“The exodus of a majority of the pre-crisis nonbank entities within the mortgage arena provides an opportunity for banks to re-establish their position within the mortgage market,” according to regulators in Connecticut.
On the servicing side of the balance sheet, Citigroup reported $180.3 billion in third-party servicing rights, a 2 percent decline from the same period last year.
Rumors abound about mortgage firms either closing or laying off staff. Meanwhile, Auction.com, known for selling troubled real estate for banks and other investors, is offering up a $600 million pool of performing multifamily mortgages.
Industry advisors familiar with MIC told Inside Mortgage Finance that the nonbank VA refi specialist was almost sold to a bank this past summer, but the deal fell through.
Correspondents are an especially good source of purchase mortgages. During the third quarter, purchase mortgages accounted for over half (50.5 percent) of correspondent-originated loans securitized by Fannie Mae and Freddie Mac.
KBRA pointed out that one jumbo MBS issuer said it will accept mortgages where lenders have implemented procedures to either close the loans with an exception or review IRS transcripts post-closing.
FHA and VA are urging mortgagees and lenders to extend all possible assistance to borrowers who have been furloughed, laid off or suffered a decline in income because of the government shutdown.
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