Walter Reports a $44 Million Loss, Cites a Pending Settlement with the CFPB. Walter Investment Management Corp., which owns the nation’s eighth-largest residential servicer, reported a $44 million loss for the fourth quarter, citing – among other things – a pending settlement with the CFPB and the Federal Trade Commission. “We have agreed to a proposed stipulated order with the FTC and CFPB, which is subject to approval by the FTC, CFPB and the court, and expect the settlement approval process may take a month or two,” the company noted in its fourth quarter 2014 earnings release. “We believe the proposed settlement is in the best interest of our business and all stakeholders.” This past October, Walter disclosed in a regulatory filing ...

Mortgage real estate investment trusts increased their holdings of residential MBS by 2.9 percent during the fourth quarter of 2014, according to data compiled by Inside MBS & ABS. Sixteen publicly-traded mortgage REITs reported a fair market value of $282.62 billion for their aggregate MBS holdings as of the end of 2014. That was up 6.7 percent from a year earlier. After diversifying into mortgage-servicing rights, risk-share transactions with the government-sponsored enterprises and other strategies, mortgage REITs are looking...[Includes one data chart]

Fannie Mae and Freddie Mac should move more quickly and expand key initiatives that are laying the groundwork for mortgage-finance reform, according to a Treasury Department official. In remarks prepared for an industry conference this week, Michael Stegman suggested the government-sponsored enterprises should expand their risk-transfer activities and open up the development of the common securitization platform to non-agency participants. “The near-term CSP initiative would not succeed...

What started as an alternative to investing in certificates of deposit has attracted interest from institutional investors and even some ABS issuance. Marketplace lending, also known as peer-to-peer lending, has strong growth prospects, according to industry analysts. Eric Rapp, a senior vice president at DBRS, estimated that $9.0 billion in marketplace loans were originated in 2014, including personal loans and financing for small business, students and real estate. “It’s still relatively small, but it’s got a fast growth trend,” he said late last week during a teleconference hosted by DBRS. Rapp said...

The Department of Justice shows no sign of letting up in its pursuit of FHA lenders that originate improperly underwritten mortgages that later result in significant taxpayer losses. MetLife Home Loans, which is no longer in operation, became the newest addition to the government’s growing list of financial institutions that opted to settle allegations brought under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act, in connection with the origination and servicing of FHA-insured mortgages. Under the agreement, MetLife will pay $123.5 million to resolve allegations that its predecessor it “[turned] a blind eye to mortgage loans that did not meet basic FHA underwriting standards,” and stuck the FHA and taxpayers with the bill when the loans defaulted. In June 2013, MetLife Bank merged into MetLife Home Loans, a mortgage finance company ...

The head of the Consumer Financial Protection Bureau held his ground this week against pressure from Republican and Democrat lawmakers to take it easy on mortgage lenders in enforcing the bureau’s integrated disclosure rule. During a hearing before the House Financial Services Committee, Reps. Randy Neugebauer, R-TX, and Brad Sherman, D-CA, pressed CFPB Director Richard Cordray to consider a 60-day enforcement delay or a “soft enforcement” period when the new mortgage disclosures take effect Aug. 1. The new rule creates an integrated disclosure framework under the Truth in Lending Act and Real Estate Settlement Procedures Act, commonly known as TRID. Cordray did not come right out...

Commercial banks and thrifts added $12.2 billion of agency single-family MBS to their investment portfolios during the fourth quarter of 2014, according to a new Inside MBS & ABS ranking and analysis of call-report data. Banks and thrifts held $1.539 trillion of MBS on their books at the end of last year, a slight 0.3 percent increase from the third quarter. Bank/thrift holdings were up 2.2 percent from the end of 2013. Growth in agency mortgage securities was...[Includes two data charts]

Federal Reserve Chair Janet Yellen indicated this week that the central bank ultimately plans on holding few, if any, mortgage-related securities on its balance sheet. It seems unlikely there will be much in the way of actual sales of agency MBS by the Fed, which leaves run-off as the method of choice to drain the central bank’s portfolio. Delivering her semi-annual Humphrey-Hawkins testimony this week on Capitol Hill, the Fed chief said the FOMC intends to adjust its monetary policy during its normalization process mostly by changing its target range for the federal funds rate and not by actively managing its balance sheet. “The primary means of raising the federal funds rate will be to increase the rate of interest paid on excess reserves,” Yellen said. She also noted...

Conversations with executives at leading industry technology vendors suggest that if mortgage lenders are not already testing their systems and processes for compliance with the impending integrated disclosure rule from the Consumer Financial Protection Bureau, they are already behind the curve. Tech vendors have been working with some of their clients for months already, and in some cases for more than a year, testing systems and process as they prepare for “TRID,” the Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rule. Scott Stucky, chief strategy officer at DocuTech, said...

As Republican leaders in Congress stake out hard-line positions on structural changes to the Consumer Financial Protection Bureau, Democrats are responding by digging in their heels, raising the prospects of more gridlock. Sen. Richard Shelby, R-AL, chairman of the Senate Banking, Housing and Urban Affairs Committee, recently stated his desire to pull the CFPB within the orbit of the congressional appropriations process. He is also interested in changing the leadership structure of the bureau from a single director to a governing board. Ranking Member Jeff Merkley, D-OR, and other Democrats are opposed...