EWSFLASH l APRIL 2014 l NMP NEWSFLASH l APRIL 2014 l NMP NEWSFLASH l Loan Profit Dips Nearly $600 Quarterly in Q4
APRIL 2014 n Utah Mortgage Professional Magazine n
NationalMortgageProfessional.com
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Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $150 on each loan they originated in the fourth quarter of 2013, down from $743 per loan in the third quarter, the Mortgage Bankers Association (MBA) reported in its Quarterly Mortgage Bankers Performance Report. “Fourth-quarter production profits were at their lowest levels since inception of the Performance Report in 2008, driven by study-high costs in a declining mortgage market,” said Marina Walsh, MBA’s vice president of industry analysis. “One consolation was in mortgage servicing, where financial income improved. However, not all mortgage companies retained mortgage servicing rights or generated margins large enough to offset production losses. It is perhaps not surprising that only 58 percent of participating companies had overall positive pre-tax profits in the quarter.” In basis points, the average production profit (net production income) was nine basis points in the fourth quarter of 2013, compared to 38 basis points in the third quarter. This marks the fifth consecutive quarter that production profits have decreased. Average production volume was $367 million per company in the fourth quarter of 2013, down from $391 million per company in the third quarter. The volume by count per company averaged 1,641 loans in the fourth quarter, down from 1,788 in the third quarter. The purchase share of total originations, by dollar volume, increased to 69 percent in the fourth quarter of 2013, up from 67 percent in the third quarter. For the mortgage industry as whole, MBA estimates the purchase share at 47 percent in the fourth quarter of 2013, down from 49 percent in the third quarter. Secondary marketing income increased to 248 basis points in the
fourth quarter, compared to 244 basis points in the third quarter. Total loan production expenses— commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations— increased to $6,959 per loan in the fourth quarter, up from $6,368 in the third quarter. Fourth quarter 2013 production expenses were the highest recorded in any quarter since the Performance Report was created in the third quarter of 2008. Personnel expenses averaged $4,385 per loan in the fourth quarter, up from $4,130 per loan in the third quarter.
GSEs Execute Three Million-Plus Foreclosure Prevention Actions Since 2008 Fannie Mae and Freddie Mac have completed more than 3.1 million foreclosure prevention actions since the start of conservatorship in 2008. These actions have helped more than 2.5 million borrowers stay in their homes, including nearly 1.6 million who received permanent loan modifications. During 2013, Fannie Mae and Freddie Mac completed nearly 448,000 foreclosure prevention actions, 99,700 of these in the fourth quarter. The majority of these allowed troubled borrowers to save their homes. The results are detailed in the Federal Housing Finance Agency’s fourth quarter 2013 Foreclosure Prevention Report, also known as the Federal Property Manager’s Report. The quarterly report has information on delinquencies in each state and an updated, interactive Borrower Assistance Map for Fannie Mae and Freddie Mac mortgages, with information on delinquencies, foreclosure prevention activities and real estate-owned (REO) properties.
Also noted in the report: l Serious delinquencies dropped seven percent during the quarter t0 the lowest level since the first quarter of 2009, and the seriously delinquent rate fell to 2.4 percent. l Nearly half of all permanent loan modifications in the fourth quarter helped to reduce homeowners’ monthly payments by over 30 percent. l Approximately 31 percent of borrowers who received permanent loan modifications in the fourth quarter had portions of their mortgage balance forborne. l There were more than 20,000 short sales and deeds-in-lieu completed in the fourth quarter, bringing the total to nearly 552,000 since the start of conservatorship. l Completed third-party sales and foreclosure sales continued a downward trend with a 15 percent reduction in the fourth quarter and foreclosure starts were down three percent.
Wells Fargo Named Top Commercial/Multifamily Originator in 2013 According to a set of commercial/multifamily real estate finance league tables prepared by the Mortgage Bankers Association (MBA), Wells Fargo; JP Morgan Chase & Company; Bank of America Merrill Lynch; Eastdil Secured; KeyBank; PNC Real Estate; HFF LP; Meridian Capital Group LLC; CBRE Capital Markets; and Prudential Mortgage Capital Company were the top commercial/multifamily mortgage originators in 2013. The MBA study is the only one of its kind to present a comprehensive set of listings of 117 different com-mercial/multifamily mortgage originators, their 2013 volumes and the different roles they play. The MBA report, Commercial Real
Estate/Multifamily Finance Firms: Annual Origination Volumes, presents origination volumes in more than 140 categories, including by role, by investor group, by property type, by financing structure type, and by the location of the originating office. Nine different companies were at the top of the 11 lists reporting total originations by investor groups: l Wells Fargo topped the list of total origination volumes l JP Morgan Chase & Company and Eastdil Secured were the top originators for commercial mortgagebacked securities (CMBS) l Bank of America Merrill Lynch and PNC Real Estate were the top originators for commercial bank loans l MetLife Real Estate Investors and Prudential Mortgage Capital were the top originators for life insurance companies l Wells Fargo and Walker & Dunlop were the top originators for Fannie Mae l CBRE Capital Markets Inc. and Berkadia were the top originators for Freddie Mac l Red Mortgage Capital LLC and Greystone were the top originators for FHA/Ginnie Mae l TIAA-CREF and JLL were the top originators for pension funds l CBRE Capital Markets and HFF LP were the top originators for credit companies l KeyBank and Eastdil Secured were the top originators for REITS, Mortgage REITS, and Investment Funds l Mesa West Capital LLC and Meridian Capital Group were the top originators for specialty finance l Wells Fargo and HFF LP were the top originators for the “other investors” category By dollar volume, the top five originators for third parties in 2013 were Eastdil Secured; HFF LP; Meridian Capital Group; CBRE Capital Markets; and KeyBank. The top five lenders in 2013 were Wells Fargo, JP Morgan Chase & Company, Bank of America Merrill Lynch, KeyBank and PNC Real Estate.