Mortgage conspiracy ring case arrests, assessing damage from UWM, Rocket broker drama, earnings drop and more of the week's top news
May 7, 2021 5:34 PM
12 arrested in California for alleged mortgage ‘conspiracy ring’
After a multi-year investigation by the Los Angeles Police Department and Federal Housing Finance Agency’s Office of Inspector General, the California attorney general arrested a dozen individuals on 133 felony counts of alleged mortgage fraud this week.
The indictment accuses the defendants of conspiring in grand theft, identity theft, forgery, filing false documents, money laundering and aggravated white-collar crime. The scams allegedly ran from 2014 to 2020 across Los Angeles, Riverside and Ventura counties and totaled a combined $15 million.
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The indictment accuses the defendants of conspiring in grand theft, identity theft, forgery, filing false documents, money laundering and aggravated white-collar crime. The scams allegedly ran from 2014 to 2020 across Los Angeles, Riverside and Ventura counties and totaled a combined $15 million.
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Is the drama between UWM, Rocket and Fairway hurting brokers?
The battle between United Wholesale Mortgage, Rocket Cos. and Fairway Independent Mortgage for the hearts and minds of mortgage brokers has the feeling of a schoolyard battle.
United Wholesale Mortgage had thrown down the gauntlet,announcing in early March that it would forbid mortgage brokers from doing business with Rocket and Fairway if they wanted to work with UWM. Rocket and Fairway subsequently shot back in the press and a small group of brokers have since launched a suit against UWM. As the controversy enters the legal system, is it hurting or helping perceptions of the wholesale business and mortgage brokers?
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United Wholesale Mortgage had thrown down the gauntlet,
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Mortgage delinquencies set a new record in March
What a difference a year can make. At this time in 2020, mortgage servicers prepared for an incoming tidal wave of distress as coronavirus unemployment and uncertainty mounted. Now, with the economy rebounding, delinquency performance did a complete 180 with the “largest single month improvement” in 11 years, according to Black Knight.
The latest Mortgage Monitor showed 217,000 homeowners became delinquent on their home loans in March, an all-time monthly low and down from 429,000 in February. Theoverall delinquency rate fell to 5.02% from 6% month-over-month but rose from 3.39% year-over-year — before the pandemic’s financial impact truly set in.
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The latest Mortgage Monitor showed 217,000 homeowners became delinquent on their home loans in March, an all-time monthly low and down from 429,000 in February. The
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LoanDepot’s originations set record despite rate jump
LoanDepot’s originations climbed to a new record in the first quarter amid higher rates and margin compression that contributed to lower consecutive-quarter net income.
Home loan volume jumped to $41.5 billion from $37.4 billion in the fourth quarter and $15.2 billion in the first quarter of 2020. Meanwhile, gain-on-sale fell to 2.71% from 3.38% in the previous three months and 3.5% in the first quarter of 2020. That left loanDepot with $427.9 million in earnings, down from $547.2 million in the fourth quarter of last year but up from nearly $89 million in the first three months of last year.
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Home loan volume jumped to $41.5 billion from $37.4 billion in the fourth quarter and $15.2 billion in the first quarter of 2020. Meanwhile, gain-on-sale fell to 2.71% from 3.38% in the previous three months and 3.5% in the first quarter of 2020. That left loanDepot with $427.9 million in earnings, down from $547.2 million in the fourth quarter of last year but up from nearly $89 million in the first three months of last year.
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Rocket on broker battle: “We are winning”
A Rocket executive made a subtle dig at United Wholesale Mortgage , without mentioning the crosstown rival by name in its earnings call this week.
"We are investing in the mortgage broker channel, and we are winning," said Julie Booth, chief financial officer. "Hundreds of broker partners joined our network during the first quarter, and our partner volume has continued to be strong into the second quarter."
Rocket plans to invest "tens of millions of dollars" in 2021 to support the broker business and "our near term priority in this channel is to drive volume and incremental profits," said Booth.
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"We are investing in the mortgage broker channel, and we are winning," said Julie Booth, chief financial officer. "Hundreds of broker partners joined our network during the first quarter, and our partner volume has continued to be strong into the second quarter."
Rocket plans to invest "tens of millions of dollars" in 2021 to support the broker business and "our near term priority in this channel is to drive volume and incremental profits," said Booth.
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Altisource, Ocwen resolve dispute over default services for New Residential
Altisource Portfolio Solutions has reached an agreement with Ocwen Financial. It resolves a dispute that arose when New Residential Investment asked Ocwen for a default services provider that was not Altisource.
The agreement also extends and expands on certainfield services Altisource will provide to Ocwen.
The companies have a shared history, as Altisource started as a corporate sibling to Ocwen and both were headed by William Erbey.
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The agreement also extends and expands on certain
The companies have a shared history, as Altisource started as a corporate sibling to Ocwen and both were headed by William Erbey.
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Home price growth hits 15-year high but is expected to taper in 2022
As the extremes of tight inventory , sharp buyer demand and favorable interest rates coalesced, home value growth in March reached heights not seen since the lead up to the housing bubble, according to CoreLogic.
