Residential mortgages serviced by banks in top foreclosure states are getting hit with higher loss severities than those serviced by nonbanks, largely because banks have so far dealt with more repercussions from regulatory settlements, according to Moody’s Investors Services. Moody’s compared major servicers’ subprime loss severities for loans in the top three foreclo-sure states of Florida, New York and New Jersey, which collectively make up about 42 percent of all subprime mortgages in foreclosure in non-agency RMBS. The rating service found that loss severities on bank-serviced mortgages in Florida averaged 95 percent, versus 81 percent for nonbank-serviced mortgages. Drilling down in the data a bit to review the extremes, on one end of the continuum for banks was CitiMortgage, which ...

Acting on a new policy that increases the focus on prosecuting individuals for corporate wrong-doing, the Department of Justice is reportedly planning to file criminal charges against executives at JPMorgan Chase and the Royal Bank of Scotland for the alleged pre-crisis sale of non-agency MBS to unsuspecting investors, the Wall Street Journal has reported. According to the report, the DOJ investigations were based on documents that allegedly suggested that shortly before the mortgage meltdown, executives at the two financial institutions securitized mortgages and sold them to investors knowing that the underlying loans were defective. The JPMorgan probe began after prosecutors uncovered crucial evidence from a related civil investigation in 2007: a memo from a bank employee cautioning senior executives about ...

Borrowers are increasingly changing the terms for loans backing recently issued commercial MBS shortly after the deal closes, said Fitch Ratings. The rating service said it has received about 15 requests this year for rating confirmations pertaining to loans from 2014 or 2015 vintage deals. While the majority of requests have been loan assumptions by new borrowing entities or ownership structures, a handful have contemplated more fundamental changes to other loan terms. But Fitch said the problem arises when some of the proposed changes would have required that the loan be modeled differently or more conservatively, had it known about the changes prior to issuance. The rating agency is especially concerned about borrowers trying to add more debt. “Additional debt, ...

The correspondent channel during the third quarter of 2015 took its biggest share of total mortgage originations in years, according to a new Inside Mortgage Finance analysis and ranking. Mortgage lenders acquired $165 billion of home loans from correspondent originators during the third quarter, a 1.9 percent increase at a time when overall production fell 7.1 percent. The surge pushed the correspondent share of new originations to 36.3 percent ... [Includes four data charts]

A number of factors could prompt the Federal Housing Finance Agency to reduce the guaranty fees charged by the government-sponsored enterprises in 2016, according to Barclays Capital analysts. “There is an economic argument as well as a policy argument to be made for reducing g-fees, especially given a greater focus on credit availability and less focus on shrinking the GSEs’ footprint,” Barclays said in a recent report. “A g-fee cut could be one of the policy developments ...

Fannie Mae has announced the winning bids for its third nonperforming loan sale while Freddie Mac has begun accepting bids for its eighth NPL transaction for 2015. Up for sale in the Fannie Mae deal were approximately 7,000 NPLs totaling $1.24 billion in unpaid principal balance, divided among three pools. The winning bidders in the transaction are Fortress, through its New Residential Investment Corp., for the first and third pools and Goldman Sachs for the second pool. The government-sponsored enterprise announced the sale in October to lighten its inventory of NPLs and manage credit losses on its delinquent loan portfolio. The GSE gave up on the severely delinquent loans after attempts to cure them through loss mitigation failed. Investors and ...

Stonegate Mortgage – which holds the distinction of being the last nonbank mortgage firm to go public – is in the process of disposing of a large swath of its retail branch network in favor of a third-party originator strategy that relies heavily on brokers and correspondents. In total, it expects to close 47 branches outright by yearend or allow the offices to be taken over by a competitor. Although the company declined to discuss its strategy, recent press statements indicate it will maintain

Delinquency rates for residential mortgages fell during the third quarter of the year across all product types and improved at the 30-day, 60-day and 90-day past-due markers, according to the Mortgage Bankers Association’s latest national delinquency survey. The delinquency rate for residential mortgages dropped to a seasonally adjusted rate of 4.99 percent of all loans outstanding at the end of the third quarter of 2015 – the lowest level since the first quarter of 2007, said the MBA ...

Freddie Mac failed to meet all of its goals aimed at lending to low-income homebuyers in 2014, according to the Federal Housing Finance Agency’s preliminary annual housing report, and Rep. Bob Menendez, D-NJ, ranking member of the Senate Subcommittee on Housing, Transportation and Community Development, wants to know why those particular home-purchase goals went unmet. The FHFA sets annual affordability goals for the two government-sponsored ...

Trade groups representing participants in the primary mortgage market and the non-agency mortgage-backed security market are calling on federal banking regulators to address state laws that allow for “super-priority” status for homeowners’ association liens. Risks from HOA super-priority liens have been of particular concern following a September 2014 ruling by the Nevada Supreme Court. The court allowed for a homeowners’ association foreclosure sale to ...