 | | | | By Brandon Ivey bivey@imfpubs.com Ocwen Financial revealed on Monday that it recently received a subpoena from the Securities and Exchange Commission seeking documents regarding related companies, and another subpoena from the SEC on Ocwen’s recent accounting issues appears to be on the way. The June 12 subpoena from the SEC appears to delve into concerns that have also been raised by the New York Department of Financial Services regarding Ocwen’s interactions with related companies in which executives at the nonbank have significant stock holdings. “We received a subpoena from the SEC requesting production of various documents relating to our business dealings with Altisource, Home Loan Servicing Solutions, Altisource Asset Management and Altisource Residential and the interests of our directors and executive officers in these companies,” Ocwen said. The nonbank added that the SEC plans to serve Ocwen with a subpoena regarding an accounting issue between Ocwen and HLSS. The nonbank said it is cooperating with the SEC on these matters. Ocwen noted that a number of class-action lawsuits have been filed relating to the issues being looked into by the SEC. “Ocwen and the other defendants intend to vigorously defend such lawsuits,” the company said. Other areas of interest: Servicing, Regulatory | | By Brandon Ivey bivey@imfpubs.com The focus of the FHA’s quality control efforts should be on loan performance, not technical defects or minor errors, according to Stephen O’Connor, senior vice president public policy and industry relations at the Mortgage Bankers Association. In a comment letter to the FHA regarding the draft Quality Control, Oversight and Compliance section of the FHA’s Single-Family Housing Policy Handbook, O’Connor said lenders spend an inordinate amount of time responding to indemnification requests about minor or inconsequential concerns. He said in many cases the issues are ultimately revoked. “MBA believes that the focus of quality control should be on loan performance, not technical defects or minor errors,” O’Connor said. “MBA does not believe a ‘gotcha’ environment is productive because it forces lenders to restrict credit and deny otherwise creditworthy borrowers access to FHA-insured financing.” He said the MBA was particularly concerned that the main focus of the draft QC section of the handbook was enforcement. O’Connor said the MBA plans to continue to work with staff at the Department of Housing and Urban Development to ensure that finalized sections of the FHA handbook balance risk management with the ability of lenders to serve FHA’s targeted population. Other areas of interest: Originations, Ginnie Mae/FHA | | By Thomas Ressler tressler@imfpubs.com Inaccurate information stands head, neck and torso above any other complaints consumers have about credit reporting, according to a new analysis by Inside the CFPB of data from the Consumer Financial Protection Bureau. Of the big three credit reporting firms – Experian, Equifax and TransUnion – gripes about incorrect data represented 68.7 percent of their combined total of 28,698 submissions. Complaints about inaccurate data include issues such as account status, account terms, “information is not mine,” personal information, public record and “reinserted previously deleted information.” The second largest credit report gripe had to do with the process credit reporting firms use to investigate disputed information. Collectively, financial institutions in the CFPB’s database saw credit reporting complaints drop by 14.9 percent in the second quarter of 2014 compared with the previous quarter. Only two of the top 50 institutions in the ranking showed an increase. For more details, see the latest issue of Inside the CFPB. Other areas of interest: Originations | | By Charles Wisniowski cwisniowski@imfpubs.com The New York-based hedge fund Pershing Square Capital Management has filed a second lawsuit against the federal government demanding it cease and desist its “net worth sweep” of Fannie Mae and Freddie Mac profits. Pershing’s second suit, filed in U.S. District Court in Washington, names the Federal Housing Finance Agency and the Treasury Department as defendants. Pershing, reportedly the largest investor in GSE common shares, is seeking an injunction to halt the sweeps, a declaratory judgment that the revised bailout terms and sweeps are illegal, an unwinding of the sweeps, as well as “other equitable and ancillary relief.” The complaint also suggests that Fannie’s and Freddie’s dividends being paid to the Treasury should be shared among common shareholders, including three retiree owners of Fannie shares who have signed on as co-plaintiffs to Pershing’s suit. Pershing filed its first complaint last week in the U.S. Court of Claims in Washington, asking for “just compensation” from the government without stating a specific amount. Unlike the various 20 lawsuits filed against the government regarding GSE shareholders, Pershing’s legal actions focus on common shareholders. Other areas of interest: Fannie, Freddie, GSEs | | By Brandon Ivey bivey@imfpubs.com More than 50 jumbo mortgage-backed securities have been issued since 2010. According to DBRS, only one of the deals has taken any losses, a 0.04 percent loss at that... The Nonprofit Alliance of Consumer Advocates is touting its ability to help troubled borrowers receive loan modifications. The NACA said it recently helped a borrower go from facing foreclosure to receiving a $400,000 principal reduction on his $669,000 mortgage. The group said it was able to track down the owner of the borrower’s loan and allege problems with the loan, such as forged signatures by the lender or notary, and other “very serious violations of law” ... American Capital Mortgage Investment’s acquisition of Residential Credit Solutions helped firm up the servicer ratings of RCS, according to Fitch Ratings. The rating service also noted that RCS’ call center metrics have declined recently. Officials at the servicer said the metrics reviewed by Fitch were challenged due to a significant increase in calls due to changes in periodic statements prompted by the Consumer Financial Protection Bureau and other letters relating to the CFPB... Universal American Mortgage, the mortgage banking subsidiary of homebuilder Lennar, recently completed its acquisition of Pinnacle Mortgage Group, a lender with 10 retail locations in Southern California and Colorado. Deloitte Corporate Finance, which advised Pinnacle on the sale, said Pinnacle will be approved directly as a seller and servicer to the agencies and will be rebranded as Eagle Home Mortgage, which is the name of Universal American Mortgage’s retail locations.
Servicing Helped Save the Day for Many Institutions in 1Q Although the results were not as favorable as in recent past quarters, by most measures the first quarter of 2014 was a good one for the mortgage industry. Servicing helped to save the day, with institutions generally earning more on servicing during the quarter than on production. IMF’s quarterly Mortgage Profitability Report provides detailed data on the first quarter results and an understanding of the path the mortgage business is on so you can get a jump on responding. Other areas of interest: Mortgage Lending & Servicing | | | |
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