February 2014

TheMReport — News and strategies for the evolving mortgage marketplace.

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Th e M Rep o RT | 49 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SERVICING local edition announcement, the agreement covers the sale of $40.7 billion in unpaid principal balance on resi- dential MSRs, an amount making up about 55 percent of Flagstar's mortgage loans "serviced-for- others" portfolio. The pool of loans covered in the deal is made up of loans origi- nated mostly after 2010 and ser- viced for Fannie Mae and Ginnie Mae, the announcement says. Per the companies' agreement, Flagstar will act as the subser- vicer on all of the loans underly- ing the MSRs, taking income from subservicing and retaining a portion of the ancillary fees. That portion of the agreement will remain in effect as long as the loans remain outstanding. For Flagstar, the deal repre- sents an opportunity to reduce the firm's MSR concentration and strengthen its balance sheet, says Lee Smith, COO. "Equally important, we are able to utilize Flagstar's servicing platform to generate ongoing servicing revenue and diversify the company's operations. We believe our re-branded servicing platform presents an attractive opportunity for organizations that are looking to purchase MSRs and have Flagstar subservice these loans, and we believe there is a growing market for such services," Smith went on to say. Speaking on behalf of his com- pany, Two Harbors president and CEO Thomas Siering said the transaction "represents substantial ongoing progress related to our MSR investment initiative." Wells Fargo, Fannie mae announce $591m settlement The agreemenT wraps up Fannie's legacy repurchase reviews. CALIFORNIA // Fannie Mae and Wells Fargo have reached an agreement that will close the book on a number of problem legacy loans, both companies announced. According to the separate an- nouncements, Wells has agreed to pay $591 million to Fannie to resolve repurchase requests on certain loans originated prior to 2009. Adjusting for prior repurchases, the bank will pay $541 million in Q 4 2013. In its own statement, Wells Fargo says it had fully accrued for the cost of the agreement as of the end of the third quarter. Though the bank—the nation's biggest home lender—remains on the hook for certain contractual responsibilities, the agreement "resolves substantially all repur- chase liabilities" related to the loans covered. For Fannie Mae, the settlement wraps up a year's worth of effort resolving legacy problems and al- lows for a fresh start this year. "We have closed out our legacy repurchase reviews with this agreement with Wells Fargo," said Timothy Mayopoulos, president and CEO of Fannie Mae. "This agreement represents a fitting conclusion to our year of hard work to put legacy issues in the rearview mirror and begin 2014 focused on improving the future of housing finance." stonegate expands with new acquisitions The company brings in more Than 200 new employees and shakes up iTs managemenT Team. MASSACHUSETTS // Stonegate Mortgage Corporation, a non- bank mortgage firm focused on origination, financing, and servicing, announced the acquisition of the wholesale lending channel and certain distributed retail assets of Nationstar Mortgage Holdings. In addition to expanding Stonegate's wholesale and retail client base, the acquisition adds more than 200 employees to the company's ranks. "It continues to be an exciting time at Stonegate Mortgage," said CEO Jim Cutillo, commenting on the acquisition. "This acquisi- tion reflects our ongoing growth strategies as we continue to build our national presence." He added: "We remain com- mitted to delivering a supe- rior customer experience in all aspects of our business. These changes enhance our commit- ment and allow us to remain leaders in the mortgage market- place," he added. As part of the transaction, Stonegate made some changes to its management structure, adding several new senior managers. Leading the company's third party origination (TPO) channels as EVP is Kevin McCafferty. McCafferty developed extensive wholesale experience with Nationstar Mortgage and LandSafe Closing Services, a Bank of America subsidiary. He also spent 20 years working with Bank of America in various capacities, last serving as wholesale mortgage executive. The TPO channel at Stonegate will be expanded into three sales divisions led by SVPs Michael Cullen (for the East Division), Paul Wyner (Central), and Greg Armstrong (West). All three will report to McCafferty. On the retail side, Fred Bolstad was named EVP and national sales manager. Before coming to Stonegate, Bolstad held several national sales posi- tions at Nationstar; previously, he served as managing director of wholesale lending and manag- ing director of national produc- tion for Citibank. The retail channel will also expand into three divisions, with SVPs Todd Fliss, Mark Etchison, and Vic Polich lead- ing the Eastern, Central, and Western divisions, respectively. In addition to expanding Stonegate's wholesale and retail client base, the acquisition adds more than 200 employees to the company's ranks.

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