Servicing

It appears that residential delinquencies are headed in the right direction - down - but the jury is still out on how improving late payments are affected by government modification programs and delays caused by the robo-signing settlement.

Stewart Information Services Corp., Houston, Thursday reported net earnings of $2.3 million for 2011, its first annual profit since 2006.

Perhaps, banks that have been exiting the residential finance space will look really stupid if housing and mortgages recover. Figures released Thursday suggest that delinquencies are falling but a huge overhang of foreclosures is on the way. Corporate earnings are at record levels, employment is rising, and just maybe, maybe housing is on the mend. But a huge stumbling block remains: ultra tight underwriting standards.

Foreclosure filings nationwide rose 3% in January from the month prior, a sign that improving delinquency rates may have a huge lag effect.

The delinquency rate on all outstanding residential mortgages fell to a three-year low in the fourth quarter with most loan types improving except for one product: FHA.

The government owned Ally Financial has agreed to sell $1 billion worth of senior notes to a group of underwriters including Barclays Capital, Citigroup, Goldman Sachs and Morgan Stanley.

The foreclosure-to-rent movement is an opportunity bound to keep servicers, investors and the Federal Housing Finance Administration busy in the near future. It also is a game changer in the nation’s housing culture because while following the path of homeownership preservation it also embraces renting.

Carver Bancorp Inc. in New York reported a loss of $700,000 for its fiscal third quarter, as the recapitalized company took steps to mark down its problem assets.

BlackRock Inc., the investment firm headed by MBS veteran Larry Fink, recently increased its position in PennyMac Mortgage Investment Trust to 5.48%, more than double its last recorded stake.

Nationstar Mortgage, the nation's 11th largest servicer, is in talks to buy all or parts of Aurora Loan Services, according to industry advisors close to the situation.