 | | | | By Paul Muolo pmuolo@imfpubs.com Nationstar Mortgage on Friday gave layoff notices to roughly 160 workers in its performing servicing division, IMFnews has learned. The cutbacks will affect employees in Scottsbluff, NE; Lewisville, TX, and 20 in Littleton, CO. A spokesman for the publicly traded nonbank confirmed the job cuts to IMFnews. He noted, “Although our servicing pipeline remains strong, we’ve improved efficiency through increased staff training, improved processes and additional technology solutions.” He added that the company is making “this change to better align our staffing with our current needs. Prior to this announcement, we had about 6,000 employees.” Unlike two of its peer companies – Ocwen Financial and Walter Investment – Nationstar Mortgage continues to buy large packages of mortgage servicing rights in the secondary market. Over the past year, several top-ranked depository lender/servicers have cut staff, but there has been less bloodletting at the nonbanks. That may change as servicing growth becomes more difficult to achieve. Other areas of interest: Originations, Servicing, Personnel, Trends & Profitability | | By Brandon Ivey bivey@imfpubs.com Redwood Trust is set to significantly increase the number of lenders that sell jumbo mortgages to the real estate investment trust, according to company officials, largely from a new partnership with the Federal Home Loan Banks. Redwood had 140 active sellers at the end of June. The REIT plans to start testing its high-balance loan program with the FHLBanks’ Mortgage Partnership Finance Program in the fourth quarter of this year. Redwood said about 750 of the more than 7,400 FHLBank members are currently active MPF program participants that could sell high-balance mortgages to the REIT under the MPF Direct program. “With the upcoming launch of MPF Direct with the FHLBank of Chicago, we expect to add a substantial number of new sellers over the next few years,” Redwood said. The company is working with the FHLBank of Chicago to identify potential sellers. The goal is to start testing MPF Direct sales early in the fourth quarter. Separately, Redwood noted that as of the end of July, the REIT had used $26.0 million in FHLBank advances to fund purchases of $30.0 million of jumbos. Redwood is one of a few nonbanks that have been allowed to tap FHLBank advances, with the REIT’s insurance subsidiary, RWT Financial, receiving approval in June. For more details, see Inside Nonconforming Markets. Other areas of interest: Originations, Secondary/MBS, Nonconforming | | By Brandon Ivey bivey@imfpubs.com Investor demand for re-performing loans has been so strong in recent months that some firms are sitting on the sidelines as yields have become unattractive. Re-performing loans are being sold both as whole loans and in non-agency MBS, largely without ratings. William Gorin, director and CEO of MFA Financial, said the real estate investment trust has been investing in unrated non-agency MBS backed by re-performing loans that were originated between 2005 and 2007. “The average credit support is in excess of 50 percent of unpaid mortgage balance,” he said during a recent call with investors. “So we’re comfortable with the mortgage credit exposure.” Craig Knutson, MFA’s president and COO, said the REIT can generate returns on investment in the high single-digits or low double-digits from re-performing loans. “And because they have a step-up coupon feature at the end of three years, we’re pretty confident in the price stability and the low interest-rate risk associated with these,” he said. For more details, see Inside MBS & ABS. Other areas of interest: Secondary/MBS, Mergers & Acquisitions, Nonconforming | | By Paul Muolo pmuolo@imfpubs.com Quicken Loans funded $625.0 million of FHA loans during May, ranking first among all lenders in the product line for the third consecutive month, according to HUD endorsement data. The May figures, which are the latest available, show Wells Fargo a distant second at $325.9 million. The FHA endorsement data do not fully account for correspondent production. Wells still ranked as the top securitizer of FHA loans, by a wide margin, during the second quarter of 2014, with correspondent originations accounting for 58 percent of its FHA production. Many banks are beginning to shy away from the product