Despite the immense popularity of fixed-rate mortgages in an environment of once-in-a-lifetime low interest rates, adjustable-rate mortgages still hold a significant chunk of the mortgage marketplace. In 2011, ARMs accounted for 19 percent of banks’ total loan originations, an American Bankers Association 2012 report on real estate lending showed. Last year’s ABA survey showed that ARM products are still being actively marketed by lenders even though the fixed-rate products dominated the mortgage marketplace. ARM lending is extremely popular with community banks, which hold such loans in...

Seven months after launching as a new wholesale and retail mortgage firm with national ambitions, Bexil American Mortgage originated its first loan, highlighting the current barriers to entry in the mortgage industry. The company, founded by industry veteran John Robbins, has obtained 18 state licenses with others pending, as well as approval from the Department of Housing and Urban Development, the FHA, Veteran’s Administration and the Department of Agriculture. Although he has started and sold two previous mortgage companies, he said “it’s a significantly different environment. It’s been more challenging...

Because the mortgage industry is so focused on staying on top of regulatory changes, adopting new technology has taken a back seat, according to a vendor of a cloud-based management tool. “When you’re up to your ankles in alligators, it’s easy to forget your goal is to drain the swamp,” said Brian Coester, CEO of Coester Appraisal Group. This year, the company launched Cloud Control, a web-based management technology that integrates different aspects of the appraisal process – from compliance to social media to real-time data – in a cloud-based system. “There’s a huge backlog in terms of what people...

While many of the largest mortgage lenders in the industry continue to scale back their operations in a somewhat precarious operating environment, a few companies see opportunity in the reshuffling and are hitting the gas pedal. None more than Nationstar Mortgage. Fresh off an initial public offering, the company has been on a buying spree for mortgage servicing and production capacity. Although Nationstar ranked as the 11th largest servicer in the market at the end of March, pending acquisitions would push it all the way to fourth place on a pro forma basis, according to a new...(Includes one data chart)

Residential Capital’s filing for bankruptcy early this week signaled Ally Financial’s exit from the mortgage industry, and though the transfer of its servicing and origination platforms will not change the market in a meaningful way beyond industry rankings, the legal situation could offer a paradigm for other beleaguered mortgage units to follow. “It wasn’t a monstrous event,” said one industry observer. “It was an unfortunate event. Everyone knew they missed an interest payment, so it wasn’t much of a surprise.” ResCap includes both GMAC Mortgage, Ally’s mainstream mortgage banking operation, and what’s...

Redwood Trust saw steady progress in growing its residential mortgage business in the first quarter of 2012, which was highlighted by two securitizations totaling $745.0 million, according to the company’s recent filing with the Securities and Exchange Commission. The Mill Valley, CA-based real estate investment trust reported first quarter income of $30 million, compared to a loss of $3 million in the previous quarter and $18 million in profits a year ago. The increase resulted from a combination of Redwood’s new mortgage banking activities that include gains from the $416 million jumbo MBS...

Ocwen Financial has been a leader in principal-reduction loan modifications and officials at the company suggest the mods give Ocwen a competitive advantage over other servicers. The advantage could come into play as bank servicers look to complete required principal-reduction mods as part of the recent $25 billion servicing settlement. “I think we’ve done as many principal-reduction mods as the rest of the industry combined ...

While issuance of non-agency mortgage-backed securities is not particularly attractive for lenders at the moment, banks have been able to turn strong profits by holding nonconforming loans in portfolio. “We’re able to make very good returns” that exceed the profit on selling to the government-sponsored enterprises, said Greg Tallmadge, a vice president at TD Bank. Speaking at the Mortgage Bankers Association’s National Secondary Market Conference this week ...

Two Harbors Investment started acquiring residential properties to offer for rent during the first quarter of 2012, with officials at the real estate investment trust anticipating strong profits from the venture. The final step in establishing an infrastructure for the program was a February agreement with Silver Bay Property Management. “Silver Bay creates the opportunity to bring in institutional excellence to this sector, which heretofore has largely been ...

Although there are signs that the clouds may be lifting over the five-year housing recession, mortgage lenders face unrelenting pressure from investors to repurchase loans or cover their losses. Some buyback requests are legitimate and should be honored, said David Stevens, president and CEO of the Mortgage Bankers Association, during a speech at the trade group’s secondary market conference in New York this week. “But lenders are finding more and more loans being sent back for repurchase for minor, technical mistakes that had questionable relevance to loan performance,” he said. The threat of repurchases...