With home sales slow, house prices still floundering and little lender appetite for cash-out refinancing, the mortgage servicing business may be another year or more away from reversing the historic contraction that’s been underway since early 2008. But a new servicing ranking by Inside Mortgage Finance reveals that some companies have managed to grow their business. Servicing remains a top-heavy industry dominated by three companies that collectively held 47.8 percent of the market as of the end of September. But only one of those firms – second-ranked Wells Fargo – has seen its servicing portfolio...(Includes one data chart)
Federal prosecutors this week sued an FHA lender to recover hundreds of millions of dollars in paid claims in connection with mortgage loans originated through branches that were not approved by the Department of Housing and Urban Development. A lawsuit filed by the U.S. Attorney in Manhattan district court this week alleged that Allied Home Mortgage Corp., President and CEO Jim Hodge and Executive Vice President Jeanne Stell engaged in reckless mortgage lending, flouted FHA mortgage insurance requirements and repeatedly lied about compliance. Such actions, the suit alleged, subsequently led to...
With the clock running down on the Home Affordable Modification Program and disappointing results so far, a new government watchdog report urges the Treasury Department to put more pressure on mortgage servicers. Only 5.4 percent of the $45.6 billion set aside for HAMP has been spent so far, said a new report by the Special Inspector General for the Troubled Asset Relief Program. With less than a year left until HAMP expires, the program has helped approximately 25,000 to 30,000 homeowners a month with new permanent mortgage modifications. Treasury estimated that nearly 1 million homeowners are still...
Now that the long-awaited revision of the Home Affordable Refinance Program is out of the way, look for the Federal Housing Finance Agency to redouble its efforts to discharge the government’s backlog of real estate owned properties with all deliberate speed. During an interview on C-SPAN’s “Newsmakers” program last weekend, FHFA Acting Director Edward DeMarco said the agencies are sifting through over 4,000 comment letters on the proposed REO bulk sales program. “Now that we have the HARP announcement out, we are turning to this as the next priority,” said DeMarco. “We do think we will have some good...
As the picture of the revised Home Affordable Refinance Program finally came into greater focus this week, MBS analysts indicate that the impact of HARP 2.0 will neither be quite as terrible for MBS investors as feared, nor terribly helpful to the stagnant housing market and the economy at large. The Federal Housing Finance Agency made most of the changes the market expected and steered clear of one that might have boosted HARP business significantly: changing the eligibility cut-off date to give existing HARP borrowers a second crack at the program. The agency agreed to remove the 125 percent loan-to-value cap – although very little...
House Republicans have already introduced a variety of separate bills to clamp down on Fannie Mae and Freddie Mac while the two government-sponsored enterprises remain in conservatorship, and a key GOP lawmaker this week introduced legislation intended to jumpstart a private MBS market to take over when the agencies are finally dissolved. The Private Mortgage Market Investment Act, drafted by Rep. Scott Garrett, R-NJ, would create a heavily regulated MBS market made up solely of private entities functioning with no federal guarantee at all. The lawmaker, who chairs the House Financial Services Subcommittee on...
Fannie Mae and Freddie Mac’s total taxpayer cash infusion could top as much as $311 billion by the end of 2014 – a “savings” of some $52 billion from similar projections one year ago, according to the Federal Housing Finance Agency.The FHFA this week released its updated projections of the financial performance of the two GSEs, including potential draws under the Senior Preferred Stock Purchase Agreements with the Treasury Department. "The projections have been updated to reflect the current outlook for house prices, interest rates, and recent trends toward borrower behavior,” explained the FHFA.
Mortgage securitization experts have not yet figured out how to preserve the liquidity and consumer benefits provided by the to-be-announced agency MBS market in a mortgage finance system that doesn’t have a role for government agencies. “The failure of the private market has been in figuring out how to encourage a solution with less government,” said Peter Nirulescu, a partner at Capital Market Risk Advisors, during a panel held by the Securities Industry and Financial Markets Association this week. Despite panelists’ varying perspectives, all agreed that the TBA market continued to perform robustly and any changes made to the...
New regulatory requirements – including a controversial plan to assign ratings on a rotating basis – are encouraging firms to test the traditional approaches to rating MBS and ABS, but some observers say the reliance on an issuer-pay business model will be tough to change. New rating services are coming up with new ways to assess risk with more dynamic, ongoing reviews and more sources of information, and they’re less reliant on being fed information, said Stephen Kudenholdt, co-chair of the capital markets practice at SNR Denton. But the expectation that the market would shift to an investor-paid model clearly hasn’t...
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