Servicing

Ally Financial Inc. on Wednesday reported a third-quarter profit of $269 million, its third consecutive quarter in the black, driven by strong results in both its mortgage banking, and automotive finance units.

PennyMac Mortgage Investment Trust, a vulture fund launched by former Countrywide Financial president Stan Kurland, earned $7.7 million in the third quarter, and declared a cash dividend of 42 cents a share.

Freddie Mac posted a $4.1 billion loss in the third quarter — after paying a $1.6 billion dividend to the U.S. Treasury — but also saw its overall "serious" delinquency rate fall to 3.8%.

Defaults, foreclosures and depreciation combined with unprecedented regulatory compliance demands have already transformed loan servicing into a highly complex and pricey process that inevitably will become even more expensive.Nobody can predict how long it will take to process, modify, review or foreclose the millions of distressed assets currently in the servicers pipelines or clogging courthouses. Estimations vary from two years to five and even 10 years. It is getting clearer, however, how overall mortgage market changes have changed subservicing.

Insiders expect significant servicing quality control cost increases as mortgage servicers go under financial and political pressure to implement efficient systems.Maybe the biggest lesson learned from “foreclosure-gate” is that servicers need to slow down, says Gagan Sharma of BSI Financial Services, Irving, Texas. A few “extra steps and checkpoints” may help control the risk of unforeseen processing costs. The servicing industry has already streamlined processes “as much as possible,” he says, now that foreclosure-gate is making people realize that “there is so much streamlining you can do.”

Mom-and-pop lodging options are popular among vacationers on a budget. Vacant foreclosure rentals on the other hand are a novel type of short-term accommodation that may soon add to a traveler’s list of inexpensive options. If only REO managers embrace the idea.Marketing vacated REOs to seasonal tourists may seem like a stretch, but the upswing in the number and management costs of vacant REOs requires out-of-the-box management in areas that happen to be tourist attractions close to popular vacation sites.

Concerns that private label investors will swamp bank issuers with repurchase claims because of poor master servicing on the residential bonds are overblown, according to a new report from Credit Suisse.

Fannie Mae bought $39.9 billion of mortgages from its seller/servicers during September, the GSE's best purchase month of the year, and a sign that origination volume is strong in the primary market.

Investors had a strong positive reaction to The Radian Group's announcement of a third quarter profit of $112 million as they drove the company's stock price up nearly 15% on Tuesday morning.

The Government National Mortgage Association later this month will start providing MBS investors with new information about the percentage of modified single-family mortgages in its MBS pools.