Did the FHFA late last summer/early fall raise concerns regarding a certain nonbank servicer’s capital in regard to a huge portfolio of mortgage servicing rights that it had bought earlier in the year from a megabank?
Early indicators suggest that mortgage originations slumped by about 23 percent in the first quarter of 2014, a harbinger of tough times to come for companies that are running on fumes. According to a new Inside Mortgage Finance analysis of loan-level data in Fannie Mae and Freddie Mac first-quarter securitizations, primary market originations for the first three months of the year totaled about $235 billion. Unless the pace picks up, 2014 could fail to reach $1 trillion for the first time since 1998. Lender surveys, which are the major factor in Inside Mortgage Finance originations estimates, are underway. Weak origination volume is...
Standard & Poor’s announced late last week that it placed 96 ratings from 20 servicer-advance ABS on watch for a potential downgrade and the rating service plans changes to its rating criteria for servicer-advance ABS. Industry analysts suggest that the actions could disrupt the market for servicer-advance ABS, as S&P has been the dominant rating service in the sector. S&P said downgrades on servicer-advance ABS are possible because the analysis that accompanied ratings on certain deals didn’t consider subordinated interest amounts as part of the ratable promise. “The CreditWatch placements reflect...
At the end of February, Ocwen Financial issued a $123.6 million security backed by mortgage-servicing rights on agency mortgages, the first of its kind. The security was attractive to investors as well as to nonbanks, with more transactions expected, according to the Urban Institute’s Housing Finance Policy Council. The transaction has a 14-year debt obligation and was secured by Ocwen-owned MSRs on mortgages with an unpaid principal balance of approximately $11.8 billion. Investors in Ocwen Asset Servicing Income Series 2014-1 receive a monthly payment of 21 basis points of the unpaid principal balance of the reference pool in the form of an interest-only strip, along with certain other payments. In a new analysis, the HFPC’s Laurie Goodman and Pamela Lee said...
Since late last year, the FHFA has decreed that it must approve any GSE servicing sale of 25,000 loans or more, which translates into roughly $5 billion of product.
The resulting lender, which will keep the Ethos name, plans to start originating qualified mortgages in the second quarter of 2014 and non-QMs by the end of the year.
Why doesn’t the MBA, NAHB and National Association of Realtors just come out and say what they really mean, which is this: Leave Fannie and Freddie alone, return them to their shareholders and they’ll never buy another ALT A or subprime mortgage again.
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