 | | | | By John Bancroft jbancroft@imfpubs.com Mortgage banking income rose significantly in the second quarter of 2014 for both production and servicing activities, according to a new Inside Mortgage Trends analysis of earnings reports from 11 major lenders. The group, which includes most of the top publicly owned companies in the mortgage industry, reported a combined $1.371 billion in production-related income during the second quarter. That was up 57.0 percent from the first three months of the year, when the group’s total production income sank to just $873.2 million. The earnings gain on origination and secondary market activity followed a healthy 22.7 percent increase in new mortgage production. The ratio of production-related income to loan originations jumped to 1.24 percent, the highest level for the group since the second quarter of last year. Warehouse lending consultants told IMFnews that many originators turned profitable after the first quarter, but are not making as much as they earned this time last year. Other areas of interest: Originations, Servicing, Data/Rankings, Warehouse, Trends & Profitability | | By Paul Muolo pmuolo@imfpubs.com Phoenix Capital, Denver, is out in the market with a $1.1 billion bulk package of servicing rights on Fannie Mae and Freddie Mac loans. Among other things, the portfolio boasts zero delinquencies. In the offering circular Phoenix did not identify the seller by name, but noted that the firm “is a subsidiary of a publicly traded company established in 1995.” As a rule, most advisory firms do not identify the sellers by name, at least not to the general public. Roughly 40 percent of the portfolio is HARP loans and 51 percent of the collateral is in California. The average age of the receivables is nine months. Written bids are due by Wednesday, Aug. 27, with the closing coming by the end of October. LoanCare is listed as the subservicer. Other areas of interest: Servicing, Personnel, Mergers & Acquisitions, Fannie, Freddie, Mortgage Lending & Servicing | | By Charles Wisniowski cwisniowski@imfpubs.com As the Federal Housing Finance Agency mulls over a proposed increase in guaranty fees charged to seller/servicers by Fannie Mae and Freddie Mac, so far those in favor of a hike remain in the minority. In its comment letter on the topic, the Securities Industry and Financial Markets Association said it is not flatly opposed to an increase in g-fees under certain conditions, but policy makers should “consider the broader context” in which the guaranty fee will be raised. The American Bankers Association, in its letter to the Treasury Department, said that the FHFA should not raise g-fees “at this time.” Instead, the ABA said increases should be undertaken “as part of a holistic approach that has as its goal the return of private capital to the secondary market, the shrinkage of the government’s role in that market and more adequate compensation paid to the government for the risks it takes on.” For more on the g-fee story, see the new edition of Inside The GSEs, now available online. Other areas of interest: Originations, Secondary/MBS, Regulatory, Fannie, Freddie | | By Brandon Ivey bivey@imfpubs.com The Securities and Exchange Commission is scheduled to vote Wednesday on two long-pending rules covering non-agency mortgage-backed securities and other asset-backed securities. The so-called “Reg AB2” measure is one of the rules under consideration. It would require increased disclosure on new non-agency MBS. The rule was first proposed in 2010, re-proposed in 2011 and was set to be finalized this past February. Instead, the SEC proposed controversial changes that would place greater burdens on issuers and potentially increase privacy concerns for borrowers. It’s not clear yet how the rule will handle these issues. The other rule scheduled to be considered covers ratings of non-agency MBS and due diligence providers, including requirements from the Dodd-Frank Act. The DFA required the SEC to address conflicts of interest on ratings with respect to sales and marketing practices, “look backs” when credit analysts leave a rating service, and other issues. Other areas of interest: Originations, Secondary/MBS, Regulatory, Nonconforming | | By Paul Muolo pmuolo@imfpubs.com Goldman Sachs & Co. late last week agreed to repurchase $3.15 billion of private-label MBS from Fannie Mae and Freddie Mac as part of a settlement with their regulator, the Federal Housing Finance Agency. Goldman had sold the non-agency product to the two GSEs in the years leading up to the housing bust. In late 2011, the FHFA sued Goldman and 17 other non-agency MBS issuers, accusing them of violations of securities laws and in some cases fraud in the sale of non-agency product. Just three of the 18 original defendants have not settled with the regulator. According to figures compiled by Inside MBS & ABS, Goldman underwrote roughly $130 billion of private-label MBS from 2004 to 2007. Some of those bonds were sold to the GSEs. In a statement, Goldman said it is “pleased to have resolved these matters,” noting that the cost has been “substantially covered by reserves” it took in the second quarter. Other areas of interest: Secondary/MBS, Regulatory, Nonconforming, Fannie, Freddie, GSEs | | By Paul Muolo, Charles Wisniowski pmuolo@imfpubs.com, cwisniowski@imfpubs.com If you’re a mortgage professional looking for work, you may want to contact Altisource Portfolio Solutions, which for tax purposes is headquartered in Luxembourg. Of course, you’ll have to work in India. Altisource – an Ocwen spin-off – recently announced what it calls its “grand opening” of a new “technology campus” in Bangalore, India. The new site doubles Altisource’s office space. The REO management company – it provides other mortgage/real estate services as well – hopes to hire an additional 500 workers… Of course, Altisource shareholders are not happy campers these days. The firm’s stock is trading at $91 compared to a 52-week high of $171. The largest institutional investor in Altisource is Luxor Capital Group of New York with a 9.43 percent stake. Ocwen chairman Bill Erbey owns a mere 724 shares, according to records available on the YahooFinance website… Not only is Phoenix Capital out in the market with a new bulk MSR deal, it also is selling a $30 million to $35 million (per month) package of “flow” rights tied to Freddie Mac product… The Federal Home Loan Bank of Atlanta recently announced that it will participate in the “mortgage partnership finance” program of the Chicago FHLB. Introduced back in 1997, the MPF program provides seller/servicers with a competitive alternative to Fannie Mae and Freddie Mac… MORTGAGE PEOPLE: 360 Mortgage Group of Austin, TX, hired Shane O’Dell as its new Western Regional Manager. He joins 360 from Majestic Mortgage of California, where he held the title of national sales director of wholesale and correspondent. 360 is mostly a third-party originator.
Smaller Players Take on More of the GSE Sales Business The top five sellers to the government-sponsored enterprises once delivered nearly two-thirds of GSE business (back in the first quarter of 2011). But in the second quarter of 2014, their tally was just 33 percent. In the latest edition of the quarterly report, GSE Seller Profile, IMF looks at the details of the sales made by all 1,855 sellers who delivered loans to Fannie Mae and Freddie Mac in the first quarter of 2014, including particulars on volume and loan demographics by channel. Compare and contrast your results, as well as your products and processes, with the rest of the market to root out refinements and new approaches that will improve your own results. Other areas of interest: Servicing, Personnel, Mergers & Acquisitions, Fannie, Freddie | | | |
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