 | | | | By Paul Muolo pmuolo@imfpubs.com Solera National Bank disclosed in a recent regulatory filing that “all” of its residential loan officers quit the company and along with them most of their support staff, leaving the firm with no presence in the market. In a filing with the Securities and Exchange Commission, Solera disclosed that the event “will have a material adverse impact on revenues because we have no meaningful loan volumes.” The departures were linked to an ugly proxy battle involving the publicly traded depository. As IMFnews went to press, company officials could not be reached for comment. The lender is based in Lakewood, CO. All four of its loan offices have been vacated. Some of the LOs have already found work elsewhere. Solera, which was founded in 2006, is not a large player in the Colorado mortgage market, but it’s highly unusual that an entire staff of loan officers would leave on their own accord all at once, especially in a tough origination market. One Colorado mortgage executive noted that Solera’s problems have been reported in the local media, including The Denver Post, for several months now. “It’s a control struggle between the original owner and current board,” said this executive. In the SEC filing, the bank said it’s in the process of recruiting to fill “key positions” following a contested 2014 shareholder meeting. Other areas of interest: Originations, Regulatory | | By Brandon Ivey bivey@imfpubs.com The Securities and Exchange Commission approved a final rule late Wednesday with new requirements for rating services and due diligence providers, including those in the mortgage sector. The rule was approved on a 3-2 vote, with the SEC’s two Republican commissioners chafing at standards required by the Dodd-Frank Act. Among other provisions, the SEC is requiring nationally recognized statistical rating organizations to strengthen their internal controls, establish new procedures designed to protect the integrity of rating methods, and establish training, experience and competence standards for those involved in the credit rating process. The SEC also established more stringent disclosure requirements for issuers and underwriters of asset-backed securities, including new non-agency MBS, with respect to their use of third-party due diligence services. Due diligence providers that work on MBS and ABS also will have to provide certifications to the rating services which will be disclosed on each rating issued. Rating services will have to submit extensive plans regarding internal controls to the SEC for operations beginning in 2015. Other requirements in the final regulation take effect nine months after the rule is published in the Federal Register, which will likely happen in September. Other areas of interest: Originations, Secondary/MBS, Regulatory, Nonconforming, Fannie, Freddie, Commercial/Multifamily | | By Paul Muolo pmuolo@imfpubs.com Fannie Mae told its employees this week that it plans to sell its iconic headquarters in Northwest Washington, DC, and consolidate its five area office locations into one over the next two to three years. The GSE’s preference is to stay in Washington, but it’s possible the company may not. Its chief competitor, Freddie Mac, is headquartered in McLean, VA, about eight miles from the nation’s capital. The relocation rumor has been making the rounds at Fannie for a few years now. In the greater Washington metro area Fannie employs 4,700 workers. Fannie, a ward of the government for almost six years, owns its headquarters at 3900 Wisconsin Avenue, but leases other locations in the area. It also occupies 4000 Wisconsin Ave. The company has offices in Virginia, Texas and California. Employees outside of the Washington area will not be affected, a spokeswoman clarified. Back in the 1980s, when Fannie Mae was losing $1 million a day, it contemplated selling the property and came up with a value of $10 million to $15 million, said one former executive who worked at the GSE. Since then the property has increased in value probably by five-fold, at least. Other areas of interest: Originations, Servicing, Secondary/MBS, Personnel, Fannie | | By John Bancroft jbancroft@imfpubs.com Fannie Mae and Freddie Mac are losing ground in the unusually soft mortgage market of 2014, according to a new analysis by Inside The GSEs. The two companies accounted for 66.3 percent of new single-family mortgage-backed securities during the second quarter of this year. That was down from 73.8 percent for all of 2013 and represented the lowest combined GSE share of new MBS since the second quarter of 2011. Since the collapse of the non-agency MBS market back in 2008, Fannie and Freddie have generally accounted for over 70 percent of new MBS production. But the sharp drop in refinance business in 2014 has taken a bigger bite out of the GSE market and had a smaller impact on Ginnie Mae