By Carrie Bay | 01/27/2012
The default servicing industry is in a state of transition, according to Larry B. Litton Jr., CEO of Selene Finance, and it's the smaller, more nimble servicing operations that will have the advantage in reacting quickly to the new rules and the changes that are in store. Litton says many of the bigger servicing shops are still set up to do what he considers commoditized types of processes and aren't able to adapt quickly to the regulatory changes coming down the line, while smaller special servicers are already built for single point of contact and to be highly responsive to consumers.
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By Carrie Bay | 12/07/2011
The U.S. Treasury said Wednesday that it will continue to withhold incentives from JPMorgan Chase and Bank of America for modifications, short sales, and deeds-in-lieu completed through government programs. JPMorgan is the only servicer participating in Treasury's Making Home Affordable program that was determined to need "substantial improvement" in complying with program guidelines during the third quarter. Bank of America moved up a notch on the assessment scorecard to needing only "moderate improvement."
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By Carrie Bay | 11/14/2011
Ocwen Financial continues to make moves to expand its portfolio. The special servicer disclosed in a filing with the Securities and Exchange Commission that it has agreed to purchase $15 billion in mortgage servicing rights from JPMorgan Chase. It's the latest in a string of transactions bolstering Ocwen's portfolio, and the company's not stopping there. Ocwen says a new venture will allow it to compete for the servicing rights of newly originated FHA loans. It is also looking to expand into reverse mortgages and home equity lines of credit.
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By Carrie Bay | 09/01/2011
Treasury has released the results of its second-quarter assessment of servicers participating in the Making Home Affordable program. Officials say they will continue to withhold program incentives owed to Bank of America and JPMorgan Chase. The two were determined to need "substantial improvement" in key areas including borrower evaluations. BofA and JPMorgan received the same score last quarter, as did Wells Fargo, but Wells has now elevated its grade to needing "moderate improvement."
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By Krista Franks | 09/01/2011
The New York Department of Financial Services is including several stipulations with its approval of Goldman Sachs' sale of its Litton Loan Servicing unit to special servicer Ocwen Financial.
Goldman Sachs has agreed to principal reductions of $53 million on Litton mortgages. In addition, the agreement forged between Goldman and New York's banking superintendent addresses the illegal practice of robo-signing and includes rules to ensure only the note-holder pursues foreclosure actions.
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By Carrie Bay | 08/12/2011
Servicers completed 2,213 pre-foreclosure short sales and deeds-in-lieu (DIL) under the government's Home Affordable Foreclosure Alternatives (HAFA) program during the month of June. Treasury's latest report shows the program is beginning to pick up steam. The number of completed HAFA transactions climbed 55 percent compared to the 1,428 transactions completed in May. That follows a 70 percent jump in finalized HAFA deals between the months of March and April.
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By Carrie Bay | 06/09/2011
The U.S. Treasury has released its regular monthly report card on the Home Affordable Modification Program (HAMP). New this time is an assessment of how the 10 largest HAMP servicers are performing. Four servicers have been designated as needing "substantial" improvement: Bank of America, JPMorgan Chase, Ocwen Loan Servicing, and Wells Fargo. Treasury says it will withhold financial incentives from three of these companies until they make identified improvements.
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By Carrie Bay | 06/06/2011
Goldman Sachs has agreed to sell its residential mortgage servicing subsidiary to Ocwen Financial Corp. Ocwen will pay $263.7 million in cash to acquire Litton Loan Servicing. In addition to the cash purchase price, Ocwen will lay out another $337 million to take care of some of Litton's outstanding debt.
The deal will result in Ocwen's acquisition of a servicing portfolio of approximately $41.2 billion in unpaid principal balance of primarily non-prime residential mortgage loans.
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By Carrie Bay | 03/21/2011
Word on the street is that Goldman Sachs is looking to sell off its mortgage servicing arm, Texas-headquartered Litton Loan Servicing. One publication's blog post says Litton never proved to be the distressed mortgage cash-cow that Goldman had hoped, while another financial news outlet reports that the servicing unit is indeed unprofitable at the moment. Industry data show that Litton's servicing portfolio has contracted by nearly 35 percent over the last two years.
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By Carrie Bay | 02/04/2011
Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and found that a loan that is modified and then reported as current is three times as likely to default over the ensuing twelve months as a current loan that has not been modified.
The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.
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