Once upon a time, in the third quarter of 2005, Countrywide Financial became the first company to amass a mortgage servicing portfolio of over $1 trillion. Just three years later, the company would be consumed by a hungry giant, Bank of America, which in the process became the first – and only – $2 trillion mortgage servicer. During the second quarter of 2013, BofA gave up its chair in the $1 trillion servicing club, reporting a 16.7 percent drop in its portfolio that left the company with “just” $988.6 billion in servicing. Since peaking at an industry record of $2.160 trillion at the end of 2009, BofA has managed to shrink its portfolio by a whopping 54.2 percent. The bank shed...[Includes one data chart]
State and federal regulators appear to be close to getting more servicers to agree to a settlement similar to the $25 billion deal agreed to by five big banks.
The Senate Committee on Banking, Housing and Urban Affairs this week approved bipartisan legislation to strengthen FHA solvency and oversight authority over lenders, paving the way toward dealing with the larger issue of housing finance reform. Introduced by Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, the FHA Solvency Act (S. 1376) passed by a vote of 21-1. The approved bill included...
The Consumer Financial Protection Bureau took its first legal action over alleged violation of the new loan originator compensation rule last week, bringing suit against Castle & Cooke Mortgage, a Utah-based nonbank, and two top executives. The CFPB claims that the defendants had an unwritten policy of paying quarterly bonuses to loan officers based on a formula that rewarded the origination of mortgages with high interest rates, “thus incentivizing loan officers to steer consumers into mortgages with less favorable terms, the very practice the compensation rule sought to prohibit,” said the CFPB’s complaint. Overall, the firm paid...
When Wells Fargo recently pulled the plug on its remaining loan-production joint ventures, it downplayed the significance of the move, explaining that in the scheme of things these unique partnerships – mostly with real estate companies – account for just 3 percent of its total production. But for some of the eight JVs that were shoved aside, it could be a big deal because it means they may now have to find either a new partner or raise additional capital. Still, not all of the JVs are fretting...
Mortgage real estate investment trusts can draw some guidance from a recent private-letter ruling from the Internal Revenue Service on whether excess spread on mortgage servicing rights can be deemed as real-estate assets for REIT purposes. According to a recently released IRS private-letter ruling dated April 12, certain excess servicing rights would constitute a real-estate asset, and income from the spread would be treated as interest on obligations secured by mortgages on real property, for purposes of tax rules governing REITs. MSRs generally represent...
RSS