Mortgage Servicers

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

August 29, 2014 - Inside FHA Lending

Around the Industry

Revised HUD/VA Addendum to the Uniform Residential Loan Application. On July 30, the FHA has posted on its HUDCLIPS website a revised Addendum to the Uniform Residential Loan Application (Form HUD-92900-A/VA Form 26-1802). This form is used for both FHA and VA mortgage originations.The Department of Veterans Affairs has updated its form to clarify what constitutes a valid marriage for the purpose of obtaining VA benefits. Although the changes to the form do not apply to FHA-insured mortgages specifically, lenders should begin using the revised form for new FHA mortgage originations as soon as possible, the FHA recommended. Processing Request for Execution of VA Quitclaim Deeds. The Department of Veterans Affairs has issued guidance (Circular 26-14-19) for handling of requests for execution of quitclaim deeds. A quitclaim deed is a legal document that is used to transfer a person’s rights to real estate to ...


August 29, 2014 - Inside FHA Lending

State Legislatures Pass Reverse Mortgage Bills

Two states have passed legislation placing varying spins on the Department of Housing and Urban Development’s counseling requirements for lenders and borrowers of FHA-insured reverse mortgages. In California, the state Senate unanimously approved AB 1700, which would mandate a seven-day “cooling off” period between the time a borrower receives counseling and when an application is taken. AB 1700 passed the CA Assembly by a vote of 73 to 1. In addition, the bill would require a lender to provide a worksheet guide that addresses certain issues the borrower should consider and discuss with the counselor, such as income and ability to repay as well as taxes and insurance. The counselor and the borrower are both required under the bill to sign the worksheet guide before any reverse mortgage application is taken. No schedule has been set for ...


August 29, 2014 - Inside FHA Lending

FASB Updates TDR Guidance for FHA, VA Loans

The Financial Accounting Standards Board has updated its guidance on troubled debt restructurings (TDRs) to provide lenders some uniformity in accounting for government-backed mortgages upon foreclosure. The changes to FASB’s rule, “Receivables – Troubled Debt Restructurings by Creditors,” affect FHA and VA lenders and would take effect for public entities with reporting periods after Dec. 15, 2014. All other entities will have to comply after Dec. 15, 2015. “In addition to accounting consistency, the updated rule provides greater certainty as to the amount that can be expected to recover through the government guarantees,” the board said. The changes became necessary because the accounting varied among lenders, resulting in diverse practices, according to the Emerging Issues Task Force, which promulgates implementation guidance within the ...


August 29, 2014 - Inside FHA Lending

U.S. Court Upholds HUD Suspension of Lender

A decision by the Department of Housing and Urban Development to suspend a Texas mortgage firm and its top executive was not “arbitrary and capricious” and did not violate due process, according to a recent Houston district court ruling. The court granted HUD’s motion for summary judgment and dismissed all of the plaintiffs’ claims with prejudice. In Allied Home Mortgage Corp. v. Donovan, (No. H-11-3864, 2014 WL 3843561, S.D. Tex. Aug. 5, 2014), a U.S. Attorney’s Office sued Allied Home Mortgage Corp. and its chief executive officer, James Hodge, in Manhattan federal district court for allegedly lying about its compliance with FHA requirements. Specifically, the former Houston-based mortgage net branch operator (currently doing business as Allquest Home Mortgage Corp.) allegedly violated the False Claims Act and the Financial Institutions Reform, recovery and Enforcement Act by ...