The Home Price Index shot up 11.3% annually in Marchand 2.2% from February. It represents the index’s largest year-over-year growth since March 2006. The rate more than doubled the year-ago growth of 4.6%, while going above the forecasted 0.5% by nearly 23 times, though that prediction came amid many pandemic-related uncertainties. The data provider projects another 1.1% jump into April with spring buying in bloom.
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The Home Price Index shot up 11.3% annually in March
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Why there’s a twist in the broker-led return of outside-the-box lending
Brokers are playing a key role in restarting the private market for home loans that the pandemic disrupted in 2020, and growing numbers of non-traditional borrowers, such as the self-employed, may need to turn to it as government-related programs change.
While the amount of self-employed Americans dropped precipitously last March to a seasonally adjusted 8.2 million from nearly 9.5 million, it’s been steadily climbing since then, Bureau of Labor Statistics figures show. As of March 2021, it was nearly 9.9 million.
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While the amount of self-employed Americans dropped precipitously last March to a seasonally adjusted 8.2 million from nearly 9.5 million, it’s been steadily climbing since then, Bureau of Labor Statistics figures show. As of March 2021, it was nearly 9.9 million.
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Genworth sets IPO for mortgage insurer, looks to raise $623M
The initial public offering for Genworth Financial's mortgage insurance subsidiary could raise over $623 million in proceeds, all of which are going to its parent company.
Furthermore, as part of the IPO, Genworth Mortgage Holdings is being rebranded as Enact Holdings. While the registration statement filed with the Securities and Exchange Commission still refers to the various operating units using the Genworth name, those will also be rebranded as Enact as soon as the company receives approval from state regulators.
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Furthermore, as part of the IPO, Genworth Mortgage Holdings is being rebranded as Enact Holdings. While the registration statement filed with the Securities and Exchange Commission still refers to the various operating units using the Genworth name, those will also be rebranded as Enact as soon as the company receives approval from state regulators.
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New Residential predicts non-QM growth, MSR purchases in earnings call
Among the opportunities that New Residential Investment is looking forward to taking advantage of following completion of the Caliber Home Loans acquisition is continued product menu expansion.
"As the competitive landscape gets more difficult on the operating side, the environment will play into our strengths with our capital base, balance sheet and great leadership team," New Residential Chairman, CEO and President Michael Nierenberg said on the company’s first quarter earnings call Wednesday. "We will be focused on growing out other products to our homeowners and build on the great retail presence that Caliber has created."
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"As the competitive landscape gets more difficult on the operating side, the environment will play into our strengths with our capital base, balance sheet and great leadership team," New Residential Chairman, CEO and President Michael Nierenberg said on the company’s first quarter earnings call Wednesday. "We will be focused on growing out other products to our homeowners and build on the great retail presence that Caliber has created."
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Cash-out refi growth raises mortgage risk but not like housing crisis
The Milliman Mortgage Default Index — a benchmark measuring delinquency probability over the lifetime of a loan through a combination of borrower, economic and underwriting risks — rose to 7.64% in the fourth quarter of 2020 from 7.39% in the third while declining from 7.7% year-over-year for loans in the Ginnie Mae market. In comparison, the index for mortgages backed by Fannie Mae and Freddie Mac held quarterly at 1.28% and fell annually from 1.5%. These index
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Fed’s Powell embraces idea of CRA for nonbanks
Federal Reserve Chair Jerome Powell indicated his support on Monday for subjecting non-depository institutions to the Community Reinvestment Act, but said the final decision should be left to Congress.
The Fed has been in talks with the other banking agencies for years to reform implementation of the anti-redlining law. The Office of the Comptroller of the Currency issued its own CRA reform rule last year, and the Fed released a reform outlinein December .
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The Fed has been in talks with the other banking agencies for years to reform implementation of the anti-redlining law. The Office of the Comptroller of the Currency issued its own CRA reform rule last year, and the Fed released a reform outline
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Commercial mortgage performance improves again, but worries remain
Commercial and multifamily mortgages continued their improvement in April, but once again, the only category with a month-to-month increase in their share of late payments was short-term delinquencies, the Mortgage Bankers Association said.
Loans where the borrower was less than 30 days late in making the regularly scheduled payment rose to 1.1% (based on the balance) in April from0.9% in March , the CREF Loan Performance Survey found.
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Loans where the borrower was less than 30 days late in making the regularly scheduled payment rose to 1.1% (based on the balance) in April from
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Home Point broker numbers grow, margins thin amid wholesale price war
Home Point Capital produced origination gains in the first quarter, but competitive market pricing put downward pressure on its net income.
The company recorded $149 million in earnings during the period, down from $184.5 million in the fourth quarter of 2020 but up compared to a loss of $10.6 million in the first three months of 2020. Mortgages produced by the Homepoint lending unit totaled $29.4 billion, up from nearly $24 billion in the final quarter of last year and almost $8.2 billion in the first quarter of 2020.
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The company recorded $149 million in earnings during the period, down from $184.5 million in the fourth quarter of 2020 but up compared to a loss of $10.6 million in the first three months of 2020. Mortgages produced by the Homepoint lending unit totaled $29.4 billion, up from nearly $24 billion in the final quarter of last year and almost $8.2 billion in the first quarter of 2020.
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