production. In fact, Ginnie issuance has exceeded Freddie production since the third quarter of 2013. For further analysis and exclusive tables on GSE MBS issuance, see Inside The GSEs, now available online. Other areas of interest: Secondary/MBS, Data/Rankings, Nonconforming, Fannie, Freddie | | By Brandon Ivey bivey@imfpubs.com In July, the Consumer Financial Protection Bureau proposed adding 40 new data fields for collection under the Home Mortgage Disclosure Act. Industry attorneys advised lenders to look at their current operations through the data fields the CFPB will likely see and make adjustments before the federal regulator completes a new in-depth analysis. Warren Traiger, counsel at the law firm of BuckleySandler, said the new HMDA data will be a fair lending “game changer” that will likely prompt new enforcement actions and other problems for lenders. “There is an opportunity to address any issues before the data are filed with your regulator and in all likelihood becomes public,” he said during a recent webinar hosted by QuestSoft, an industry vendor. The comment period on the CFPB’s proposed rule closes Oct. 22, and lenders won’t be subject to the proposed new reporting requirements until 2016 at the earliest. Among the proposed fields to be added are credit scores, loan-to-value ratios and total points and fees. “These are data that most lenders use in their internal fair lending analysis,” Traiger said. “The industry is no longer going to be able to justify potential issues by what is not immediately known to the regulator.” For further analysis, see the new edition of Inside Mortgage Trends. Other areas of interest: Originations, Regulatory, Data/Rankings | | By Paul Muolo, Brandon Ivey pmuolo@imfpubs.com, bivey@imfpubs.com Now that Fannie Mae has put a “for sale” sign on its Wisconsin Ave. headquarters in Northwest Washington, is Freddie Mac next? There has been some speculation that Freddie would follow suit and unload its HQ. We sent an email to two Freddie press officers, but at press time had not heard back from them on the matter. We have no information suggesting that Freddie will sell its McLean, VA, campus, but it would make sense. It has owned that property for several years and presumably the land has increased in value nicely… Anyone who works in mortgage banking knows that profit margins can be razor thin at times. That’s why most lenders of size own or rent office space in geographic areas where costs are low. When’s the last time you heard about a large mortgage company having its headquarters or servicing platform in New York City or San Francisco? But if Fannie and Freddie sell their properties, shouldn’t they move to a low-cost state like Wyoming or Montana? It would put them further away from the Inspector General of the Federal Housing Finance Agency. Just a thought… MORTGAGE STOCK SELLING NEWS: Arthur Walker, senior vice president of international tax planning for Ocwen Financial, filed noticed with the Securities and Exchange Commission that on Aug. 26 he sold 821 shares of company stock at $27.65 a unit. The sale generated proceeds of about $22,700. REGULATORY NEWS: The disclosure requirements for non-agency MBS and other securitized asset classes that the Securities and Exchange Commission approved on Wednesday will not apply to 144A offerings, known as private placements. In recent years, most jumbo MBS has been issued as private placements. The SEC said it is still considering whether the new loan-level disclosure requirements and other standards should apply to private placements. MORTGAGE PEOPLE: Robert Benmosche is stepping down this weekend after five years as CEO of American International Group, the parent of United Guaranty, the nation’s largest mortgage insurance firm. Benmosche said that he learned in May that he had up to a year to live. The CEO, who was diagnosed with cancer four years ago, said he wants to enjoy the time he has left after outliving earlier prognoses and repaying the insurer’s $182.3 billion in government assistance.
One Way to Boost Originations: Dip Your Toe in Non-QM Waters So-called non-QM lending is quickly shaping up to be one of the hottest new areas for mortgage lending growth. But before venturing into non-QM lending, mortgage lenders need to weigh the risks (including litigation) against the potentials: veins of profitable new business that have few alternative lending sources. Join Inside Mortgage Finance for “Unlocking the Potential of Non-QM Lending” at 2:30 pm ET on Wednesday, Sept. 24, and hear from lenders that are already part of the non-QM market. Learn the calculations they use to determine the market’s viability and how they’re meeting the challenges presented with non-QM lending. Other areas of interest: Originations, Servicing, Secondary/MBS, Personnel, Regulatory, Fannie, Freddie | | | |
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