August 29, 2014 - Inside FHA Lending

Over $65B in FHA Loans Securitized in 1H14

An estimated $65.5 billion of FHA-insured mortgages, excluding reverse and modified loans, were included in Ginnie Mae mortgage-backed securities issued during the first six months of 2014, according to an Inside FHA Lending analysis of agency securitization data. Ginnie Mae FHA MBS issued during the first half of the year nearly matches the total number of new FHA loans originated over the same period (see related chart, p. 4-5). FHA purchase home mortgages served as collateral on 76.3 percent of Ginnie Mae MBS issued over the six-month period, while loans to first-time homebuyers accounted for 63.0 percent of Ginnie MBS issued during the period. The FHA loans in Ginnie pools over the last two quarters showed an average FICO score of 681, a loan-to-value ratio of 92.5 percent and an average loan amount of $169,093. Except for fifth-ranked Freedom Mortgage, the rest of the top five ... [1 chart]


August 29, 2014 - IMFnews

What We’re Hearing: The Never Ending Ocwen Story / Moody’s Downgrades Ocwen / No HQ Sale for Freddie Mac / Will the CFPB Buy the Fannie Property? / Now, Why Does Fannie Mae Need an Attorney with NYSE Knowledge?

Where will Fannie Mae ultimately windup? The early betting is the Washington waterfront near Nationals Park…


August 29, 2014 - Inside FHA Lending

FHA Bars Post-Payment Charge on Prepaid Loans

The FHA has issued two final rules enhancing consumer protections – one prohibiting lenders from charging additional interest on FHA-insured mortgages that are paid in full and another ensuring that borrowers of adjustable-rate mortgages receive earlier notice of rate changes. Both rules were published in the Aug. 26 Federal Register. The first rule eliminates the practice of charging the borrower a full-month’s interest even if the mortgage is prepaid in full before the end of the month. It adopted the proposed rule, which was issued for comment on March 13, 2014, without change. Effective Jan. 21, 2015, charging borrowers post-settlement interest, which is broadly defined by the Consumer Financial Protection Bureau as a “prepayment penalty,” will be prohibited for all FHA single-family mortgage products and programs. In the rule’s preamble, HUD said it expects lenders to ...


August 29, 2014 - Inside FHA Lending

GNMA Unable to Use $200 Million Windfall

Roughly $1 billion in damages will flow through to the FHA and Ginnie Mae from Bank of America’s record $16.65 billion global mortgage-backed securities settlement with the Department of Justice. Although most of the DOJ’s case centered around faulty private-label MBS that BofA and its forbears (namely Countrywide and Merrill Lynch) underwrote during the housing boom, a small piece of the settlement is tied to servicing chores that the bank did for Ginnie Mae. And apparently, BofA didn’t do a very good job of servicing the underlying product. The bank took over as the subservicer on roughly $26.2 billion in mortgage servicing rights that once belonged to Taylor, Bean & Whitaker, a large nonbank based in Ocala, FL. When TBW went bust in the second half of 2009, BofA was given the subservicing contract. “BofA serviced the loans for us,” said Ginnie Mae president Ted Tozer. “And they did a ...


August 29, 2014 - IMFnews

Mortgage M&A Heats Up. A Busy Second Half in Terms of Deals?

Chuck Klein, managing partner of Mortgage Banking Solutions, is engaged in roughly 12 transactions. “I think at least six of those will close,” he said.


August 29, 2014 - Inside Nonconforming Markets

CFPB Taking a Close Look at Servicing Transfers

The Consumer Financial Protection Bureau has released an updated bulletin regarding servicing transfers due to continued concerns about how troubled borrowers fare when servicing moves from one firm to another. “In particular, CFPB examiners will carefully scrutinize transfers of loans with pending loss mitigation applications or approved trial and permanent modification plans,” the regulator said. “Examples of good practices by servicers include flagging those loans and ...


August 29, 2014 - IMFnews

New York Attorney General, CFPB Target More Mortgage Relief Firms

The New York AG has secured a temporary restraining order barring the loan mod companies from collecting advance fees. The state's top cop also froze their bank accounts.


August 29, 2014 - IMFnews

FHFA IG: Freddie Mac Could Save Millions by Reviewing More Servicer Claims

In 2013, Freddie Mac reimbursed its servicers $1.4 billion but identified and denied $126 million in what the IG calls “erroneous” claims.


