The Psychology Behind the Recovery

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Th e M Rep o RT | 51 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 First american to snap Up interthinx The real esTaTe soluTions provider is looking To enhance iTs offerings wiTh The newly acquired company. california // First American Financial Corporation, a company specializing in title insurance, settlement services, and risk solutions for participants in real estate transactions, announced the signing of an agreement to acquire Interthinx, Inc., a provider of loan quality analytics, decision support tools, and loan review services. First American struck the deal with Verisk Analytics, Inc., agreeing to pay $155 million. The transaction is expected to close by March 31, pending closing conditions. First American CEO Dennis Gilmore said the purchase comes in response to customers' desire "for a tighter integration between loan origination activities, loan quality verification processes, and title and settlement services." "The added capabilities of Interthinx will allow us to leverage our central role in real estate transactions to offer our customers further assurances in areas that present risk, including fraud, identity and income validation, collateral adequacy, and compliance," Gilmore said. "This puts First American in a unique position to provide the industry's most robust loan- quality assurance solutions— from application to closing." The acquisition also represents a "significant step" in the company's effort to capitalize on its unique data assets to enhance its offerings, he added. For Interthinx's part, president Jeff Moyer said the firm is "delighted by the opportunity to combine our expertise with that of First American, a company known for its integrity, innovation, and solid commitment to the real estate community." seneca completes ams acquisition The company hopes To conTinue building on The servicing acquisiTions iT inked over The lasT few monThs. new york // Seneca Mortgage Investments L.P., a real estate investment firm focused on mort- gage servicing rights (MSRs), an- nounced it closed on its purchase of AMS Servicing. The acquisition was first an- nounced in September 2013 by Seneca, a joint venture among affiliates of GSO Capital Partners L.P., EJF Capital LLC, and Arbor Commercial Mortgage LLC. "We are very excited to close on this new business venture," said Darren Richman, senior managing director of GSO Capital Partners. "The evolu- tion of the residential mortgage servicing marketplace, along with the strength of this partnership, presents an excellent opportu- nity for the Seneca Mortgage Companies, as a well-capitalized, non-bank, non-originator, to dif- ferentiate itself in the industry as a purchaser of mortgage servic- ing rights, as evidenced by the significant growth we have seen in a short period of time." The final approval builds on the progress of the last several months, during which Seneca provided funding for AMS to ac- quire MSRs to assets with an ag- gregate unpaid principal balance of $9.7 billion. With licensing in all 50 states and approvals from Fannie Mae and Freddie Mac, all parties involved say the new joint venture "is strongly positioned for continued growth." "We are extremely pleased to be joining two very successful part- ners whose expertise and capital strength will help us collectively execute our core business strategy," said Ivan Kaufman, chairman and CEO of Arbor Commercial Mortgage. "Going forward, this new partnership will certainly maximize our ability to capitalize on the many opportunities we see in the residential mortgage servicing marketplace and will greatly enhance and diversify the AMS Servicing platform." JPmorgan to Pay $614m Over False claims The feds say The bank submiTTed noncomplianT loans for governmenT insurance. new york // JPMorgan Chase announced a settlement with the government, putting to bed yet another complaint in a long line of legal issues plaguing the megabank. The Justice Department and JPMorgan both announced the bank will pay $614 million in restitution for violations of the False Claims Act. The government claims starting as early as 2002, the firm knowingly originated and underwrote non-compliant loans and submitted them for insurance coverage and guarantees by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA). As a consequence, the DoJ said FHA and VA "incurred substantial losses when unqualified loans failed and caused [the agencies] to cover the associated losses." "This settlement recovers wrong- fully claimed funds for vital govern- ment programs that give millions of Americans the opportunity to own a home and sends a clear message that we will take appropriately aggressive action against financial institutions that knowingly engage in improper mortgage lending practices," said associate attorney general Tony West. As part of the settlement, JPMorgan also agreed to enhance its quality control program for future loans submitted to FHA's Direct Endorsement Lender program. In a statement, JPMorgan said, "The settlement represents another significant step in the firm's efforts to put historical mortgage-related issues behind it." The bank added that it is fully reserved for the settlement.

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