Mortgage Servicers

Browse articles from all of our Newsletters related to Mortgage Servicers.

July 11, 2014 - Inside Mortgage Trends

Walter Moves Toward ‘Capital-Light’ Model

Walter Investment Management took steps last week to transition to a business model that requires less capital by funding Walter Capital Opportunity and completing an excess servicing spread sale with WCO. WCO is a real estate investment trust that Walter formed in November to hold mortgage servicing rights. Last week, WCO acquired 70 percent of the excess servicing spread from a pool of loans serviced by Green Tree Servicing ...

July 11, 2014 - Inside Mortgage Trends

FHFA Weighs Capital for Nonbank Servicers

By now, the word is out: the Federal Housing Finance Agency is exploring codifying capital minimums for nonbank servicers as a way to help Fannie Mae and Freddie Mac better manage counterparty risk. Industry officials tracking the topic told Inside Mortgage Trends they don’t believe the FHFA is necessarily worried about the capital positions of the big three nonbanks: Nationstar Mortgage, Ocwen Financial, and Walter Investment Management ...

July 11, 2014 - Inside The GSEs

FHFA-OIG Raises Red Flags About GSE Nonbank Servicers

A new audit issued last week by the Federal Housing Finance Agency’s official watchdog revealed that an unnamed nonbank special servicer raised red flags for Fannie Mae, Freddie Mac and their regulator. The report by the FHFA’s Office of Inspector General prompted the FHFA to issue guidance on the counterparty risk posed by nonbank servicers by year’s end. The OIG audit said the Finance Agency and the two GSEs “have responded well to specific problems at nonbank special servicers.”

July 11, 2014 - IMFnews

What We’re Hearing: Is Our Mortgage Origination Estimate Crazy? / Good News from At Least One Warehouse Lender / Bullish on Non-QM Lending? / The FHFA MI Proposal is Out and the World Hasn’t Ended, Yet / As for Radian… / Frank Raines’ New Job

So, you doubt our 2Q origination estimate? Here’s what an executive from a top-five warehouse bank told us: “We’re experiencing a significant pick up in outstandings."

July 11, 2014 - Inside MBS & ABS

Fed Issues Action Plans for Goldman Sachs, Morgan Stanley to Improve Oversight of Third-Party Servicers

The Federal Reserve has released action plans for Goldman Sachs and Morgan Stanley to correct deficiencies in the firms’ risk management procedures for third-party mortgage servicers. The plans were a requirement under enforcement actions issued by the Fed and the Office of the Comptroller of the Currency between April 2011 and April 2012 against 16 mortgage servicers, including Goldman Sachs and Morgan Stanley. The servicers came under scrutiny for deficient servicing practices and foreclosure procedures, and later settled with the government. Morgan Stanley’s regulatory action plan supplements...

July 11, 2014 - IMFnews

Residential Originations Spike 31 Percent at Wells Fargo, but Bank Marks down MSRs

However, compared to the same quarter a year ago, loan production at Wells took it on the chin, falling a bloodcurdling 59 percent.

July 10, 2014 - IMFnews

Short Takes: More Room to Run for Mortgage Insurance Stocks? / Nationstar Cuts New Employment Deal with Its President / Is the Single-Family Investment Market Overheating? / FHFA Hoping on HARP

We know of some veteran mortgage bankers who believe the “fix and flip” housing market is getting overheated. One lender told us he fears a severe correction could hit California…

July 10, 2014 - Inside Mortgage Finance

Mismatched Default/Claims Data in CAIVRS, FHA System Result in Ineligible Borrowers Obtaining New FHA Loans

The Inspector General of the Department of Housing and Urban Development called on the FHA to clean up and update its shared database of federal debtors in default, including FHA borrowers, to ensure the information it holds matches data in the FHA’s default and claims systems. An audit by HUD’s IG found that the Credit Alert Verification Reporting System (CAIVRS), which lenders use to screen delinquent federal debtors from obtaining any more government-backed loans, did not contain default, foreclosure and claims information for more than 260,000 borrowers. As a result, ineligible borrowers were able to obtain new federal loans and loan guarantees. The IG estimates...

July 10, 2014 - Inside Mortgage Finance

Although the MSR Market for ‘Legacy’ Product Remains Weak, ‘Flow’ Deals Rule the Roost

Thanks to lousy origination profits posted over the past six months, mortgage bankers increasingly are boosting earnings through servicing-released arrangements, causing a mini-boom in flow transactions. “You might say we’re back to a normal operating environment where originations are cash-flow negative,” which is forcing lenders to book profits through MSR sales, said Jeff Levine, managing director of Houlihan Lokey, an investment banking firm. But Levine is...

