Jumbo MSRs Slide; Finance of America Says IPO/SPAC is a Go - IMFnews

Share Register Advertise March 03, 2021 Slip Sliding Away: Jumbo MSRs bivey@imfpubs.com Most major jumbo mortgage servicers decreased their portfolios in 2020, according to a new ranking and analysis by Inside Nonconforming Markets. A group of 30 servicers tracked by the publication handled $1.16 trillion of jumbos as of Dec. 31, down 5.9% from the end of 2019. On a sequential basis, 4Q20 servicing balances slipped by 2.5%. The three largest servicers in the group boasted receivables of more than $100 billion each, all posting portfolio declines in the fourth quarter and for the full year. Wells Fargo was the top jumbo servicer, with $268.73 billion of product at yearend, down 14.2% from the end of 2019. While origination of jumbos at Wells declined on an annual basis last year, officials at the bank said prepayments were elevated due to a surge of refis in 2020. For full details and exclusive jumbo servicing rankings, see Inside Nonconforming Markets, now available online. CFPB Nominee: Agency Will Not Dictate Housing Finance Policy lburden@imfpubs.com Consumer Financial Protection Bureau director nominee Rohit Chopra provided few details of what changes may lie ahead at the agency during Tuesday’s confirmation hearing before the Senate Banking Committee. When asked what he thought were the most important considerations as the CFPB grapples with changes to the QM rule, the nominee said the bureau will not dictate housing finance policy and plans to obtain input from all interested parties. Chopra said industry participants will be offered a “robust way to comply” with fair lending laws and that wrongdoers will be held accountable when they do not. One senator stated the CFPB had taken action against lenders and servicers based on supervisory guidance and asked Chopra if he would comply with the supervisory guidance rule, which states that such guidance does not have the force of law but is merely a statement of regulator expectations. In response, Chopra said he hadn’t read the rule, noting that supervisory guidance exists to help institutions understand how best to comply. For more details on his testimony, see the new edition of Inside Mortgage Finance, available online Thursday afternoon. Angel Oak Stocks its First MBS with Post-Volatility Loans bivey@imfpubs.com After issuing a number of MBS transactions collateralized by loans originated before March 2020, Angel Oak Companies is set to issue a deal with newer product, suggesting the worst of the pandemic is in the rearview. Mortgages in the planned $272.3 million MBS have seasoned for an average of six months, according to a presale report from Fitch Ratings. Most of the loans were originated by Angel Oak, along with a 2.5% share from unidentified lenders. Nearly all of the borrowers are current and only 2.5% received forbearance due to the coronavirus. Servicing is being handled by Select Portfolio Servicing. Unlike other recent non-QM deals, the servicer will advance missed payments of principal and interest for 180 days, including delinquent loans in forbearance. The characteristics of mortgages in the deal are somewhat stronger than previous issuance from Angel Oak. Some 86.5% of the borrowers are self-employed. PennyMac Sees Green from the Ginnie EBO Game pmuolo@imfpubs.com In a nutshell, mortgage banker PennyMac Financial Services appears to be making a killing in the Ginnie Mae early-buyout game. In its recent fourth-quarter earnings statement, the Westlake Village, CA-based lender/servicer laid out just how profitable Ginnie EBOs can be: “Servicing segment revenue included $199.1 million in net gains on loans held for sale related to reperforming government-insured and guaranteed loans, up significantly from $154.4 million in the prior quarter.” And in the year-ago quarter? Not so much. The strategy contributed $29.7 million to the bottom line in the fourth quarter of 2019. Then again, the business of buying delinquent FHA and VA loans out of MBS pools and rehabilitating them had yet to be juiced by the economic damage caused by the pandemic. In short, thanks to the coronavirus, FHA delinquencies have soared — and along with them the forbearance rate on Ginnie product. For more on the story, see Inside MBS & ABS, now available online. Short Takes: FoAM Says IPO is a Go / Fourth Quarter Results / An Interesting MBS from PIMCO / From FHA Chief to Multifamily Lender pmuolo@imfpubs.com, bivey@imfpubs.com, mvolkova@imfpubs.com When it comes to Finance of America Mortgage becoming a public company via a special purpose acquisition company maneuver, it’s been quiet of late – that is, until yesterday. The Blackstone Group-controlled mortgage banker issued fourth quarter earnings Tuesday and stated that its IPO/SPAC is still a go… As for its earnings, the news was good but not great. Fourth quarter revenues came in at $539 million, down 10.9% sequentially. Pre-tax income totaled $153 million compared to $242 million in 3Q20. Originations rose 7% quarter to quarter. Then again, several mortgage bankers were in the same boat: Higher 4Q20 lending volumes but lower net earnings. Bottom line: It will be interesting to see what kind of investors show up for the IPO/SPAC… Finance of America bills itself as a “diversified, vertically integrated consumer lending platform” operating in three segments: forward and reverse originations, commercial real estate lending, and two non-lending segments: services and portfolio management… Bond-investing behemoth PIMCO is set to issue a new non-agency MBS backed by home-equity lines of credit originated by Capital One nine years ago. That’s not a misprint. PIMCO acquired the HELOCs after Capital One exited the mortgage business in 2018, according to Fitch Ratings. MORTGAGE PEOPLE: Dana Wade, a former FHA commissioner in the Trump administration, has landed a job in government lending. Commercial mortgage banker Walker & Dunlop, Bethesda, MD, this week said it hired Wade as chief production officer for FHA loans. The nonbank said Wade also will lead the company’s affordable financing activities. Millennial-Driven Demand Buoys Housing Market As many older homeowners opt to age in place, millennials are picking up the slack on homebuying activity. And industry observers believe millennial-driven demand will fuel the market for several years to come. Do you have practices in place that appeal to this group of potential borrowers? The millennial generation doesn’t approach the mortgage process in the same way as previous customers, so grabbing their attention — and business — may require you to shake up your selling tactics. Gather some key tips for capturing market share within the millennial mortgage market in the Inside Mortgage Finance guide Mortgages for Millennials. -   To ensure delivery to your inbox, add news@imfpubs.com to your address book or safe sender list. Home | Update Your Account | Mortgage Data | User Agreement | Unsubscribe © Copyright 2020 Inside Mortgage Finance Publications 7910 Woodmont Ave., Suite 1000, Bethesda, MD 20814 Tel: (301) 951-1240; Fax: (301) 656-1709

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