Servicing problems are being addressed “quickly and effectively” by the servicers subject to the $25 billion national servicing settlement, save for Walter Investment Management’s Green Tree Servicing, according to Joseph Smith, the settlement’s monitor. In a report released last week, Smith said Green Tree failed eight metrics tested in the second half of 2013, while Bank of America, Citi, JPMorgan Chase, Ocwen and Wells Fargo passed all of their settlement tests ...
Here’s what the current state of mortgage banking boils down to: Can the industry survive on $1 trillion to $1.2 trillion in production a year through 2015?
Originations that don’t meet standards for qualified mortgages have largely been held in bank portfolios in the months since the Consumer Financial Protection Bureau’s ability-to-repay rule took effect. However, nonbanks are also eyeing the products, and industry participants suggest that non-QMs will eventually be included in non-agency mortgage-backed securities. Laurence Platt, a partner at the law firm of K&L Gates, said a number of hedge funds and investment banks are ...
A New York state appeals court last week shut down Morgan Stanley’s attempt to undo a lower court finding that Allstate Insurance Co.’s lawsuit over $100 million in allegedly overrated MBS had been timely filed. A five-judge panel of the New York Supreme Court Appellate Division, First Department, was not swayed by Morgan Stanley’s argument that the trial judge had erred in holding that Allstate must have had actual notice of its claims of misrepresentation by the investment bank in order for the suit to be time-barred. Allstate sued...
ResCap Liquidating Trust filed lawsuits last week against a number of Residential Funding’s correspondent lenders regarding alleged breaches of representations and warranties on mortgages included in non-agency MBS. The lawsuits relate to business completed before RFC’s parent company Residential Capital entered bankruptcy. RLT, which was established to liquidate and distribute the assets of the debtors in the ResCap bankruptcy case, filed 12 similar lawsuits last week seeking buybacks from Bank of America and First Republic Bank (as successors of Old First Republic), PHH Mortgage, RBC Mortgage and a number of smaller lenders. The correspondent lenders sold more than $1.52 billion in mortgages to RFC, according to the lawsuits. RLT claims...
Ford Credit priced a $1.08 billion deal earlier this month backed by prime auto-loan receivables that included a noteworthy twist, according to John McElravey, director of consumer ABS research at Wells Fargo Securities. The deal will revolve for five years before paying principal with a soft-bullet maturity. “In our opinion, this deal adds an interesting new dimension to prime auto-loan ABS,” McElravey said in a recent report. “We would not be surprised if other prime lenders eventually adopted similar structures based on market pricing and the pace of investor acceptance. Upon reflection, it is somewhat surprising that more prime auto-loan ABS have not been structured in this way.” Moody’s Investors Service explained...
“Due to the new Dodd-Frank guidelines, fewer buyers will be qualified to purchase homes, which will ultimately affect my livelihood as well,” one Realtor said.
The 3 percent points-and-fees cap for qualified mortgages will likely accelerate an emerging practice of lenders rolling a variety of fees into the rate sheet price as the market continues to evolve toward a no-points mortgage, according to a leading industry consultant. “There has been a shift in the market over the last five years toward zero point loans as lenders build the traditional one percent origination fee into the rate-sheet price,” said Nicole Yung, a managing director with the Stratmor Group, a mortgage banking consulting firm. “This change has been driven by a consumer preference for low up-front costs and the historically low interest rates.” However, there seems...
Mortgage firms that hope to acquire other companies can expect to pay anywhere from $200,000 to $500,000 in due-diligence costs as they put their targets under the financial microscope, according to interviews conducted by Inside Mortgage Finance over the past few weeks. The price quotes can vary greatly depending on the size of the company being targeted, especially if there’s a servicing portfolio and platform that needs to be looked at. “The cost absolutely varies...
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