Ginnie Mae is once again getting anxious about the growing – and large – presence of nonbanks that service the agency’s MBS, fearing a liquidity crisis could erupt because some firms rely too heavily on “non-traditional and very sophisticated funding mechanisms.” In a statement issued to Inside MBS & ABS this week, Ginnie contrasted nonbanks to depositories “who traditionally were the primary issuers of Ginnie Mae MBS.” The agency added...[Includes one data table]
The Federal Deposit Insurance Corp. this week revised its securitization safe-harbor rule to clarify loss mitigation standards for mortgage servicers to synchronize it with the similar requirements issued by the Consumer Financial Protection Bureau. The FDIC safe-harbor rule sets standards under which the agency will not attempt to capture assets of a failed bank that are transferred to qualifying securitizations. Under the previous rule, servicers of residential mortgages backing MBS that enjoy safe-harbor status were required to take loss mitigation action within 90 days after the loan becomes delinquent. In January 2013, the CFPB adopted...
A federal appeals court in New York this week will hear arguments from African-American subprime borrowers in Detroit in connection with a proposed class action challenging Morgan Stanley’s mortgage securitization practices during the subprime mortgage boom. The American Civil Liberties Union and its partners are seeking class-action status for the borrowers’ Fair Housing Act claims, which were initially rejected by a lower court. The court previously ruled that each borrower would have to sue on his or her own. The issue on appeal at the U.S. Court of Appeals for the Second Circuit is...
CFPB examiners found problems with loan modification acknowledgement notices, including sending them too late and having incorrect information or deceptive statements…
Subservicing vendors continued to increase their contract totals in the first quarter as owners of mortgage servicing rights moved more of their business to these specialists to counter regulatory burdens that show few signs of abating. According to exclusive survey figures compiled by Inside Mortgage Finance, $1.625 trillion of home mortgages were being handled by subservicers at March 31, a 5.5 percent sequential increase and a 19.5 percent gain year-over-year. Subservicing firms – a business mostly dominated by nonbanks with one key exception – now process...[Includes one data table]
The slow foreclosure timelines in states with a judicial foreclosure process appear to have a silver lining: home-price bubbles are more prevalent in other states, according to Fitch Ratings. In a report released this week, analysts at the rating service said home prices nationally appear to be on solid footing, although some regional pockets of price risk are growing, primarily in states in the West and Southwest. Fitch said...
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