August 28, 2014 - IMFnews

Short Takes: Maybe Freddie Mac Will Sell its HQ Too? / A GSE in Montana? / Ocwen Executive Selling Shares / About Those Private MBS Placements… / Benmosche Stepping Down from AIG

But if Fannie and Freddie sell their headquarter properties, shouldn’t they move to a low cost state like Wyoming or Montana? I


August 28, 2014 - IMFnews

Fannie Mae Will Sell Headquarters in Washington. But What’s The Land Worth?

Back in the 1980s, when Fannie Mae was losing $1 million a day, it contemplated selling the property and came up with a value of $10 million to $15 million. Today, it's worth much more than that.


August 27, 2014 - IMFnews

Ginnie Mae Will Sell $5.7 Billion of Taylor Bean MSRs but Not Until Next Year

“BofA did a poor servicing job for us,” said Ginnie Mae President Ted Tozer.


August 27, 2014 - IMFnews

Short Takes: Top FHA Lender with a (Relatively) Low LTV / Share Price of Altisource Unit Turns Ugly / Fannie Customer Count / Nationwide Title Goes Green / New President for BB&T

On Wednesday, shares of Altisource Asset Management Corp. were selling for $697 compared to a 52-week high of $1,209.


August 27, 2014 - IMFnews

Flagstar in Talks with CFPB Over Alleged Loss Mitigation Violations, Default Servicing

Flagstar, which owns roughly $69 billion in mortgage servicing rights, said it has already provided the CFPB with documents and “other information.”


August 26, 2014 - IMFnews

Prospect Mortgage Still in the Hunt for M&A Deals, But So Far Nothing

A few months back, merger talks between Prospect and Caliber Home Loans broke down. To date, both companies have declined to discuss the matter.


August 25, 2014 - IMFnews

Short Takes: Altisource to Hire 500 Workers…in India / Altisource Investors Not Happy? / Phoenix Capital Stays Busy with MSR Deals / Atlanta FHLB Joins MPF Program / 360 Mortgage Hires Western Regional Manager

Altisource shareholders are not happy campers these days. The firm’s stock is trading at $91 compared to a 52-week high of $171.


August 25, 2014 - IMFnews

Subsidiary of Publicly Traded Firm Selling $1.1 Billion of MSRs

Written bids are due by Wednesday, Aug. 27 with the closing coming by the end of October. LoanCare is listed as the subservicer.


August 25, 2014 - IMFnews

Servicing and Origination Profits Recovered Nicely in Second Quarter

Warehouse lending consultants told IMFnews that many originators turned profitable after the first quarter, but are not making as much as they earned this time last year.


August 22, 2014 - Inside Mortgage Trends

FASB Clarifies TDR Guidance for FHA, VA Loans

The Financial Accounting Standards Board has announced changes to the way it accounts for government-backed mortgage loans upon foreclosure. The change, which is being made through FASB’s rule, “Receivables – Troubled Debt Restructurings by Creditors,” is aimed at reducing diversity in the accounting treatment of FHA and VA loans that have been subject to foreclosure, according to FASB’s Emerging Issues Task Force. The EITF ...


August 22, 2014 - IMFnews

What We’re Hearing: Banks to FDIC: Drop Dead / FHA and Ginnie Get a Chunk of the Massive BofA Settlement / Should DOJ Sue a Dead Subprime Executive? / LO Profession in Bifurcation Mode / The Pain Caused by Ocwen / DocMagic Gets CFPB Contract

A fair question to ask is this: If DOJ goes after Mozilo, why not go after the owners of Ameriquest/Argent which created so much of the faulty subprime product that Greenwich securitized?


August 21, 2014 - IMFnews

Short Takes: Manny Friedman Bullish on PennyMac / The Ocwen Mystery: Why All the Spinoffs? / Reverse Loan Officers Clean Up / CTM Has a New Parent / LenderLive Names New Servicing Executive

The average loan officer makes a $4,000 commission on each reach reverse mortgage they originate. Really?


