A Big Push From Small Lenders
Smaller banks are stepping in to take mortgage market share from big lenders, often by concentrating on local expertise and customer service. "What we're seeing is the community banks and regional market lenders taking a larger market share of residential business," notes Norman Koenigsberg with New Jersey-based First Choice Bank subsidiary First Choice Loan Services. The firm's loan origination volume increased to $2.26 billion in 2012 from $1.2 billion in 2011, and the company will very likely end this year with about $2 billion in originations, says a company spokesman. Koenigsberg sees First Choice Loan Services' expansion as the result of its hiring of qualified talent in regional markets, and a strong focus on purchase mortgages. He says local knowledge is particularly essential to borrowers in competitive and complex real estate markets.

From "A Big Push From Small Lenders"
New York Times (12/27/13) Prevost, Lisa

 

Community Banks on Road to Recovery, FDIC Says

U.S. community banks rebounded from the recession in 2012 and their recovery continues to move forward, according to a Federal Deposit Insurance Corp. (FDIC) study on 6,141 lenders. Those banks enjoyed a collective profit of $16.4 billion during the year, and their average profit margin topped 1 percent for the first time in five years while the number and rate of community bank failures decreased. "Recent signs point to renewed interest in new bank charters," the FDIC says. "Community banks continued to strengthen their balance sheets in 2012 by reducing problem assets and increasing capital levels." The report determined that community banks' greater profitability was fueled by higher noninterest income and lower loss provisions, which easily compensated for the decline in net interest income.

From "Community Banks on Road to Recovery, FDIC Says"
Albuquerque Business First (12/26/13) Domrzalski, Dennis

Happy New Year!

Have a safe and happy 2014.

Merry Christmas!

Housing Starts Jump in November

Housing starts leaped 22.7 percent in November to a seasonally adjusted annual rate of 1.09 million units, the Commerce Department reported yesterday. Starts were 29.6 percent above their rate a year ago. However, permits for new construction, which are considered a gauge of future demand, fell 3.1 percent to an annual rate of 1.01 million.

---ABA Daily Newbytes

Mortgage Rates Continue Rising

The average rate for a 30-year fixed-rate mortgage climbed to 4.35 percent from last week’s rate of 4.16 percent, Freddie Mac said yesterday. At this time in 2012, the 30-year FRM rate averaged 3.34 percent

Fannie Mae Mortgage-Guarantee Fees Increased by U.S. Overseer

Fannie Mae and Freddie Mac are set to raise the fees they charge lenders to insure loans as part of an effort to dial down their presence in the mortgage market, the Federal Housing Finance Agency (FHFA) announced. For the first time, the firms also will begin charging higher fees in four states -- Connecticut, Florida, New York, and New Jersey -- where long foreclosure timelines make it more costly for them to dispose of homes they take over after borrowers default. In addition, the FHFA is revising its fee structure so that borrowers with poor credit will pay more. The fee hikes, typically passed on to borrowers in the form of higher interest rates, take effect in March and the following month. Fees are set to rise an average of 14 basis points on a typical 30-year fixed mortgage.

From "Fannie Mae Mortgage-Guarantee Fees Increased by U.S. Overseer"
Bloomberg (12/10/13) Benson, Clea

Consumer Bureau Defends ‘Back to Basics’ Rules

Consumer Financial Protection Bureau regulations to rein in the mortgage market are simple to understand and easy to follow, said Director Richard Cordray at a Consumer Federation of America event on Thursday. Cordray promised that the bureau would be “vigilant“ in enforcing the “back to basics” regulations for mortgage lenders and servicers, according to prepared remarks.

From "Consumer Bureau Defends ‘Back to Basics’ Rules"
The Hill (12/05/13)

Smaller Mortgage Lenders Lead Field

Big banks have been retrenching from the mortgage business recently, leaving smaller players to pick up larger pieces of business. As of the third quarter, smaller mortgage players held a 60 percent market share of the U.S. origination market, up from 39 percent in 2009, according to industry publication Inside Mortgage Finance. The trend is opening up opportunities for small companies such as loanDepot.com, regional banks such as M&T Bank and larger mortgage players like Quicken Loans.

From "Smaller Mortgage Lenders Lead Field"
Wall Street Journal (12/05/13) Raice, Shayndi

Small Banks Fear Regulation 'Tidal Wave'

Advocates of small banks and credit unions say that rules intended to protect consumers from abuse by major Wall Street banks have ended up hurting smaller institutions and could force them out of business. Lawmakers on both sides of the aisle seem open to possible fixes to blunt impacts on smaller institutions from the Consumer Financial Protection Bureau (CFPB) and other agencies. Over the summer, Sen. Elizabeth Warren (D-Mass.), one of the most vocal advocates for financial reform in Congress and the architect behind the CFPB, suggested a two-tiered banking regulation for large and small institutions. Multiple legislative efforts to give regulatory relief to small banks and credit unions are currently working their way through Congress, though few have gained much traction.

From "Small Banks Fear Regulation 'Tidal Wave'"
The Hill (12/04/13) Hattem, Julian

Shift on Nonconforming Mortgages

Some of the nation's largest banks will offer loans that don't conform to new gold-standard lending definitions under sweeping mortgage regulations set to take effect next month. Executives at Wells Fargo said the bank will make some loans that don't meet the definition of a "qualified mortgage," a new designation that allows banks to demonstrate they have met requirements ensuring borrowers can afford their mortgages. JPMorgan Chase, Bank of America and Citigroup are also likely to make some loans that fall outside of the standard, according to bank representatives, although the loans are likely to be limited to affluent bank customers. While lenders aren't barred from making loans that fall outside the "QM" rules, they could face greater legal liability on those mortgages. Mortgage investors are also much less likely to purchase those loans. Wells Fargo said it has opted to continue providing mortgages that don't meet the safer legal standard because recently originated loans that don't satisfy the QM criteria have had very few defaults.

From "Shift on Nonconforming Mortgages"
Wall Street Journal (12/03/13) Timiraos, Nick

Mortgage Rates Rise

The average rate for a 30-year fixed-rate mortgage rose to 4.29 percent from the previous week’s rate of 4.22 percent, Freddie Mac said Thursday. At the same time in 2012, the 30-year FRM rate averaged 3.32 percent.