“Obviously we’ve touched a nerve,” Mel Watt, director of the Federal Housing Finance Agency, said of the FHFA’s proposal to revise standards for membership in the Federal Home Loan Bank System. At a hearing this week by the House Financial Services Committee, a number of Congressmen raised concerns about the proposed rule the FHFA issued in September. Rep. Frank Lucas, R-OK, was skeptical of the FHFA’s intentions, asking what problem the FHFA was trying to fix. “There are some potential problems that we are trying to fix, to make sure that the FHLBanks meet the statutory purposes that have been set,” Watt replied. “First of all, you don’t want anybody to be a member of the FHLBank system and get ...
Mortgage vendors usually see their fortunes rise and fall based on loan origination volume, but don’t tell that to DocMagic, which is consolidating its hold in the document preparation business. In a year in which residential production fell 34 percent, the Torrance, CA-based DocMagic grew its client base to 7,500, a gain of 1,000 in just over 12 months. The privately held doc prep/software company doesn’t generally disclose revenue figures, but according to ...
The government-sponsored enterprises’ new low downpayment programs received a vigorous defense from Melvin Watt, the director of the Federal Housing Finance Agency, at a hearing this week by the House Financial Services Committee. Republicans on the committee attacked the programs from a number of angles, including raising concerns about default rates on mortgages with lower downpayments and fears of a “race to the bottom” with the FHA. “If you carefully look at other considerations and take them into account in deciding whether to back that credit, you can ensure...
The recent dip in interest rates has sellers of mortgage servicing rights questioning whether they should sell into a market of weakening prices or hang on until values firm up. As always, the answer depends on what type of servicing rights a seller is looking to unload in a market where the yield on the benchmark 10-year Treasury is once again nearing its low for the year. With rates low on current production, prices are...
Sales of mortgage servicing rights by big banks will continue to be driven by the desire to reduce the handling of delinquent mortgages – not by Basel III capital requirements, according to analysts at Moody’s Investors Service. Nonbank servicers that have grown in recent years often cite Basel capital requirements as a significant factor in bank sales of MSRs. Warren Kornfeld, a senior vice president at Moody’s, noted that Bank of America, Citigroup and JPMorgan Chase were active sellers of MSRs in recent years. “We believe the sales were primarily motivated by their desire to reduce credit-impaired servicing volume,” he said. Under Basel III, banks face...
Wells Fargo and JPMorgan Chase reached a financial settlement with the Consumer Financial Protection Bureau and the Maryland attorney general last week over allegations related to illegal mortgage kickbacks involving some of their loan officers and Genuine Title, a title company based inMaryland that went out of business last spring. The two government agencies are seeking civil penalties of $24 million from Wells Fargo and $600,000 from JPMorgan Chase. They also want $10.8 million from Wells and $300,000 from JPMorgan Chase in redress for consumers whose loans were involved in the marketing arrangement at issue. The CFPB and the Maryland AG also took action...
Not only have nonbank lenders steadily increased their production market share the past two years, but their loan officers, in general, earn more money on a per unit basis than their depository counterparts. At least that was the finding of several interviews conducted by Inside Mortgage Finance during January. “Banks are tiered 50 to 100 basis points [per loan] with qualifiers,” said Paul Hindman, managing director of business development for Grid Financial. “Nonbanks are tiered 75 to 175 basis points with qualifiers.” And LOs who work for net branch operators can earn...
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