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 ...

The Consumer Financial Protection Bureau issued its final rule on mortgage servicing this week, with perhaps the most significant change from the proposed rule being tougher treatment on the servicing industry’s dual tracking practices. However, the bureau threw the industry a few bones along the way. The CFPB decided not to require a single point of contact for distressed borrowers, but will require servicers to have “dedicated staff” to handle borrower concerns with their mortgages, something the bureau refers to as “continuity of contact.” The final rulemaking also essentially pre-empts...

The residential mortgage servicing market continued its incredible shrinking act during the third quarter of 2012, falling below the $10 trillion mark for the first time since early 2006. The Federal Reserve reported that total single-family mortgage debt outstanding declined by 0.9 percent during the third quarter, drifting down to $9.926 trillion. The supply of mortgage servicing has been in a steady decline since peaking at $11.179 trillion in March 2008. The agency servicing market was...[Includes two data charts]

Sales of delinquent mortgages to nonbank servicers are expected to continue throughout 2013, according to industry analysts. The sale of $306 billion in mortgage servicing rights announced this week by Bank of America could be the largest transfer this year, but there appears to be plenty of remaining volume for established special servicers and expected new nonbank servicers. “We believe that other banks with large MSR assets may also begin to complete sales or pursue other strategies to limit their size on bank balance sheets,” Fitch Ratings said. Analysts suggest...

Nationstar Mortgage announced this week that it agreed to purchase $113 billion in non-agency mortgage servicing rights, as measured by unpaid principal balance, from Bank of America. The sale will more than double Nationstar’s non-agency servicing portfolio. Some $102 billion in agency mortgages are included in the sale, which priced at $1.3 billion. Walter Investment Management concurrently announced the purchase of $93 billion of unpaid principal balance in Fannie Mae-backed servicing assets from BofA. Ocwen Financial also reportedly bid...