TheMReport — News and strategies for the evolving mortgage marketplace.
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LOCAL EDITION SERVICING impose heavy penalties on those banks that fall short," he added. Federal officials and 49 state attorneys general, including Jepsen, negotiated with the nation's five largest servicers – including Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo – to secure roughly $25 billion for homeowners in every state ex- cept Oklahoma. The attorney general for Oklahoma obtained a separate settlement with the servicers last week. As part of the settlement, servicers will provide $17 billion to borrowers via relief options, including principal reductions, with an estimated $32 billion potentially on the way in direct relief. Servicers agreed to offer $3 billion in refinance opportunities to mortgage borrowers who are also current on their loans and $5 billion to state and federal authorities, with about $4 billion for the former and $750 million for the latter. The settlement did not ab- solve the servicers of civil and criminal claims, with individual borrowers and investors free to pursue their own cases. MountainView Announces New Sale of Servicing Rights SERVICING GROUP INITIATES SALE OF AN ESTIMATED $130 MILLION PORTFOLIO OF FHA MORTGAGE LOANS. COLORADO // In Colorado, MountainView Servicing Group has announced the sale of an estimated $129 million in Ginnie Mae mortgage servicing rights. MountainView's servicing portfolio auction encompasses 566 loans, and most of the loans—around 99 percent—are Federal Housing Administration fixed-rate mortgages. The Ginnie Mae mortgage servicing rights being put up for sale are comprised of retail 56 | THE M REPORT originations, which account for 50 percent of the portfolio, and the remaining half of the loans being offered are associated with third-party brokers. The company said in a public statement that most of the servic- ing rights being sold are related MountainView's servicing divi- sion serves to advise independent mortgage companies, mortgage banks, thrifts, credit unions, and special servicers in the areas of trading, valuation, and overall management of residential mort- gage servicing rights. when purchasing a mortgage, and many potential buyers may be pushed out of the mortgage market altogether. The controversial QRM rule, which is contained in the Dodd- Frank Act, has been the subject of lengthy debates since it was first proposed, and the regulatory move is largely unpopular both on Capitol Hill and Wall Street. Apart from raising down pay- ment standards for borrowers, the QRM rule also mandates that lenders choosing to extend loans falling below the 20 percent down payment requirement maintain 5 percent ownership of the loan. It's a risk mitigation proposal that many inside the indus- try feel would stifle mortgage lending to a profound degree, considering the number of home- owners who've lost valuable equity since the housing crisis. Based on the findings from UNC's Center for Community Capital, a QRM mandate of even 10 percent could reduce the nation's pool of borrowers by as much as 38 percent. When looking at the current 20 percent threshold established by the rule, the Center found that nearly 61 percent of the country's borrow- ers would be unable to qualify. Commenting on its survey, the to loans that are approximately 14 months seasoned. MountainView went on to add that the included loans are spread throughout the United States. During the third quarter of 2011, MountainView was re- sponsible for helping Fannie Mae liquidate a $485 servicing portfolio in Illinois, and during the same time frame, the com- pany was also responsible for a selling a smaller allotment of Ginnie Mae servicing rights. The more diminutive sale included an estimated $45 million in servic- ing rights, most of which were related to loans in California. Based in Denver, the servic- ing arm of MountainView is a wholly owned subsidiary of MountainView Capital Holdings. UNC's Center of Community Capital Releases Mortgage Study EXAMINING THE QRM RULE WITHIN THE DODD-FRANK ACT, FINDINGS FROM UNC'S SURVEY CONFIRM THE NEGATIVE IMPLICATIONS OF THE LEGISLATION. NORTH CAROLINA // According to a recent report from the Center for Community Capital at the University of North Carolina, the new regulations surrounding qualified-residential mortgages (QRM) will require creditworthy borrowers to take on a heavier financial burden Center stated that the ultimate goal—reducing foreclosures— would not "necessarily outweigh the costs of reducing borrowers' access" to mortgage loans. In a statement from the organization, the Center also noted that African-American and Latino consumers were likely to be the most negatively affected groups should the government proceed with the QRM regula- tions. The Center's study recom- mended that only the riskiest loan types be subject to QRM requirements, such as interest-on- ly loans or loans extended with no income documents. Elaborating on its sugges- tions, the Center added, "While higher down payments do result in fewer defaults, the payoff is small relative to the number of creditworthy households who could be shut out of the market, the study shows." SECONDARY MARKET ANALYTICS SERVICING ORIGINATION