Servicing

The pandemic has upended staffing plans, sparked concerns about servicers’ capacity to handle the expected crush of missed payments, and even raised questions about their ability to stay afloat.

Mortgage companies that borrow heavily to keep their operations running may face financial pressure from coronavirus-related market volatility as it affects the valuations of collateral securing their financing.

Mortgage lenders could benefit from the surge in refinancing due to widening market spreads, and that could help offset damage to servicing rights portfolio valuations, according to Keefe, Bruyette & Woods.

Fannie Mae completed its first two Credit Insurance Risk Transfer transactions of 2020, shifting $1 billion of single-family loan credit risk to insurers and reinsurers.

Any impact from the coronavirus outbreak on commercial and multifamily loan delinquencies won't be known for some time, the Mortgage Bankers Association said.

The cancellation by New Residential of a money-losing subservicing agreement should benefit Ocwen's financial results going forward, the company said.

Black Knight introduced a model to gauge prepayment speeds and credit risk for investors that purchase commercial mortgage-backed securities.

The Federal Housing Finance Agency plans to increase liquidity standards for nonbank conforming loan servicers, and at the same time raise the net worth requirements for those that also perform the function for Ginnie Mae.

Despite changes by the Federal Housing Administration, bankers remain reluctant to join the program for fear of legal liability. But that could change if it revamps servicing processes, experts say.

The delinquency rate for commercial mortgage-backed securities ended 2019 at its lowest point in nearly 11 years, aided by increased issuance and the resolution of legacy transactions, Fitch Ratings said.