Freddie Mac's earnings bear up amid banking crisis

Freddie Mac was largely insulated from any major issues associated with the banking crisis in the first quarter but warned there could be more lending contraction in the future. "We had a solid quarter, earning $2 billion with no significant impact to our earnings or balance sheet from the recent banking industry disruption," CEO Michael DeVito said. He acknowledged, however, that the event did adversely affect multifamily construction to some extent. "The risk of credit tightening remains elevated," he noted. Freddie's earnings were slightly improved on a consecutive-quarter basis but the numbers for the fiscal period were lower than a year ago. Freddie Mac had earned $1.8 billion the previous quarter and $3.8 billion during the first fiscal period of 2022. 

READ MORE: Freddie Mac's earnings bear up amid banking crisis

Ocwen once again victorious over CFPB in federal court

A federal judge in Florida has once again granted Ocwen Financial a victory over the Consumer Financial Protection Bureau, apparently bringing a long-running case to a close. Judge Kenneth Marra first granted Ocwen summary judgment in May 2021, but the CFPB appealed. In April 2022, the Eleventh Circuit Court of Appeals ordered him to do a count-by-count analysis of the nine remaining claims raised. Ocwen's ongoing defense to the claims that were first raised in 2017 by the CFPB — a case 30 state attorneys general and regulators eventually joined — was that they were covered by the National Mortgage Settlement and that the Bureau's actions constituted a form of double jeopardy known in legal terms as res judicata.

Despite interest rate decrease, weekly mortgage volume fell: MBA

Mortgage activity decreased for the second time in three weeks, even as the 30-year interest rate headed downward, the Mortgage Bankers Association said. The MBA's Market Composite Index dropped a seasonally adjusted 1.2% for the period ending April 28, ending a month characterized by fluctuating borrower activity. One week prior, applications increased 3.7%, but compared to the same seven-day period in 2022, volumes were 39% lower. Rates declined slightly for the first time in three weeks.

How JPMorgan Chase could make the most of First Republic's servicing

JPMorgan Chase's deal to buy the "substantial majority" of First Republic Bank's assets mitigates a risk involved in the low-rate mortgages that played a key role in its troubles. In the process, the acquiring bank gets quite a valuable servicing portfolio. While the loans in question were a concern for First Republic given their mismatch with high-rate deposits, a government-supported risk sharing agreement minimizes that downside. That leaves the acquiring bank the right to service what otherwise are high-quality mortgages made to wealthy, sought-after clients. "Maybe their management of their balance sheet wasn't great, but First Republic certainly knew how to take care of customers from what I understand," said Jon Van Gorp, chairman at law firm Mayer Brown.

Two Harbors bringing $15 billion in mortgage servicing on board

Two Harbors Investment Corp. has entered commitments to add another $15 billion in mortgage servicing rights, executives said during the company's first-quarter earnings call on Tuesday. Although the company reported a loss, a forecast recession could make it increasingly necessary to advance funds against missed borrower payments, and a recent banking crisis has threatened availability of corporate lending, executives expressed confidence in the company's finances. "Funding for both [residential mortgage-backed securities] and MSR remains stable and we have more than ample liquidity," President and CEO Bill Greenberg said in a press release. Some analysts were cautiously optimistic as well, at least in the near term.

CFPB proposes rule for clean energy home loans

The Consumer Financial Protection Bureau has relaunched efforts to put safeguards around clean energy loans, the agency announced Monday. Proposed rulemaking by the government watchdog would establish consumer protections around residential Property Assessed Clean Energy (PACE) loans, which are used to finance home upgrades, such as installing solar panels or updating a property to withstand natural disasters. Specifically, the rule would adjust disclosure requirements to help consumers understand the loans' impact on their property tax payments. One such change requires creditors to consider a consumer's monthly payments to their escrow accounts as a factor when making a repayment ability determination.

Carrington reports ransomware attack at tech vendor

A ransomware attack at a technology firm compromised information of Carrington Mortgage Services customers including partial Social Security numbers, the servicer said last week. Neither Carrington nor its vendor Alvaria, the workforce management company which suffered the breach in March, disclosed the total number of clients impacted in letters to state attorneys general, although at least 4,167 Massachusetts residents were affected. It's the most recently disclosed hack of a mortgage player after a spate of incidents across the industry reported last year.

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