Servicing

Ally Financial Inc. has agreed to pay Fannie Mae $462 million to settle repurchase demands for breaches of representations and warranties related to whole loans and private-label securities the lender sold the GSE.

FBR Capital Markets, a 21-year-old investment bank hobbled during the financial crisis by a bloated cost structure and ties to a mortgage REIT, seems to be making all of the right moves. But it is still waiting for them to pay off.

In recent months, servicing failures have led to executive mea culpas, Washington drubbings and a 50-state investigation of the country’s biggest banks. As unpleasant as all of those things were, they have only dented large servicers’ profitability.

The recent whipsaw action in rates that hit some players has helped validate the need for proper hedging.“It validates the need for a disciplined hedging policy throughout the industry,” said Bill Sias, a managing director at MountainView Securities who works in the pipeline hedging area.

The volume of mortgage loans moving to REO continued to drop in November as moratoria further delayed foreclosure sales, according to Lender Processing Services, Jacksonville, Fla.

Home prices fell in October for the third month in a row and it appears the housing market is headed for a double dip, according to the Standard & Poor's/Case-Shiller house price index.

If Congress decided to wind down Fannie Mae and Freddie Mac and move toward a fully private secondary market, the Federal Housing Administration could act as backstop to ensure access to credit, according to a Congressional Budget Office report.

Residential foreclosures have been rising for the past six months and will continue to accelerate in 2011, according to analysts at CoreLogic.

Spanish bank Grupo Santander has agreed to purchase a $2 billion Mexican mortgage portfolio from General Electric Co.'s finance division for $162 million plus the assumption of debt, according to Dow Jones.

Data indicate the renewed mortgage industry urgency to encourage short sales and other preforeclosure solutions that help control bank repossession rates is not necessarily shared by buyers in areas where foreclosures are more affordable.An updated report by Foreclosure-Response.org that reviewed delinquency data from March 2009 to June 2010 for all 366 U.S. metro areas reveals that “the severity and trajectory of the problem vary dramatically across the nation.”