More sales of mortgage servicing rights are expected as a result of final Basel III capital rules approved by U.S. bank regulators over the past week. As anticipated, the Federal Reserve and other agencies declared that mortgage servicing rights cannot exceed 10 percent of Tier 1 capital – or 15 percent when deferred tax assets are factored into the equation. As was originally proposed, any MSR amounts above 15 percent must be deducted from Tier 1 capital, and any amounts included in capital will carry a risk weight of 250 percent. “Mortgage servicing rights were not given...
Mortgage banking and brokerage firms are about to start laying off production workers as refi applications continue to decline, but industry executives say the heaviest layoffs are unlikely to come until the end of summer. That’s when lenders begin closing mortgages that first entered the pipeline in May, when the application picture was brighter. According to figures compiled by the Bureau of Labor Statistics, the mortgage banking and brokerage sectors employed 293,800 full-time workers in May, compared to 295,500 in April, a loss of 1,700 positions. Compared to a year ago, employment is up 10 percent. The brokerage sector alone employed...
In recently issued guidance, the VA said reduction of principal in connection with a loan modification may produce a higher expected return for a servicer than termination of the loan.
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