Tag Archives: mortgage servicing rights

Texas orders Ocwen to stop acquiring new mortgage servicing rights

The Texas Department of Savings and Mortgage Lending recently ordered Ocwen Financial Corporation to cease and desist, adding its name to a growing list of states and regulators coming after the mortgage servicer over alleged violations of state and federal law.

According to the order, as first reported by Kristen Mosbrucker with the San Antonio Business Journal, “The Savings and Mortgage Lending Commissioner having determined Ocwen Loan Servicing, LLC, has engaged in, or is engaging in, or is about to engage in, acts or practices constitution violations of state and federal law and applicable regulations, hereby issues the following finding of facts and order to cease and desist.”

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California settlement puts Ocwen on a leash, prohibited from acquiring California MSRs without state’s approval

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Under the terms of the agreement, in addition to thepreviously disclosed $2.5 million fine Ocwen must pay California, Ocwen is also prohibited from acquiring any additional mortgage servicing rights for loans in California until the CDBO is “satisfied that (Ocwen-subsidiary)Ocwen Loan Servicing can satisfactorily respond to the requests for information and documentation made in the course of a regulatory exam.”

Perhaps most importantly though, the settlement only covers Ocwen’s failure to provide the documents to the CDBO, not what the documents contain.

“The consent order addresses and resolves the examination disputes between the CDBO and OLS, and does not involve any accusation or admission of wrongdoing with regard to OLS’s servicing practices,” Ocwen’s SEC filing states.

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$4.2B Fannie, Freddie MSR portfolio for sale

Denver-based, MountainView Servicing Group is advising the sale of a Freddie Mac and Fannie Maemortgage-servicing rights portfolio, with $4.2 billion of aggregate unpaid principal balance.

The portfolio features 100% fixed-rate and first lien product, a weighted average original FICO score of 752 and a weighted average original loan-to-value ratio of 75%.

In addition, it has a weighted average interest rate of 4.19% and low delinquencies.

The portfolio is highly concentrated in California (51.3%), Arizona (8%), Texas (5.9%) and Colorado (5.2%). The average loan size it $23,937.

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$2.7 billion Fannie, Freddie MSR portfolio for sale

MountainView Servicing Group is the advisor for the sale of a Fannie Mae and Freddie Mac mortgage servicing rights portfolio with $2,738,563,642 of total unpaid principal balance.

The portfolio features 100% fixed-rate and first lien product, along with 100% retail production.

It also includes 80% purchase originations, a weighted average original FICO score of 746, a weighted average original loan-to-value ratio of 79% and a weighted average interest rate of 4.51%.

In addition, top states in the portfolio’s nationwide geography are California (17.6%), Arizona (16.4%), Utah (16.4%), and Colorado (9.7%). The portfolio’s average loan size is $207,263.

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Who said the MSR market was frozen?

Back in April, Ocwen Financial (OCN) Executive Chairman William Erbey said that the entire mortgage servicing rights market was frozen by the New York Department Financial Service, after the DFS put a $2.7 billion MSR deal between Ocwen and Wells Fargo (WFC) on an indefinite hold.

“Until we resolve – this relates to Ocwen – until we resolve New York State we’re not acquiring any new (MSR) portfolios at all. As a matter of fact the entire market – nothing is being put out for bid right now,” Erbey said at the time. “The whole market has stopped until that gets resolved.”

While that may be true from his perspective, indeed New York is reportedly deepening its investigation, recent activity shows a fair amount of activity elsewhere in the space.

In fact, since Erbey made his proclamation, at least $9.2 billion in in MSRs have been brought to the market.

In May, a $3 billion Fannie Mae bulk MSR portfolio was offered by MountainView Servicing Group, which acted as the exclusive broker for the deal. In June, another $1 billion in Fannie-backed MSRs hit the market.

In July, more than $4 billion in MSRs was brought to the market in two separate deals. First, Seattle-based HomeStreet (HMST), the parent company of HomeStreet Bank, agreed to sell approximately $3 billionin MSRs to SunTrust Mortgage.

Then, an additional $1 billion in MSRs hit the market later in the month, consisting of loans backed by Fannie,Freddie Mac, and Ginnie Mae.

And earlier this month, $1.2 billion more in MSRs was brought to the market, boasting Fannie and Ginnie-backed loans.

Now, nearly $5 billion more in bulk MSRs is available for sale, according to Mountainview and Interactive Mortgage Advisors, which are each acting as the exclusive sale advisor for two new deals.

The larger of the two offerings is a $3.17 billion pool of MSRs, backed by Ginnie Mae.

“The seller is a well-known, independent mortgage banking entity with strong financials to stand behind all representations and warranties, as well as, experienced senior management to facilitate a smooth transaction in all areas,” Interactive said in an announcement.

The pool carries a weighted average note rate of 3.67% and a service fee of 29.41 basis points. The pool also carries a 12-month average escrow balance of 1.07% of the unpaid principal balance and is sub-serviced by a “nationally known company.”

Bids for the pool are due Wednesday, August 27 by 12:00 p.m. Mountain time.

 

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Nationstar faces challenges as Wall Street turns skeptical on nonbank MSRs

Nationstar (NSM) isn’t facing quite the level of pushback or regulatory targeting as its counterpart Ocwen Financial (OCN), but it is having a devil of a time lately and it was reflected in reports and on the market boards Friday.

Nationstar will report its second-quarter earnings on Wednesday, August 6.

Nonbanks snapping up mortgage servicing rights have been fighting against a flurry of regulatory pushback and scrutiny, not so much for anything they have done, but because of their growing share of the MSR servicing space.

TheStreet Ratings team rated Nationstar as a “hold” with a ratings score of C-. TheStreet Ratings Team had this to say about their recommendation:

We rate NATIONSTAR MORTGAGE HOLDINGS (NSM) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company’s strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and a generally disappointing performance in the stock itself.

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