Goldman Sachs last week announced it has agreed to a $5.1 billion settlement, the largest regulatory penalty in the firm’s history, concluding an investigation brought by the Residential MBS Working Group of the U.S. Financial Fraud Enforcement Task Force. The agreement in principle is poised to resolve actual and potential civil claims by the U.S. Department of Justice, the New York and Illinois attorneys general, the National Credit Union Administration (as conservator for several failed credit unions) and the Federal Home Loan Banks of Chicago and Seattle. At issue are...

The first security backed by proceeds from properties that have “rent-to-own” agreements has caused some divergence among rating services. Home Partners of America is preparing to issue a $508.88 million deal, which received preliminary AAA ratings from two firms. Moody’s Investors Service and Morningstar Credit Ratings issued presale reports on Home Partners of America 2016-1 last week. Kroll Bond Rating Agency followed with a warning that rent-to-own deals present more risks than single-family rental securitizations. The collateral for the security is...

There is also a school of thought that going forward, loan officers won’t be needed as much because of new origination technologies...

An estimated $254.15 billion of agency mortgage servicing rights were transferred in bulk sales transactions last year, according to a new Inside Mortgage Trends analysis of loan-level mortgage-backed securities disclosures. The peak of the market came during the second quarter of 2015, when a whopping $102.27 billion of MSR were transferred to new servicers. Some $61.80 billion of that was in the Ginnie Mae program, with Bank of America ... [Includes one data chart]

With oil prices hitting multiyear lows this week, now might seem like a good time for residential lenders to tighten up underwriting standards in oil-producing states such as Alaska, Oklahoma, North Dakota and Texas. But so far, lending executives hardly seem worried. Jim Picard, vice president at Denali Home Loans in Alaska, said the state has suffered some job losses in oil “but we’re still at full employment.” He noted that energy jobs are a small part of Alaska’s economy ...

Also, the agency servicing market has continued to become less top-heavy.

The SEC said Ocwen improperly used MSR valuations performed by Home Loan Servicing Solutions, a related party to which it sold the MSRs.

Nonbank institutions continued to expand their footprint in agency mortgage servicing rights last year, thanks to both their growing share of new originations and a hefty dose of MSR transfers, according to a new Inside Mortgage Finance ranking and analysis. At the end of 2015, some $5.931 trillion of home mortgages were connected to mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. That was up a modest 0.8 percent from the same period back in 2014 and included a small 0.3 percent increase from the third to the fourth quarter of last year. These figures are based on agency MBS disclosures that typically vary slightly from aggregate data released by the three agencies. Nonbanks accounted...[Includes two data tables]

The servicing auction market experienced a flurry of deals at yearend 2015, but investors for the most part have been more cautious about what they’re willing to pay for mortgage servicing rights, given some of the large markdowns that damaged second- and third-quarter earnings. “A lot of investors got hurt by buying during the first half of last year,” said one MSR investor who spoke under the condition his name not be used. “A few of them aren’t bidding anymore.” During the first half of 2015, MSR buyers were willing...

Part of the $5.1 billion settlement amount Goldman Sachs agreed to in principle with the federal government last week will be used to provide relief for homeowners who owe more than the current appraised value of their homes. The agreement would resolve an ongoing investigation by the Residential Mortgage-Backed Securities Working Group of the U.S. Financial Fraud Enforcement Task Force, which President Obama established in 2009 to pursue those who played a role in causing the financial crisis. The tentative agreement would resolve...