Some Americans were left worse off after their mortgages were sold to private-equity firms by the Department of Housing and Urban Development.
That’s according to a report released by the U.S. Government Accountability Office, which this month released a new analysis of HUD’s Distress Asset Stabilization Program. That program has overseen the sale of roughly 111,000 loans insured by the Federal Housing Administration, which were valued at around $19 billion, between 2010 and 2016.
‘The GAO’s report shows that HUD had no rules in place to ensure that the sales would help homeowners, and in fact, the GAO’s data show that homeowners lost out while private equity companies gained.’—Geoff Walsh, a staff attorney with the National Consumer Law Center
The loans, which were in default at the time of the various auctions run by HUD, were auctioned off in bulk sales. The buyers of the loans were largely comprised of private-equity firms and hedge funds.
In more recent years, however, the FHA altered the program to sell a greater number of loans to nonprofits in addition to private-equity firms and hedge funds. The logic behind this move: Nonprofits are more interested in keeping people in their homes, consumer advocates say. What’s more, studies show foreclosures can hurt house prices in the community.
The federal government’s program is intended to reduce the effect they could have on the HUD’s insurance fund if the loans went into foreclosure.
The GAO found that these loan sales generally don’t benefit the homeowners whose mortgages are being auctioned off. Overall, the sold loans were more likely to experience foreclosure than defaulted loans that the FHA did not sell off. Notably, the GAO pointed out that the FHA doesn’t evaluate the outcomes for sold loans in this manner.
The National Consumer Law Center has previously criticized the department’s loan-sale program as benefiting mortgage servicers and private-equity firms at the expense of homeowners.
HUD did not return a request for comment on the GAO’s findings.
Whether or not a loan went into foreclosure largely depended on who bought it. Some purchasers’ loans were far more likely to go into foreclosure than others. Another concern for borrowers: The loss-mitigation options the purchasers make available to borrowers can vary widely, while the FHA’s are more consistent.
The National Consumer Law Center warned that, once loans are sold, the borrowers lose their rights to certain protections afforded by the FHA to help them avoid foreclosure. The GAO’s report notes that changes the FHA made to eligibility criteria led to an increased likelihood that a sold loan was located in a state with a longer foreclosure process, such as New York or Illinois.
“HUD’s policy specifically undermines mediation programs and other consumer protections built into state foreclosure laws, programs proven to help borrowers avoid foreclosure and investors retain performing loans,” Walsh argued.
Additionally, the GAO’s examination found that around 2.67% of the loans the department sold did not meet its established eligibility criteria. These loans were ineligible for many reasons — some were not delinquent long enough or involved in a bankruptcy, while others were undergoing loss mitigation and should have remained under FHA protection.
HUD relies on loan servicers to verify eligibility.
But as the GAO notes, delinquency can be fluid, so these loans’ status could have changed in the time between a servicer identified them as eligible and when they were sold.
The GAO’s report provided nine recommendations for how HUD could improve its loan-sale program, including by evaluating loan performance after they are sold and reviewing eligibility criteria and the process by which loans are chosen for sale.
Mortgage Servicing Rights, New York, NY (2019)
In a climate of increased regulatory scrutiny and low interest rates, it is of even greater importance for the $10 trillion MSR industry to meet, compare notes and discuss the latest. Agency MSR Transfers were up 13.9% in 2018 and sales of MSR linked to single-family mortgage backed securities hit $613.46 million last year. There has never been a better time for the industry to meet!
IMN is excited to be back in NYC for the great networking and to continue to explore the key industry issues including the origination trends, view from the Regulators, and more.
With more than 450 participants at our 2018 NYC event, with many from Banks, Non-Bank Originators, Mortgage Investors, Hedge Funds & Other Institutional Investors, the IMN forum is the only opportunity on the calendar that brings together owners and administrators of mortgage servicing rights for a dedicated 1 1/2 days discussing nothing but MSR.
IMN is excited to present a brand-new program again featuring banks, servicers and investors speaking on varied sessions and small group meetings.
We look forward to seeing you for another great networking and informative event.
