FHA servicers held approximately 7.5 million loans as of April 30, with the top 50 servicers accounting for 97.2 percent, an Inside FHA Lending analysis of agency data showed. Wells Fargo and Bank of America together held an estimated 4.0 million loans for a whopping 54.3 percent of the market. An estimated 2.0 percent of FHA loans serviced by Wells were delinquent, while BofA reported 19.2 percent of its FHA portfolio delinquent. Wells had a foreclosure rate of 2.17 percent while BofA had a 2.51 percent rate. JPMorgan Chase had 658,966 FHA loans, 18.8 percent in various stages of delinquency, and a market share of ... [1 Chart]
A proposal to replace the FHAs current Tier Ranking System with a Servicer Performance Scorecard as a basis for determining servicer incentive payment is expected to be published in the Federal Register by the end of this month. In the previous issue of Inside FHA Lending (Volume 5, Issue 11, May 25), it was reported that a coalition of industry groups asked the FHA to adopt a private transfer fee rule in harmony with the final rule recently adopted by the Federal Housing Finance Agency. In a recent seller/servicer bulletin, Freddie Mac announced that, effective July 16, it will not purchase mortgages that are ...
Home Loan Servicing Solutions, recently launched as an independent acquirer of high quality mortgage servicing assets from Ocwen Financial Corp., is off to a good start as analysts gave it a thumbs up after a promising first-quarter debut. Analysts with Keefe, Bruyette & Woods gave the new company an Outperform rating and projected upward-trending dividend yields of 8.2 percent in 2012 and 9.9 percent in 2013-14. On May 8, the company declared a 10-cent monthly dividend, and the 30-cent quarterly dividend is slightly below KBWs estimate of quarterly earnings-per-share of 32 cents...
Special servicer Homeward Residential is stepping up in the market with diversified product offerings supported by a new brand and identity, and upgraded servicer ratings. Formerly American Home Mortgage Servicing, Homeward Residential is now a full-service mortgage banking operation with a full suite of services, including correspondent and warehouse lending, residential loan servicing (including subservicing and special servicing), and loan settlement services. The company ranked as the 15th largest wholesale lender in the first quarter of 2012 after just venturing into mortgage...
Nearly one-third of homeowners are underwater on their mortgages, Zillow reported last week, a significantly higher number than other analysts have estimated. Zillow, a real estate information company, said nearly 16 million homeowners, or 31.4 percent, owe more than their house is worth. The company partnered with credit agency TransUnion to take into account second mortgages to calculate total loan-to-value ratios. In its most recent report, CoreLogic said 11.1 million homeowners were in a negative equity situation in March. CoreLogic relies on public data and bases its estimates on the...
Nonbank venture capital funds that see opportunity in the expected pullback of banks from the $10 trillion mortgage servicing rights sector likely will not dodge the growing regulatory compliance burden that has become one motivation for banks to pull out of the business. Nationstar Mortgage Holdings, a unit of Fortress Investment Group that was taken public in March, is on pace to become the largest nonbank servicer in the industry if it succeeds in buying the mortgage servicing portfolio of GMAC Mortgage and Residential Capital. Nationstar CEO Jay Bray recently went on record saying he expects...
The Supreme Court of the United States last week sided with Quicken Loans while unanimously rejecting the legal arguments of two federal agencies in affirming a lower courts determination that a plaintiff must prove a settlement fee was split by two or more persons in order to successfully stake a claim under the Real Estate Settlement Procedures Act. The relevant portion of RESPA at issue in Freeman et al. v. Quicken Loans Inc. is the provision that [n]o person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a...
In Hogan v. Washington Mutual Bank, N.A. et al, the Arizona high court has dismissed the show me the note claim in foreclosure litigation, throwing out a legal argument often used to block an impending foreclosure. We granted review to decide whether a trustee may foreclose on a deed of trust without the beneficiary first having to show ownership of the note that the deed secures, explained Arizona Supreme Court Chief Justice Rebecca White Berch. We hold that Arizonas non-judicial foreclosure statutes do not require the beneficiary to prove its authority or...
Last week, the Federal Reserve Board put out action plans for Citigroup and HSBC Finance Corp. to correct deficiencies in their residential mortgage loan servicing and foreclosure processing. These enforcement actions require the mortgage servicing subsidiaries to provide appropriate remediation to borrowers who suffered financial injury as a result of errors by the servicers. The Fed also released the engagement letter between Ally Financial Inc. and its independent consultant to review foreclosures that were in the firms pipeline in 2009 and 2010...
The U.S. Court of Appeals for the 11th Circuit recently reversed and remanded a lower courts rejection of a Fair Debt Collections Practices Act claim, determining in Reese v. Ellis, Painter, Rattertree & Adams, LLP that the contents of a dunning notice from the lenders foreclosing law firm amount to an effort to collect a debt under the act. In this case, the borrowers, Izell and Raven Reese of Roswell, GA, purchased a piece of property in 2004 with the help of a $650,000 loan from Provident Funding Associates, LP. To get that loan, the Reeses signed a promissory note and...