Overwhelmed by the tidal wave of foreclosures and under intense scrutiny by lawmakers and regulators, the mortgage industry and default servicers in particular are being challenged like never before to keep up with complex, ever-changing compliance rules and they are in dire need of a technology solution to keep up with the changes. Compliance technology vendors such as Irvine, CA-based DecisionReady are striving to keep up with the demands of their clients, who may not exactly know what they want but know they need a solution that keeps them connected and on top of the latest legal and procedural changes, according to...
Wells Fargo accounted for a whopping 26.1 percent of home mortgages originated during the third quarter, and when you throw in the production numbers for other kingpins in the industry it’s hard to see how small lenders survive. But beneath the gaudy market shares of the Wells Fargos and JPMorgan Chases of the world stand hundreds of small originators – mortgage brokers, community banks, credit unions and old-school independent mortgage bankers – that feed them a significant amount of business. The key to finding success under the shadow of the industry giants is developing a speciality, usually coupled with an obsession for...
A niche FHA mortgage insurance program could become a significant tool to help address the massive inventory of real estate owned, and soon-to-be REO, that continues to weigh on the housing market, some industry observers say. The FHA 203k program was designed to help borrowers who want to purchase a “fixer-upper” home. Started back in 1978, the program insures long-term loans that include both the purchase and rehabilitation of the property. But in 1996, the Department of Housing and Urban Development put a moratorium on issuing 203k loans to private investor-owners, citing instances of fraud and abuse and the inability to...
The Standard and Poor’s/Case-Shiller Home Price Indices for October saw “a modest glimmer of hope.” The indices, which track the price-path for single family homes in 20 national urban centers, saw a 0.2 percent increase from August for the 10- and 20-city composites. Home prices are still lower than they were at this time in 2010 in most cities, Detroit (2.7 percent) and Washington DC (0.3 percent) being the only two markets to post positive annual returns. However, according to David Blitzer, S&P’s chairman of the index committee, 16 of 20 cities and both composites saw their annual rates of change improve in...
The U.S. Senate voted late last week to approve an amendment to a federal spending bill that was offered by Sens. Bob Menendez, D-NJ, and Johnny Isakson, R-GA, to reinstate the higher loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration that expired on Sept. 30. Those limits dropped to $625,500 in a number of high-cost markets on Oct. 1, and would be restored to $729,750 through December 2013 under the Menendez/Isakson amendment. The National Association of Home Builders was pleased.
Buyback risk is raising costs throughout the mortgage industry and causing lenders to boost cred-it standards beyond the levels required by investors, according to several experts at last week’s annual convention of the Mortgage Bankers Association. “The industry is spending hundreds of millions of dollars in repurchases and defending repurchases,” said David Stevens, chairman and CEO of the MBA. At a time when lenders are being pushed to “keep skin in the game,” a 5 percent risk-retention requirement for securitization might almost seem like a better deal than the costly repurchase process, he added. Brian Chappelle said...
MetLife announced last week that it wants to sell its mortgage banking business, but regulatory and legal issues that are partly driving the firm’s retreat may also make it hard to find a buyer. Nowadays, starting from scratch may make more sense than buying someone else’s problems. MetLife explained in a press release that the decision was prompted by an “uncertain marketplace and regulatory environment [that requires] a tremendous amount of resources – both in terms of people and capital – to effectively compete in and profitably grow the forward mortgage business. Doing so would divert these resources away from...
Small and mid-sized lenders participating in the Ginnie Mae mortgage-backed securities program may gain more financing flexibility – and a more competitive footing against the giants in the market – as the agency makes it easier to pledge mortgage servicing rights. Ginnie this week announced a revised Acknowledgement Agreement that will make it simpler for the agency to honor servicing pledges and permit the transfer of MSRs. Until now, Ginnie servicers that need cash to honor their servicing advance responsibilities have not been able to put their MSRs up as collateral for financing, explained Ted Tozer, president of Ginnie Mae, in...
After negotiating with a potential buyer, Bank of America gave up trying to sell its correspondent business and will simply shut the program down by the end of the year, leaving a huge potential hole in the market. The rumored bidder, NationStar Mortgage, reportedly wanted a higher price than BofA was willing to pay to take the correspondent unit off the bank’s hands. “After a comprehensive review of market opportunities, Bank of America will close its correspondent lending channel by the end of 2011, following an orderly transition with clients,” the company said in a written statement. BofA, which had already...
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