August 21, 2014 - IMFnews

Lenders With Less Than $8 Million in Capital May Need to Sell

Franchise deals – where stock and licenses change hands – could dominate the M&A market for the remainder of the year.


August 21, 2014 - IMFnews

Is the ‘Legacy’ Mortgage Servicing Market Drying Up for Good?

Most servicing advisors – and stock analysts – continue to believe Ocwen will complete the Wells deal, probably sometime this fall. “Who else is willing to buy it?” said one source.


August 21, 2014 - IMFnews

Final Tally: Banks Posted Solid Gains in Mortgage Income During 2Q

The second-quarter rebound in mortgage profits was linked to an increase in new lending and loan sales.


August 20, 2014 - IMFnews

Short Takes: Former Subprime CEO Continues On / Privlo Definitely Did Not Raise $350 Million / Comerica Seeks Warehouse Manager for LA / More Regulations Coming from the CFPB? / A Sea Change in Fannie Underwriting Guidelines?

A big deal or ho-hum: Fannie Mae in late July said it will allow for shorter waiting periods involving mortgage debt charge-off accounts and mortgage debt that is discharged through a bankruptcy.


August 20, 2014 - IMFnews

More Regulatory Scrutiny Tied to Mortgage Servicing Transfers (Sales)

An agency spokesman told IMFnews that as a “general matter” the CFPB considers transfers significant if they involve at least 5,000 loans.


August 20, 2014 - IMFnews

GSE Shareholder Group Gets Face Time with FHFA’s Watt, But…

Investors Unite now boasts almost 1,000 members, which include both common and preferred stakeholders in Fannie Mae and Freddie Mac.


August 20, 2014 - IMFnews

Pacific Union Hires Former Resolutions Chief at JPMorgan, Lending Executive From Wells

During his career, Dunnery was also a director within Fannie Mae’s national servicing organization.


August 20, 2014 - IMFnews

Compliance Vendor Warns CFPB’s HMDA Proposal Could be the Death Knell for Mortgage Lending

“I’m wondering how many people buy homes outside of buying them with cash,” Ryan said during the webinar. “To me it’s that serious.”


August 20, 2014 - IMFnews

$7 Billion-Plus in MSRs Up for Grabs Through Three Auctions

Servicing advisors told IMFnews that many of the bulk deals they have been seeing of late are $4 billion in size or under.


August 19, 2014 - IMFnews

SEC Subpoenas Ocwen Regarding Business with Related Companies

Ocwen received a subpoena from the Securities and Exchange Commission and another subpoena from the SEC appears to be on the way.


August 18, 2014 - Inside the CFPB

Worth Noting/Comments Due This Week/Vendor Update

CFPB Making Its Presence Felt Among Fannie Mae and Freddie Mac Servicers. Fannie Mae’s latest earning filing indicates the CFPB and/or the New York State Department of Financial Services have been reviewing the activities of Fannie Mae’s three largest non-depository servicers (which would be Nationstar, Ocwen and possibly Quicken Loans, according to the latest ranking by Inside Mortgage Finance, an affiliated publication). The scrutiny of Quicken Loans seems to be a new development. The bureau would not comment. Meanwhile, during the first half of 2014, Freddie Mac said in its second quarter earnings announcement that it implemented requirements for its seller/ servicers in response to some final rules from the CFPB, including rules concerning the requirements for borrowers’ ability to ...


August 18, 2014 - IMFnews

Short Takes: Nationstar Creates President’s Post at Champion / Who’s Selling the $27 Billion of MSRs? / Yet More Non-QM Menu Announcements / Moody’s Ready to Update Jumbo Criteria

Mystery continues to surround the seller of that $27 billion MSR package...


