Ginnie Mae capital plan gets pushback, Freddie Mac, ICE, New Residential release earnings & more of this week's top news
July 30, 2021 4:29 PM
Nonbank lenders balk at Ginnie Mae capital plan
A Ginnie Mae proposal to introduce a risk-based capital requirement for nonbanks has sparked an outcry from mortgage lenders that originate the vast majority of loans to first-time homebuyers and minorities.
Ginnie issued arequest for input in early July on a plan that would impose added net worth and liquidity requirements for all issuers. It would also subject nonbank lenders to a 10% risk-based capital ratio with a risk weight of 250% for mortgage servicing rights — dramatically higher than the calculation for other assets.
State and federal regulators have sought for years to impose prudential regulation and stress-testing on nonbank lenders but the new Ginnie plan is the first to include a risk-based capital standard.
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Ginnie issued a
State and federal regulators have sought for years to impose prudential regulation and stress-testing on nonbank lenders but the new Ginnie plan is the first to include a risk-based capital standard.
Read the
Flagstar's 2Q mortgage earnings slip on margin compression
Flagstar Bancorp's second quarter mortgage banking earnings fell 26% compared with the prior three months and 45% year-over-year as gain on sales margins dipped and its servicing rights.
The Troy, Mich.-based bank, which is in the process ofbeing acquired by New York Community Bancorp, reported combined net mortgage origination and servicing income during the quarter of $163 million, compared with $227 million in the first quarter and $295 million for the second quarter of 2020.
But the parent company, which also has community bank branches along withmortgage warehouse and securitization operations, recorded net income for the second quarter of $147 million. That is relatively flat with the first quarter's $149 million, but approximately 26% higher than the year-ago's $116 million.
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The Troy, Mich.-based bank, which is in the process of
But the parent company, which also has community bank branches along with
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New Residential 2Q earnings released
New Residential Investment Corp. reported gains in originations and servicing segments in the second quarter, and expects MSRs and residential investments, along with its recent Caliber acquisition , to lead to profitability in future quarters.
The New York-based REIT announced $121.3 million in net income for the second-quarter in its earnings call Thursday, compared to a net loss of $8.9 million in the same COVID-impacted quarter last year. In this year’sfirst quarter , the company’s net income came in at $277.6 million.
With the portfolio of recently acquired Caliber Home Loans largely complementing New Residential’s NewRez lending business, company executives were optimistic about future prospects, particularly in originations, after the deal closes in the third quarter.
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The New York-based REIT announced $121.3 million in net income for the second-quarter in its earnings call Thursday, compared to a net loss of $8.9 million in the same COVID-impacted quarter last year. In this year’s
With the portfolio of recently acquired Caliber Home Loans largely complementing New Residential’s NewRez lending business, company executives were optimistic about future prospects, particularly in originations, after the deal closes in the third quarter.
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Jay Z, Will Smith-related funds invest in homeownership fintech Landis
Investment funds connected with Jay-Z and Will Smith participated in homeownership technology company Landis' $165 million Series A private equity raise.
The round is led by Sequoia Capital. Other investors include Arrive (part of Shawn "Jay-Z" Carter's Roc Nation); Dreamers VC (associated with Smith) and existing investor Signia Venture Partners.
"Landis is an innovative company that also has a social mission we are aligned with," Smith said in the press release. "We are excited to be part of a journey that helps Americans achieve homeownership through financial education."
Read thefull story here.
The round is led by Sequoia Capital. Other investors include Arrive (part of Shawn "Jay-Z" Carter's Roc Nation); Dreamers VC (associated with Smith) and existing investor Signia Venture Partners.
"Landis is an innovative company that also has a social mission we are aligned with," Smith said in the press release. "We are excited to be part of a journey that helps Americans achieve homeownership through financial education."
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Doma CEO Max Simkoff on speeding up the timeline to go public
Doma is on the verge of becoming a publicly-held title insurance underwriter, with shareholders of its proposed special purpose acquisition company partner , Capitol Investment Corp. V, set to vote on the deal Tuesday morning.
If the deal is completed, Doma will join thebig four underwriters : Fidelity, First American, Old Republic and Stewart, as public companies, along with Investors Title; a sixth underwriter, the former Entitle Direct, is a unit of mortgage insurer Radian Group.
Although Doma’s underwriting business, North American Title, has been growing, it still only hadone-quarter of the open orders that No. 4 Stewart produced in the first quarter.
