Ocwen Financial’s travails continued to worsen this week after rating agencies announced adverse ratings actions amid the servicer’s mounting regulatory and legal problems. On April 24, Moody’s Investors Service placed Ocwen’s servicer assessment on review for a possible downgrade. On April 25, Fitch Ratings revised its previous rosy affirmation of the company’s primary servicer rating and stable outlook to negative. Both firms said the ratings actions were due to the increased regulatory scrutiny on Ocwen’s servicing operations, which could lead to hefty penalties that could pose a threat to the company’s financial stability. On April 20, a consortium of state mortgage regulators filed...
With Fannie Mae and Freddie Mac set to lose their capital buffers in eight short months, industry trade groups, think tanks and policy wonks are churning out reform blueprints at warp speed these days even though Congress likely won’t act until sometime next year, if then. Last week, the Mortgage Bankers Association floated its plan to reconstitute the two government-sponsored enterprises – followed by several critiques, not all of them kind – and this week the Independent Community Bankers of America published its proposal. Both plans throw...
Among the handful of lenders that provide relatively early reporting of their jumbo origination activity, production was down significantly in the first quarter of 2017 compared with the previous quarter, according to an analysis by Inside Nonconforming Markets. Officials at the lenders noted that seasonal factors contributed to the slowdown along with an increase in interest rates. And the lenders stress that originations are likely to rebound. First Republic Bank funded $2.52 billion ...
An affiliate of Lone Star Funds is set to issue the largest nonprime mortgage-backed security backed by post-crisis originations. The deal will be nearly twice the size of the previous record holder, which was also issued by Lone Star. Most of the mortgages in COLT 2017-1 Mortgage Loan Trust were originated by Lone Star’s Caliber Home Loans, along with a 22.0 percent share for loans originated by Sterling Bank and Trust. The deal received preliminary AAA ratings from DBRS, Fitch Ratings ...
Bank of America has made a break from most of the other big banks in terms of sending conforming mortgages to the government-sponsored enterprises. Officials at the bank said BofA is retaining more of its GSE-eligible loans, though the strategy can result in short-term decreases to mortgage-banking income. “We believe retaining these mortgages will provide better economics over time, plus retention deepens our relationship with these customers,” Paul Donofrio, BofA’s chief financial officer ...
Lenders offering non-qualified mortgages that rely solely on a borrower’s assets need to carefully prove the borrower’s ability to repay, according to guidance from the Consumer Financial Protection Bureau. In a notice issued this week, the regulator cautioned that a large downpayment alone isn’t sufficient to prove a borrower’s ability to repay a non-QM that is based on the consumer’s assets. The spring edition of the CFPB’s supervisory highlights publication provides insights from ...
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