August 15, 2014 - Inside FHA Lending

Reverse Mortgages Reportable Under HMDA

Reverse mortgages would be included in Home Mortgage Disclosure Act reports under a proposed rule published recently by the Consumer Financial Protection Bureau. The proposed rule would expand the definition of a “covered loan” under HMDA to include reverse mortgages and home-equity lines of credit (HELOCs), which include reverse mortgages structured as open-end HELOCs. Currently, HMDA regulations do not require reporting of HELOCs, although lenders may do so if they choose. Currently, financial institutions only have to report information on a closed-end reverse mortgage if the transaction involves a home purchase, home improvement or refinancing. Among other things, the CFPB has proposed to require that all reverse mortgages and HELOCs be identified by loan type to distinguish them from other categories of ...


August 15, 2014 - Inside FHA Lending

GNMA’s Conversion Plan: Devil is in the Details

Two industry trade groups expressed support for consolidating Ginnie Mae’s mortgage-backed securities program and creating a new MBS but they are at loggerheads on some of the details. Commenting on the Ginnie Mae proposal, the Securities Industry and Financial Markets Association (SIFMA) and the Mortgage Bankers Association (MBA) said the disagreements are mostly on how to resolve issues related to winding down the Ginnie Mae I MBS program and providing a conversion option for existing securities. “It is clear that further discussion is warranted, and direct engagement with key stakeholders should be beneficial,” the trade groups suggested. Ginnie Mae has received considerable support from a variety of industry players for its “straw man” proposal to shift to a single MBS program based on the existing Ginnie II. The program now accounts for more than 90 percent of all ...


August 18, 2014 - IMFnews

Nationstar Mortgage Cuts 160 Servicing Workers in ‘Performing’ Unit

Over the past year, several top ranked depository lender/servicers have cut staff, but there has been less bloodletting at the nonbanks.


August 15, 2014 - Inside FHA Lending

More Indemnification Demands Anticipated

The False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) not only have become strong enforcement tools in the fight against FHA mortgage fraud but also an efficient means of recovering taxpayer losses. Having used both federal statutes effectively to wrangle huge settlements from large banks, federal prosecutors now have their eyes set on mid-level banks, according to compliance experts during a recent webinar hosted by Inside Mortgage Finance Publications. “Because these FCA [and FIRREA] lawsuits have been a cash cow for the Department of Justice and the Inspector General of the Department of Housing and Urban Development, I think these agencies will target mid-level banks next,” said ...


August 15, 2014 - Inside FHA Lending

IG Audit Finds Flaws in Indemnification Recovery

The Department of Housing and Urban Development failed to bill lenders for 486 loans with enforceable indemnification agreements that created losses for the FHA, according to the HUD Inspector General. The loans were originated between 2004 and 2014 and were either in the Accelerated Claims Disposition program or the Claims Without Conveyance of Title program, or they went into default before an indemnification agreement expired. Due to procedural errors and apparent lack of oversight, HUD failed to recover $37.1 million for 486 loans that had enforceable indemnification agreements. The unbilled loans represented 8.0 percent of total activity in the programs during that period. In addition, HUD did not ensure that indemnification agreements were extended to 64 of 2,078 loans that were streamline financed. As a result, HUD incurred losses of ...


August 15, 2014 - Inside FHA Lending

FHA Chief Galante to Resign in the Fall

FHA Commissioner Carol Galante has announced plans to step down from her current post, leaving behind a Mutual Mortgage Insurance Fund that appears well on its way to recovery and a slumping FHA business. Industry response to Galante’s Aug. 12 announcement was mixed. Some stakeholders applauded her toughness and resolve in steering FHA through hard times, while others criticized her for policies that made it more difficult and costly for first-time homebuyers to obtain an FHA-insured mortgage loan. Galante’s nearly three-and-a-half year stint as FHA commissioner was highlighted by her efforts to stabilize the FHA’s ailing Mutual Mortgage Insurance Fund, reduce losses and improve lender oversight. She achieved these goals by creating a comprehensive risk-management structure at FHA, revamping FHA pricing and credit policies, and ...


