Commercial banks reported a measurable increase in earnings from their mortgage banking activities during the first quarter of 2011, but production volume is slowing and the industry continues to bear a significant burden from repurchase demands. Banks reported a combined $4.21 billion in mortgage banking income during the first quarter, according to an analysis of call report data by Inside Mortgage Trends, an affiliated newsletter. That was up a healthy 20.8 percent from the last four months of 2010, though it trailed the industry’s mortgage...[includes one data chart]

The supply of home mortgage debt fell again in the first quarter of 2011 despite an increase in agency servicing, according to an Inside Mortgage Finance analysis of new data released by the Federal Reserve. Outstanding home mortgage debt declined to $10.458 trillion as of the end of March, down 0.7 percent from the end of 2010. That marked the 12th consecutive quarterly decline in the supply of mortgage servicing and took the market back to a level not seen since the end of 2006. Since peaking in the first quarter of 2008, the volume of home mortgage debt outstanding has...[includes two data charts]

More than two years after being placed into government conservatorship, Fannie Mae and Freddie Mac remain “critical supervisory concerns” as “key challenges” at both government-sponsored enterprises continue to compel the GSEs to rely on federal funding to stay afloat, according to the Federal Housing Finance Agency. FHFA’s annual report to Congress this week noted losses from mortgages originated from 2005 through 2008, as well as forecasted losses from that same pre-conservatorship period, remain a continuing source of...

In light of Fannie Mae and Freddie Mac’s federal conservatorship status and the resulting control by the Treasury Department, the two GSEs are “effectively part of the government” and their operations should be reflected in the federal budget, according to the Congressional Budget Office.CBO has concluded that using a fair-value approach to estimate Fannie and Freddie’s subsidy costs is the best way to give Congress and taxpayers the most accurate accounting information.

Fannie Mae and Freddie Mac’s home retention activity declined for the most part during the first quarter, according to the latest Federal Housing Finance Agency’s Foreclosure Prevention and Refinance Report.Total home retention efforts dropped to 143,977 during the first three months of the year, down 20 percent from the fourth quarter, while loan modifications in the period also declined to 86,201, down 28 percent.

The sponsor of legislation that would make Fannie Mae and Freddie Mac subject to the Freedom of Information Act’s government transparency provisions told Inside The GSEs this week he is optimistic his bill has a “real fighting chance” of passage in the House.Rep. Jason Chaffetz, R-UT, said his bill, H.R. 463, The Fannie Mae and Freddie Mac Transparency Act of 2011, has “picked up momentum” following a hearing two weeks ago, and the headlines it produced, in which the GSEs’ regulator panned the bill as potentially harmful to Fannie and Freddie.

An historic downturn in mortgage production that’s expected to unfold through the better part of 2012 could segue into a long-term contraction in the industry as new mortgage rules kick into gear. Emerging new rules on “qualified residential mortgages” and “qualified mortgages” resulting from...

Although some of the pressure of repurchase demands and mortgage insurance rescissions seems to be easing, industry experts caution that lenders will be grappling with these issues for years to come. The industry isn't done yet with purchases stemming from the 2006-08 vintages, said Arthur Prieston, chairman of...

Updated guidelines for the servicing of delinquent mortgages owned or guaranteed by Fannie Mae and Freddie Mac will expedite borrower outreach, align loan modification terms and establish a “consistent schedule of performance-based incentive payments and penalties,” according to...

Although community banks appeared to have fewer foreclosure processing problems and lower overall mortgage default rates, they should look at recent consent orders signed by 14 large servicers for best practices, according to a new Federal Deposit Insurance Corp. report. “Community banks fared far better than...