There isn’t a lot of doubt about the increasingly top-heavy nature of the mortgage business, but industry experts are divided over the role government policy has played and its impact down the road as Dodd-Frank Act reforms take root. A decade ago, in 2001, the top five lenders in the market accounted for 37.6 percent of total originations and 36.6 percent of mortgage servicing. By the end of last year, the top five lenders had a combined market share of 59.1 percent in originations and 55.2 percent in mortgage servicing.That trend could be exacerbated by the increased compliance ...

Mortgage servicers have not maximized their potential outreach to borrowers facing foreclosure in the wake of the consent orders issued last year by the Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision, according to a new report by the Government Accountability Office. The same can be said for the regulators. “Regulators and servicers have gradually increased their efforts to reach eligible borrowers and have taken steps to improve communication materials,” the GAO said, but they failed to undertake such “best practices” ...

A larger percentage of loans originated over the past three years show evidence of collusion fraud among parties to the transaction, according to LexisNexis. Prior to 2009, collusion fraud – defined as incidents of verified, non-arm’s length transactions – was reported on less than 5.0 percent of loans, the company said. For loans originated in 2009, that rate jumped to 7.0 percent and then to 9.7 percent in 2010. The rate edged down to 6.8 percent for 2011 originations, but experts think the reported numbers understate the prevalence of such fraud.“Because these complex relationships ...

Mortgages sold to Fannie Mae and Freddie Mac are increasingly coming from lenders’ retail production channels, according to a new analysis by Inside Mortgage Trends. In the second quarter of 2012, 58.1 percent of single-family loans securitized by the government-sponsored enterprises were retail originations, up from 52.9 percent in the first quarter. Broker originations dropped from 10.8 percent of GSE business to 9.0 percent, and the correspondent share slipped from 36.3 percent to 32.9 percent. After accounting for a whopping 83.2 percent of Fannie/Freddie business in the first quarter ...

Delinquencies on home-equity loans increased in the first quarter of 2012 and industry analysts expect further increases even though first-lien mortgage performance has been improving. The top two holders of HELs have differing strategies on HEL originations, and some smaller banks are also pushing the products. The serious delinquency rate on HELs hit 2.83 percent in the first quarter of 2012, according to the Inside Mortgage Finance Bank Mortgage Database. Delinquencies increased 34.1 percent from the end of 2011 and ...

Loan modifications performed on mortgages in bank portfolios perform much better than mods on mortgages included in non-agency mortgage-backed securities, according to an analysis by Inside Nonconforming Markets of new data from the Office of the Comptroller of the Currency. The performance varies significantly even as the two types of non-agency mortgages receive the vast majority of principal reduction loan mods. The 12-month re-default rate on mods implemented from 2008 through the first quarter of 2011 was ...

The Federal Deposit Insurance Corp. is revising its definition of subprime mortgages in an effort to better compare bank portfolios, according to analysts that worked on the rule proposed by the FDIC in March. Brenda Bruno, a senior financial analyst at the FDIC, said the regulator is looking to classify “the worst” of subprime mortgages as higher-risk. “We are looking at those assets that are really sort of the ‘bottom of the barrel’ type assets,” she said last week during a webinar sponsored by VantageScore Solutions ...

The Department of Housing and Urban Development said it has received $1.2 billion in recent settlements with large mortgage lenders and servicers but HUD’s internal watchdog, which did much of the legwork in the investigations, reveals a much smaller amount. According to recent audit reports published by HUD’s Office of the Inspector General, only Bank of America and Flagstar Bank have made payments under settlement agreements with HUD and the Department of Justice to resolve government claims. In separate memos to HUD’s Office of General Counsel last month, Kim Randall, director of the HUD OIG Civil Fraud Division, sought clearance to ...

Tentative signs of stability in home prices in early 2012 have yet to spur a rebound in home-equity lending, as the outstanding balance of second mortgages fell to its lowest level in seven years. According to the Federal Reserve, the supply of home-equity loans fell 2.7 percent in the first quarter of 2012 to just $849.5 billion. The home-equity market, which includes home-equity lines of credit and closed-end second mortgages, has shrunk by 24.9 percent since peaking...(Includes three data charts)

Old Republic International Corp.’s top management said it is postponing indefinitely plans to reenter the mortgage guaranty market after cancelling a planned spinoff and reversing the partial leveraged buyout of its subsidiary, Republic Financial Indemnity Group. In a conference call this week, ORI Chief Executive Officer Aldo Zucaro stood by the company’s decision to withdraw the registration statement filed with the Securities and Exchange Commission in May for spinning off RFIG common stock to ORI shareholders. He said stakeholders, including the North Carolina Department of Insurance, Fannie Mae, Freddie Mac, banks, debtholders and shareholders, rejected...