Financial institutions

Mortgage lenders have imposed steep pricing adjustments for cash-out refinancing as more borrowers seek forbearance.

The Treasury secretary said recent government moves will help the firms get through the risk of millions of borrowers missing their loan payments.

Lenders that split their sales of loans and servicing between two different investors may be facing yet another challenge due to the coronavirus outbreak.

Mark Calabria needs to be working to secure a Fed facility for servicer advances and to support, not denigrate, smaller servicers, the Mortgage Bankers Association said.

Ocwen Financial has approximately $749 million of liquidity from various sources to deal with servicing issues arising from the coronavirus, a company press release said.

The change — effective immediately — will reduce capital demands by about 2% overall, the Fed estimated, and will be open for a 45-day comment period.

After budget cuts and a strategic transition, the interagency body conceived by Dodd-Frank to identify systemic threats has largely been silent as the pandemic roils the economy.

Mortgage servicers need direction from federal agencies on how to implement the forbearance plans called for in the CARES Act, according to the Community Home Lenders Association.

Draw-downs on C&I credit more than quadrupled in a seven-day period ended March 25. Lenders may try to rein them in if the crisis drags out, but legal precedent isn’t on their side.

Refinancing activity is surging, existing borrowers are inquiring about loan modifications, loan closings are being delayed by more complex credit checks — and banks are short on people to handle it all.

In signing off on deposit insurance for the payments giant and student loan servicer, the FDIC sanctioned the first new industrial loan companies in over a decade.

If banks are unable to weather the economic fallout from the outbreak, calls for more dramatic reforms could get louder.

GreatAmerica Financial in Iowa is looking to form a bank so it can offer more products to small and midsize companies.

Banks may be protected from a direct hit, but they have invested in vehicles that include such loans, potentially exposing them to defaults.

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.

An effort by the Federal Housing Finance Agency to examine membership rules for the Federal Home Loan Bank System is reigniting an argument over whether to allow more nonbanks in or impose tougher barriers.

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

The agency plans to conduct a review of how it regulates the 11 Federal Home Loan banks amid concerns that some companies are inappropriately seeking a back door into the Home Loan Bank System.

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.