New nonprime originations haven’t been enough to prop up the volume of subprime mortgages outstanding, according to a new ranking by Inside Nonconforming Markets. The top 15 subprime servicers handled an estimated $212.73 billion of the loans as of the end of the second quarter of 2017, down 4.1 percent from the previous quarter and down 18.2 percent from a year ago. None of the servicers posted...[Includes one data table]

Citadel Servicing Corp. recently launched a one-month bank-statement program for self-employed borrowers. While some lenders offer bank-statement programs, borrowers are typically required to provide at least one year of documentation. Citadel stressed that deposits into the borrower’s bank account aren’t the determinant figure to verify income. “Income is attested to and declared [by the borrower], a Citadel underwriter will confirm that ... [Includes three briefs]

Ocwen Financial reported a net loss of $44.44 million for the second quarter of 2017, with legal issues accounting for a large portion of the loss. The nonbank also agreed on terms with New Residential Investment to transfer mortgage servicing rights on non-agency mortgages. Ocwen had a $33.60 million expense in the quarter tied to legal settlements. “We settled additional legacy litigation matters further reducing future uncertainty,” said Ron Faris, the company’s president and CEO ...

Data regarding subprime mortgages outstanding, delinquencies and loss mitigation activity are getting more difficult to track as the market has essentially been in runoff mode since 2009.Few servicers report on their subprime portfolios, a key delinquency data series was recently discontinued and details on loan modifications are lagging. Some $247.0 billion of subprime mortgages were outstanding as of the end of the first quarter of 2017 ... [Includes one data chart]

Ocwen Financial announced last week that it’s negotiating an agreement with New Residential Investment involving mortgage servicing rights for non-agency mortgages. The agreement would reduce the servicing fee Ocwen receives but provide the company some stability and an equity investment. Before the agreement, New Residential owned rights to MSR on mortgages serviced by Ocwen with an unpaid principal balance of $117.0 billion. The loans are in non-agency ...

Last week, the Consumer Financial Protection Bureau and many state regulators took coordinated actions against Ocwen Financial, alleging a number of servicing problems. Ocwen, the largest subprime servicer, disputes the allegations. The CFPB lawsuit, along with lawsuits and cease-and-desist orders from at least 24 state regulators, could be catastrophic for Ocwen. Most of the cease-and-desist orders prevent the company from originating mortgages until it proves it can appropriately ...

With the potential for restrictions placed on Ocwen Financial to be removed in the near future, officials at the nonbank stress that Ocwen has transformed compared with when the restrictions were applied. Near the end of 2014, Ocwen agreed to a $150.0 million settlement with the New York Department of Financial Services. Among other provisions, the settlement required Ocwen to meet certain benchmarks and receive approval from the state regulator before acquiring ...

Ocwen Financial announced that it signed an agreement with the New York State Department of Financial Services this week to terminate the state regulator’s third-party operations monitor at Ocwen on April 14. Ocwen said the agreement provides a path for the nonbank to receive approval from the NYDFS to resume acquiring mortgage servicing rights. The Structured Finance Industry Group is preparing the next phase of its effort to revive the non-agency ... [Includes two briefs]

The total unpaid principal balance of subprime mortgages outstanding continued its slow decline in 2016, ending the year at an estimated $255.0 billion, according to Inside Nonconforming Markets. Subprime performance was mixed in the fourth quarter, with the share of loans past due increasing compared with the previous quarter, according to the Mortgage Bankers Association. Some 14.28 percent of mortgages were past due as of the end of the ... [Includes one data chart]

Limitations spanning more than three years on Ocwen Financial’s ability to acquire servicing could be ending soon. Company officials stress that a resumption of servicing acquisitions will help Ocwen see some benefits from economies of scale. In the three years since the New York Department of Financial Services started preventing Ocwen from acquiring servicing, Ocwen’s portfolio has declined by more than 50.0 percent, hitting an unpaid principal balance of $209.09 billion ...