August 15, 2014 - Inside Nonconforming Markets

Subprime Performance Improves, Portfolios Shrink

It was business as usual in the subprime servicing market during the second quarter of 2014, save for the lack of large transfers of servicing from banks to nonbank special servicers. Subprime mortgage performance continued to improve and the amount of subprime mortgages outstanding continued to decline. Some $374.0 billion in subprime mortgages were outstanding as of the end of the second quarter of 2014 ... [Includes one data chart]


August 15, 2014 - IMFnews

Pershing Square Sues U.S., GSEs for ‘Brazen’ Profit Sweep

The hedge fund contends the government’s actions short change investors and amounts to a de facto liquidation of Fannie Mae and Freddie Mac...


August 15, 2014 - IMFnews

What We’re Hearing: Maybe Ocwen Should Go Private / A $750 Million Stock Buyback for Ocwen? / Why It’s Hard to be Bullish on the Nonbank ‘Big Three’ / Who the Heck is Privlo? / No Wonder the MBA Likes Mel Watt

We only bring up the “going private” issue because class action attorneys have finally woken up to the fact that Ocwen’s shares have been clobbered over the past year...


August 15, 2014 - Inside MBS & ABS

Trade Groups Raise Issues Related to GNMA’s Plan to Shift to Single MBS, Agree on Some, Differ on Others

Though mortgage securitizers, issuers, lenders and servicers support a proposal to consolidate Ginnie Mae’s two MBS program into a single security, certain specific issues appeared to divide them. In a recent joint letter to Ginnie Mae, the Securities Industry and Financial Markets Association and the Mortgage Bankers Association said many of their members agree on a number of the issues raised by the proposal, but in some cases disagree on the solutions. “It is clear that further discussion is warranted, and direct engagement with key stakeholders should be beneficial,” the trade groups suggested. Both industry groups were responding...


August 14, 2014 - Inside Mortgage Finance

Delinquencies Increase in Second Quarter, Servicers Grapple with Regulatory Issues

Mortgage delinquencies increased slightly in the second quarter of 2014 compared with the previous quarter, according to the Inside Mortgage Finance Large Servicer Delinquency Index. However, delinquency rates adjusted for seasonal factors showed a decline from the first three months of the year, and the unadjusted rate was down from a year. The total delinquency rate for 23 large servicers, with no seasonal adjustment, hit 6.59 percent at the end of the second quarter, up from 6.52 percent the previous quarter but down from 7.33 percent in the second quarter of 2013. “We have returned...[Includes one data chart]


August 14, 2014 - Inside Mortgage Finance

The ‘Legacy’ MSR Market is Drying Up And It’s Not All Tied to Regulatory Scrutiny

The market for “legacy” mortgage servicing rights has been on ice since earlier this year because of regulatory scrutiny, but there’s a new school of thought that suggests the halcyon days of mega transactions might be over for good. Servicing advisors who work in the MSR market note that the “Lawsky effect” is still being felt by Ocwen Financial and some of its peers, but as time goes on it will be less of a factor. “There’s...


August 14, 2014 - IMFnews

Short Takes: On the Other Hand, PHH Will Buy MSRs Too / Falling out of Love with FHA / Growth Good, Shrinkage Bad / Radian Declares a Measly Dividend / Hedge Fund Takes Big Position in Radian

Senator Investor Group now owns a 6.28 percent stake in Radian, a top ranked mortgage insurer.


August 14, 2014 - IMFnews

GSE Shareholder Group Wants FHFA to End Conservatorships Now

The Investors Unite chief said Watt has publicly acknowledged that he possesses the Congressional authority to end the GSE conservatorships under the Housing and Economic Recovery Act of 2008.


Poll

Home-equity lending is beginning to show new life. My company (pick one):

Plans to enter this market over the next 12 months.

25%

Is already making home equity loans and hopes to increase the offerings.

45%

Is in the market but don’t expect much growth.

15%

Is not making second liens and has no plans to do so.

15%

Housing Pulse