AboutMYmortgage, Board Member
AHP Servicing, President & Chief Executive Officer
Aladdin Capital Management, LLC, Senior Managing Director
ALDAN Group, Chief Executive Officer
ALTRA Mortgage Capital, General Counsel
Amar Capital, Managing Director
American Destiny Real Estate Services, President & CEO
American Enterprise Institute, Co–Director & Chief Risk Officer
Amrock, Senior Account Executive
Andrew Davidson & Co., Inc., Director, Business Development
Andrew Davidson & Co., Inc., Director, Model Risk Management
Andrew Davidson & Co., Inc., Director, Model Risk Management
Andrew Davidson & Co., Inc., Director, Marketing
Angel Oak Capital, Managing Director
Angel Oak Capital, Managing Director
Angel Oak Capital, Senior Portfolio Manager
Angelo Gordon & Co, Managing Director
Angelo Gordon & Co, Vice President
Ark Mortgage, Director of Capital Markets
Aspen Capital, Partner
Aspen Grove Solutions, CEO
Atalaya Capital Management LP, Managing Director
Automation Holdings LLC, Managing Member
Automation Holdings LLC, Managing Member
BDF Law Group, Managing Partner
BDF Law Group, Managing Partner
BlackRock, Managing Director
Blue Water Financial Technologies, Managing Director
Blue Water Financial Technologies, Managing Director
Brean Capital, Head of Fixed Income Strategy
Brock & Scott, PLLC, CMO & Director
Buckley LLP, Partner
Burr & Forman LLP, Partner
Burr & Forman LLP, Partner
Burr & Forman LLP, Attorney at Law
Cadwalader, Wickersham & Taft LLP, Partner
Cadwalader, Wickersham & Taft LLP, Partner
Cadwalader, Wickersham & Taft LLP, Attorney Development and Legal Recruitment Coordinator
Caliber Home Loans, EVP–Head Of Capital Markets
Capital Markets Cooperative/CMC Funding, President & CEO
Carrington, Managing Director
Carrington Mortgage Holdings, Executive Vice President
CastleRock REO, President
Cenlar FSB, SVP
Cenlar FSB, EVP
Cherry Hill Mortgage Investment Corp., President & Chief Executive Officer
Citi Mortgage, Director/Quantitative Analyst, Mortgage Analysis
Citi Mortgage, Co–Head of Capital Markets
Citi Mortgage, Head of MSR trading
Citi Mortgage, VP MSR Trading
Citi Mortgage, Co–Head of Capital Markets
Citi Mortgage, SVP, Capital Markets
Citizens Bank, Vice President
Claims Recovery Financial Services, LLC, Vice Chair
Clear Capital, Executive Vice President, Customer Development
Computershare Loan Services, Global Head of Marketing
Conventus LLC, Servicing Manager
Conventus LLC, Servicing Associate
CPPIB America, Inc, Senior Associate
Credit Suisse Securities (USA) LLC, Director
Customers Bank, Executive Vice President
Dentons, Chair, Capital Markets
Dentons, Partner
DoubleLine, Trader
DoubleLine Group LP, MBS
Dovenmuehle Mortgage, VP of Business Development
Eaton Vance, Analyst
Equity Now Inc., Operations Manager
Essent US Holdings, Inc., Vice President, Strategic Investments
Fannie Mae, Credit Risk Analyst
FDIC, Senior Capital Markets Specialist
FDIC, Manager, Capital Markets
FDIC, Senior Capital Markets Specialist
FDIC, Manager, Capital Markets
FDIC, Securitization and Analysis
FDIC, Assistant Director, Complex Financial Institutions
Federal Deposit Insurance Corporation, Asset Management Specialist
Federal Home Loan Bank of Chicago, Vice President, MPF National Marketing
Federal Housing Finance Agency, Senior Risk Analyst
Federal Reserve Bank of Atlanta, Senior Financial Specialist
FHFA, Risk Modeling Manager
FHFA, Associate Director
Fifth Third, VP, MSR and Whole Loan Transaction Manager
Fifth Third Bank, VP, Director of MSR
Fifth Third Bank, SVP, Head of Capital Markets
Fifth Third Bank, VP, Director of MSR
Figure, Managing Director
Figure, Vice President
First Guaranty Mortgage Corp., Chief Executive Officer
First Guaranty Mortgage Corporation, Director, Capital Markets
First Guaranty Mortgage Corporation, Senior Director – Capital Markets
First National Bank of Omaha, Director of Secondary Marketing
FirstBank, Portfolio Manager
FirstBank, President – Loan Operations
FirstKey Mortgage, LLC, Managing Director
Flagstar Bank, Executive Vice President/Chief Operating Officer
Flagstar Bank, Senior Vice President – Asset/Liability ManagerAsset/Liability Management
Fortress Investment Group / New Residential Investment Corp, VP, Valuations
