Secondary markets

Competition is heating up in the mortgage market as more lenders increase their production capacity, according to the chief financial officer of Fifth Third Bancorp.

Tom Wind, the executive VP of residential and consumer lending at EverBank and an industry veteran whose mortgage banking experience goes back over 20 years, believes the jumbo loan market is in growth mode. Overall housing market improvements and loan limit changes have opened the door to more growth, he said. “The jumbo business out there is starting to rebuild.

SunTrust Banks reported mortgage production income of $103 million for the second quarter, compared with $63 million in 1Q12 and a mere $4 million in 2Q11.

Cardinal Financial Corp. earned $10.2 million in the second quarter, with its mortgage banking division contributing net income of $4.4 million.

Stonegate Mortgage Corp. has hired Flagstar veteran Paul Wyner as senior vice president/national sales manager in charge of third-party residential lending.

First Horizon National in Memphis lost close to $125 million in the second quarter after it bought back scores of soured mortgage loans from Fannie Mae and Freddie Mac.

Citigroup plans to cut roughly 350 additional jobs this year from its securities division, which includes investment banking and trading.

San Bernardino County's proposal to use eminent domain to seize, and then restructure, underwater private-label mortgages could hurt Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

On July 17, a 26-count indictment was unsealed charging Eliseo Jara Jr., Sergio Jara, Antonio Perez Marcial, Lucia Yolanda Chavez, Arlene Jeanette Jara, Candace Shantel Gonzales, Joseph Shawn Chavez Jr., Melissa Rochelle Jara and Ricardo Fabian Salinas in a mortgage fraud conspiracy. The indictment was returned on July 12 by a federal grand jury in Fresno and the defendants were arrested at their residences on July 17.

The Securities Industry and Financial Markets Association has reached a consensus on the issue of cities using their power of eminent domain to refinance underwater mortgages that reside in private-label MBS, saying it will foul up the securitization process.

As we’ve reported before, private equity firms have been eyeing the mortgage market for the past two years – in particular MSRs. But here’s the catch: although there has been plenty of ‘talk,’ no household name PE firms (if there is such a thing) have taken the bait.

The Prestwick Mortgage Group is marketing a $58 million package of MSRs backed by mostly multifamily commercial mortgages held by private investors.

Orrstown Financial Services sold $28.6 million of nonperforming commercial loans to an unnamed outside investor.

Wells Fargo will continue to purchase brokered loans through its correspondent channel, which has cheered up the National Association of Mortgage Brokers.

Total loan application volume increased 16.9% on a seasonally adjusted basis for the week ended July 13.

The problem with the jumbo MBS market is the sterling credit quality of current production and the staunch unwillingness of originators to sell mortgages into securitization trusts.

CU Members Mortgage said it signed 22 new credit union clients in the second quarter.

A regulator will allow bond insurer MBIA Inc. to make a payment on surplus notes issued in 2008.

Among the many concerns San Bernardino County’s recent eminent domain proposal highlighted, one that stood out to me was the larger problem with second liens.

ASF executive director Tom Deutsch told a congressional panel that the 5% risk retention requirement will increase costs for mortgage borrowers. But the costs will be “prohibitive” if the final rule also requires the securitizer to maintain a “premium capture cash reserve account,” which is not required by the statute.