Over the past two years, roughly a dozen investment vehicles have raised at least $500 million each to buy mortgage servicing rights, fueling a red-hot market that for now shows no sign of slowing. Some of these “funds” are headed by mortgage banking veterans such as Emanuel Friedman – the former co-CEO of Friedman, Billings, Ramsey Group – and Michael Lau, a former top deal maker at Phoenix Capital, one of the largest servicing brokerage firms in the nation. According to interviews conducted by Inside Mortgage Finance, Lau’s company, Pingora Loan Servicing, has amassed...

The Consumer Financial Protection Bureau has decided to streamline its post-examination reporting, apparently in response to banker concerns about prompt feedback regarding lender compliance with federal consumer financial laws. In a new supervisory highlights report, the CFPB said it would stop using written recommendations – opting for oral, on‐site guidance instead. The bureau also will combine all issues it expects a bank to address into a single section called “matters requiring attention.” The agency also decided...

Average credit scores and debt-to-income ratios on FHA mortgages loosened as 2013 progressed, according to an analysis by Inside Mortgage Finance. Lenders have gotten particularly aggressive regarding credit score requirements, and recent changes to FHA guidelines could prompt further loosening on DTI ratios. According to an Inside Mortgage Finance analysis of Ginnie Mae loan-level mortgage-backed security data, the average credit score on FHA loans was 706.1 in January. However, as FHA originations declined during the year, average credit scores on FHA loans also fell, hitting 685.4 in December. Average credit scores on FHA originations could continue...[Includes one data chart]

The Treasury Department’s surprise move in the summer of 2012 to rewrite the Senior Preferred Stock Purchase Agreements it had with Fannie Mae and Freddie Mac was an “unlawful” action that could have a far-reaching impact well beyond the shareholders of the two government-sponsored enterprises, according to an attorney representing shareholders. Speaking Wednesday at a forum sponsored by Ralph Nader’s Shareholder Rights advocacy group, attorney Ted Olson of Gibson Dunn & Crutcher said Treasury’s Third Amendment to the PSPA was a calculated effort by the Obama administration to ensure that GSE stockholders got nothing, according to internal Treasury documents they obtained. The amendment replaced the quarterly GSE dividend payment with a net-worth sweep of all company profits. Perry Capital, represented by Olson, is...

Graham Williams, CEO of Mortgage Resolution Partners, a firm that has achieved notoriety in the mortgage industry for trying to use eminent domain to seize underwater loans, is moving on. But that doesn’t mean the concept of municipalities using the legal strategy is going away. “I’m transitioning out of the CEO job,” Williams told Inside Mortgage Finance. “The company will continue on.” Asked whether a CEO search is underway, he said he didn’t know. As Inside Mortgage Finance went to press this week, there were...

The Federal Reserve’s move to reduce its purchases of agency mortgage-backed securities may eventually change the relative costs and benefits of financing new production through Fannie Mae, Freddie Mac and Ginnie Mae. “We’re in an environment where I think banks are going to get interested in at least the more attractive credit risks and holding those in portfolio,” said Mark Calabria, director of financial regulation studies at the libertarian Cato Institute in Washington, DC. “So, to me, the most important question going forward over the next two years for the MBS market is how much of this [new production] is going to make its way into MBS and how much will be held on balance sheets as whole loans.” Calabria predicted...

Morgan Stanley notes: “The agreement in principle is subject to final approvals by the parties. In connection with the settlement, the company will record an addition to legal reserves of $150 million, which will have the impact of reducing income..."

The nation’s third largest FHA servicer also admitted that it failed to inform the government mortgage insurers when its own internal reviews discovered more than 500 defective loans that never should have been submitted for coverage.

“This situation consisted of sexually charged behavior and comments from the supervisory staff and participating mortgage bankers, which resulted in a sexist and uncivil atmosphere,” the EEOC said of the JPM workplace.

According to company correspondence provided to Inside Mortgage Finance, Green Tree's target date for exiting the wholesale/broker channel is mid-April.