It will be difficult to tell whether the Dodd-Frank Act is driving waves of small lenders out of the mortgage market or whether a severe drought in new production is an equally weighty factor, but community lenders may be gaining some ground among policymakers. At a hearing in the House Financial Services Committee this week, Chairman Jeb Hensarling, R-TX, read at some length from a letter he received from a small mortgage banker in central Texas who said his firm is being forced out of the market because of the cost and complexity of regulatory compliance. The major culprit is the wave of mortgage regulations imposed by the Consumer Financial Protection Bureau under the Dodd-Frank Act. Hensarling did not reveal the company’s name. Rep. Shelley Moore Capito, R-WV, who chairs the Financial Institutions and Consumer Credit Subcommittee, reiterated...
Affordable housing advocates are praising the leadership of the Senate Banking, Housing and Urban Affairs Committee for including a “robust dedicated source of revenue” for the National Housing Trust Fund in their bipartisan housing-finance reform legislation. A provision of the legislation filed by Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, would expand both the base and the rate for the National Housing Trust Fund and the Capital Magnet Fund. Current law provides...
Standard & Poor’s announced late last week that it placed 96 ratings from 20 servicer-advance ABS on watch for a potential downgrade and the rating service plans changes to its rating criteria for servicer-advance ABS. Industry analysts suggest that the actions could disrupt the market for servicer-advance ABS, as S&P has been the dominant rating service in the sector. S&P said downgrades on servicer-advance ABS are possible because the analysis that accompanied ratings on certain deals didn’t consider subordinated interest amounts as part of the ratable promise. “The CreditWatch placements reflect...
At the end of February, Ocwen Financial issued a $123.6 million security backed by mortgage-servicing rights on agency mortgages, the first of its kind. The security was attractive to investors as well as to nonbanks, with more transactions expected, according to the Urban Institute’s Housing Finance Policy Council. The transaction has a 14-year debt obligation and was secured by Ocwen-owned MSRs on mortgages with an unpaid principal balance of approximately $11.8 billion. Investors in Ocwen Asset Servicing Income Series 2014-1 receive a monthly payment of 21 basis points of the unpaid principal balance of the reference pool in the form of an interest-only strip, along with certain other payments. In a new analysis, the HFPC’s Laurie Goodman and Pamela Lee said...
The price of agency MBS has been rising since early April, which can only mean good things for publicly-traded real estate investment trusts that own the asset class. However, REIT share prices haven’t improved much of late, with some companies such as Annaly Capital Management continuing to trade closer to their 52-week lows than their highs. Late this week, for instance, Annaly – one of the largest MBS investing REITs – was trading at $11.30 compared to a 52-week high of $15.98 and a low of $9.66. But better days may be...
Another suggestion is to increase the $100,000 threshold for “smaller loans” to $200,000 allowing for mortgage amounts beneath that level to be subject to more workable points-and-fees limits.
The chairman and CEO of CapWealth Advisors – a private equity firm with stakes in the GSEs – was critical of all the housing reform bills introduced so far and the premise that Fannie and Freddie need to be wound down to affect reform.
Since late last year, the FHFA has decreed that it must approve any GSE servicing sale of 25,000 loans or more, which translates into roughly $5 billion of product.
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