Did perceived liquidity problems at PHH Corp. lead to this week's ouster of company president and CEO Jerry Selitto? I'm told that PHH doesn't have any liquidity problems and the company said as much in a recent SEC filing. Then again, that same SEC filing warns that Fannie Mae could yank an “early funding committed facility” it has with the nonbank, though no one in the market truly believes the GSE would pull such a stunt. But some PHH observers note that the publicly traded mortgage firm's biggest problem is its mortgage servicing rights. Thanks to falling interest rates it's been marking down the value of its MSRs big time. In 3Q the MSR hit was $361 million. Ouch. You would think that PHH would hedge its MSRs but it doesn't, not really. But one source noted that if rates rise, the company will then “mark up” its MSR holdings by hundreds of millions of dollars. Of course such an event will come too late for Jerry Selitto who either resigned or got bounced. (We don't know which.) We're told that he was growing tired of fighting with company's board, a board that includes former MBS maven Greg Parseghian, a Wall Street and Freddie Mac veteran who knows a thing or two about hedging.
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The new Financial Stability Oversight Council report also recommends an expanded Ginnie Mae PTAP facility and an industry-funded liquidity resource.
May 10 -
The publicly traded title holding companies all had stronger earnings as the mortgage market improved from one year prior.
May 10 -
One in every 37 residential properties nationwide had a loan-to-value ratio of 125% or greater to begin the year, according to a new report.
May 10 -
There's temporary leeway on formal compliance with replacement-cost value requirements in order to sort out insurer concerns with a recent re-emphasis on them.
May 10 -
Max Levchin, CEO of the buy now/pay later lender, said recent tests show young adults prefer interacting with intelligent chatbots over phone-based agents, but the company doesn't foresee major cost savings from generative AI for a few more years.
May 10 -
Test your knowledge of the biggest mortgage headlines of the week. No. 2 pencil not required!
May 10