Nationstar Mortgage Holdings Inc., NSM -4.27% a company that processes payments for millions of mortgages, was temporarily prevented last year from buying the rights to service home-loans backed by Fannie Mae FNMA +0.26% and Freddie Mac,FMCC -0.52% according to people familiar with the matter.
Although the restrictions on Nationstar were later lifted, the incident helps illustrate why a federal watchdog is raising concerns about rapid growth of nonbank financial firms in the mortgage market. A report released Tuesday by the inspector general of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, said some nonbank mortgage-servicing companies may lack adequate funding, putting the mortgage market at risk.
The report described the troubles of one particular company that breached Fannie Mae’s minimum capital requirement for servicers, which prompted Fannie Mae to limit the company’s ability to acquire servicing rights for additional mortgages.
The report didn’t mention the name of the company, but people familiar with the matter identified the servicer as Nationstar. In a statement, a Nationstar spokesman said the company “has strong working relationships with Fannie Mae and Freddie Mac.” The spokesman said the company currently meets “all capital requirements for conducting business.”