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Inside Mortgage Finance

February 2, 2017

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Nonbank Share of Top 50 Mortgage Servicers Up Sharply in 4Q16, Plenty of Upheaval Ahead

Nonbanks continued to grab a larger share of the mortgage servicing business during the fourth quarter of 2016, and the rapid emergence of investor servicers – firms that buy mortgage-servicing rights while tapping other firms to actually administer the pools – promises to bring more change. A new Inside Mortgage Finance ranking and analysis shows that nonbanks that ranked among the top 50 servicers increased their holdings by 6.9 percent during the fourth quarter. Depository institutions among the top 50 servicers reduced their holdings by 1.2 percent during the same period. With Citi, the sixth-largest servicer at the end of 2016, now in the process of selling a large chunk of its MSR assets – in some cases to investors that will use subservicers – the demographics of the industry will change...[Includes two data tables] Read More

Citigroup May Have Company as it Exits the MSR Arena; The First Step in an Eventual Withdrawal from Lending?

Not only did Citigroup shock the market this week with its decision to exit residential servicing operations, but the move could be the start of an eventual withdrawal from all mortgage banking. For now, the nation’s sixth-largest servicer – and 13th-largest originator – is strongly refuting such talk, but that isn’t stopping the industry from speculating on the megabank’s next move. “If they firmly believe they can’t make money in servicing and cross-selling, then this is... Read More

As Legal Action in PHH v. CFPB Continues, Agency Brings RESPA Action Against Prospect Mortgage

The Consumer Financial Protection Bureau this week announced a Real Estate Settlement Procedures Act enforcement action against a nonbank lender that appears to reflect a traditional interpretation of the law’s anti-kickback provisions, while a flurry of new paperwork fell on its controversial legal battle with PHH Mortgage. The bureau this week brought a $3.5 million enforcement action against Prospect Mortgage, accusing the firm of illegal kickbacks for mortgage business referrals from real estate brokers, and in an unusual twist, a mortgage servicing operation. The CFPB said... Read More

New Residential Bulks Up on MSR Assets. Regulatory Scrutiny Not Far Behind? Behind the Scenes: Fortress

Real estate investment trust New Residential Investment Corp. has been quietly trolling for mortgage servicing assets the past year and snagged a big one this week when it agreed to buy $97 billion in agency rights from Citigroup. Now comes the hard part: incorporating the receivables into an already fast-growing portfolio and convincing regulators at the Federal Housing Finance Agency and Ginnie Mae officials that it has both the management structure and the financial wherewithal to handle so much product. According to a tally from Inside Mortgage Finance, since early December New Residential has acquired... Read More

GOP Executes a Work-Around to Push Through Favorable Votes on Nominee for Treasury, AG

A day after Democrats on the Senate Finance Committee delayed a vote on some of President Trump’s nominations by refusing to attend a confirmation hearing, Republicans used a parliamentary maneuver to push through a unanimous favorable vote on two of them. Mortgage industry observers were expecting positive votes this week from the committee on the nominations of Steve Mnuchin as the new head of the U.S. Treasury and Sen. Jeff Sessions, R-AL, as the next U.S. Attorney General. However, Democrat members of the committee refused... Read More

MBA Housing Finance Reform Plan Recommends Multiple Guarantors to Increase Competition

The Mortgage Bankers Association this week released an updated proposal to establish multiple privately owned guarantors to promote competition in the marketplace. In the MBA’s blueprint, the guarantors would be organized as privately-owned utilities with a regulated rate of return. “The more market participants that compete... Read More

Redfin to Offer Purchase Mortgages, Pairing Real Estate Agents and Title Business with New Lending Operation

Real estate brokerage firm Redfin is preparing to offer purchase mortgages to homebuyers who use the firm’s real estate agents. The company announced Redfin Mortgage last week, promising a “digital mortgage,” low interest rates and faster closing times. The new lender will be led by Jason Bateman, a former executive vice president of mortgage operations at BBVA Compass. “When your real estate agent, title professional and lender work together, you win,” he said. “Lenders should spend their time determining which loan is right for a customer, not looking for new customers.” Initially, Redfin Mortgage plans... Read More

Community Banks Call for Curbs on ‘Fair Lending Overreach,’ Seek Elimination of Disparate Impact from Fair Lending Laws

The Independent Community Bankers of America is urging the Trump administration to push for the elimination of disparate impact from federal fair lending laws to curb “fair lending overreach” and unwarranted enforcement actions against community banks. The ICBA is seeking an amendment to federal fair lending laws to bar certain disparate-impact causes of action. The amendment would clarify that disparate impact without a finding of an intent to discriminate is not a fair lending violation. “This would ensure that community banks that uniformly apply sound and neutral lending standards are not subjected to unnecessary regulatory enforcement actions or frivolous and abusive lawsuits,” said Lilly Thomas, ICBA senior vice president and senior regulatory counsel. Thomas said... Read More

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