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If the deal is completed, Doma will join the
Although Doma’s underwriting business, North American Title, has been growing, it still only had
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State regulator group issues standards for nonbank mortgage servicers
The Conference of State Bank Supervisors has unveiled banklike prudential standards for overseeing nonbank mortgage servicers.
The CSBS’s board of directors on Tuesdayreleased the model standards, which states may adopt voluntarily, after taking into account public feedback on a proposal it issued in 2020.
The standards resemble the capital and liquidity requirementsproposed by the Federal Housing Finance Agency for mortgages serviced for the government-sponsored enterprises Fannie Mae and Freddie Mac. Though the FHFA’s standards apply only to Fannie and Freddie, the CSBS standards also take into account nonagency mortgages.
“The standards provide states with uniform financial condition and corporate governance requirements for nonbank mortgage servicer regulation while preserving local accountability to consumers,” John Ryan, the bank supervisor group's president and CEO, said in a press release.
Read thefull story here.
The CSBS’s board of directors on Tuesday
The standards resemble the capital and liquidity requirements
“The standards provide states with uniform financial condition and corporate governance requirements for nonbank mortgage servicer regulation while preserving local accountability to consumers,” John Ryan, the bank supervisor group's president and CEO, said in a press release.
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New 2022 data standards could head off foreclosure errors in transfers
The restart of foreclosures is intensifying challenges involved in ensuring correct and compliant information is received when mortgages or related cash-flows transfer, but one such hurdle could be eliminated soon.
Protocols aimed at ensuring nothing is lost in translation when information about billing, late payments and related processing moves to a new system are set for comment and subsequent release in 2022, according to the Mortgage Industry Standards Maintenance Organization.
“These transactions sometimes cause confusion among borrowers about when their next payment is due and things of that nature. Standards would help clear that up,” said Seth Appleton, president of MISMO, in an interview.
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Protocols aimed at ensuring nothing is lost in translation when information about billing, late payments and related processing moves to a new system are set for comment and subsequent release in 2022, according to the Mortgage Industry Standards Maintenance Organization.
“These transactions sometimes cause confusion among borrowers about when their next payment is due and things of that nature. Standards would help clear that up,” said Seth Appleton, president of MISMO, in an interview.
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Andrew Harrer/Bloomberg
As FHFA sets eviction rules, MBA redoubles push to get aid to tenants
The Mortgage Bankers Association called on housing finance firms to step up efforts to connect tenants with government rental assistance as new rules for restarting evictions were laid out Wednesday.
With the two large government-sponsored enterprises adding a notification period for tenants in properties securing their loans, and the Consumer Financial Protection Bureau releasing an online tool to assist tenants and landlords in securing aid from the Emergency Rental Assistance programs, the MBA urged members to get more involved too.
“With the CDC nationwide eviction moratorium set to expire on July 31st, we are working closely with our multifamily loan servicing members to communicate to their borrowers that billions of dollars [are] available to help tenants and landlords in need,” MBA President and CEO Bob Broeksmit said in an emailed statement on Wednesday. “We will continue to partner with policymakers and industry stakeholders to build awareness and push forstates to distribute rental assistance more efficiently.”
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With the two large government-sponsored enterprises adding a notification period for tenants in properties securing their loans, and the Consumer Financial Protection Bureau releasing an online tool to assist tenants and landlords in securing aid from the Emergency Rental Assistance programs, the MBA urged members to get more involved too.
“With the CDC nationwide eviction moratorium set to expire on July 31st, we are working closely with our multifamily loan servicing members to communicate to their borrowers that billions of dollars [are] available to help tenants and landlords in need,” MBA President and CEO Bob Broeksmit said in an emailed statement on Wednesday. “We will continue to partner with policymakers and industry stakeholders to build awareness and push for
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Purchase applications drop to lowest level in over a year
Low interest rates led to a spike in refinances, helping drive up overall mortgage activity last week as purchase applications reached their lowest level in over a year, according to the latest data from the Mortgage Bankers Association.
The MBA’s Market Composite Index, which tracks mortgage applications through a survey of MBA members, increased 5.7% on a seasonally adjusted basis from the previous week for the period ending June 23. The unadjusted index came in 6% higherweek over week . Compared to the same period in 2020, the seasonally adjusted application volume was 12.4% lower.
The Purchase Index fell a seasonally adjusted 2% — or 1% on an unadjusted basis — hitting its lowest point since May 2020. Purchases have declined on an annual basis for the past three months.
