walter Investment Management noted that creating mortgage-servicing rights via their own originations can be more cost effective than acquiring MSRs or subservicing from other lenders. Nationstar originated $24.0 billion in mortgages in 2013, making it the ... Read More

Wholesale Channel Riding Highs and Lows

In the last couple of years, the wholesale origination channel has been a revolving door for industry players, with some exiting for various reasons and new ones coming in to take up the slack. Those currently in the game expect the instability will continue for some time. Wholesalers say the decision to exit the business or enter at one’s own peril boils down to perception: Is the glass half empty or half full? Brian Benjamin, a mortgage broker and president/CEO of Two River Mortgages ... Read More

Third-Party Originations Still Play Big Role

Loan correspondents and mortgage brokers continue to play a major role in the agency mortgage market, accounting for 42.9 percent of loans securitized by Fannie Mae, Freddie Mac and Ginnie Mae in 2013, according to a new Inside Mortgage Trends analysis. Correspondents accounted for most of the third-party originations securitized by the agencies, and Wells Fargo was the top producer of these loans. Just over half of the loans sold by Wells were ... [Includes one data chart] Read More

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