July 10, 2014 - IMFnews

House Democrats File ‘Middle Ground’ GSE Reform Legislation

The Democratic proposal calls for private mortgage capital to backstop the first 5 percent of conventional-mortgage securitizations with the remaining 95 percent of risk shared “on a pari passu basis.”

July 9, 2014 - IMFnews

Mortgage Banker with a ‘Substantial’ MSR Portfolio Unloading Some of its Holdings

Over the past six months, many nonbanks have moved to sell MSRs as a way to remain cash flow positive in a tough origination market.

July 8, 2014 - IMFnews

Short Takes: What it Takes to Survive the Mortgage Downturn: Scale / Whole Loan Sales or MBS, That is the Question / HomeStreet Dominates Redwood Deal / Ellie Mae Will Need a New General Counsel / Here Comes the Earnings Flood

Will loan production in the second half surprise the naysayers? Will non-QM lending take off? Stay tuned...

July 8, 2014 - IMFnews

Mortgage Brokers Add Jobs While Lender/Servicers Cut

With just $1 trillion in originations expected this year, lenders and servicers are trimming their payrolls accordingly.

July 8, 2014 - IMFnews

Fed: Homeowners Have Received $3.1 Billion So Far as Part of National Foreclosure Settlement

The payment amounts to the borrowers range from several hundred dollars to $125,000, according to the Independent Foreclosure Review audit.

July 8, 2014 - IMFnews

PHH Will Invest $350 Million in Mortgage Unit, but Outsourcing and Layoffs Ahead

Will PHH sell its mortgage division this year? Don't bet on it. But it will spend millions on a company restructuring.

July 8, 2014 - IMFnews

Mortgage Complaints Filed with the CFPB Fell by Almost 19 Percent in 2Q

Bank of America is the mortgage complaint king with 38,098 official gripes filed with the Consumer Financial Protection Bureau.

July 7, 2014 - Inside the CFPB

Credit Unions Support Broader Exemptions from CFPB Rules

Credit union industry representatives want the CFPB to expand some exemptions in some of its recent rulemakings so their CU members could reach larger portions of their targeted markets. One of the recent amendments the bureau proposed to its mortgage rules issued in 2013 would provide an alternative definition of “small provider” applicable to Internal Revenue Code Section 501(c)(3) nonprofit entities that service loans for a fee and on behalf of other nonprofit entities within the same overall organization. This is the so-called “small servicer exemption.” Also for 501(c)(3) nonprofit entities, the proposed rule would exempt certain interest-free, contingent subordinate liens from the credit extension limit under the ability-to-repay rule. This is what’s known as the “small creditor exemption.” As ...

July 7, 2014 - IMFnews

Short Takes: Delinquencies Creep Into Shellpoint Deal / Freddie’s Latest Risk-Share Deal / Consumers Gaining Confidence on Housing but Fears Persist / GSE Group Up to 700 Members / Another Mortgage M&A Deal

As of May, only three of the loans were 30-days delinquent, with the other once-delinquent mortgages having returned to current status or paid off.

July 7, 2014 - IMFnews

Walter Sells Excess Servicing Strip for $75 Million

York Capital is backing Walter Capital Opportunity Corp., the buyer of the excess MSRs.

July 3, 2014 - Inside MBS & ABS

Research Finds Securitized HELs have Higher Default Probability, Loss Severity Compared to Portfolio Loans

Securitization, particularly non-agency securitization of subprime and Alt A mortgages, has been widely blamed for the recent financial crisis, although less-studied home-equity loans also may have contributed, according to a government working paper. Results suggested that securitized home-equity loans have higher default risk and produce greater loss severity than similar loans held in portfolio by lenders, according to authors Michael LaCour-Little, a professor of finance at California State University at Fullerton, and Yanan Zhang, a financial economist at the Office of the Comptroller of the Currency. The authors sampled...