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The MBA’s Market Composite Index, which tracks mortgage applications through a survey of MBA members, increased 5.7% on a seasonally adjusted basis from the previous week for the period ending June 23. The unadjusted index came in 6% higher
The Purchase Index fell a seasonally adjusted 2% — or 1% on an unadjusted basis — hitting its lowest point since May 2020. Purchases have declined on an annual basis for the past three months.
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Fannie, Freddie, FHA offer some tenants relief as eviction ban ends
One day before the federal eviction ban was to expire, the Federal Housing Administration, the Department of Veterans Affairs, and a government-sponsored enterprise oversight agency extended relief for certain tenants.
The FHA, the Department of Veterans Affairs and the Federal Housing Finance Agency announced separately on Friday that they’re extending moratoria on evictions from single-family real-estate owned properties through Sept. 30, following a recommendation by the Biden administration.
Mortgage servicers can proceed with certain foreclosures after a ban on these ends on July 31, but no evictions of the renters on the properties involved can take place until the end of September, according to the FHA.
Read full story here .
The FHA, the Department of Veterans Affairs and the Federal Housing Finance Agency announced separately on Friday that they’re extending moratoria on evictions from single-family real-estate owned properties through Sept. 30, following a recommendation by the Biden administration.
Mortgage servicers can proceed with certain foreclosures after a ban on these ends on July 31, but no evictions of the renters on the properties involved can take place until the end of September, according to the FHA.
Mr. Cooper 2Q earnings released
Mr. Cooper on Thursday reported $439 million in second-quarter earnings, benefitting from some transitory revenue sources as it made progress toward its goal to build longer-term gains with a $1 trillion servicing portfolio.
The company’s earnings were down slightly fromthe previous quarter’s $561 million , but up significantly from $73 million a year earlier. Its $4.85 earnings-per-share beat Seeking Alpha’s estimate by $1.38. The $574 million in revenue reported missed the SA estimate by $92 million.
At $654 billion, Mr. Cooper’s servicing portfolio size was up 4% from the previous quarter and 16% annually. Acquisitions of mortgage servicing rights accounted for $16 billion of the growth in the unpaid principal balance of loans, followed by mortgages acquired from other companies through the correspondent channel ($12 billion), subservicing and other sources ($10 billion), and direct-to-consumer originations ($9 billion). Runoff of MSRs reduced the net increase in the portfolio by $22 billion.
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The company’s earnings were down slightly from
At $654 billion, Mr. Cooper’s servicing portfolio size was up 4% from the previous quarter and 16% annually. Acquisitions of mortgage servicing rights accounted for $16 billion of the growth in the unpaid principal balance of loans, followed by mortgages acquired from other companies through the correspondent channel ($12 billion), subservicing and other sources ($10 billion), and direct-to-consumer originations ($9 billion). Runoff of MSRs reduced the net increase in the portfolio by $22 billion.
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Out-of-town home buyers pay $17k more than locals
Add hometown discounts to the growing number of challenges home buyers face.
Consumers moving from one place to another pay an average of $17,123 more than local property purchasers, according to a study of the top 11 migratory housing markets between July 1, 2020 and June 30, 2021 by Redfin.
By dollar amount, the widest discrepancies came in Sacramento, Calif., with out-of-towners paying $67,500 more, $50,450 more in Dallas and an additional $47,500 in Miami. Out-of-towners actually paid $16,500 less in Las Vegas, $13,000 less in Tampa, Fla., and $9,000 less in Cape Coral, Fla.
When broken down by the percentage paid over askingAustin, Texas led the group , with migrant workers paying 7.8% more than list price — $470,000 versus $439,900 — and locals paying only 3.7% more than sticker price — $447,500 and $425,000. Sacramento migrants came next at 3% — paying an average of $627,500 for a $615,950 listing — then 2.5% for Dallas migrants — paying $438,450 for a home listed for $425,000.
Read thefull story here.
Consumers moving from one place to another pay an average of $17,123 more than local property purchasers, according to a study of the top 11 migratory housing markets between July 1, 2020 and June 30, 2021 by Redfin.
By dollar amount, the widest discrepancies came in Sacramento, Calif., with out-of-towners paying $67,500 more, $50,450 more in Dallas and an additional $47,500 in Miami. Out-of-towners actually paid $16,500 less in Las Vegas, $13,000 less in Tampa, Fla., and $9,000 less in Cape Coral, Fla.
