With the planned acquisition of Homeward Residential, Ocwen Financial fired the latest shot as nonbank special servicers compete to grow their portfolios. While officials at Ocwen noted the “synergistic” benefits of the planned purchase, industry analysts warned that the move puts Ocwen in a shaky financial position. The company announced last week that it plans to acquire Homeward for $588 million in cash and $162 million in Ocwen stock. The acquisition will strengthen Ocwen’s position as the largest ...

In collaboration with the Residential Mortgage-Backed Securities Working Group, New York Attorney General Eric Schneiderman filed a lawsuit last week against JPMorgan Chase and two related entities. The lawsuit targets underwriting on nonprime MBS deals, and Schneiderman said it could serve as a model for future planned actions by the Obama administration’s RMBS Working Group. “There are more cases to come,” he said. “We believe that this is a workable template for future actions against issuers of ...

Bank and thrift holdings of home-equity loans continue to decline, according to the Inside Mortgage Finance Bank Mortgage Database, with lenders hesitant to pursue new originations. The low interest rate environment for first liens has not particularly extended to HELs, with interest rates above 5.00 percent often offered to borrowers looking into a home-equity loan. Banks and thrifts held $1.14 trillion in home-equity lines-of-credit, HELOC commitments and closed-end second liens ... [Includes one data chart]

“Servicers are less likely to act on the first-lien mortgage owned by investors when they themselves own the second-lien mortgage secured by the same property,” according to a new study based on data collected by the Office of the Comptroller of the Currency from 10 large bank servicers. The study confirms suspicions that bank servicers are conflicted regarding loss mitigation, particularly because their second-lien holdings continue to perform relatively well even as corresponding first liens have ...

The Federal Deposit Insurance Corp. will implement a new definition for subprime mortgages beginning April 1, 2013. The definition will apply to banks with assets of $10 billion or more as part of the FDIC’s Large Bank Pricing model, which determines deposit insurance rates. The reporting deadline was revealed this week as the FDIC published a final rule to determine Deposit Insurance Fund assessment rates for large and highly complex insured depository institutions. The rule was prompted after ...

Fitch Ratings completed a review of ratings of jumbo mortgage-backed securities last week, resulting in downgrades of 6 percent of outstanding jumbo MBS. The downgrades were concentrated on pre-2005 MBS. “Adverse selection and structural features vulnerable to tail-risk have increased negative rating pressure for seasoned jumbo MBS,” Fitch said. The rating service noted that 14 percent of jumbo MBS remains on watch for downgrade and a determination on the ratings is expected by the end ... [Includes two briefs]

Portfolio lenders held to a cautious strategy for home-equity lending during the first half of 2012, with most companies not doing enough new business to offset runoff in their retained holdings, according to a new Inside Mortgage Finance ranking and analysis. But several large lenders reported significant increases in HEL originations during the second quarter, and some institutions managed to originate enough new business to increase their retained portfolios. The credit union sector continued to show more enthusiasm for the business than commercial banks and savings institutions. As of the end of June, banks, thrifts and credit unions held...[Includes three data charts]

In an effort related to the national mortgage servicing settlement, Bank of America announced last week that it has pre-qualified 150,000 borrowers to receive full extinguishments of their second-lien mortgages. Banks have been slow to modify second liens because their performance remains relatively strong even as borrowers struggle with first liens and negative equity. BofA said the full balance of second liens owned and serviced by the bank will be forgiven and the bank’s lien on the corresponding property ...

First-lien mortgages held in bank and thrift portfolios increased by 4.1 percent at the end of the second quarter of 2012 compared with the same period in 2011, according to an Inside Nonconforming Markets analysis of bank call report data. The strong increase comes as banks actively sell poorly performing legacy mortgages and suggests that lenders have increased their non-agency portfolio originations. Of the 21 banks and thrifts with at least $10.0 billion in first-lien holdings as of the ... [Includes one data chart]

Special servicers are set to receive more than $300.0 billion in distressed agency mortgages, according to industry analysts. The projections come after positive reviews of Fannie Mae’s controversial purchase and transfer of $73.0 billion in mortgage servicing rights from Bank of America in 2011. The Federal Housing Finance Agency and the FHFA Office of Inspector General each determined that Fannie paid a premium for BofA’s mortgage servicing rights, but significant savings will be recognized due ...