A conflict-of-interest provision in the $25 billion robo-signing settlement approved by the court last week could make it harder for independent settlement monitor Joseph Smith to organize an oversight monitoring team within the agreement’s timeline. Smith, North Carolina’s former commissioner of banks, may have to issue or seek clarifying guidelines that would allow him to recruit attorneys and other professionals for his monitoring team and begin a phased implementation of the settlement’s servicing standards and mandatory relief requirements, according to an industry attorney. Last week...

President Obama this week signed into law a measure that, among other things, kills big bonus payments to Fannie Mae and Freddie Mac executives for as long as the GSEs are subsidized by taxpayers. After nearly two months and some legislative positioning, Congress passed the Stop Trading on Congressional Knowledge Act of 2012. Primarily, the STOCK Act bars House and Senate members and their staff from using non-public, inside information for personal benefit.However, an amendment to the bill which was passed on an overwhelmingly bipartisan margin in both houses of Congress prohibits the payment of bonuses over and above a GSE executive’s salary compensation while Fannie and Freddie remain in government conservatorship.

Roughly one out of every 14 banks in the country suffered significant investment losses following the September 2008 government takeover of Fannie Mae and Freddie Mac, according to a new Federal Reserve discussion paper. The paper, When Good Investments Go Bad: The Constriction in Community Bank Lending After the 2008 GSE Takeover, details how financial institutions took a bath when the two companies were placed into conservatorship and dividend payments on common and preferred shares were suspended.

Mortgage banking operations reported stronger earnings in both loan production and servicing operations during the fourth quarter of 2011, according to a new Inside Mortgage Trends analysis. A group of nine institutions reported a total of $2.73 billion in earnings from mortgage production activity during the fourth quarter. That was up 20.8 percent from the third quarter. All but one company in the group, which includes most of the top lenders in the industry, reported positive results on loan production activities, which typically include secondary marketing results. The...(Includes one data chart)

Mortgage bankers reported stronger corporate income during the fourth quarter of 2011, but profitability was generally lower on a per-loan basis, according to the most recent performance report released by the Mortgage Bankers Association this week. Based on a survey of some 310 mortgage bankers, the study found average pretax income of $1.51 million per company in the fourth quarter, up 34.8 percent from the third quarter of last year. That brought the average pretax income for the year to $3.69 million, down 14.2 percent from 2010. Average profits per loan were generally down in the fourth quarter, even...

Banks maintain real estate-owned properties unequally, with properties in minority communities showing clear signs of vacancy while those in white communities receive necessary attention, according to a new investigation by the National Fair Housing Alliance. The investigation, outlined in the report “The Banks are Back – Our Neighborhoods are Not: Discrimination in the Maintenance and Marketing of REO Properties,” looked at 1,036 REO properties in nine different metro areas, comparing those in predominantly Latino and African-American neighborhoods to those in predominately white communities...

Iowa Attorney General Tom Miller downplayed concerns raised by investors in non-agency mortgage-backed securities regarding the pending $25.0 billion servicing settlement. “The current set of concerns aren’t particularly warranted,” he said this week during a webinar hosted by Inside Mortgage Finance Publications. The Association of Mortgage Investors has asked for a number of changes to the settlement, including a cap on the amount of principal reduction that can be completed on non-agency MBS to meet the participating servicers’ loss mitigation requirements. Miller said the AMI is the only group he is aware of that might challenge approval of the settlement by the U.S. District Court for the District of Columbia. “I think that their concerns are not going to be realized ...

Bank and thrift portfolio holdings of first liens increased in the fourth quarter of 2011 compared with the previous quarter, according to the Inside Mortgage Finance Bank Mortgage Database. Loan modifications completed by the major bank and thrift servicers during that period also decreased significantly, as portfolio performance has improved. Banks and thrifts held $1.76 trillion in first liens at the end of 2011, up 1.9 percent from the third quarter of 2011. The increase in holdings suggests strong portfolio originations as some banks are allowing their mortgage portfolios to run-off and others are selling delinquent mortgages. At the same time, loan modifications offered by the major banks and thrifts declined by ... [Includes one data chart]

Fannie Mae, Freddie Mac and the FHA accounted for 41.8 percent of the $84.66 billion in lending over the $417,000 threshold in 2011, the lowest share they’ve had since emergency loan limits went into effect in 2008, according to an analysis by affiliated publication Inside Mortgage Finance. The agency share of jumbo production peaked in the second half of 2009 at 53.1 percent.The government-sponsored enterprises and Ginnie Mae financed 36.6 percent of the loans exceeding $417,000 that were originated in the fourth quarter of 2011. That was down from a 42.7 percent agency share of the jumbo market in the third quarter of 2011 ... [Includes three briefs]

Unless Congress takes legislative action by the end of the year, Fannie Mae and Freddie Mac’s “unlimited” pipeline of cash support from the U.S. Treasury will be significantly dialed back, a paper by Deutsche Bank cautions. Although agency mortgage market observers have assumed that the Treasury will extend the taxpayers’ unlimited line of credit to the GSEs before the Dec. 31 deadline, a close reading of the authorizing legislation suggests that the Treasury may not be able to extend unlimited support without the approval of Congress, noted Deutsche Bank.