OneWest Bank’s decision to sell $78 billion in unpaid principal balance of mortgage servicing rights and related servicing advance receivables to Ocwen Financial continues the trend of banks unloading servicing with special servicers. However, the deal is unique in that OneWest’s owners have been looking to cash out of the entire banking operation for a while. Ocwen announced late last week that it will buy the MSRs and servicing advance receivables for $2.53 billion, with the sale expected to close in stages this year. “We have entered into a definitive agreement with Ocwen Loan Servicing to sell our third-party mortgage servicing rights for forward mortgages in order to sharpen our focus on developing a leading regional banking franchise,” said Joseph Otting, president and CEO of OneWest. The bank was...

Mortgage lending industry representatives were unanimous in their view that the Consumer Financial Protection Bureau’s ability-to-repay rule and “qualified mortgage” standard, as currently constituted, may severely restrict access to mortgage credit on multiple levels. Testifying earlier this week before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, James Gardill, chairman of the board of WesBanco, Inc., said on behalf of the American Bankers Association that the QM rule will limit mortgage lending because the QM guidelines narrow lending parameters. “Even within the QM framework, many concerns remain that could limit credit availability to a diverse group of consumers,” Gardill said. Debra Still, chairman of the Mortgage Bankers Association, said...

Sometimes, industry “best practices” are as much what not to do as they are what in fact to do. That reality that is taking on a new degree of seriousness with the CFPB as the new sheriff in town when it comes to the Home Mortgage Disclosure Act and all of the new attention being paid to HMDA data. Maria Marquez, a manager for enterprise risk services at Deloitte & Touche LLP, told a group discussion during the American Bankers Association’s regulatory compliance conference that large banks are facing heightened...

The recent market tumult caused by suggestions that the Federal Reserve’s quantitative easing program (QE3) may soon be tapering off is likely over, and price adjustments may have created good buying opportunities in the non-agency MBS sector, according to analysts. With less than $1 trillion in MBS still outstanding in the market, and very few higher-yield investment options around, non-agency MBS remains a good investment choice, said Bank of America Merrill Lynch analysts Chris Flanagan, Ryan Asato and Justin Borst. In their latest market analysis, the BAML researchers said...

The outlook for Federal Reserve policy and any adjustments to its $85 billion per month agency MBS buying spree depends a great deal on how the U.S. housing market evolves during the second quarter through the end of this year, according to analysts from Standard & Poor’s. Robert Keiser, vice president of Global Markets Intelligence at S&P Capital IQ, told attendees of an S&P webinar this week that all the signs point to the Fed specifically targeting housing in the third installment of its quantitative easing policy (QE3) as an instrument to stimulate economic growth. “The Fed recognizes...

The likelihood of new loans exceeding the statutory “high-priced mortgage loan” (HPML) threshold due to a recent policy change relating to FHA mortgage insurance premium payments is causing uneasiness among some lenders, said an industry trade group. This week, the Consumer Mortgage Coalition warned that lenders might not originate FHA-insured loans if they thought the new MIP policy would cause the mortgages to turn into HPMLs and subject them to increased liability. Specifically, the new MIP policy might prevent ...

The federal government seized control of Fannie Mae and Freddie Mac by extra-legal means during the 2008 financial crisis and then went out of its way to curtail the two government-sponsored enterprises’ profits while unjustly denying GSE shareholders just compensation for their deliberately devalued holdings, according to a lawsuit filed this week. The suit filed by GSE shareholders in the U.S. Court of Federal Claims in Washington, DC, asserts the takeover of Fannie and Freddie by the Federal Housing Finance Agency was “unlawful and unwarranted” and an unconstitutional violation of due process which cost investors billions of dollars. “Even if a statutory basis existed...

Some experts are predicting that the new ability-to-repay rule issued by the Consumer Financial Protection Bureau, which sets the boundaries of “qualified mortgages,” will also lead some lenders to focus on so-called non-QM loans that will become the new subprime market. At the American Bankers Association’s regulatory compliance conference, held this week in Chicago, ABA Senior Regulatory Counsel Rodrigo Alba said publicly what many mortgage bankers have been thinking privately. Responding to a comment from one banker who said her institution might opt to do only non-QM lending, just for simplicity’s sake, Alba said, “Wanted or not, this may start leaning into being the new subprime.” He added...

Community lenders are lobbying for significant exemptions to the Dodd-Frank Act and based on their track record and support in Washington, DC, they might be successful. The Community Mortgage Lenders of America released draft legislation this week known as “The Community Mortgage Lenders Act of 2013.” The bill would exempt community lenders from a number of mortgage requirements in the DFA and beyond. The bill defines...

U.S Bank may proceed on a limited basis in its legal claim against Bank of America and Countrywide Financial in connection with a soured $1.75 billion MBS deal after a New York state judge ruled last week to narrow the case to just a fraction of the loans in dispute. Judge Eileen Bransten dismissed a breach of contract claim against BofA that sought to force the bank to repurchase some 4,400 loans in the pool due to “pervasive breaches” in the representations and warranties of the securities. U.S. Bank, in its capacity as trustee for HarborView Mortgage Loan Trust, sued BofA and Countrywide in August 2011 seeking repurchase of non-performing loans from the underlying residential MBS. The judge said...