S&P Global Ratings upgraded servicer ratings for Ocwen Loan Servicing to average from below average this week. Ocwen’s stock price increased significantly after the upgrade because of ratings clauses in Ocwen’s subservicing agreements with New Residential Investment. S&P downgraded Ocwen’s servicer ratings in June 2015 and if the ratings weren’t raised by April 2017, New Residential could transfer the subservicing to a different company. As of the end of ...

Ocwen Financial reported a net loss of $87.20 million for the second quarter of 2016, with most of the loss related to so-called legacy issues. A planned settlement with the Department of Justice of two lawsuits involving the Home Affordable Modification Program and FHA mortgages caused $40.10 million in pre-tax losses for the nonbank lender-servicer. The company also paid $28.10 million during the quarter to cover the cost of monitoring settlements involving federal regulators ...

Investors in non-agency mortgage-backed securities serviced by Ocwen Financial released a report this week calling for Standard & Poor’s to upgrade Ocwen’s servicer ratings. In June 2015, S&P downgraded Ocwen Loan Servicing’s servicer ratings to “below average,” citing regulatory issues and investor scrutiny along with concerns about internal audits at Ocwen. The downgrade is a focus for some investors because some of the non-agency MBS serviced by Ocwen have ...

Verizon Wireless is preparing to package the payment plans on more than 3.09 million cell phones into an ABS, marking the first time an ABS in the U.S. will be backed by such collateral. The planned $1.17 billion Verizon Owner Trust 2016-1 received preliminary AAA ratings from Fitch Ratings and Standard & Poor’s. “It’s the most interesting type of consumer ABS product we’ve seen in a long time,” said Darrell Wheeler, head of research for global structured finance at S&P. “And obviously, with the amount of phones in the market today, it has a lot of potential.” Analysts at Moody’s Investors Service noted...

Ocwen Financial faced mixed results in servicing litigation recently while avoiding further downgrades of its corporate issuer default rating. Last week, Ocwen announced that it had agreed to settle two lawsuits brought by the Department of Justice involving the Home Affordable Modification Program and FHA mortgages. The pending $30 million settlement involves alleged violations of the False Claims Act, among other issues. The lawsuits were brought in 2012 by ...

After declining for 10 consecutive quarters, the serious delinquency rate on subprime mortgages increased in the first quarter of 2016, according to the Mortgage Bankers Association. The non-seasonally-adjusted serious delinquency rate on subprime mortgages was 12.41 percent at the end of the first quarter of 2016, up from 12.39 percent the previous quarter and down from 15.17 percent in the first quarter of 2015. The serious delinquency rate ... [Includes six briefs]

Falling delinquency and foreclosure rates over the last few years have continued to break recent records, according to industry sources, thanks to several factors including an improved housing market and price appreciation. As of the end of March, only 4.95 percent of the $5.08 trillion of home mortgages covered by the Inside Mortgage Finance Large Servicer Delinquency Index were in default or foreclosure status. That was down from 5.54 percent at the end of the fourth quarter. The figures are not seasonally adjusted. The Mortgage Bankers Association reported...[Includes one data table]

Ongoing declines in the volume of subprime mortgages outstanding have done little to limit regulatory issues involving subprime servicing. An estimated $287.0 billion in subprime mortgages were outstanding as of the end of the first quarter of 2016, down 16.3 percent from the first quarter of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. The Consumer Financial Protection Bureau released...[Includes one data table]

Thanks to a resurgence of deals backed by vehicle-related financing, non-mortgage ABS production rebounded strongly in the first three months of 2016, according to a new Inside MBS & ABS analysis and ranking. But ABS issuance levels came up well short of the volume generated during the first three months of last year, and a few key segments continued to limp along. A total of $41.42 billion of non-mortgage ABS were issued...[Includes two data tables]

More than a year after state regulators proposed prudential standards for nonbank servicers, there’s no specific timeframe for releasing final standards. Officials at the Conference of State Bank Supervisors note that they are hoping for a coordinated approach with federal entities to regulate nonbank servicers. In March 2015, the American Association of Residential Mortgage Regulators and CSBS proposed standards for nonbank servicers. The proposal included baseline ...