Daily Dose

Despite the fact that 89 percent of the mortgage industry professional surveyed by the Collingwood Group last September said regulations were hurting their business, 76 percent of respondents in March's Mortgage Industry Outlook Report said they would be willing to pay up to 25 basis points when asked how much they would pay "to be relieved of all liability for future buybacks, indemnifications and/or lawsuits."

In an update on its website dated March 2, Ocwen announced that it had "signed a letter of intent with a buyer on the sale of mortgage servicing rights (MSRs) on a portfolio consisting of approximately 277,000 performing Agency loans owned by Fannie Mae with a total unpaid principal balance of approximately $45 billion." In that March 2 update, Ocwen wrote that the transaction was "subject to a definitive agreement, approvals by Fannie Mae and FHFA and other customary conditions, Ocwen expects the transaction to close by mid-year and the loan servicing to transfer over the course of the second half of 2015."

According to February's first mortgage default index, the rate ticked downward to 1.00 percent in February from 1.02 percent in January after seven months of increases since falling to its lowest level of 0.88 in July 2014. February's first mortgage default rate represents a decline of 23 basis points from February 2014 (1.23 percent). The rate recently experienced its largest increase in the previous 15 months (five basis points) from November to December 2014.

In its February 2015 Real Estate Investor Activity Report, Auction.com reported that overall, 56 percent of investors preferred flipping compared to 42.8 percent who preferred renting. The percentage of investors surveyed in February who preferred flipping was 6 percentage points higher than in Q4 2014.

Despite the year-over-year decline in the percentage of underwater residential properties, negative equity remains a serious issue, according to Anand Nallathambi, president and CEO of CoreLogic. For the full year of 2014, 1.2 million borrowers regained equity – but nearly five and a half million properties remained in negative equity as of the end of the year after approximately 172,000 homes slipped into negative equity from the third quarter to the fourth quarter in 2014.

Nomura, which is headquartered in Japan and is one of the world's biggest banks, is the first financial institution to go to trial out of the 18 lenders FHFA sued in 2011 to recoup U.S. taxpayer costs following the government's $188 billion bailout of Fannie Mae and Freddie Mac in 2008, after which the government seized control of both Enterprises.

A group of consumer advocates has expressed concern over non-borrowing spouses facing foreclosure and eviction following the death of a borrowing spouse, according to comments the group recently submitted totaling 65 pages to the U.S. Department of Housing and Urban Development (HUD).

According to the report, Fannie Mae and Freddie Mac exceeded their $90 billion risk transfer goal. During 2014, the two Enterprises executed credit risk transfers on single-family mortgages with unpaid balance transfers of over $340 billion. As part of the FHFA requirement both enterprises continued to reduce their mortgage portfolios. As of December 2014, Freddie Mac’s portfolio stood at $408 billion and Fannie Mae’s stood at $413 billion, for a combined reduction of $131 billion. Both numbers were significantly under the $470 billion cap required by the Senior Preferred Stock Purchase Agreements.

A hugely profitable year in 2013 for both Fannie Mae ($84 billion) and Freddie Mac ($49 billion) shifted widespread speculation from winding down the two GSEs to instead ending FHFA's conservatorship of the two Enterprises, which began in September 2008 after the two received a combined $188 billion from Treasury in bailout funds.

While foreclosure numbers have declined significantly since the peak years of 2010 and 2011, a recent uptick in foreclosure starts demonstrates the need still exists for loss mitigation programs such as the NFMC to help families and individuals stay in their homes when their mortgages become delinquent. The current demand for NFMC grant funds ($87 million) was nearly double the amount of $44.8 million that was awarded.