July 3, 2014 - Inside FHA Lending

Around the Industry

Senate Banking Committee Approves HUD, FHFA IG Nominees. The Senate Committee on Banking, Housing and Urban Affairs recently approved the nomination of Julian Castro as the next secretary of the Department of Housing and Urban Development. Castro, D, is the incumbent mayor of San Antonio, TX. The panel also approved the nomination of Laura Wertheimer as inspector general of the Federal Housing Finance Agency. The Senate has yet to confirm their nominations. Meanwhile, HUD Secretary Shaun Donovan’s nomination for director of the Office of Management and Budget was approved by the Senate Committee on Homeland Security and Governmental Reform on June 25. FHA Policies on Arm’s Length Transactions and Compliance with State Laws. The FHA is developing guidance to address concerns that laws in certain states may conflict with its arm’s length transaction requirements for preforeclosure/short sales. Until the guidance is issued, FHA lenders should seek guidance and assistance from the FHA National Servicing Center in matters of ...

July 3, 2014 - Inside MBS & ABS

Eminent Domain Comes Up for Air Again on East, West Coasts as Industry Groups Go Back on Defense

The issue of eminent domain is rearing its head again, compelling mortgage and securitization industry groups to once more mobilize their resources to deep-six the latest initiatives. The most recent manifestation of a resurgent interest in eminent domain is in California, where John Avalos, a member of the San Francisco Board of Supervisors, has sponsored a resolution seeking to enter the city into a joint powers authority agreement with Richmond, CA, a vehicle by which both cities could seize underwater but performing mortgages using eminent domain. Avalos’ resolution targets...

July 3, 2014 - Inside FHA Lending

FHA Requests Feedback on Handbook Sections

The FHA is seeking comment on two new sections of a proposed single-family handbook for mortgage lenders. The handbook is in development. Once completed, it will serve as the centralized source of current and future FHA policies. Agency staff is collating policies from several handbooks, rules, mortgagee letters, notices and other sources to incorporate into the handbook. The FHA is publishing two new sections, “Doing Business with FHA – FHA Lenders and Mortgagees” and “Quality Control, Oversight and Compliance,” for comment. The “Doing Business” section lays out the requirements for FHA lender approval, including eligibility requirements, application processes, operating requirements and post-approval changes. The section also contains the recertification process as well as processes for applying for ...

July 3, 2014 - Inside FHA Lending

Protection Extended for Surviving HECM Spouses

The FHA has extended indefinitely the timeframe during which servicers may begin to foreclose on properties with reverse mortgages while it considers possible steps to protect non-borrowing spouses of deceased reverse-mortgage borrowers from outright eviction from their homes. The latest action stemmed from a June 10 court order, which found that current statutory protection for reverse mortgage borrowers against forced eviction and foreclosure extended to their spouses even if the latter is not a co-signer on the note. Non-borrowing spouses of deceased Home Equity Conversion Mortgage borrowers sued in federal district court in Washington, DC, last year to stop foreclosure on their homes and to challenge the Department of Housing and Urban Development’s interpretation of the regulation. Since launching the HECM program, HUD has required that a HECM be ...

July 3, 2014 - Inside FHA Lending

Agencies Take Down Another FHA Lender

U.S. Bank became the latest casualty in the government’s offensive against lax underwriting and improper origination of FHA mortgages after the bank to pay $200 million to settle all related charges. The Minneapolis-based bank became the seventh FHA lender since 2012 that has entered into settlement agreements with the Department of Justice and the Department of Housing and Urban Development to resolve alleged violation of the False Claims Act and the Financial Institution Reform, Recovery and Enforcement Act, according to Inside FHA Lending’s analysis of government data. The government lawsuits allege that the banks’ certification of loans as eligible for FHA insurance under the direct endorsement program violated the FCA. The banks’ misconduct allegedly contributed to the legacy losses that crippled the FHA Mutual Mortgage Insurance Fund and placed the ...

July 3, 2014 - Inside Mortgage Finance

FHFA-OIG Report Cites Risks to Fannie, Freddie From Nonbank Servicers Using Short-Term Financing

The Federal Housing Finance Agency agreed to provide guidance to Fannie Mae and Freddie Mac on how to manage the risks arising from their work with nonbank special servicers, the FHFA’s Office of Inspector General said in a report issued this week. The OIG said the FHFA and the government-sponsored enterprises “have responded well to specific problems at nonbank special servicers.” However, it said the FHFA “has not established a risk management process or overall oversight framework to handle some general risks” such servicers pose. The report cites...

July 3, 2014 - Inside Nonconforming Markets

Few Laws Address Servicer-Affiliate Relationships

Among the myriad of servicing concerns raised by the New York Department of Financial Services in recent months are the relationships between nonbank special servicers and their affiliates. Industry lawyers suggest that few laws specifically address the issue, though the area could see increased regulation and enforcement. In April, Ben Lawsky, superintendent of the NYDFS, expanded his probe of Ocwen Financial to include sales of real estate owned properties ...

