Walter Reports a $44 Million Loss, Cites a Pending Settlement with the CFPB. Walter Investment Management Corp., which owns the nation’s eighth-largest residential servicer, reported a $44 million loss for the fourth quarter, citing – among other things – a pending settlement with the CFPB and the Federal Trade Commission. “We have agreed to a proposed stipulated order with the FTC and CFPB, which is subject to approval by the FTC, CFPB and the court, and expect the settlement approval process may take a month or two,” the company noted in its fourth quarter 2014 earnings release. “We believe the proposed settlement is in the best interest of our business and all stakeholders.” This past October, Walter disclosed in a regulatory filing ...
FHA launched into the new year with a slight dip in forward mortgage loan originations in January from December with nonbanks leading the charge, according to Inside FHA Lending’s analysis of agency data. Lenders originated $11.8 billion in FHA-insured loans in January, a 0.7 percent decrease from December and down 3.5 percent from the prior year. FHA was charging a higher annual mortgage insurance premium of 1.35 percent for most of the month until a 50 basis point reduction, effective Jan. 26, lowered the MIP to 0.85 percent for a 30-year, fixed-rate mortgage with a five percent downpayment, and down to 0.80 percent for a similar FHA loan with more than five percent downpayment. The impact of the reduced MIP on February originations is still unclear, but most FHA lenders are expecting a boost in volume because many consumers ... [1 chart]
Nationstar Mortgage has filed a $1 billion shelf registration with the Securities and Exchange Commission, signaling its intention to sell debt securities and other instruments to the general public. But whether the lender/servicer actually uses the shelf is another matter entirely. “The mixed shelf is the company’s first amendment or filing of a new registration statement since May 2013,” noted analyst Kevin Barker of Compass Point Research & Trading. A mixed shelf means Nationstar could issue debt, preferred and common stock, as well as depository shares and warrants. Interestingly, the filing came...
Mortgage real estate investment trusts increased their holdings of residential MBS by 2.9 percent during the fourth quarter of 2014, according to data compiled by Inside MBS & ABS. Sixteen publicly-traded mortgage REITs reported a fair market value of $282.62 billion for their aggregate MBS holdings as of the end of 2014. That was up 6.7 percent from a year earlier. After diversifying into mortgage-servicing rights, risk-share transactions with the government-sponsored enterprises and other strategies, mortgage REITs are looking...[Includes one data chart]
One popular strategy among investors trying to profit from the woes of Ocwen Financial is to purchase subprime MBS tranches being serviced by the company and then declare a “material breach” in its servicing covenants. Speculators have been doing this while selling short Ocwen’s stock. According to analysts and investors familiar with the strategy – which is being employed by a fund called BlueMountain (and others) – subprime tranches can be bought at deep discounts. A material breach can occur when a rating agency downgrades the servicer, in this case Ocwen. For several weeks in January and February when Ocwen’s shares were plunging to new lows, it appeared...
Ginnie Mae plans to dispose of an estimated $5.3 billion in re-performing and nonperforming loans from a defaulted issuer’s portfolio following refusal by government auditors to sign off on the agency’s FY 2014 financial statement due to questionable accounting of the assets. Ginnie Mae President Ted Tozer said he hopes to dispose of the loans, which are part of $6.6 billion in non-pooled loan assets from the now-defunct Taylor, Bean & Whitaker Mortgage Corp.’s portfolio, within the year. Ginnie is currently managing the portfolio. According to a new Inspector General report, the $6.6 billion represented...
Industry participants and staff at the Securities and Exchange Commission continue to work on compliance with pending requirements regarding due diligence, Regulation AB and risk retention. Last week, the American Institute of Certified Public Accountants released interpretations regarding how accountants can comply with due-diligence disclosure requirements that are set to take effect June 15. MBS and ABS issued after that date that receive a rating will be required to disclose certain details about due diligence completed by third parties. Accountants have raised...
If Fannie and/or Freddie have a negative net worth, investors wouldn’t buy their MBS and if investors don’t buy their MBS we would have financial Armageddon…
Ginnie Mae will restate its FY 2014 and FY 2013 financial statements after federal auditors withheld their opinion for lack of sufficient information because of accounting anomalies and poor servicing oversight. An audit report issued by the Department of Housing and Urban Development Inspector General said the issues in the FY 2014 financial statement arose from servicing problems associated with a defaulted issuer’s portfolio, which Ginnie Mae is currently managing. The portfolio once belonged to the now-defunct Taylor, Bean & Whitaker, a Florida-based loan originator and a top Ginnie Mae issuer.The FHA suspended TBW in August 2009 due to its failure to submit a mandatory annual report and to disclose certain transactions that suggested fraud. Soon after, Ginnie Mae terminated TBW as an issuer/servicer and seized the company’s $25 billion Ginnie MBS portfolio. According to the IG report, ...
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