The mortgage servicing industry is continuing to sift through the massive new mortgage servicing final rulemaking issued last week by the Consumer Financial Protection Bureau. But one week into the review process, it seems clear that the cost of compliance and any strategic advantage between players is going to vary company to company, based less on size of the entity and more on the degree to which servicers have read the tea leaves ahead of time and started to prepare. “The reality is that there is lots of work to be done as an industry, regardless of your size or your portfolio mix,” said Michael Waldron, a partner and practice leader of the mortgage banking unit at the Ballard Spahr law firm. On the heels of the recent settlement of top bank servicing obligations under the consent orders related to robosigning practices, there has been...

It may be too early to declare an end to the cycle of servicers marking down the value of their mortgage servicing rights, but a new Inside Mortgage Finance analysis suggests that some large banks began raising their valuations in the fourth quarter. Across the board, all of the nation’s top five servicers – Wells Fargo, JPMorgan Chase, Bank of America, Citigroup, and U.S. Bancorp – increased the asset value of their MSRs in the fourth quarter of 2012, even though none of them reported significant growth in the unpaid principal balance of home loans serviced for other investors. Wells Fargo, the nation’s largest servicer with a market share of almost 19 percent, saw...[Includes one data chart]

The Consumer Financial Protection Bureau followed another mandate from the Dodd-Frank Act late last week, promulgating a final rule that requires mortgage lenders to provide applicants with free copies of all appraisals and other home-value estimates, and to inform consumers within three days of receiving an application for a loan of their right to receive copies of all appraisals. An applicant may waive the timing requirement for providing these copies, but must be given a copy of all appraisals and other written valuations at or prior to closing or account opening or, if the transaction is not consummated, within 30 days after the creditor makes a decision. While the rule prohibits...

Fannie Mae is informing the mortgage cooperatives it works with that going forward that all the different affinity groups doing business with the government-sponsored enterprise will be treated the same when it comes to guaranty fees and charges for its Desktop Underwriter program, Inside Mortgage Finance has learned. One executive close to the situation told Inside Mortgage Finance that action by Fannie essentially “equalizes” all cooperatives in terms of the pricing breaks they receive from the GSE. Some affinity relationships have been in place...

The non-agency jumbo MBS market in 2012 posted its best year since the cratering of the U.S. housing market and financial market collapse back in 2008, and increased regulatory clarity may spur the recovery further in 2013. A total of $3.46 billion of non-agency jumbo MBS were issued last year, according to a new ranking and analysis by Inside MBS & ABS. In the pre-crash years, that level of issuance didn’t add up to a decent week in productivity. But last year’s prime non-agency MBS issuance was...[Includes three data charts]

The ability-to-repay “qualified mortgage” final rule released last week by the Consumer Financial Protection Bureau will likely impair access to and the cost of jumbo and nonprime mortgage loans, in spite of the market clarity and certainty it provides, according to many market observers. Wall Street MBS analyst Laurie Goodman and the rest of her MBS strategy group at Amherst Securities said the implications for jumbo mortgage is that loans with debt-to-income ratios greater than 43 percent will not be made by most lenders, as these mortgages will not qualify for QM status. “The penalties for making non-QM mortgages can be...

Recent changes announced by the Basel Committee for pending capital standards will increase demand from private capital for non-agency MBS, according to industry participants, but some say the benefit may be muted. Last week, the Basel Committee adjusted the liquidity coverage ratio for Basel III capital requirements by expanding the definition for “high quality liquid assets” to include Level 2B assets. Among the assets newly eligible are certain residential MBS rated AA or higher, subject to a 25.0 percent haircut. “The Basel Committee made...

Inside Mortgage Finance Publications, Inc. announced this week that it has just settled a major copyright infringement dispute with a large national financial institution for more than one quarter of a million dollars. Without admitting any infringement, liability or wrongdoing, the financial institution agreed to pay IMFP to settle charges that it had violated federal copyright laws by making unauthorized copies of Inside Mortgage Finance. IMFP alleged that the financial institution had engaged in ongoing in-fringement, distributing infringing copies of dozens of registered issues to a group of non-subscribing employees. “We never like...

The Consumer Financial Protection Bureau estimates that about 70 percent of the mortgages originated from 1997 to 2003 would likely meet the agency’s new “qualified mortgage” designation. Under the agency’s recently minted ability-to-repay final rule, lenders that originated qualified mortgages will be legally protected against lawsuits brought by borrowers. The ATR rule itself broadly requires lenders to consider a number of factors in underwriting most home mortgages – a few loan types ...

A few weeks ago, ES Appraisal Services, Jacksonville, FL, closed its doors, the second national appraisal management company to go bust in the past year. The other was Appraisal Loft. ES Appraisal’s demise was a hardly a surprise. For months, industry message boards were full of comments from independent appraisers who worked as contractors for the firm, complaining about unpaid invoices. In December, the company sent an email to appraisers confirming the news. At one point the firm employed, on a contractual basis ...