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Analysis: Small lenders ride U.S. mortgage wave as big banks cut back

By Anna Louie Sussman - Mon Feb 4, 2013 6:36am EST

(Reuters) - Guaranteed Rate, Inc, a home loan company, opened shop in 2000 in Chicago with a single office. Now it is one of the 20 biggest U.S. mortgage lenders, with more than 140 offices.

Most of that growth has come in the last two years and Chief Executive Victor Ciardelli said in an interview he is not planning to slow down.

"We've hired over a thousand people over the last year and we're trying to hire a ton more," Ciardelli said.

Guaranteed Rate is one of scores of independent mortgage lenders and community banks pushing up through the rubble of the housing collapse, as profits rise amid improving demand for home loans for new purchases or mortgage refinancing. They are winning business from banks such as Citigroup Inc (C.N) or Bank of America Corp (BAC.N) that have retrenched after the financial crisis.

The five biggest U.S. mortgage lenders controlled just 53.2 percent of the market last year, down from nearly two-thirds in 2010, Inside Mortgage Finance data shows. As small lenders grow, that share could shrink to 40 percent of the $1.8 trillion mortgage market by 2014, a recent FBR Capital Markets report forecast.

Read more: http://www.reuters.com/article/2013/02/04/us-mortgages-smalllenders-idUSBRE91304920130204

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John Symond 'totally focused' on Aussie Home Loans

by: Michael Bennet - From: The Australian - March 21, 2013 12:33PM

THE Commonwealth Bank is free to take control of John Symond's Aussie Home Loans after the corporate
regulator said it would allow the bank to acquire what it doesn't already own of the mortgage broker.

[...]

Australia's big four banks - CBA, Westpac, ANZ and NAB - account
for more than 80 per cent of the nation's $1.3 trillion mortgage market.
http://www.theaustralian.com.au/business/financial-services/accc-clears-cba-to-acquire-majority-stake-in-aussie-home-loans/story-fn91wd6x-1226602260009

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U.S. Banks Bigger Than GDP as Accounting Rift Masks Risk

By Yalman Onaran on February 19, 2013

That label, like a similar one on automobile side-view mirrors, might be required of the four largest U.S. lenders if Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., has his way. Applying stricter accounting standards for derivatives and off-balance-sheet assets would make the banks twice as big as they say they are -- or about the size of the U.S. economy -- according to data compiled by Bloomberg.

“Derivatives, like loans, carry risk,” Hoenig said in an interview. “To recognize those bets on the balance sheet would give a better picture of the risk exposures that are there.”

More: http://www.businessweek.com/news/2013-02-19/u-dot-s-dot-banks-bigger-than-gdp-as-accounting-rift-masks-risk

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5 big US banks have cut mortgage debt by $19B

Associated PressBy MARCY GORDON | Associated Press – Thu, Feb 21, 2013 1:25 PM EST

WASHINGTON (AP) — Five of the biggest U.S. banks have cut struggling homeowners' mortgage balances by $19
billion, part of a total $45.8 billion in relief provided under a landmark settlement over foreclosure abuses.

More than 550,000 borrowers received some form of mortgage relief between March 1 and Dec. 31, 2012, according to a report issued Thursday by Joseph Smith, the monitor of the settlement.

That translates to about $82,668 per homeowner, according to the report, which is based on the banks' own accounts of their progress. Smith said he must confirm the banks' data before they can get credit under the settlement.

The deal was struck a year ago by the federal government and 49 states with the five largest U.S. mortgage servicers: Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. Under the settlement, the five agreed to reduce balances on mortgages where the borrower owes more than the home is worth and to refinance some loans. The banks also are required to make foreclosure their last resort, and they can't foreclose on a homeowner who is being considered for a loan modification.

The settlement closed a painful chapter of the financial crisis when home values sank and millions edged toward foreclosure. Many companies had processed foreclosures without verifying documents.

The agreement reduces mortgage debt for only a fraction of those whose mortgages are underwater. About 11 million U.S. households are underwater, and the settlement is expected to help about a million of them.

Smith's report says $19.5 billion of the $45.8 billion in relief was in the form of short sales, in which lenders agree to accept less than what the seller owes on the mortgage. Lenders are increasingly favoring short sales rather than waiting for troubled loans to go through the foreclosure process.

Of the roughly $19 billion in reduced mortgage principal, according to the report, Bank of America had provided $13.5 billion; JPMorgan Chase, $1.8 billion; Citigroup, $1.9 billion; Wells Fargo, $1.4 billion; and Ally, $238 million.

Ally, the former financial arm of General Motors Co., now has fulfilled its obligation for the relief it is required to provide under the settlement, Smith said.

The banks provided another $2.2 billion in relief by refinancing 56,400 home loans with an average principal balance of $211,834. As a result, borrowers will save an average of about $417 in interest payments each month, the report says.

The banks also had $3.5 billion worth of loans under trial modifications as of Dec. 31. That could lead to permanent reduction in loan balances of $138,802 if the trials are completed.

"I believe we have made progress, particularly as it relates to (mortgage) relief, but I know from my regular conversations with advocates across the nation that the banks and I have much more work to do on behalf of borrowers," Smith said in a statement.

In separate settlements announced last month, 13 banks agreed to pay a combined $9.3 billion to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes. The settlements ended a review of loan files required under a 2011 action by federal agencies.

They could compensate borrowers whose homes were seized because of abuses such as "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents. The settlements also will help eliminate huge potential liabilities for the banks: Aurora, Bank of America, Citigroup, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Wells Fargo.

http://finance.yahoo.com/news/5-big-us-banks-cut-mortgage-debt-19b-155741282--finance.html