as the Inspector General of the Department of Housing and Urban Development and Justice Department take banks to task for underwriting flaws tied to their legacy production. David Stevens, president and CEO of the Mortgage Bankers Association, said “several” mortgage executives have told him that their companies have intentionally shrunk their exposure to FHA. But he cautioned, “None have said they will completely exit FHA.” Other areas of interest: Originations, Data/Rankings, Ginnie Mae/FHA, Trends & Profitability | | By Brandon Ivey bivey@imfpubs.com The government-sponsored enterprises’ holdings of nonprime mortgages continue to decline, largely due to runoff, according to a new analysis by Inside Nonconforming Markets. Fannie Mae and Freddie Mac held a combined $252.2 billion of Alt A and subprime mortgage assets at the end of the second quarter, down 18.3 percent from 2Q13. Purchased/guaranteed mortgages account for 71.9 percent of the holdings, with the rest of the GSEs’ nonprime exposure in non-agency mortgage-backed securities. Fannie has the larger portfolio of nonprime holdings, mostly purchased/guaranteed Alt A mortgages. The serious delinquency rate on the GSE’s purchased/guaranteed Alt A mortgages fell from 10.19 percent in the second quarter of 2013 to 8.37 percent in the second quarter of 2014, with average loan-to-value ratios on the loans falling from 89.0 percent to 80.0 percent in that time. Alt A mortgages have accounted for 10.1 percent of Fannie’s credit losses this year, down from a 26.0 percent share in all of 2013. In 2009, Alt A mortgages accounted for a whopping 39.6 percent of Fannie’s credit losses. For further analysis and detailed tables, see Inside Nonconforming Markets. Other areas of interest: Secondary/MBS, Data/Rankings, Nonconforming, Fannie, Freddie | | By Paul Muolo, Brandon Ivey pmuolo@imfpubs.com, bivey@imfpubs.com Nationstar Mortgage has been doing some restructuring of late, including making changes to its Champion Mortgage platform. Recently, the company named Mike Rawls to the newly created position of president at Champion. The platform entails reverse mortgage lending. Last month it added nonperforming mortgages to the division, a spokesman told IMFnews. Previously, Rawls was EVP of default servicing at the company… Who’s selling that $27 billion mortgage servicing rights portfolio we wrote about last week? Early on, sources said it must be a bank. Now, we’re hearing that it’s a large nonbank. Stay tuned… The list of lenders preparing to offer loans that don’t meet qualified mortgage standards continues to grow. A recent tally of those entering the space includes: Bayview, Impac Mortgage, New Penn Financial, and RPM Mortgage to name a few. Zais Financial even landed a $100 million financing facility from Credit Suisse First Boston Mortgage Capital. For more on the story, see the new edition of Inside Nonconforming Markets… Moody’s Investors Service has announced a proposed update to its rating criteria for jumbo mortgage-backed securities. Under the proposed criteria, collateral modeling will be based on a new version of Moody’s Individual Loan Analysis tool as opposed to the portfolio analysis tool Moody’s has used since 2008. Navneet Agarwal, a managing director at Moody’s, said the proposed changes set “a new standard for transparency” by providing issuers with a tool to estimate Moody’s initial calculation of AAA stress loss for a potential security. Comments are due by Oct. 14… MORTGAGE PEOPLE: NewOak recently hired Anastasia Davis Stull as a managing director in its credit services group, responsible for business development and regulatory compliance. Prior to joining NewOak, Stull was a director of compliance for Treliant Risk Advisors in New York.
Channel Analysis: IMF Looks Lender by Lender at Channel Choices Correspondents delivered a larger share of purchase-money originations in 2013, but the loans created via the retail channel were higher quality when measured by FICO score, loan-to-value ratio and debt-to-income ratio. Look into the pros and cons of each channel and get details on how some 1,700 lenders sourced their 2013 business in IMF’s Guide to Mortgage Originations Channels. Other areas of interest: Originations, Servicing, Secondary/MBS, Personnel, Nonconforming | | | |
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