A mortgage marketing program with a money-back guarantee sounds too good to be true, but participating lenders that reported more than 400 percent return-on-investment can probably attest it is no scam. Mortgage Returns, a provider of customer relationship management and marketing solutions, reported that 35 lenders in its Guaranteed Marketing program averaged a 426 percent ROI after using it. The program revolves around the company’s Five-Touch mortgage refinance campaign. Launched in May, the program generated...

Ocwen Financial is set to reduce its effective tax rate by more than half due to the recent formation of a subsidiary corporation in the U.S. Virgin Islands. The federal corporate income tax rate in the U.S. is 35.0 percent and Ocwen had an effective tax rate of 36.0 percent through two quarters in 2012. “We believe [Ocwen’s effective tax rate] will be mid-to-high single digits,” said Bill Erbey, executive chairman of the servicer, during an earnings presentation last week. He said the lower tax rate could take effect...

Confidence in homeownership is shifting among consumers in the wake of the 2008 collapse of the housing market, but it’s mostly younger homeowners whose faith has been rattled the most, according to some new research. Economists at the Boston Federal Reserve Bank recently surveyed individuals about their attitudes toward renting versus buying a home, about commuting, and about how much to spend on a mortgage. They found that younger respondents are relatively less confident about homeownership after larger price declines, while older respondents are relatively more confident. “People who in 2008 lived in ZIP codes that were hardest hit by the crash in housing prices – as compared to those who resided in areas that were least severely affected – are...

Fannie Mae and Freddie Mac this week both celebrated large second-quarter profits that easily exceeded their installment payments to the U.S. Treasury as the price of government conservatorship, but buried in their earnings report was the hard truth lenders know too well: contentious buyback demands showed no sign of letting up. “Our expectation [is] that the amount of our outstanding repurchase requests to seller/servicers will remain high and that we may be unable to recover on all outstanding loan repurchase obligations resulting from seller/servicers’ breaches of contractual obligations,” Fannie said. As of the end of June, the two government-sponsored enterprises had...[Includes one data chart]

Officials at Ocwen Financial revealed this week that the servicer hired more employees than operationally necessary in an effort to win bids for servicing and subservicing. They said they are now in the process of right-sizing staffing levels through a number of different techniques. “We over-hired to make sure we could hit the cover off the ball on the deals that we knew we had in-hand,” Ron Faris, president and CEO of Ocwen, said during the servicer’s earnings presentation for the second quarter of 2012. Ocwen completed ...

Sales and purchases of vintage non-agency MBS have been well above average levels in recent weeks as investors see value in the sector with the housing market recovering. The purchases are being made by traditional buyers such as money managers and insurance companies as well as by banks, according to industry analysts. Daily trading volume of non-agency MBS has averaged about $3.0 billion in recent weeks, based on an analysis of TRACE data by Barclays Capital. During the past six to 12 months, daily non-agency MBS trading averaged $1.7 billion to $2.0 billion. Some $1.09 trillion in non-agency MBS was...

Bank investments in vintage non-agency mortgage-backed securities have increased recently due to a number of factors specific to the sector as well as broader economic issues. However, Standard & Poor’s warned last week that some banks are increasingly relying on non-agency MBS to prop up earnings, which could lead banks to take even further risks with their non-agency investments and hedging. “If this occurs in a significant manner, we could lower our ratings on a bank that is undertaking such activity,” the rating service said ...

Another fund participating in the Public-Private Investment Program terminated its investment period, suggesting the PPIP is less useful for investors in non-agency mortgage-backed securities than investing without the help of the Troubled Asset Relief Program. The Treasury Department recently announced that the RLJ Western Public-Private Investment Fund ended its investment period on July 15. Invesco’s PPIF made a similar announcement in September and ended its participation in the PPIP in April, leaving ... [Includes one chart]

The withdrawal of one of the biggest opponents to Bank of America’s pending $8.5 billion settlement with non-agency mortgage-backed security investors will not necessarily speed approval of the deal, according to industry analysts. Last month, the hedge fund Baupost (known as Walnut Place in the lawsuit) dropped its objections to the settlement and moved to sell some its holdings on Countrywide Financial non-agency MBS. A number of other entities continue to oppose the settlement, including AIG and ...

The Securities and Exchange Commission published interpretive guidance last week regarding references in federal regulations to ratings of mortgage-backed securities. Even though the Dodd-Frank Act mandated that such references be changed by July 20, the SEC’s guidance will keep the references intact until the federal regulator and others can establish new standards of creditworthiness. The Office of the Comptroller of the Currency and the National Credit Union Administration have also ... [Includes three briefs]