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Inside Mortgage Finance

May 8, 2014

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Trillion-Dollar Servicer Club Shrinks to One As Deconsolidation Continues in Early 2014

Although the pace of blockbuster servicing deals appears to have slowed, the giants of the mortgage-servicing business continued to leak market share in early 2014. Significantly, there is now just one lender with more than $1 trillion in mortgage servicing. Back in the third quarter of 2005, Countrywide Financial became the first company to amass over $1 trillion in mortgage servicing, and Wells Fargo joined the club by the end of that year. Chase Home Finance became a $1 trillion servicer in the fourth quarter of 2008, shortly after Bank of America took over Countrywide and became the first $2 trillion servicer. But BofA dumped...[Includes two data charts] Read More

A New Concept is Floated: Maybe Fannie And Freddie Servicing Fees Are Too Low

Should Fannie Mae and Freddie Mac increase the 25 basis point servicing fee they pay mortgage companies that service their loans? The issue was apparently raised by at least one mortgage executive at a recent advisory board meeting that Fannie held with some of its customers. Two servicing advisors with knowledge of the meeting confirmed the story, but few in the industry believe that any type of increase is being contemplated at this time. One major concern centers... Read More

State Regulators Considering Raising the Bar For Nonbank Servicers; Capital Is an Issue

State regulators are evaluating regulation and supervision of nonbank servicers due to the growth seen in the sector in recent years, according to officials at the Conference of State Bank Supervisors, which last month closed a request for proposals on the issue. “This is just a really good time for us as a system to look at this change, what does this change mean, and how should it inform the licensing regime on the state side,” said Michael Stevens, senior executive vice president at the CSBS. Among other issues, state regulators are researching... Read More

Johnson-Crapo Reform Bill Markup Set to Resume Next Week But Observers Say Measure Won’t Get to Floor Vote

The Senate Banking, Housing and Urban Affairs Committee is expected to vote on the housing finance reform legislation next week, but there’s a growing consensus among industry observers that no amount of last-minute patchwork compromises will make the bill ready for a prime-time Senate vote. Many observers said last week’s abrupt announcement by Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID, to delay consideration of S. 1217 in order to gain more than the minimum 12 votes needed to clear the committee doomed the chances of getting the bill to the floor for a vote. A banking committee staffer told... Read More

All Mortgages Held in Portfolio Would be QM Under Legislation Passed by House Committee

During a legislative markup session this week, the House Financial Services Committee approved H.R. 2673, the Portfolio Lending and Mortgage Access Act, introduced by Rep. Andy Barr, R-KY, which would deem all mortgages held in portfolio to be qualified mortgages under the Consumer Financial Protection Bureau’s ability-to-repay rule. Republican supporters characterized the bill as the ultimate “skin in the game” measure and noted it was specifically drafted to avoid the pitfalls of the “originate to distribute” model so heavily criticized for contributing to the financial crisis. But Democrat opponents said... Read More

Fannie, Freddie Earn Combined $9.3 Billion in First Quarter, GSEs Downplay Expectations of Future Profits

Fannie Mae and Freddie Mac together earned $9.3 billion in the first quarter, thanks largely to big settlements of lawsuits over non-agency mortgage-backed securities. Together, the two government-sponsored enterprises will have paid about $213.1 billion to the Treasury at the end of June, roughly $25.1 billion more than the $188 billion the two companies have drawn from the Treasury since being placed in government conservatorship. Freddie earned... Read More

GAO Calls Upon Regulators to Strengthen Oversight, Improve Transparency of Foreclosure Review Process

The amended consent process that led to faster cash payouts to victims of improper loan modifications and foreclosure practices should be evaluated and tested further to ensure servicers’ implementation of foreclosure prevention principles, according to the Government Accountability Office. The new GAO report represents the third and final phase of the watchdog’s examination of the Office of the Comptroller of the Currency’s Independent Foreclosure Review (IFR) process. In 2013, the IFR was replaced for most servicers with cash payments and foreclosure prevention actions. The latest report found... Read More

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