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Inside Mortgage Finance

November 2, 2017

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Minor Retreat for Top Tier of Mortgage Servicers In 3Q17, Market Share Tilts Further to Nonbanks

There were no seismic shifts in the demographics of the mortgage-servicing business during the third quarter of 2017, although a new Inside Mortgage Finance ranking and analysis revealed an unexpected decline in the total holdings of the top servicers and a shift in composition. The top five shops held a whopping $3.716 trillion of servicing on their books at the end of September, down 0.2 percent from the previous quarter. The only top-five servicer to ... [Includes two data charts] Read More

Fannie ‘Servicing Marketplace’ Program Isn’t Operational Yet but It’s Causing Consternation in Certain Circles

In an attempt to help its smaller seller/servicers achieve better pricing on coissuance transactions, Fannie Mae will launch a new “Servicing Marketplace” designed as an upgrade to an existing program that some say was seldom used. The new platform allows sellers to choose a Fannie-approved coissuance servicer and commit to sell servicing rights at the same time they sell the loan into a Fannie mortgage-backed security. All transactions are on a bifurcated basis; that is, the seller is still ... Read More

Nationstar Mortgage May be in Play, But It’s Hard to Predict Who Possible Suitors Could Be

The possible sale of Nationstar Mortgage could have ramifications for a handful of other publicly traded nonbank mortgage firms, including Ocwen Financial, New Residential Investment Corp., and Walter Investment Management Corp. For now, Nationstar and its largest investor – Fortress Investment Corp. – are saying little about the matter, but it’s been widely reported the past week that SoftBank (soon to own Fortress) has hired investment bankers to explore a sale of ... Read More

MBA Calls for Changes to FHA Lender Review System, Specific Remedies in Response to Lender Complaints

While the Department of Housing and Urban Development’s newly implemented FHA Loan Review System and its defect taxonomy has reduced lender exposure to false-claims risk, the system needs more tweaks to become fully efficient, says the Mortgage Bankers Association. While acknowledging great improvement in lender certainty and clarity regarding False Claims Act risk, the MBA wants to see “assignment-specific remedies” for each tier of defect severity. And though lenders say ... Read More

Federal Bank Regulators Propose Reducing/Simplifying Capital Requirements for Mortgage Servicing Assets

In a well-telegraphed move, federal regulators this week proposed reduced capital requirements for bank holdings of mortgage servicing assets, including mortgage servicing rights. The proposal issued late last week was part of an effort to “simplify” servicing-related capital requirements for all but the largest banks. The proposal would eliminate a 10 percent common equity tier 1 capital deduction threshold that currently applies to MSAs and certain other assets. Instead, a 25 percent deduction ... Read More

CFPB Publishes Tool to Track Delinquencies, Initial Sample Finds Rates at Lowest Since Crisis

The Consumer Financial Protection Bureau this week rolled out a new online tool to track mortgage delinquency rates for all 50 states and the District of Columbia. The mechanism also illustrates the CFPB’s findings on the county and metro-area level with interactive charts and graphs, all based on information in the National Mortgage Database. The Mortgage Performance Trends tool measures loans 30 to 89 days late and those more than 90 days late. The interactive charts and maps ... Read More

Treasury Urges HUD to Weigh Its Use of ‘Disparate Impact’ in State-Regulated Insurance Markets

The Department of the Treasury, in the third of four reports related to an executive review of federal financial regulations, urged the Department of Housing and Urban Development to reconsider its use of disparate impact policy in the insurance industry. Released last week, the latest report focused on asset management and insurance and the regulatory structure of financial entities and products in each of these structures. Treasury called upon HUD to reevaluate its use of the ... Read More

GOP Tax Reform Effort Poised to Reduce Homeownership Incentives Provided by the Mortgage Interest Deduction

One of the biggest takeaways for the mortgage industry in Republicans’ tax reform effort is that homeownership incentives provided by the mortgage interest deduction will be reduced significantly. Republican leaders have stressed that they don’t plan to eliminate the MID. But a near doubling of the standard deduction and other provisions included in tax reform will make the deduction worth much less, according to Leonard Burman, an institute fellow at the ... Read More

Fannie, Freddie Combined Earnings Reach $7.7 Billion In Third Quarter, G-Fee Income Continues to Grow

Fannie Mae and Freddie Mac generated a combined $7.69 billion in net income during the third quarter of 2017, up significantly from the $4.86 billion in the second quarter, according to an Inside Mortgage Finance analysis of earnings reports released this week. Freddie’s earnings were unusually high at $4.67 billion thanks to a legal settlement with the Royal Bank of Scotland over non-agency mortgage-backed securities sold by the investment firm to the government-sponsored ... Read More

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