Nationstar Mortgage announced this week that it agreed to purchase $113 billion in non-agency mortgage servicing rights, as measured by unpaid principal balance, from Bank of America. The sale will more than double Nationstar’s non-agency servicing portfolio. Some $102 billion in agency mortgages are included in the sale, which priced at $1.3 billion. Walter Investment Management concurrently announced the purchase of $93 billion of unpaid principal balance in Fannie Mae-backed servicing assets from BofA. Ocwen Financial also reportedly bid...

Redwood Trust is set to issue its first non-agency jumbo mortgage-backed security of the year, a portion of which will include ARMs and significant contributions from EverBank. The real estate investment trust said it is close to being able to issue one non-agency MBS a month this year, up from six in all of 2012. Sequoia Mortgage Trust 2013-1 largely includes characteristics common to other recent Redwood deals, including 7.30 percent credit enhancement for the two tranches set to receive AAA ratings from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service. However, ARMs have not been included in a Redwood deal since a January 2012 issuance. ARMs will account...

Bank and thrift holdings of home-equity loans declined by 2.5 percent in the third quarter of 2012 compared with the previous quarter, according to the Inside Mortgage Finance Bank Mortgage Database. A significant portion of the holdings remain in a negative equity position, though overall homeowner equity increased in the past year. Banks and thrifts reported $1.11 trillion in total HEL business at the end of the third quarter of 2012, including home-equity lines of credit and closed-end second mortgages held in portfolio, and unused HELOC commitments. The $103.36 billion in CES holdings in the third quarter of 2012 was down 5.8 percent from the previous quarter. Cristian de Ritis, a senior director of consumer credit economics at Moody’s Analytics, said...[Includes one data chart]

The Consumer Financial Protection Bureau this week issued a final rule setting new restrictions and requirements for high-cost mortgages. The rule implements requirements set by the Dodd-Frank Act and will take effect in January 2014. For first-lien mortgages, high-cost loans have annual percentage rates 6.5 percentage points or more above the average prime offer rate. The APR threshold for second liens is 8.5 percent above the APOR. The DFA expanded the definition of high-cost mortgages to include purchase mortgages and home-equity lines of credit in addition to refinances. The CFPB noted...

An $8.5 billion settlement this week between federal regulators and 10 servicers included a large portion of non-agency mortgages. Servicers with significant non-agency holdings were also left out of the settlement, though federal regulators said they are still working toward a deal with those companies. The settlement applies to foreclosures initiated in 2009 and 2010. Non-agency mortgages had much higher foreclosure rates than other mortgage types during that time. Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo agreed...

Servicers handling portfolio loans and non-agency mortgages continue to increase their use of principal reduction loan modifications, according to the Office of the Comptroller of the Currency. Some 23,335 principal reduction mods were completed in the third quarter, up from 11,178 in the third quarter of 2011 and from 14,944 in the second quarter of 2012. The mods accounted...[Includes four briefs]

Mortgage industry participants are confident that newly confirmed FHA Commissioner Carol Galante will deliver on reforms she committed to in an effort to reach out to Republican critics. Eighteen Senate Republicans veered away from their hardline party colleagues to help Carol Galante secure confirmation of her nomination as the Department of Housing and Urban Development’s chief overseer of the FHA mortgage insurance program and overlord of housing policies. Galante broke through the GOP firewall Dec. 30 after the Senate voted 69 to 24 to approve her nomination. She needed at least 60 votes to ...

Although it is far from settled that the FHA will raise its downpayment threshold from the current 3.5 percent, there is a growing fear among some lenders that Republicans in Congress might push for a 10 percent downpayment. If that happens, said David Lykken, managing partner of Mortgage Banking Solutions, Austin, TX, “it would bring HUD to its knees.” Lykken and others fear that anything north of 5 percent would hammer the market, in particular first-time homebuyers who use the program heavily for purchases as opposed to refinancings. “We need the FHA charter to help first-time buyers,” he said. How much of a downpayment hike certain House GOP members might demand will be ...

A federal appeals court in Washington, DC, has overturned a lower court’s dismissal of a lawsuit accusing the Department of Housing and Urban Development of denying protection for surviving spouses of deceased principal borrowers of reverse mortgages against ejection due to foreclosure. The case, Robert Bennett, et al. v. Shaun Donovan, revealed an apparent inconsistency between HUD regulations and the federal statute that created the FHA’s Home Equity Conversion Mortgage Program. This inconsistency was at the root of the district court’s previous decision to dismiss plaintiffs’ claim for lack of standing, which the ...

Homeowners may seek to stop a non-judicial foreclosure if the lender fails to comply with the Department of Housing and Urban Development’s servicing requirements, according to a California appeals court. In Pfeiffer v. Countrywide Home Loans, the plaintiffs sued to halt foreclosure proceedings that the lender initiated after the FHA mortgage went into defThe complaint alleged that Countrywide failed to provide the borrowers the 30-day advance notice required by the federal Fair Debt Collection Practices Act or to conduct a face-to-face interview, which HUD requires prior to initiating foreclosure proceedings. In addition to the injunction, the plaintiffs ...