FPCM, PM
Freddie Mac, Director
Freedom Mortgage Corporation, Executive Vice President
George Mason Mortgage, SVP – Capital Markets
Ghidotti | Berger LLP ,
Ghidotti | Berger LLP, Attorney
Ginnie Mae, Director
Global Corporate Finance, Managing Director
Goldman Sachs, Vice President
Home Point Financial Corporation, Sr Managing Director, Capital Markets
Home Point Financial Corporation, Chief Financial Officer
HomeStreet Bank, SVP, Quantitative Manager
Houlihan Lokey, Senior Vice President
Hudson Advisors, Director
Hudson Advisors, Vice President
Hudson Advisors, Director
Hudson Advisors, Associate
Huntington Banks, Portfolio Management Director
Hunton Andrews Kurth LLP, Associate
Hunton Andrews Kurth LLP, Counsel
Hunton Andrews Kurth LLP, Partner
Hunton Andrews Kurth LLP, Partner
Hunton Andrews Kurth LLP, Partner
Hunton Andrews Kurth LLP, Partner
Hunton Andrews Kurth LLP, Associate
Hunton Andrews Kurth LLP, Counsel
Hunton Andrews Kurth LLP, Partner
Hunton Andrews Kurth LLP, Business Development Manager
IMN, Sr Manager, Investor Relations
IMN, Chief Executive Officer
Incenter, Executive Vice President of Sales, Lender Services
Incenter, VP, Transaction Manager
Incenter Mortgage Advisors, Managing Director, Analytics
Incenter Mortgage Advisors, VP, Analytics
Inside Mortgage Finance Publications, Inc., Executive Editor
JMA Outreach Solutions, Director Business Development
Jornaya, Head of Consumer Finance
JP Morgan Chase, CMG Risk Executive
JP Morgan Securities LLC, Managing Director
JP Morgan Securities LLC, Managing Director
JP Morgan Securities LLC, Executive Director
Katten Muchin Rosenman LLP, Partner
Keefe, Bruyette & Woods, Managing Director
KML Law Group, P.C, CEO
KPMG, Director
KPMG, Partner
Laurel Road, Capital Markets
Laurel Road, Capital Markets
Laurel Road, Co–Head of Capital Markets
Laurel Road, Capital Markets
Leste Capital Management, Portfolio Manager: Credit
Lift Strategic Partners, Co–Founder/Managing Partner
Lift Strategic Partners, Co–Founder / Managing Partner
LoanCare, Servicing Solutions Manager
LoanCare, LLC, EVP Strategy and Business Dev.
Longbridge Financial, Chief Executive Officer
M/I Financial, LLC, SVP, Capital Markets and Risk
Matic Insurance Services, Enterprise Sales Executive
Mayer Brown LLP, Partner
Mayer Brown LLP, Co–Head Securitization
McCarthy Holthus, LLP, Partner–Compliance
MCT Trading Inc, Director MSR Services
MCT Trading Inc, Director of Analytics
MIAC, Managing Director
MountainView Financial Solutions, LLC, Managing Director
MountainView Financial Solutions, LLC, Managing Direcor
MountainView Financial Solutions, LLC, Managing Director
MountainView Financial Solutions, LLC, Managing Director
MountainView Financial Solutions, LLC, Managing Director
MountainView Financial Solutions, LLC, Managing Director
Mr Cooper, SVP Portfolio Investments
National Loan Exchange, Inc., National Sales Director
Nationwide Title Clearing, Marketing Coordinator
Navigant Consulting, Director
Navy Federal Credit Union, Senior Financial Risk Manager
New Residential Investment Corp, SVP, NRZ Valuations
NexBank Warehsoue, SVP
NYFIN, Manager
Peerform, Director of Lending Capital Markets
PennyMac, MD, Portfolio Risk Management
PennyMac, SVP, Servicing Investments
PennyMac, Chief Investment Officer
PennyMac, Finance and Valuations, MSR
Pingora Asset Management, Chief Executive Officer
Pingora Asset Management, Chief Executive Officer
Pingora Asset Management, LLC, General Counsel
Plaza Home Mortgage, Inc., CFO/COO
PNC, VP – MSR Transaction Manager
PNC Bank, A Divsion of PNC Bank, N.A., SVP–Managing Director MSR Acquisitions
PNC Financial Services Group, VP, Sr. Audit Manager
PNC Mortgage, MSR Account Manager
PNC Mortgage, MSR Account Manager
PolyPaths LLC, Director of Marketing
PolyPaths LLC, Senior Managing Director
PolyPaths LLC, Managing Director
PricewaterhouseCoopers LLP, Principal
PRP Advisors, Managing Director
PulteMortgage, Vice President Asset Administration
QPWB Law/Attorneys’ Title Services, Business Development Director
Quantitative Risk Management, Senior Vice President
Quintairos, Prieto, Wood & Boyer, PA / Attorneys’ Title Services, LLC, Partner / Managing Member
Radian, SVP
RJ O’Brien, SVP
