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Inside Mortgage Trends

December 12, 2014

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Bank Repurchases Tumble to Post-Crash Low in 3Q14; Is Industry Over-Reserved?

Commercial banks and thrifts reported a seventh consecutive quarterly decline in mortgage purchases and indemnifications during the third quarter but still hold hefty amounts in reserves against future buybacks, according to a new analysis by Inside Mortgage Trends. Banks and thrifts reported $998.8 million in mortgage repurchases and indemnifications during the third quarter, down 1.3 percent from the second. It was also the lowest quarterly repurchase figure reported since ... Read More

Mortgage Banking Profit Down Slightly in 3Q14

Mortgage banking profitability declined in the third quarter despite an uptick in net income on servicing, according to the Mortgage Bankers Association’s latest performance report. Average firm pretax income declined by 9.6 percent, from $1.58 million in the second quarter to $1.43 million in the third, the MBA reported. The group’s quarterly report includes lenders of all types and sizes but has a significant number of smaller independent mortgage companies. Some 82.9 percent of lenders turned a profit ... Read More

Execs Are Tackling Complaints With Technology

Executives at mortgage lending operations and other financial services providers are increasingly relying on the latest technology to get a better handle on consumer complaints filed with the Consumer Financial Protection Bureau, according to a recent survey by Aptean, an enterprise application software vendor based in Atlanta. “To minimize both costs and consumer friction, savvy financial institutions are leveraging technology to identify and manage the root cause of consumer complaints ... Read More

Can a Software Vendor Grow in a Flat Market?

Mortgage production likely will be flat in 2015, a prognosis that usually doesn’t warm the hearts of vendors that make their living off of originators. But don’t tell that to Ellie Mae, the publicly traded mortgage software provider whose Encompass platform has been growing steadily in recent years. In an interview with Inside Mortgage Trends, company President and Chief Operating Officer Jonathan Corr predicted that Ellie Mae’s revenues will grow by 25 percent next year, the same growth rate as ... Read More

MSR Values Edge Higher in 3Q14

Commercial banks and thrifts reported slightly higher valuations on their mortgage servicing rights during the third quarter of 2014, but they continued to shed MSR, according to a new Inside Mortgage Trends analysis of call-report data. Banks serviced a total of $4.412 trillion of home mortgages for other investors, typically loans that have been pooled in mortgage-backed securities. That was down 1.0 percent from the second quarter and off 7.5 percent from the third quarter of 2013 ... Read More

Private MIs Post Gains in 3Q14

Private mortgage insurers ended the third quarter of 2014 on a strong note, increasing their combined volume of net premiums written to $1.05 billion, up 9.8 percent from the prior quarter and 2.8 percent over the first nine months compared to the same period a year ago, according to an Inside Mortgage Trends analysis of industry data. Based on the upward production trend over the last three quarters, it appears the private MIs are on their way to a strong close at year end ... Read More

Downpayments a Major Lever for Originations

Downpayment requirements play a larger role than interest rates in whether a potential borrower can afford a mortgage, according to new research from staff at the Federal Reserve Bank of New York. Potential borrowers who are less wealthy are particularly sensitive to downpayment requirements. Andreas Fuster and Basit Zafar, senior economists at the NY Fed, designed a survey in which respondents are asked for their maximum willingness to pay for a home comparable to their current home ... Read More

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