TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/57493
WHAT'S NEXT Springing Forward The origination and servicing industries will soon encounter a wave of refinancing and regulatory expansion, and in February, President Barack Obama touted these decisions and a so-called Homeowner's 'Bill of Rights' in his State of the Union address, even while the Labor Department beat expectations by posting a gain of 243,000 jobs. Follow MReport as we spring forward to the end of Q1 . . . . NOW Nearly one-and-a-half years came to a close in February when state and federal officials an- nounced a historic $25 billion mortgage servicing settlement. The agreement solidified help from Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo in the form of homeowner relief, refinancing commitments, and more. Obama deployed several housing initiatives in his State of the Union address in January. Among these: An unparalleled expansion to refinance op- portunities for eligible homeowners, the elimina- tion of appraisal responsibilities for homeowners, and a Homeowner's Bill of Rights. VS. NEXT Proponents lauded the settlement as a landmark accomplishment that proved the justice system still works. Critics alternately charged that it went too far or simply not far enough, with those on the left billing it as child's play and those on the right fearing for the economy. What's clear: The settlement does not preclude future claims against servicers. Expect a highly touted number of initiatives to get sidetracked by a divided Congress. Many complain that the ability for homeowners to trade in their private-label loans for government-backed loans, courtesy of the cash-strapped Federal Housing Administration, is a step too far. The Labor Department beat back expectations of a shortfall in jobs numbers by fielding 243,000 new positions in January. Economists from across the spectrum hailed the figures as a step in the right direction for the country, citing higher sales, low interest rates, and a boon for consumer con- fidence. In line with Obama's State of the Union address, New York Attorney General Eric Schneiderman joined officials with the Justice Department, HUD, and other agencies to unveil the Residential Mortgage-Backed Securities Working Group in January. The Justice Department immediately subpoenaed 11 banks. FBR Capital Markets analyst Paul Miller writes in a February note that refinance share of activity will continue to post a "mini-refi boom" in the new year, with small loan originators rivaling big- ger financial institutions. The research arm of the investment bank said that refinance volume may hit 1.6 million. A steady economic recovery moved forward tentatively for the nation as unemployment claims likewise fell to 8.3 percent in January. What's this mean for the recovery in the months ahead? Good things, economists agree, so long as a debt crisis in Europe doesn't tip the world economy. Critics and proponents continue to stick to their issues, with some calling the Working Group yet another misstep for the government and oth- ers wondering whether it will nab any big-time fraudsters. Both sides tend to believe that general election politics may have something to do with it. Modifications to the Home Affordable Refinance Program received a bevy of criticism last fall but reportedly persist in generating returns for home- owners. Some say that Obama's recent pledge to expand refinance opportunities will indeed help turn the tide for a slow economic recovery. THE M REPORT | 19