Paul Muolo

MountainView Servicing Group LLC still hopes to sell a $262 million bulk package of Fannie Mae servicing rights after the portfolio did not trade by its initial bid deadline.

The debate over overhauling servicing compensation continues. Should the GSEs trim the 25 basis point minimum or not? One industry veteran wrote to us recently, noting this: “In regard to reduced fees, the servicing industry has recently proven that they cannot manage mortgage portfolios and staff appropriately and make a profit given the current fee levels.

“I fear that with Fannie and Freddie reporting earnings again the whole debate on reforming them will fall apart,” one senior mortgage insurance official told me this past week. That was on Thursday, the day after Freddie Mac reported its first true net profit in almost two years, earning $676 million in the first quarter.

The debate over how (and if) servicing compensation should be changed continues to rage on – quietly, that is. Our sources tell us that Fannie Mae appears to be the one driving this truck with Freddie Mac and Ginnie Mae sitting in the back seat, shouting, “Slow down.”

The nation’s four largest residential servicers – with the exception of Wells Fargo & Co. – took large writedowns on the asset value of their residential servicing portfolios in the first quarter, according to an analysis done by National Mortgage News.

Early this morning the yield on the benchmark 10-year Treasury fell to 3.17% and oil tumbled $4 a barrel. If these two economic ‘events’ don’t spur home buying (and maybe more refinancings) then nothing will. Of course, many consumers still think that values haven’t bottomed and there’s more room to fall.

Annaly Capital Management, one of the nation’s largest mortgage investing REITs, earned just shy of $700 million in the first quarter, double what it earned in the same period a year earlier.

Some mortgage vulture funds may be heading for the exits, but not the publicly traded PennyMac Mortgage Investment Trust, the brainchild of former Countrywide Financial Corp. president Stanford Kurland.

Genworth Financial earned $82 million in the first quarter, a 54% drop from the year ago, as continued losses at its mortgage insurance unit held back the company’s financial recovery.

When it comes to mortgage lending, the nation’s megabanks are in an interesting position. When applications boom they (in theory) have more financial wherewithal than the little guy to capture market share. And of course, because they have so much market share, they are also in a position to suffer the most.

Freddie Mac’s capital market chief, Peter J. Federico, a 23-year veteran of the GSE, announced that he is leaving the company in mid-May.

Pacific Union Financial LLC, Walnut Creek, Calif., has launched a new correspondent division to purchase already funded residential loans from mortgage bankers, community banks, and credit unions.

As any mortgage banking veteran can tell you, the two key drivers of home loan demand are interest rates and jobs. Rates continue to look enticing (though not as enticing as early December) and the job market seems to be improving. (We’ll know for sure when the new employment numbers are released this Friday.)

The residential mortgage division of Ally Financial posted earnings of $34 million in the first quarter, a 78% decline from the same period a year ago.

Interactive Mortgage Advisors, Denver, is offering a $402 million package of bulk servicing rights backed by Government National Mortgage Association guaranteed loans.

It may be premature to declare the death of wholesale mortgage lending in America, but certainly it would appear that the future looks exceedingly bright for correspondent lending. We know of at least one large net branch (broker) that recently became a mortgage banker and is boasting as much to its customers.

Over the past three years the sale of bulk servicing rights has been anemic, that is, unless Uncle Sam (namely the FDIC) has been the one doing the selling.

Although a handful of bidders have pondered the thought of buying roughly $40 billion of servicing rights being peddled by HSBC Bank USA, it appears the deal has stalled for now.

If you listen to the brokerage community, especially their trade group officials, the new loan officer compensation rules spell disaster for third-party mortgage salesmen. But for retail LOs working at firms that actually fund mortgages (as opposed to brokering them) the outlook is unclear. In fact, when it comes to LO dollars earned, it may even be a wash.

WASHINGTON—The National Association of Independent Housing Professionals is giving up—for now—on its legal battle against the Federal Reserve Board to block the agency’s just-implemented loan officer compensation rule.