What We’re Hearing: Sale of PHH Mortgage Moves Closer? / More Departures at Nationstar Mortgage / Lawsky and Ocwen: Status Quo / Sen. Warner Issues Warning to Colleagues on GSE Reform
By Paul Muolo
pmuolo@imfpubs.com
Is PHH Corp. moving closer to selling its mortgage banking division? The company isn’t providing much guidance outside its recent earnings call, but something may be afoot. At least one private equity fund has increased its stake in the company: Orange Capital LLC. According to a new filing with the Securities and Exchange Commission, Orange now owns 7.2 percent of PHH. In its last filing in January, the stake was 6.0 percent. Investors in the stock continue to worry about how many of PHH’s private-label lending agreements will be renewed when they eventually expire…
As IMFnews reported earlier in the week, Lisa Rodgers, a top production executive for Nationstar Mortgage, left the company without explanation. Now we’re hearing that three other top executives also have left. At press time, Nationstar’s media department had not returned telephone calls and emails on the matter. One advisor familiar with the fast-growing nonbank had this to say: “They’ve had some strange and unexplained hiccups. Perhaps, they’re overwhelmed with boarding costly, high-touch consumers. Or perhaps they didn’t pay the expected executive level bonuses at year-end”…
Nationstar is publicly traded but its largest single shareholder is Fortress Investments with a whopping 74 percent stake in the company. Jefferies & Co. recently downgraded Nationstar to “hold” from “buy”…
Late Thursday there were market rumors that Ocwen Financial might be moving closer to some type of agreement with New York regulator Ben Lawsky over many concerns. But a quick check with Ocwen management Friday morning revealed that nothing is afoot. Absolutely nothing. The company’s guidance has not changed in the least…
However, it should be pointed out that on Thursday federal judge Rosemary Collyer denied a motion filed by one Chris Wyatt to a legal settlement struck late last year between Ocwen and the Consumer Financial Protection Bureau and other parties. In his motion to oppose, Wyatt argued that the final judgment against Ocwen did not provide “equitable relief and compensation.” Under the original settlement, Ocwen agreed to provide $2 billion in principal reduction to underwater borrowers and refund $125 million to the nearly 185,000 borrowers who have already been foreclosed upon…
IN CASE YOU MISSED IT #1: During the Senate Banking Committee markup on the Johnson-Crapo GSE reform bill this week, Sen. Mark Warner, D-VA, warned lawmakers voting against the bill that when Fannie Mae or Freddie Mac start losing money again and costing the government billions, it will be their fault. At least that was one reporter’s take on the situation. Losing money again? Does Warner know something the rest of the industry doesn’t know? How can they not make money? Their cost of funds is next to zero and the assets they slap their guarantee on are close to flawless. And wait a second, isn’t Warner from Virginia where a little ole GSE called Freddie Mac is headquartered and employs thousands? Aren’t those employees considered his constituents? Then again, I guess Fannie and Freddie could start losing money again if they screw up a hedge or the housing market tanks. It’s possible, but so are the chances of the Mets or Marlins winning the World Series this year.
IN CASE YOU MISSED IT #2: At a recent conference sponsored by Sohn Investment, Pershing Square chief Bill Ackman said the common stock of Fannie and Freddie could be worth between $23 and $47 a share. Sounds like a hot stock tip. But wait, didn’t Pershing Square load up on GSE shares last year at about $2 a pop? How selfless of him to give that piece of investing advice.
QUOTE OF THE WEEK: “I feel the wholesale [broker] channel will not only survive, but will actually grow.” – Paul Rozo, president of PRMG Mortgage.
MORTGAGE PEOPLE: Mortgage industry veteran Randy Lightbody has a new job. RECOVCO, a national mortgage due-diligence firm, named Lightbody as its new CEO. During his career, he has worked for several companies, including Digital Risk, Morgan Stanley, Bank One and others. CoreLogic has hired Bridget Berg as senior director of fraud solutions strategy. Prior to joining the mortgage vendor, Berg worked for Wells Fargo, where she was vice president of fraud risk management. USA Mortgage/DAS Acquisition Co. of St. Louis has hired Bryan Bergjans as director of veteran lending, a newly created position. The company says it has funded at least $1 billion per year for the past five years.
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