Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Back to the Future of Mortgage Lending

This webinar will be a discussion on understanding what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

Mortgage

Three major nonbank mortgage servicers; Only one is profitable

Moody's takes a look at NSM, OCN and WAC earnings

The common view that nonbanks are taking over the mortgage space from the big banks in a meaningful way is being muted by a harsh-reality report from Moody’s Investors Service.

While nonbanks continue to make decent inroads on the originations side of the business, it’s the servicing side that’s proved more of a struggle.

According to a Moody’s review of 2015 financials at the three largest US non-bank mortgage servicers — Nationstar Mortgage, Ocwen Financial and Walter Investment Management — only one was profitable.

"Nationstar was the only large Moody's-rated non-bank mortgage servicer to be profitable in 2015, and its net income was just $43 million," says Moody's analyst, Warren Kornfeld.

"Concurrently, all three non-bank servicers' reliance on confidence-sensitive, short-term funding heightens their liquidity and refinancing risk, while Walter faces the additional challenge of a weak capital position," he adds.

Why little to no profits?

High operational costs and increased regulatory oversight hit, and will continue to hit, these nonbanks' bottom line.

Moody’s expects it will be another tough year to come for these three nonbank mortgage servicers.

“Profitability has been weak for the past two years due mainly to mortgage servicing right fair value adjustments and goodwill impairments, along with higher regulatory expenses,” Moody's says in a recent report.

There is one area where Nationstar and Ocwen do outperform the big banks, the report states; Both hold better levels of loss mitigation, in comparison.

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