July 3, 2014 - Inside Nonconforming Markets

Capital Requirements Likely for Nonbank Servicers

Officials with the Conference of State Bank Supervisors suggest that state regulators are likely to set capital requirements for nonbank servicers due to concerns about how a failure of a nonbank would impact borrowers. “People have to feel confident that their mortgage check is going where it’s supposed to go, when it’s supposed to get there,” Chuck Cross, a senior vice president for consumer protection at the CSBS, said last week during a webinar hosted by Inside Mortgage Finance Publications ...

July 3, 2014 - IMFnews

What We’re Hearing: Those Darn Confidentiality Agreements with FHFA / Nationstar Does Not Borrow Short! Got That? / A 15-Year ARM (No, That’s Not a Misprint) / Ginnie Hits $1.5 Trillion Mark

One MI CEO, who we called, said this: “Thanks for reaching out. We, along with the other MIs are currently in confidential discussions with FHFA and the GSEs regarding the new standards. Unfortunately, we cannot comment until they are public.”

July 3, 2014 - IMFnews

Will Reperforming Mortgages Wind Up in MBS?

Then again, there are different definitions of what constitutes a “re-performing” mortgage. Most of the loans trading in this market are modified loans that have six to 12 months of seasoning and a clean cash-flow history.

July 2, 2014 - IMFnews

Short Takes: Who’s the Mystery Nonbank Singled Out by the FHFA IG? / Nonbank Mortgage Stocks Suffer, Then Recover (Sort of) / The Loch Ness Monster and HELOC Resets / Applications Fall Ever So Slightly / HSBC is the Latest to Settle

It should be noted that after the FHFA IG report was released, the share value of Nationstar, Ocwen and Walter all suffered in trading...

July 2, 2014 - IMFnews

Will FHFA Capital Rules for Nonbank Servicers Alter the MSR Purchase Market?

Nonbank capital rules from the FHFA will add certainty to the MSR market, but there will plenty of indigestion along the way.

July 2, 2014 - IMFnews

CFPB Blames ‘Compliance’ for Huge Renovation Costs; Tsk, Tsk

Oh, the irony: tough compliance regulations drive up the cost of renovating the HQ of the Consumer Financial Protection Bureau.

July 1, 2014 - IMFnews

Short Takes: Wells Fargo in Repo Deal with Ocwen Spin-off / New Capital Rules for Mortgage Insurers? / In Non-QM Loans We Trust / Don’t Fear the HELOC Reaper / Radian Completes Clayton Deal / USB Settles FHA Charges

Will a coming boom in the production of non-qualified mortgages help residential lenders survive the origination slump?

July 1, 2014 - IMFnews

Mortgage M&A Heats Up: Sale of CTM Nears; HomeStreet Sells $3B of MSRs; MIAC Active

There has been plenty of talk about mortgage M&A, and now it appears that deals are finally happening.

July 1, 2014 - IMFnews

FHFA IG Worries About Nonbank Servicers Using Short-Term Loans, More

The FHFA IG seems to be singling out one nonbank megaservicer in particular. But the Inspector General isn't naming names...

July 1, 2014 - IMFnews

FHFA Spearheading Effort on Capital Standards for Nonbank Servicers

But it’s not just talk of capital standards for nonbanks that has some in the industry spooked – it’s the issue of what constitutes capital.

June 30, 2014 - IMFnews

Short Takes: No CEO and president Needed for the Common Securitization Platform? / A Sweet Dividend for Investors in PennyMac / Is Home Building ‘Back’? Not So Fast / ABA Renews Strategic Alliance Deal With Freddie Mac

In case you haven’t noticed, many mortgage stocks are trading much closer to their 52-week lows than their highs.

June 30, 2014 - IMFnews

Vantium Capital Awarded Servicing of Bankrupt Mortgage Firm

The downfall of Community Home is intriguing: the servicer closed its Jackson office and had customers send payments to Las Vegas. From there, payments were sent to a location in Costa Rica, according to AP.

June 30, 2014 - IMFnews

MSR Values at Roughly Two-Times Historical Levels; a $50B Auction Coming?

To participate in the MSR market, institutional investors must partner with licensed and compliant servicers.

June 30, 2014 - IMFnews

HAMP Program Extended to the End of 2016, At Least

Treasury Secretary Jacob Lew acknowledged that HAMP hasn’t been as successful as the Obama administration would have liked.

