Mortgage

Monday Morning Cup of Coffee: Ocwen booms, Goldman negative on economy

Monday Morning Cup of Coffee takes a look at stories across the HousingWire news desk, with more coverage to come on bigger issues.

Congratulations to the Seattle Seahawks champions of Super Bowl XLVIII.  

Football aside, when it comes to which city is actually better, Denver or Seattle, it can be answered with a lot more facts: economic facts.

According to an article from CNBC, while their populations are fairly similar, their demographic differ significantly, with homes in Seattle nearly twice as pricey as those in Denver.

The median home value in Seattle hits around $430,700, compared to Denver, which hovers around $253,300. However, Denver’s housing prices are recovering faster than Seattle’s, which are up 9.5% from a year ago, compared to Seattle’s 8.4% gain.

“The differences in the two markets are based on income, as all housing always is. The median income in Seattle is $45,736, while the median income in Denver is $39,500,” the article noted.

Additionally, Denver has more homes with kids, bringing down housing and household spending power. HousingWire actually ran something similar a couple of days ago. Just saying.

Mortgage servicer Ocwen (OCN) is quickly growing into a $500 billion company due to bondholders and troubled borrowers, an article in the New York Post cited.

Last month alone, the company added to a roughly three-year acquisition binge by acquiring $39 billion in servicing rights from Wells Fargo (WF).

“Banks have been dumping their servicing rights, and Ocwen has been snatching them up. This deal and others, with Goldman Sachs and JPMorgan Chase, will add up to a $500 billion servicing portfolio,” the article said.

But before the servicer could celebrate its growing business, it had to overcome several legal woes.

”After examining the potential violations, we have concluded that Ocwen made troubled borrowers more vulnerable to foreclosure,” Richard Cordray, director of the Consumer Financial Protection Bureau, said in December when announcing a $2.2 billion settlement of accusations against the company.

Ocwen was left to pay $67 million in cash to victims of wrongful foreclosure.

The recent massive data breaches at Target and other major corporations may have a significant impact on borrowers’ credit scores and potentially hinder future loan applications and home sales, the Los Angeles Times, and other media outlets, reported.

The Target breach alone affected approximately 70 million credit and debit card customers. And although companies are offering free credit-monitoring services, due to the large amount of people affected, it is likely that few have taken advantage of the offers.

As a result, homes sales could be knocked off track by the sudden appearance of new debts on buyers’ credit card reports, causing delays in the mortgage application process. 

“Even if you explain that you were a victim of identity theft, your financing could be put on ice until you and the bureaus clean up your reports,” the article noted.

Both the US economic data and financial market sentiment have taken a turn for the worse since the beginning of the year, according to a recent Goldman Sachs report.

The US-MAP surprise index has fallen into negative territory and the current activity indicator has slowed from an average of 3.1% in October/November to 2.3% in December, due to the weakness in the employment and housing indicators.

The preliminary forecast for the nonfarm payroll report is expected to bounceback to a 200,000 pace of increase since they do not expect any significant weather impact on the seasonally adjusted level of payrolls this month.

“We also expect a relatively strong household employment survey. In particular, we see a drop in the unemployment rate from 6.7% to 6.6%, partly because the expiration of emergency unemployment benefits at year end may have caused another drop in labor force participation and partly because we expect a good increase in household employment, which has likewise underperformed job market indicators such as claims,” the report said.

Meanwhile, it is also possible that the employment weakness in the establishment and household survey is genuine, and other labor market indicators will soon turn down as well, but that is not expected.  

The Federal Insurance Corp. reported that Syringa Bank in Boise, Id. was closed by the Idaho Department of Finance for the week ending Jan. 31.

All deposit accounts, expect the Cede & Co. deposits, have been transferred to Sunwest Bank and will be available immediately.

Furthermore, the former Syringa Bank locations will reopen as branches of Sunwest Bank.

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please