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37 » VISIT US ONLINE @ DSNEWS.COM MORTGAGE BANK PROFITS STUMBLE IN Q3 DESPITE PRODUCTION VOLUME INCREASE Mortgage banking profits hit another stumbling block in the third quarter, sinking slightly as a decline in secondary market income offset rising production numbers. Home lenders took in an average profit of $897 on each loan they originated over Q 3, the Mortgage Bankers Association (MBA) said at the end of 2014. at average was down from $954 in the second quarter but still a vast improvement from an average per-loan loss of $194 in the first quarter. "Average company production volume was up in the third quarter, which resulted in a nominal decrease in per-loan production expenses," said Marina Walsh, VP of industry analysis for MBA. "Nonetheless, production profits were slightly down because of a decrease in secondary marketing income." According to the group, average production volume came to $437 million per company last quarter, up from $378 million the prior period. By count, lenders average 1,901 new mortgages per company compared to 1,676 in Q2. At the same time, secondary marketing income for the quarter was 261 basis points, a decline from 270 basis points the previous quarter. e net cost to originate a mortgage was $5,038 per loan, a decrease from $5,074 in Q2, MBA reported. at total includes all production operating expenses and commissions with the exception of fee income. e average loan balance for first mortgages in the quarter was $231,914, up more than $6,000 from the last survey and a new record high. Among other findings, MBA reported a small drop in purchase loan origination share, which was 72 percent by dollar volume compared to 74 percent in Q2. For the industry as a whole, the association estimates purchase loans accounted for 62 percent of total originations in Q 3. Meanwhile, the share of high-cost first mortgage originations continued to increase, rising to a survey high of 9.4 percent as lenders loosen standards on jumbo products. Including all business lines, 83 percent of the nearly 350 companies in the study posted pre-tax financial profits last quarter, up from 81 percent in Q2. SENATE CONFIRMS NOMINEE FOR HUD DEPUTY SECRETARY e United States Senate voted last year to confirm the nomination of former Treasury assistant secretary Nani Coloretti to her new post as deputy secretary of the U.S. Department of Housing and Urban Development (HUD). Coloretti's confirmation comes a little more than four months after the Senate confirmed Julián Castro as HUD secretary. Working as the second most senior official at the agency, she will manage day-to-day operations, including a $45 billion annual budget. "Nani is a proven executive who has excelled at making government more efficient at the municipal and federal levels," Castro said. "Her breadth of experience and track record at the Treasury Department make her the ideal choice for a mission-oriented agency like HUD." In her time at Treasury, Coloretti advised the secretary on the development and execution of the department's budget, strategic plans, and the internal management of the agency and its bureaus. Coloretti's past work includes a number of positions at various housing and financial regulators, including the Consumer Financial Protection Bureau, where she served as acting COO in its early years. She also served as a member of the Government Accountability and Transparency Board following her appointment in July 2012. "I'm immensely grateful for the trust that President Obama and Secretary Castro are placing in me to help lead HUD at this critical time," Coloretti said. "I'm looking forward to working with the Department's outstanding employees and continue a data-driven approach to help make HUD's operations run as efficiently as possible." FORECLOSURE COMPLETION NUMBERS REMAIN HIGH DESPITE STEEP DECLINE IN OCTOBER Foreclosure completions declined signifi- cantly both month-over-month and year-over- year last October, but are still way above pre-recession levels, according to CoreLogic's October 2014 National Foreclosure Report. Foreclosure completions, which are an indica- tor of the number of homes lost to foreclosure, totaled 41,000 for October 2014, according to CoreLogic. e number was down 26.4 percent from October 2013, when 55,000 foreclosures were completed. Month-over-month, foreclosure com- pletions fell 34.1 percent, down from the 62,000 completions that were reported for September. e number of foreclosure completions has dropped 65 percent from its peak achieved in September 2010, according to CoreLogic. Before the housing market crashed in 2007, foreclosure completions averaged about 21,000 per month nationwide between 2000 and 2006. Foreclosure inventory, which is the number of homes in some state of foreclosure, totaled 605,000 in October 2014, which was a 30.9 percent decline from October 2013, when 875,000 homes were in some state of foreclosure in the U.S. Octo- ber 2014 was the 36th consecutive month in which there was a year-over-year decline in foreclosure inventory, according to CoreLogic. Foreclosure inventory declined by 2.1 percent month-over- month from September to October. "While there has been a large improvement in the reduction of foreclosure inventory, com- pleted foreclosures remain high and serve as one of the obstacles to new single-family construc- tion," said Sam Khater, deputy chief economist for CoreLogic. "Until the flow of completed foreclosures declines to normal levels, new-home construction will not pick up because builders have little incentive to compete with foreclosure stock." CoreLogic reported that 1.6 percent of all homes with a mortgage in the U.S. were in some state of foreclosure in October 2014, down from 2.2. percent in October 2013. October 2014's foreclosure rate of 1.6 percent was the lowest it has been since May 2008. "e foreclosure inventory is less than 2 percent and seriously delinquent loans are trend- ing lower right now," said Anand Nallathambi, president and CEO of CoreLogic. "At current rates, we can expect the foreclosure inventory to slip below 500,000 units during 2015." Mortgage loans originated in 2006 had a higher percentage of foreclosures than any other year as of November 2014 with 2.30 percent, according to RealtyTrac. KNOW THIS

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