Zais Financial Corp. has begun to quantify the effects that the major flooding across Louisiana had on its Baton Rouge-based mortgage banking subsidiary, GMFS.
GMFS reported that it does not expect the flooding to have a material impact on its 2016 financial position, and the subsidiary is already back to operating at full capacity with loan locks at pre-flood levels. Before the natural disaster, production was at $420 million for the quarter, the company said in a news release Thursday.
Still, GMFS does have some balance sheet and mortgage servicing rights exposure to the incident. The mortgage bank has 15 loans with $3 million in unpaid principal balance that it expected the properties to have some flood damage. The loans represent 5.4% of the total unpaid principal balance for loans located in storm areas the company has held for sale. GMFS is currently assessing the damage to the properties and confirming if the borrowers had flood insurance.
Additionally, GMFS said that 6.4% of its servicing customers have accepted a 90-day forbearance period, during which it will advance taxes, insurance payments and the principal and interest due depending on the investor. GMFS said it believes it has sufficient liquidity to cover the advances, which are expected to total $1.75 million per month.
