Servicer-advance rates on vintage non-agency MBS have been up and down in recent quarters, showing further variances based on the servicer and issuer. The fluctuations have made it difficult to project valuations for certain securities, but industry analysts suggest that as mortgage performance continues to improve, servicer-advance rates will stabilize. The rate at which servicers advanced missed borrower payments on mortgages in non-agency MBS decreased slightly on a quarterly basis in the first quarter of 2014 after a gain the previous quarter, according to Fitch Ratings. Pooling and servicing agreements for non-agency MBS require servicers to continue making advance payments until the payments are deemed non-recoverable. Non-agency MBS values are...

Ginnie Mae has asked Bank of America to provide missing documents on government insured loan pools after being informed by the MBS custodian that key paperwork is missing from the files. According to industry advisors familiar with the matter, the missing documents are tied to an $8 billion mortgage-servicing sale from BofA to PennyMac. So far, both parties have declined to discuss the matter publicly. One observer noted...

In a development with potentially negative implications for lenders, servicers and investors in student loan ABS, the Consumer Financial Protection Bureau released a report this week critical of the “auto-default” practice seen in private student lending. According to the CFPB’s Mid-Year Update on Student Loan Complaints, borrowers say that some lenders demand immediate full repayment upon the death or bankruptcy of their loan co-signer, even in cases when the loan is current. Borrowers also said they confronted bureaucratic barriers to releasing co-signers from their loans, something that could help avoid auto-defaults. “Students often rely...

At one shop based in the Midwest there’s unconfirmed talk of loan officers who haven’t been paid for months, unpaid leases and top executives who were on vacation as volumes collapsed.

Better performance on newer vintage FHA loans helped drive down the agency’s overall portfolio delinquency rate and fueled the decline in 30-, 60- and 90-day delinquencies during the first quarter of 2014, according to Inside FHA Lending’s analysis of FHA servicing data. Total delinquencies during the first quarter improved to 12.88 percent as of March 31 from 15.23 percent as of Dec. 31, 2013. The 30-60 day delinquency rate also fell to 5.41 percent from 7.14 percent, while the serious delinquencies (90 days or more past due) dropped modestly to 7.46 percent from 8.08 percent over the same period. The overall foreclosure rate, however, increased slightly to 2.36 percent during the first three months of 2014 from 2.30 percent at the end of 2013. FHA servicers ended the first quarter with ... [1 chart]

Ginnie Mae has held up for several weeks an $8 billion sale of servicing rights from Bank of America to a nonbank because of missing documents on government-backed mortgages. Ted Tozer, president of the agency, confirmed the delay in approvals to Inside FHA Lending, but declined to name the nonbank on the buy-side of the transaction. However, sources familiar with the deal identified the counter-party as PennyMac. BofA and PennyMac would not comment. Once the missing documents are located and placed in the proper files, the deal will move forward, said Tozer. Tozer noted that that in the past the agency did not lose sleep over large MSR transfers because up until three years ago the nation’s megabanks were buyers of MSRs. “We knew they had the financial strength to make the P&I [principal and interest] payments” to the MBS investors, he said. But with nonbank servicers, such as Green Tree, Nationstar Mortgage, Ocwen Financial as well as PennyMac, rapidly growing their portfolios, the agency is ...

The FHA will allow lenders to suspend foreclosures on properties backed by Home Equity Conversion Mortgage loans for up to 60 days to help non-borrowing spouses of deceased HECM borrowers temporarily avoid eviction and, possibly, foreclosure. The announcement of the policy came as a federal district court judge for the District of Columbia considered whether to certify a class-action case filed by four surviving spouses of HECM borrowers last month. The lawsuit alleges that HUD had failed to protect them from being displaced from their homes – the same protection HECM regulations extend to reverse mortgage borrowers. The suit accuses the department of violating the federal Administrative Procedures Act by promulgating contradictory regulations without public comment. Last September, a DC judge found HUD in violation of federal law in a similar case and ordered that the case ...

Wells Fargo has expanded its acceptance of electronic signatures on FHA mortgage-related documents to correspondent lenders – a move that could spur other lenders to consider a similar shift as purchase originations rise. Details of the expansion are available in Wells Fargo current Seller Guide. However, access is restricted to correspondent lenders because the guide contains proprietary information, according to a company spokesman. DocuSign, whose Digitized Transaction Management (DTM) platform is being used by Wells Fargo and other financial services clients, said the expansion follows FHA’s announcement earlier this year of acceptance of e-signatures on all single-family origination and servicing/loss mitigation documents, FHA claims and real estate-owned sales contracts, with the exception of notes. The FHA announcement builds on an ...

HUD Secretary Shaun Donovan said this week that housing finance reform can no longer be put off, but no more so than for the FHA which continues to play an “outsized role” in the mortgage market as private capital remains on the sidelines. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does this bill represent progress? Absolutely,” said Donovan, seeking to win over housing advocacy groups disenchanted with the bill. “When looking for ways to improve [the bill], let’s not lose sight of its potential. Let’s not forget its importance to the housing market and its future.” The Johnson-Crapo legislative proposal calls for a wind-down of Fannie Mae and Freddie Mac and creation of a ...

Home Loan Servicing Solutions recently completed its first acquisition of Ginnie Mae whole loans through the agency’s early buy-out (EBO) program. The purchase price for the FHA-insured loans was $556.6 million. HLSS acquired the loans from Ocwen with an unpaid principal balance (UPB) of $549.4 million. Ocwen initially acquired the loans through the GNMA EBO program, which allows Ginnie Mae servicers to purchase delinquent loans from applicable loan securitization pools. HLSS financed its purchase by opening a new $600 million mortgage loan facility. It received $472.7 million in proceeds from this facility to help fund its EBO loan purchase from Ocwen. The loans are held as investments in a special purpose entity (SPE). “It is our expectation that since our GNMA EBO loans are insured by the FHA, the cash flows of this SPE will be sufficient to meet all claims of the debt holders,” the company said ...