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Inside Mortgage Finance

November 6, 2014

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Nonbanks Continue Expanding Their Share of Mortgage Servicing Market at Evolutionary Pace

Nonbank mortgage servicers continued to gradually expand their share of the market during the third quarter of 2014, but the pace has clearly slowed. Nonbank institutions accounted for 27.2 percent of the $7.389 trillion of servicing controlled by the top 50 servicers in the industry, according to a new Inside Mortgage Finance ranking and analysis. The nonbank share of the top 50 in combined servicing was up from 26.8 percent at the midway point in 2014 and 24.0 percent in September 2013. The nonbank expansion has slowed...[Includes two data charts] Read More

The Current M&A Craze – It’s All About Originations; Ocwen a Seller of MSRs?

Of the dozen or so mortgage company sales that have been announced over the past two months, just one has involved a servicing portfolio of any size and even that transaction – $1.5 billion of mortgage servicing rights owned by Continental Home Loans – was small. In today’s merger and acquisitions market, it’s all about building loan origination capacity as buyers such as Freedom Mortgage, LoanDepot and Guild Mortgage try to keep growing. Moreover, this thirst for production comes... Read More

Servicing Transfer Complaints ‘Escalating’ In HAMP; Little Response from Treasury

The Treasury Department isn’t doing enough to address issues with servicing transfers in the Home Affordable Modification Program, according to the Special Inspector General for the Troubled Asset Relief Program. The SIGTARP warned that complaints about servicing transfers are “escalating,” though that’s from a low base, with only 84 complaints from borrowers this year. “The serious problems raised by homeowners include lost and delayed HAMP applications, trial and permanent modifications not being honored, and the miscalculation or misapplication of monthly payments,” the SIGTARP said in a report released last week. The Treasury monitors... Read More

Provident No Longer a Giant in Table Funding; Brokers Nervous About a Possible Pullout

In 2013, Provident Funding Associates of California was the second largest originator of home mortgages through loan brokers, but it has fallen from that high perch in recent quarters. Moreover, there have been recent reports that the privately held nonbank may significantly trim the number of states where it’s willing to accept submissions from brokers. Wholesalers and brokers alike told Inside Mortgage Finance they have heard talk of a large-scale pullout by Provident in multiple states, but have seen nothing definitive. According to agency mortgage-backed securities data compiled by Inside Mortgage Finance, Provident was active with brokers doing business in 41 states over the first nine months of 2014. One broker trade group official, requesting anonymity, said... Read More

Lenders Strongly Oppose Proposal from State Regulators to Increase Reporting Requirements

A proposal from the Conference of State Bank Supervisors to increase reporting requirements on state mortgage call reports has been met with strong resistance from a number of lender trade groups. In October, the CSBS proposed collecting additional quarterly information regarding qualified mortgages and servicing, among other data submitted as part of the Nationwide Mortgage Licensing System and Registry’s mortgage call report. The comment period closed late last week. “We join... Read More

PHH Mortgage Dodges a Bullet, For Now, as Judge Throws Out Punitive Damages in Loan Mod Dispute

PHH Mortgage may avoid taking a big hit in a legal dispute with a homeowner after the company mishandled his mortgage modification. Last week, in Linza v. PHH Mortgage Corp. et al., Yuba County (CA) Superior Court Judge Stephen Berrier threw out most of the jury’s original $16.2 million verdict against the company, including all punitive damages. Instead, the judge said that homeowner Phillip Linza is entitled to only $159,000 in damages. The case stems... Read More

DC Court Throws Out HUD Disparate-Impact Rule

The U.S. District Court for the District of Columbia early this week ruled that the Fair Housing Act does not provide for a disparate-impact theory of discrimination. The court’s ruling in American Insurance Association v. U.S. Department of Housing and Urban Development said the FHAct only permits disparate treatment as a basis for discrimination. HUD issued... Read More

Reinstatement of GSEs’ 97 LTV Programs Would Benefit Private MIs but Delay Recovery of MMIF, Analysts Say

Private mortgage insurers would welcome the return of conventional 97 percent loan-to-value mortgages from the government-sponsored enterprises, but analysts say it might not be a slam dunk. The private MI industry has been encouraging the GSEs, particularly Fannie Mae, to bring back the 97 percent LTV product to compete with the FHA’s main product, which requires just a 3.5 percent downpayment. For years, Fannie offered... Read More

Lessons Learned From Enforcement Trends Help Lenders Cope With New UDAAP Environment

As mortgage lenders continue to feel their way around the world of unfair, deceptive or abusive acts or practices (UDAAP) as defined by the Dodd-Frank Act and the Consumer Financial Protection Bureau, there is much they can learn from a close examination of recent enforcement actions. During a webinar this week sponsored by Inside Mortgage Finance, Mercedes Tunstall, a partner with Pillsbury Winthrop Shaw Pittman, said CFPB consent orders show that the bureau is watching telemarketing practices very closely. The CFPB is... Read More

GSEs Keep Cranking Out Profits in 3Q14

Fannie Mae and Freddie Mac reported a combined $6.0 billion in net income for the third quarter of 2014, up from $5.1 billion in the previous quarter. The two government-sponsored enterprises will send to the Treasury $6.8 billion as return on the government’s senior preferred stock. That will bring cumulative payments under the GSE conservatorships to $225.5 billion. Fannie and Freddie were given... Read More

GOP Control of 114th Congress Could Spur Renewed GSE Reform Effort, Support for Government Guaranty Grows

With the Republicans poised to take control of the U.S. Senate and having gained an even greater GOP majority in the House, legislative conversations surrounding housing finance reform should return to Capitol Hill, but few political commentators believe a bill can actually be passed. Control of the Senate swung back to the GOP for the first time since 2006 after the polls closed, as Republicans now enjoy a 52-45-3 majority in the Senate. However, the race in Louisiana between incumbent Democrat Mary Landrieu and Republican challenger, Rep. Bill Cassidy is headed... Read More

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