National City Corp., Cleveland, took a $115 million hit in the second quarter due to hedging losses on its residential servicing portfolio.The company -- which is contemplating exiting the subprime business -- has taken $243 million in servicing-related hedging losses so far this year. The entire bank, overall, earned $473 million in the quarter, but its A-paper mortgage unit lost $52 million. Its residential subprime business, though, had a strong second quarter, posting a $148 million profit. (Its net mortgage profit for the quarter totaled $96 million.) NatCity has adopted a policy of selling into the secondary market all subprime loans funded by its First Franklin Financial affiliate. During a conference call on July 18, company officials blamed the hedging losses on the implementation of a new model to estimate mortgage loan prepayments. In a statement, it notes that prepayments "are a significant factor" in determining the asset value of mortgage servicing rights. Even though the bank may sell First Franklin, it called the company a "fabulous" business.
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According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.
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Leaders of ORNL Federal Credit Union are piloting Zest AI's new artificial intelligence-powered assistant to ensure equitable underwriting practices and measure performance against similar institutions.
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McCargo stabilized the agency at a crucial time as she helped navigate it through both a pandemic and subsequent dramatic interest-rate cycle change.
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The quasi-public entity's plan to buy certain closed-end seconds would constitute "unnecessary government encroachment," the Structured Finance Association said.
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The mortgage subsidiary of Hilltop Holdings posted another quarterly loss and volume slipped, but management also sees signs of optimism.
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The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
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