Lower interest rates resulted in strong originations in the second quarter, causing lenders to smile. But for firms with large MSR portfolios, asset writedowns were the norm.
Earlier this year, Wells Fargo offloaded roughly $20.7 billion in Ginnie servicing rights. The buyers? A bank and a nonbank. Meanwhile, the Equifax data hack will cost upwards of $700 million in settlement costs.
In 2018, residential originations suffered but that didn't crimp the pay packages of CEOs and other top executives at publicly traded mortgage companies. Leading the pack: Douglas Lebda, CEO of Lending Tree at $42.3 million.
Industry groups are unsettled by state mortgage servicing requirements that go beyond the Consumer Financial Protection Bureau’s rules. More than 30 states now require nonbank servicers to obtain licenses.
The company filed for bankruptcy protection this week, a maneuver that could lead to a merger with Finance of America. What the two nonbanks have in common: both are owned by The Blackstone Group. But it’s hardly a done deal.
Thanks to sustained low interest rates, auctions of mortgage servicing rights are scarce these days, but not impossible. Investors are still interested but they're cautious. Meanwhile, loan production continues to increase.
State regulators are showing no sign of slackening their focus on "fair servicing," with mortgage processors seeing more examinations focusing on disparate-impact theories.
Most of the decline in bank MSR activity in the first quarter was attributable to Wells Fargo, while Flagstar accounted for a big chunk of the increase among savings institutions.
Grapevine: A few days ahead of a scheduled bankruptcy auction, New Residential Investment Corp. has swooped in and made a "stalking horse" bid. Meanwhile, a big promotion at Fannie Mae and a record month for Guaranteed Rate.
It's no secret that Ginnie Mae officials are losing sleep over nonbanks dominating the government MBS market. With liquidity a primary concern, the agency is ready to consider "non-traditional" investors in its MSRs. But there's a catch: They may have to commit as much as $1 billion.
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