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Historical trends in foreclosure activity are a function of both prevailing underwriting quality and economic conditions. This look back at foreclosures from 1979 through the present reveals how economic conditions [...]

Fannie Mae, the mortgage-finance giant agreed demands from the Office of Federal Housing Enterprise (OFHEO) to keep 30% more capital on its balance sheet than the current rules requirement, raising the prospect that Fannie will have to raise new funds from investors or sell assets. If Fannie Mae reduces or slows the growth of its mortgage assets, it would in turn issue fewer liabilities.

An analysis of the accounting methods of Fannie Mae, a vehicle that makes home financing more available to Americans by buying mortgages from banks and other primary lenders, finds that they allow billions of dollars of derivative-related losses not to be reflected on its income statement. Whenever the interest rates swing sharply, the gap between the duration of Fannie Mae's assets and liabilities also shifts, resulting in large derivative losses that do not show in the income statement.

An analysis of bank call reports over several years shows that small servicers have not been driven out of the business because of the new accounting rules on servicing. Many, [...]

Tax returns don't measure up to financial statements when it comes to underwriting the self-employed. A well-heeled businessman comes into a mortgage bank and meets with a loan officer he [...]

The Financial Accounting Standards Board (FSAB) issued Statement No. (SFAS) 65 to supersede Statement of Position 74-12, 'Accounting Practices in the Mortgage Banking Industry,' from the American Institute of Certified Public Accountants' Accounting Standards Executive Committee. The Mortgage Bankers Assn. of America questioned SFAS 65 for its inconsistency over capitalization of servicing rights and for its churning impact over servicing rights. Thus, FSAB issued Statement No. 122 to amend SFAS 65.

With recent changes in accounting treatment, mortgage servicers will need to relearn the art of risk management. With originated servicing now on the balance sheet, lenders are entering a whole [...]

Soon originated servicing will come out of the shadows and into the glaring light of the balance sheet. Retained servicing will then join purchased servicing as a booked asset, ending [...]

Regulatory pressure and increased lender caution are causing mortgage lending institutions to exercise greater quality control over staff and fee appraisals. Appraisal quality control is increasingly taking the form of [...]

There are several ways to find adjustment errors in an ARM servicing portfolio. Here's some pros and cons of different ways to detect the problems. Many mortgage servicers today are [...]

Finding a Financial Yardstick Mortgage bankers have long posed a unique challenge for credit and investment analysts. This stems from the fact that mortgage bankers often produce only limited financial [...]

The new Financial Accounting Standards Board rule number 122 changes the rules for valuing mortgage servicing rights (MSR). It was issued in May 1995 and ended the accounting distinction between origination activities MSRs and open market MSRs. Some mortgage bankers may change their behavior and nonbank mortgage companies may increase their profits and stock prices.

Most mortgage bankers will tell you they perform some cost accounting. And many can quote their cost of servicing. But usually what they are referring to as their average cost [...]

Citicorp announced revised 2nd-qtr 1992 earnings in mid-August, due to a writedown on approximately $1 billion of mortgage-servicing assets. Regulators forced the bank to write down the assets by $95 million, more than double the writedown Citicorp had taken voluntarily. Second-quarter earnings were $143 million, 16% lower than previously estimated. The writedown calls attention to the higher level of financial risk taken by mortgage banks with the active mortgage refinancing market., Citicorp's surprising writedown of mortgage-servicing assets serves as a powerful reminder that the mortgage refinancing boom is not without perils. Most banks active in mortgages say they don't expect to [...]

Michael A. Carpenter, GMAC Inc.'s newly installed chief executive, says his top priority is to stop its troubled mortgage unit from dragging down the rest of the $178 billion-asset company. [...]

WASHINGTON - When the Federal Housing Administration unexpectedly delayed the release of a highly anticipated audit of its capital reserves last week, the industry initially feared the government mortgage insurance [...]

National City Corp. said it has reached a tentative $6.1 million settlement with several government agencies after an audit of its National City Mortgage Co. The Cleveland company said Monday [...]

The FSA's internal report into the Northern Rock crisis has revealed a startling catalogue of regulatory failures, including basic mistakes such as not recording key meetings. The report by its […]

Freddie Mac's fourth-quarter loss would have been $1.2 billion larger, or $3.7 billion, had it not made important changes to its accounting methodology that it said provided a more accurate [...]

MPs have launched a stinging attack on Northern Rock's auditors for failing to spot funding problems at the crisis-hit bank and making more than AGBP1m in fees from the lender. [...]

WASHINGTON -- As problems in the mortgage market continue to unfold, Fannie Mae's first current quarterly report in three years has reignited a fight between the government-sponsored enterprises and their [...]

The Irvine, Calif., subprime lender New Century Financial Corp. said that it has found more accounting errors but will not bother to correct them or the errors it discovered previously. [...]

GRANT THORNTON DROPS PAIR OF SUBPRIME CLIENTS Grant Thornton has quit as auditor to subprime lenders Fremont General Corp. and Accredited Home Lenders Holding Co.. In federal filings, the audit [...]

The mortgage blues hit bank stocks again Monday, leading to dramatic losses among several consumer lenders. Shares of New Century Financial Corp. sank nearly 69%. The Irvine, Calif., company disclosed [...]

Bank-owned subprime lenders learned last week how underwriting on hybrid adjustable-rate mortgages may soon be changing. For Fremont General Corp., those changes already have arrived. Among the items included in [...]

Fannie Mae on Wednesday said that restating earnings from 2002 through mid-2004 will cost more than previously estimated, and that the total bill for getting caught up on financial reporting [...]

Warehouse lines of credit are the lifeblood of independent mortgage banks - and for all the talk of industry consolidation, there are still scores of such outfits around. But with [...]

The Federal Agricultural Mortgage Corp., or Farmer Mac, said Friday that it would have to restate more than three years of earnings to correct accounting mistakes related to Statement of [...]

Shares of Doral Financial Corp. fell sharply Wednesday, despite the San Juan, Puerto Rico, company's announcement Tuesday evening that it had taken one more step toward resolving its accounting woes. [...]

MOUNT LAUREL, NJ -- PHH Corp., which is in the midst of an accounting review, released un-audited first-quarter performance measures last month, including what the company's CEO described as 'disappointing' [...]

Fannie Mae has put a hold on its acquisition, development, and construction lending program under an agreement with the Office of Federal Housing Enterprise Oversight, the mortgage company said Thursday. [...]

Rep. Richard Baker, R-La., said Wednesday that he has referred Franklin Raines and Tim Howard, the two former top executives at Fannie Mae, to the Justice Department and accused them [...]

OPEN FOR COMMENT Basel II A proposal by federal regulators to align regulatory capital requirements more closely with the risk profiles of the largest banks. Regulators are collecting comments and [...]

Washington -- Fannie Mae, which is working through a $10.8 billion earnings restatement scandal, has found yet more accounting errors and will have to move $28.5 billion in assets to [...]

The portfolio cap Fannie Mae agreed to implement in a settlement announced last week with its regulator over accounting misdeeds has turned out to not be the $727 billion observers [...]

First BanCorp announced a big step Wednesday in undoing transactions with Doral Financial Corp. that led to accounting issues for both San Juan, Puerto Rico, companies. It said it had [...]

Freddie Mac said Friday that it would release complete full-year 2005 financial results today after the market closes. The government-sponsored enterprise scheduled a conference call at 5 p.m. eastern standard [...]