RJ O’Brien, Assistant Vice President, Fixed Income Group
RJ O’Brien, Assistant Vice President
Roc Capital, Managing Director
Roosevelt Management Co., Managing Director
Roosevelt Management Co., Vice President
Roosevelt Management Company, Senior Managing Director
RoundPoint Financial Group, CEO
RoundPoint Mortgage, AVP MSR Aquisitions
Roundpoint Mortgage, Vice President of Capital Markets
Roundpoint Mortgage Servicing Corporation, SVP Business Development
RoundPoint Mortgage Servicing Corporation, SVP Portfolio Management
RoundPoint Mortgage Servicing Corporation, SVP Portfolio Management
Rubin Lublin, Director of Client Relations/Business Development
Rushmore Loan Management Services, LLC, President
Sagent Lending Technologies, CEO
Schiller, Knap, Lefkowitz & Hertzel, LLP, Associate Attorney
Scratch, CEO
Scratch Services, Inc, Head of Partnerships
Secured Investment Lending, CIO
Secured Investment Lending Corp, President
SHD Legal Group, P.A., Managing Shareholder
SHD Legal Group, P.A., Partner – Litigation
Sheppard Mullin Richter & Hampton LLP, Partner
Stern & Eisenberg, PC, Managing Partner, CEO
Stern & Eisenberg, PC, Managing Partner, CEO
SunTrust Bank, Analyst, Mortgage Capital Markets
SunTrust Bank, FVP, Capital Markets
SunTrust Bank, MSR Asset Manager
SunTrust Bank, MSR Asset Manager
SunTrust Mortgage, Senior VP – Capital Markets
Swiss Capital, President
Syncora Guarantee, Director
Texas Capital Bank, EVP, Mortgage Finance
Texas Capital Bank, Vice President
Texas Capital Bank, EVP, Mortgage Finance
The Wall Street Journal, Reporter
Thomson Reuters, Senior Mortgage Specialist
TIAA Bank, Sr. Director | Sr. Risk Officer
Titan Advisors, Senior Research Analyst
Tourmalet Advisors, Senior Vice President
Traditional Mortgage Acceptance Corporation, Chief Financial Officer
Two Harbors Investment Corp., Managing Director
U.S. Bank, Vice President
US Bancorp, Vice President
US Bancorp, Vice President
US Bank, Risk Manager
US Bank, SVP
US Bank, SVP, MSR Hedging
Värde Partners, Director
Veterans United Home Loans, Analyst
Veterans United Home Loans, Capital Markets Trader
Veterans United Home Loans, Director of Capital Markets
Virginia Housing Development Authority, Director of Single Family Finance
WEI Mortgage LLC, a wholly–owned subsidiary of Arc Home LLC, Correspondent Lending
WEI Mortgage LLC, a wholly–owned subsidiary of Arc Home LLC, SVP, Capital Markets
WEI Mortgage LLC, a wholly–owned subsidiary of Arc Home LLC, Correspondent Lending
WEI Mortgage LLC, a wholly–owned subsidiary of Arc Home LLC, Senior Vice President
Weichert Financial Services, Chief Operating Officer / EVP Capital Markets
Wells Fargo Securities, Director
West Wheelock Capital, Managing Principal
York Traditions Bank, Managing Director Mortgage Service
- Accounting Firms
- Government Regulators
- Independent Mortgage Bankers/Sellers
- Investment bankers
- Law Firms
- MSR Brokers
- MSR Buyers/Investors
- Private Equity Funds
- Service Providers
Texas Attendee at IMN, and the Only Sponsor who’s logo did not link to a working website is, of course, the largest foreclosure mill in the State of Texas;
The BDF Law Group is comprised of the following firms: Barrett Daffin Frappier Turner & Engel, LLP, (Texas & Georgia) Barrett Daffin Frappier Treder & Weiss, LLP (California, Nevada, & Arizona) and Barrett Frappier & Weisserman, LLP (Colorado). The BDF Law Group provides a full range of legal services to creditors on defaulted commercial and residential mortgage loans.
Robert Forster
Managing Partner
BDF Law Group
Robert D. Forster, II, is the Managing Partner of the BDF Law Group as a whole and is based in the Addison, Texas location.
Texas Attendee at IMN, and the Only Sponsor who’s logo did not link to a working website is, of course, the largest foreclosure mill in the State of Texas;
The BDF Law Group is comprised of the following firms: Barrett Daffin Frappier Turner & Engel, LLP, (Texas & Georgia) Barrett Daffin Frappier Treder & Weiss, LLP (California, Nevada, & Arizona) and Barrett Frappier & Weisserman, LLP (Colorado). The BDF Law Group provides a full range of legal services to creditors on defaulted commercial and residential mortgage loans.
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