Image: Thinkstock
As servicers began modifying staggering numbers of mortgages, they took control and implemented stringent underwriting practices that will serve as a model for all mortgage underwriting in the future.
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"Nothing is really being put out for bid right now," Ocwen executive chairman William Erbey recently said. "It's the whole market that's basically stopped."
Brokers of servicing rights say the overall market remains robust, despite suggestions by Ocwen's William Erbey last week that trades had ground to a halt. Trading of seriously delinquent portfolios has slowed on concerns about increased liability.
Mortgage bondholders have long complained to regulators that the national mortgage settlement gave large bank servicers credit for principal reductions and loan modifications they did not pay for themselves.
Image: Bloomberg News
Regulator Benjamin Lawsky is concerned that Hubzu, a website run by Ocwen's Alitsource affiliate, charges inflated fees "through conflicted business relationships" at the expense of mortgage investors and strapped homeowners.
The days of seeking 20% market share in mortgages
B of A caught observers off guard by announcing $6 billion in mortgage litigation expenses, but the move is an attempt to convince analysts and investors that there is an end in sight to its crisis-era legal woes. It just might work.
WAKE-UP CALL:
Ginnie Mae has halted the transfer of mortgage servicing rights from Bank of America to a nonbank servicer because of missing documents. The agency is asking the top servicers for an inventory of loans with missing documents.
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