When broken down by the percentage paid over asking
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Benefit Street buying Capstead, forming 4th largest commercial REIT
Benefit Street Partners Realty Trust, a private but publicly listed company, plans to acquire Capstead Mortgage Corp. in a deal that would make the combined entity the fourth largest commercial real estate investment trust with nearly $2 billion in equity.
Capstead’s common stockholders will receive a cash payment equal to a 15.75% premium to its diluted book value per share. In addition, they will receive shares of BSPRT common stock calculated on an adjusted book-for-book basis on a yet-to-be determined date proof to the deal’s closing. (Companies’ book values reflect their assets minus certain liabilities.) The move initially gave a slight lift to Capstead’s publicly-traded stock, which was up at $6.53 per share Monday afternoon, as compared from $6.41 when the market opened.
The proposed acquisition points to an interesting strategy, in which a player from the commercial sector that remained active throughoutthe pandemic ’s challenges will use the liquidation of a residential mortgage company’s assets to move several notches up in the rankings. The outlook for the commercial market is positive this year.
Read thefull story here.
Capstead’s common stockholders will receive a cash payment equal to a 15.75% premium to its diluted book value per share. In addition, they will receive shares of BSPRT common stock calculated on an adjusted book-for-book basis on a yet-to-be determined date proof to the deal’s closing. (Companies’ book values reflect their assets minus certain liabilities.) The move initially gave a slight lift to Capstead’s publicly-traded stock, which was up at $6.53 per share Monday afternoon, as compared from $6.41 when the market opened.
The proposed acquisition points to an interesting strategy, in which a player from the commercial sector that remained active throughout
Read the
Blend launches financial equality program
Blend Labs will join the growing number of companies launching plans that aim to improve racial equity in personal finances and homeownership.
The technology provider, which has long touted itsaims to make financial service experiences as efficient as ordering on Amazon, launched Blend Impact, a three-pronged program aimed at giving historically underserved communities better opportunities to build wealth through banking and home buying.
"Blend's mission is to expand access to the world's financial resources, and we are committed to creating a more inclusive financial services ecosystem for everyone," Nima Ghamsari, co-founder and head of Blend, said in a press release.
Read thefull story here.
The technology provider, which has long touted its
"Blend's mission is to expand access to the world's financial resources, and we are committed to creating a more inclusive financial services ecosystem for everyone," Nima Ghamsari, co-founder and head of Blend, said in a press release.
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Freddie Mac, Mr. Cooper, Cenlar, LendingHome name new leaders
McLean, Virginia-based Freddie Mac announced that it had promoted Jerry Mauricio to chief compliance officer. Mauricio had been the GSE’s interim CCO since January. With over twenty years of related experience within financial services, Mauricio will lead Freddie Mac’s compliance risk management program for the company’s regulatory and conservatorship obligations. He has been with Freddie Mac since 2019, working in capital markets and consumer compliance divisions. He previously led or helped oversee compliance operations at leading financial institutions, such as Capital One, BNP Paribas, Barclays and Lehman Brothers.
In itslatest leadership change , Dallas-based Mr. Cooper Group announced the hiring of mortgage industry veteran Shawn Stone as executive vice president and chief revenue officer. Stone will focus on the company’s growth objectives, explore new delivery channels and oversee Mr. Cooper’s originations business. Stone returns to the mortgage lender and servicer from Renovate America, where he was its CEO, and also served as CEO of Global Mortgage Capital. He previously spent 18 years at Mr. Cooper in several different capacities, including as founder and president of its Xome business.
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In its
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Newrez markets new ARM products
A new marketing push around adjustable-rate mortgages at Newrez highlights a change in the relative pricing of the loans that has increased their attractiveness in certain niches.
Newrez is selling ARMs that are fixed for five, seven or 10 years before adjusting in niches that includethe non-QM and jumbo markets. It’s also offering them through multiple loan channels.
A change in the relationship between short- and long-term rates has made ARMs more attractive, Jeff Gravelle, chief production officer at Newrez, noted. Although the current market typically has favored fixed rate loans, the relative discount for five-year products has increased.
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Newrez is selling ARMs that are fixed for five, seven or 10 years before adjusting in niches that include
A change in the relationship between short- and long-term rates has made ARMs more attractive, Jeff Gravelle, chief production officer at Newrez, noted. Although the current market typically has favored fixed rate loans, the relative discount for five-year products has increased.
Read the
