Servicing

The owners of a Los Angeles-based real estate company were charged last week by the Securities and Exchange Commission with violating antifraud and securities registration provisions by defrauding investors through a business that had false track records.

It’s not easy being a GSE, executives speaking as the Mortgage Bankers Association’s National Secondary Market Conference in New York made clear last week.

The government controlled Ally Financial Monday morning said its board has voted to place Residential Capital LLC into Chapter 11 bankruptcy protection while it finalizes a deal to sell substantially all of its assets to Nationstar Mortgage for $4 billion. In total, 50 ResCap affiliates are affected by the filing.

Is the mortgage industry in the throes of what might turn out to be a lengthy and profitable recovery? Let’s look at the signs: Fannie Mae just posted a hefty profit, Freddie Mac has earned money on an operating basis for at least two quarters in a row, many lenders are enjoying strong profit margins and the HARP program appears to be humming along. Optimists might have reason to pop some champagne.

The Office of the Comptroller of the Currency has dismissed one of the consultants overseeing a massive foreclosure review after it discovered a conflict of interest in outside work the company has performed.

The discussion in a number of panel sessions at the Mortgage Bankers Association National Secondary Market Conference in New York on May 6 through 9, was if, let alone when, private capital would return to the industry. In the exhibit hall, much of the vendor focus was on technology and compliance which would ease that transition. Nary a wholesaler or correspondent aggregator was exhibiting.

The National Mortgage Settlement between state attorneys general and the federal government on one side and major mortgage servicers on the other is likely to affect the way small servicers and subservicers do business.

Fannie Mae and Bank of America are involved in a major dispute over $7 billion of outstanding buyback requests with the GSE cutting back on the loans it purchases from the giant bank.

Hilltop Holdings of Dallas, a property and casualty insurer, has agreed to buy fast-growing mortgage lender PlainsCapital in a cash-and-stock deal valued at $537 million.

Over the past dozen years, one of the best things I’ve done on the road is to gather top industry officials around me and have a freeform, on-the-record roundtable of industry issues.