Origination

In case you haven't been paying close attention and reading the National Mortgage News website (and our paper weekly) the past year, there's a gargantuan shift underway in the mortgage industry. We correctly predicted that the servicing side of the business is 'deconsolidating.'

Collateral Intelligence has signed on with FICO to provide valuation and support for the credit risk provider’s analytic solution that predicts borrowers who are at risk of strategically defaulting on their mortgages.

There has been a lot of talk about how good mortgage credit quality has been post-downturn, but to get a better sense of how good, investors may want to consider some of the steps being taken to mitigate loan performance risk.

The rate-indicative 10-year Treasury yield as of Friday just before noon had continued its upward movement to a point notably higher than the range it had been in previously, but hedged players in the industry so far appear to be weathering the move relatively well.

Despite the government's promise to crack down on violators of the new LO comp rules, nearly one year after they went into effect regulators have failed to deliver on their stern warnings and promises. Not surprisingly, some companies have elected to largely ignore the law, instituting compensation policies that are an obvious and blatant effort at circumventing the new compensation rules.

The Dodd-Frank legislation set new boundaries on the appraisal industry, especially in the areas of valuator independence and fees paid to those who perform work through appraisal management companies.

Farmer Mac earned $13.3 million for the fourth quarter and $13.8 million for the full year 2011, as the company saw increased net interest income and it was able to release funds from its allowances for loan losses.

It's known as the 'Oops' loan market - where Fannie Mae/Freddie Mac lenders get jammed on a buyback request not because the loan is delinquent, but because one of the GSEs finds an underwriting flaw and demands a repurchase or damages. The seller/servicer then takes that loan and resells it to another buyer.

Just wanted to give you a few more observations from Barry Habib from his presentation at the Regional Conference of Mortgage Bankers Associations in Atlantic City.

Regulators likely will increase enforcement of the Real Estate Settlement Procedures Act, with an idea toward sham 'affiliated business arrangements,' according to former FHA commissioner Brian Montgomery.