Close to one-third of the $154.79 billion in non-agency MBS serviced by Ocwen Financial is subject to potential servicing transfers due to downgrades to the firm’s servicer ratings and actions by investors. However, Ocwen has managed to retain servicing on a vast majority of the 119 deals thus far, helped by the proceeds the company delivers to non-agency MBS investors. Ocwen faces the potential loss of non-agency MBS servicing on two fronts. Some $43.1 billion ...
Servicing employment has been under pressure the past few years as loan processors such as Ocwen Financial, Nationstar Mortgage and others move to offshore as many back office workers as possible.
Ocwen Financial looks to be close to completing its downsizing through servicing sales that will leave its non-agency mortgage portfolio mostly intact. The nonbank is also working toward being able to acquire servicing again and has plans to boost originations. Ocwen handled servicing on $154.79 billion in non-agency mortgages as of the end of the second quarter of 2015, including subservicing. The unpaid principal balance of non-agency mortgages ...
The largest servicers participating in the non-agency portion of the Home Affordable Modification Program will be required to offer streamlined HAMP mods beginning in 2016, according to a directive from the Treasury Department. The Streamline HAMP offering will allow borrowers to qualify for mods without full completion of a HAMP application, without income verification and without the front-end debt-to-income ratio limit of 31 percent for typical HAMP mods ...
Flagstar Bancorp held a portfolio of $1.56 billion in interest-only mortgages at the end of 2011, with payments for many of the borrowers set to double in the coming years. A year ago, officials at the bank were touting its efforts to work with borrowers to limit the payment shock that kicks in when IOs reset and they have to start repaying principal. While those efforts continue, Flagstar has also sold more than half of its IO holdings, seeing strong demand from ...
M&T Bank is in talks with the federal government to resolve an investigation of a pre-crisis sale of FHA-insured and conforming mortgages to Fannie Mae and Freddie Mac that resulted in losses for the government-sponsored enterprises. The New York-based bank disclosed the settlement discussion in a second-quarter filing with the Securities and Exchange Commission and is cooperating with the investigation. The Department of Justice and the Department of Housing and Urban Development’s Inspector General are investigating whether M&T Bank complied with FHA’s underwriting guidelines as well as with guidelines for selling loans to Fannie and Freddie. It is unclear how much the FHA paid out in loss claims in this case but investigators said that, based upon their review of a sample of FHA loans for which a claim was paid, “some of the loans do not meet underwriting guidelines.” M&T Bank could be ...
A growing number of issuers are engaging in servicing transfers prematurely or making changes to their servicing platforms, causing problems for Ginnie Mae’s monthly pool-level and loan-level reporting. A Ginnie Mae issuer “transfers servicing” when it shifts in-house servicing to a subservicer, moves servicing from one subservicer to another, or relocates servicing in-house. Effective servicing as well as accurate and timely reporting are critical to Ginnie’s mortgage-backed securities program, the company said in recently issued guidance on servicing transfers. The new policy guidance would ensure that issuers have the capacity and oversight controls at all times to meet their obligations under the Ginnie Mae MBS program. Currently, issuers are required to obtain Ginnie’s approval before engaging in any servicing transfer with a subservicer or from one subservicer to another. Effective immediately, any issuer that wishes to ...
A California federal district court’s recent decision to reject fair housing claims related to FHA loans brought by the City of Los Angeles against Wells Fargo relied heavily on the U.S. Supreme Court’s recent decision on disparate impact, according to legal experts. Specifically, the U.S. District Court for the Central District of California granted summary judgment for Wells Fargo in a Fair Housing Act case brought by the City of L.A. The suit alleged that the bank’s mortgage lending practices had a disparate impact on minority borrowers, which resulted in a disparate number of foreclosures in minority areas. Wells Fargo was accused of reverse redlining since at least 2004 by imposing different terms or conditions on minority borrowers. The suit further alleged that Wells Fargo originated eight types of “predatory” home loans targeted to minorities. These loans include “high-cost” loans, subprime loans, interest-only loans, ...
The U.S. Department of Agriculture’s Rural Housing Service has delayed the implementation of the revised document upload process for guaranteed single-family home loans. The changes to the document-uploading component in the RHS Guaranteed Underwriting System (GUS) will be implemented on Aug. 26, not Aug. 12 as initially planned, to ease current restrictions on RHS’ document upload. However, an application must first be established before uploading any document into GUS. This can be done by completing the first three pages of a GUS application. Previously, users were not allowed to upload documents into GUS until a final submission had successfully processed. In addition, before the changes to the document uploading process, only users with a security designation that included “final submit authority” were allowed to upload documents. The revised system now allows users with a security designation of ...
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