Interest rates are set to increase for a significant number of borrowers that received loan modifications after the financial crisis. Incentive payments to borrowers and servicers will also end, which could prompt performance issues on outstanding loan mods. The majority of mortgages modified under the Home Affordable Modification Program include interest rate resets after five years, and some proprietary loan mods followed a similar model. A relative trickle of resets will occur in 2014, followed by a massive ...
There are pockets in the jumbo market that offer lenders attractive yields, if they are willing to take on the risk of originating loans that don’t meet qualified-mortgage requirements, according to Matthew Ostrander, CEO of Parkside Lending. The lender recently launched Parkside Mortgage Trust, a real estate investment trust that will purchase non-agency loans originated by Parkside. “Parkside’s analytics of loan performance and product development has been many years in the making to ensure our ...
One of the biggest challenges for nonbanks that want to originate jumbos is finding capital to fund the operations. Two Harbors Investment appears to have found a unique source of capital for non-agency originations: a government-sponsored enterprise. In December, TH Insurance Holdings, a wholly owned subsidiary of Two Harbors, was granted membership in the Federal Home Loan Bank of Des Moines. Officials at Two Harbors said the company appears to be the first real estate investment trust to receive ...
Two real estate investment trusts with jumbo mortgage correspondent and conduit operations have scaled back their activity due to strong competition from banks. “The majority of today’s jumbo mortgage activity is being driven by banks originating or acquiring loans for their balance sheet,” said Stanford Kurland, chairman and CEO of PennyMac Mortgage Investment Trust. PennyMac had ramped up its jumbo activity in the second quarter of 2013 with $107 million in fundings. In the third quarter of 2013 ...
Ocwen Financial announced last week that its purchase of mortgage servicing rights from Wells Fargo is on “indefinite hold” due to a request from the New York Department of Financial Services. While some have suggested that the deal for servicing on mortgages with an unpaid principal balance of $39.2 billion won’t be completed, officials at nonbanks note that delays on servicing transfers due to third parties are common. In recent years, the time required to fulfill contractual conditions from initial closing ...
Certain nonbank servicers are getting “too big, too fast,” Ben Lawsky, superintendent of the New York Department of Financial Services, said in a speech this week. The remarks came after the NYDFS halted the transfer of mortgage servicing rights with an unpaid principal balance from Wells Fargo to Ocwen Financial. Lawsky said state regulators and servicers need to make sure that transfers of servicing to nonbanks don’t put borrowers at risk. He raised particular concerns about staffing levels at nonbanks, with ...
For an industry that’s looking at a 30 percent decline in originations, we’re seeing a great deal of SEC 13-d filings by investment funds that are upping their stakes in such players as MGIC, Radian, Ocwen, Walter, EverBank and the like.
Freddie Mac last week announced a $1 billion offering of its Structured Agency Credit Risk debt notes, the government-sponsored enterprise’s first risk-sharing transaction of 2014 and its third such deal since the company rolled out the STACR series last year. The deal is backed by a pool of $32.4 billion 30-year fixed-rate mortgages acquired by Freddie in the second quarter of 2013. More than 65 investors participated in Freddie’s latest STACR deal, and more than 20 of those investors were newcomers, according to Kevin Palmer, vice president of single-family strategic credit costing and structuring for Freddie. “We’ve introduced...
Federal Reserve Chair Janet Yellen stuck close to the script of her predecessor on the subject of the Fed’s “quantitative easing” exit strategy during her first Humphrey-Hawkins appearance before Congress this week, reaffirming that the central bank’s pull-back from its asset-purchase program is likely to continue, barring a dramatic surprise. “Let me emphasize that I expect a great deal of continuity in the Fed Open Market Committee’s approach to monetary policy,” Yellen told the House Financial Services Committee on Tuesday. “I served on the committee as we formulated our current policy strategy and I strongly support that strategy, which is designed to fulfill the Federal Reserve’s statutory mandate of maximum employment and price stability.” The new Fed chief reminded...
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