New rules from the Consumer Financial Protection Bureau require servicers to consult with loan owners regarding the loss mitigation process and increase reporting of loss mitigation activity. Senior officials at the CFPB said they have received complaints that servicers are not offering loan modification options allowed by loan owners, including non-agency mortgage-backed security investors. A senior CFPB official said servicers do not always have strong incentives to offer ...

Six months after non-agency servicers were able to offer expanded loan modification options under the Home Affordable Modification Program, only 331 of such “Tier 2” mods had been completed, according to the Treasury Department. Industry analysts suggest that HAMP will fall well short of the Treasury’s volume goals when the program expires at the end of this year, possibly due to noncompliance by servicers. HAMP Tier 2 was announced in January and effective June 1, though not all non-agency HAMP servicers ...

The Department of Veterans Affairs has announced new security measures to ensure that only authorized lenders and servicers have access to mortgage-related data. Guidance issued earlier this month establishes new security procedures for resetting users’ PIN numbers and validating their identities. Users must be validated as an employee of the lender/servicer that seeks access to the VA’s Veteran Information Portal (VIP). The VA will provide each approved lender/servicer with a list of previous users for validation. Upon completion of the validation, the list must be ...

The Department of Housing and Urban Development has sweetened the pot to encourage more investors to participate in an FHA program for disposing of real estate-owned properties to ease HUD’s housing inventory. HUD announced it is raising the discount for REO properties under its First Look Sales Method to 15 percent from 10 percent. Properties include those that do not meet the standards for FHA insurance. The special program was launched in 2010 to give preference to eligible purchasers under the Neighborhood Stabilization Program (NSP) to ...

The mortgage servicing industry is continuing to sift through the massive new mortgage servicing final rulemaking issued last week by the Consumer Financial Protection Bureau. But one week into the review process, it seems clear that the cost of compliance and any strategic advantage between players is going to vary company to company, based less on size of the entity and more on the degree to which servicers have read the tea leaves ahead of time and started to prepare. “The reality is that there is lots of work to be done as an industry, regardless of your size or your portfolio mix,” said Michael Waldron, a partner and practice leader of the mortgage banking unit at the Ballard Spahr law firm. On the heels of the recent settlement of top bank servicing obligations under the consent orders related to robosigning practices, there has been...

It may be too early to declare an end to the cycle of servicers marking down the value of their mortgage servicing rights, but a new Inside Mortgage Finance analysis suggests that some large banks began raising their valuations in the fourth quarter. Across the board, all of the nation’s top five servicers – Wells Fargo, JPMorgan Chase, Bank of America, Citigroup, and U.S. Bancorp – increased the asset value of their MSRs in the fourth quarter of 2012, even though none of them reported significant growth in the unpaid principal balance of home loans serviced for other investors. Wells Fargo, the nation’s largest servicer with a market share of almost 19 percent, saw...[Includes one data chart]

Moody’s Investors Service recently implemented a significant overhaul of its methods for assessing servicers of non-agency MBS, replacing criteria issued in 2001. Among other changes, the new standards expand the data sources Moody’s will look at to include more timely figures from trustees and servicing performance for the government-sponsored enterprises. The analysis by Moody’s includes monthly loan-level data from the servicer if provided on a timely basis, monthly performance data from the trustee when available, and GSE servicing data as needed. Previously, the rating service largely relied on loan-level portfolio data from servicers. “The trust data is...

During the next 12 to 24 months, investors should expect “robust growth” from the historically fragmented single-family real estate-owned-to-rental market as it emerges into an institutional asset class, according to analysts at Keefe, Bruyette & Woods. The KBW report noted that despite the market’s traditionally limited funding source of capital – retail or smaller institutional investors – its horizons are expanding. “Investor interest has increased...

With roughly $900 billion of mortgage servicing rights changing hands since October (or about to), and more on the way, Fannie Mae and Freddie Mac will be busy in the months ahead approving the transfer of MSRs.Much of the MSR product being sold by Bank of America in its recent deal with Nationstar Mortgage and Walter Investment Management Corp. is tied to loans guaranteed by Fannie, Freddie and Ginnie Mae.Servicing advisors who’ve worked with the GSEs note that their approval on a servicing sale is hardly a routine matter, especially if the product has high delinquencies, which is the case with some of the BofA receivables.

Home Loan Servicing Solutions – an affiliate of Ocwen Financial – made some significant moves recently with an acquisition of rights to receive servicing fees on $34.6 billion in unpaid principal balance handled by Ocwen. And the company is set to issue a $750.0 million securitization backed by servicer advances. Near the end of December, HLSS announced that it acquired rights to receive servicing fees on nonprime mortgages. Ocwen will continue to service the mortgages, receive a monthly base fee ...