Midyear Mortgage Review
Take a look back at the top stories shaping the mortgage industry during the first half of 2017.
Trump administration takes shape
Moments after Trump’s swearing in, HUD suspended a 25-basis-point cut to Federal Housing Administration insurance premiums that was announced, but not instituted, during the waning days of now-former HUD Secretary Julian Castro’s term under the Obama administration.
Treasury Secretary Steven Mnuchin has set a goal of tackling housing finance reform within the next year. The roles of FHA commissioner and Ginnie Mae president still need to be filled to serve under Housing and Urban Development Secretary Ben Carson.
Rising rates, low inventory fuel sharp drop in originations
Simultaneous increases to interest rates and home prices have created an affordability crisis nationwide. Combined with a shortage of available housing inventory and the purchase mortgage market that was expected to emerge in 2017 has been anemic.
With the Republicans in control of the White House and both chambers of Congress, overhauling the Dodd- Frank Act has been a top priority.
CFPB: the Constitution, Cordray and consent orders
The Consumer Financial Protection Bureau’s long-running battle with PHH Corp. entered its third year and has fueled a tense standoff between Trump and CFPB Director Richard Cordray.
Citi calls it quits in servicing
Citigroup is getting out of mortgage servicing, after agreeing to sell a $97 billion mortgage servicing portfolio to New Residential Investment Corp. and subservice its remaining accounts by the end of 2018.
More Ocwen scrutiny
In April, the CFPB sued Ocwen, while regulators from more than 30 states issued cease-and-desist orders, all accusing the company of widespread servicing errors such as sending inaccurate monthly statements, improperly crediting payments, and mishandling taxes in escrow accounts.
Ocwen’s stock price plummeted on the news of the regulatory action and the company risked losing its biggest customer, New Residential Investment Corp. Instead, New Residential agreed to acquire a 5% stake in Ocwen and extend its subservicing relationship for five years.
New hope for housing finance reform
Federal Housing Finance Agency Director Mel Watt appears poised for a showdown with Congress after warning that he is willing to act unilaterally to rebuild capital at Fannie and Freddie in order to prevent a potential draw on the Treasury Department.