June 27, 2014 - Inside Mortgage Trends

HAMP Gets Tweaks in its Twilight

The Treasury Department announced this week that the Home Affordable Modification Program and related initiatives will be extended again, this time until at least the end of 2016. HAMP activity has declined fairly steadily since 2010 but received a boost recently due to changes by the FHA. “We need to be there for homeowners facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages and those whose homes are ...

June 27, 2014 - IMFnews

What We’re Hearing: A Spike in Demand for ‘Key’ Mortgage Talent / About Those M&A Deals… / ‘Significant’ MSR Auctions in the Works / Good CFPB News for Ocwen and Nationstar / Risk-Based Capital for Mortgage Insurance Firms? / Carrington Under Investigation by the SEC

We continue to hear plenty of talk about mortgage mergers and acquisitions with deal announcements likely to come between early July and late August.

June 27, 2014 - IMFnews

Bank of America Gives Pink Slips to 540 ‘Legacy’ Servicing Employees

The bloodletting in Bank of America's servicing division continued this month with the megabank giving pink slips to hundreds of workers.

June 27, 2014 - Inside MBS & ABS

Signs of Life in the Market for Re-performing Loans, But How Many Will Wind up in Securitizations?

Over the past few months, at least $407 million of re-performing residential mortgages have been auctioned off in the secondary market, according to a recent tally from Mountain View Capital Group, Denver. As for how many of these loans will wind up in an MBS, that’s a different matter. DBRS has rated what it calls 15 “seasoned” loan programs since 2009, only four of which it considers to be re-performing. But according to DBRS Managing Director of Structured Finance Quincy Tang, “There’s certainly no shortage of re-performing collateral in the market.” In other words, despite the improvement in the housing market, there are...

June 26, 2014 - IMFnews

Short Takes: FHFA Moving Closer on a Risk-to-Capital Ratio for MI Firms? / Does Sterling Still Love Prospect Mortgage? / Delinquencies Hit a Multi-Year Low / Is the MSR ‘Trade’ Getting Old? / Pete Carroll’s New Director Job

What does the future hold for the hedge fund-owned Prospect Mortgage?

June 26, 2014 - Inside Mortgage Finance

Servicing Expected to Continue to Be A Focus for CFPB, State Regulators

Regulatory scrutiny of the servicing sector appears unlikely to decrease anytime soon as officials with the Consumer Financial Protection Bureau along with state regulators note that regulation of servicing is a top priority. During a webinar this week hosted by Inside Mortgage Finance, Ann Thompson, a senior analyst in the CFPB’s Office of Supervision Policy, said the federal regulator conducts a risk-based analysis of issues affecting consumers. “Mortgage-related issues are presenting...

June 26, 2014 - IMFnews

Lenders Respond to QM 3-Point Fee Cap by Taking Profits From Gain-on-Sale

“Rather than earning on the front end, they’re increasing margins on the secondary sale," said mortgage analyst Ken Richey.

June 26, 2014 - Inside Mortgage Finance

FHFA Spearheading Effort on Capital Standards for Nonbank Servicers, States Looking at the Issue as Well

Although Fannie Mae and Freddie Mac have, for years, had minimum capital requirements for mortgage companies that want to become seller/servicers, the Federal Housing Finance Agency and state regulators are now exploring codifying a capital minimum for nonbanks, according to industry officials and state regulators. During a webinar this week sponsored by Inside Mortgage Finance, participants highlighted the “hot topic” nature of capital requirements for nonbanks. John Prendergast, vice president of non-depository supervision for the Conference of State Bank Supervisors, indicated that capital requirements for nonbanks are more of a matter of when, not if. However, participants who have been tracking the matter caution...

June 26, 2014 - Inside Mortgage Finance

Mortgage Servicing Market Shrank Again in Early 2014; Nonbanks Continue Building Market Share

The supply of mortgage debt outstanding declined again during the first quarter of 2014, slipping to its lowest level in eight years, according to new Federal Reserve data. There was a total of $9.851 trillion of home mortgages outstanding as of the end of March, down 0.4 percent from the previous quarter. The mortgage servicing market has been in almost constant decline since midway through 2008, with a modest bump higher in the third quarter of last year after a relatively strong rally in housing activity. Even the agency mortgage servicing market lost...[Includes two data charts]


Will non-QM lending add to loan production by 2015?

Yes, but not by much.
Yes, by a lot. Necessity is the mother of invention.
No way. You’re dreaming.
I’m hopeful, but unsure of the whole non-QM market.

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