First American to acquire subservicer ServiceMac

First American Financial Corp. announced Monday an agreement to acquire subservicer ServiceMac, which it anticipates closing at the end of 2021.

First American Financial, which provides title insurance, settlement services and risk solutions for real estate transactions, has acquired a minority interest in ServiceMac’s parent company and that interest will convert into equity of ServiceMac at the acquisition’s closing, pending regulatory approvals.

ServiceMac was founded in 2017 as an independent subservicer, offering lenders, investors and other mortgage servicers personalized solutions that span the mortgage life cycle, enhancing security, customer satisfaction, retention capabilities and profitability, the company said.

“The acquisition of ServiceMac reflects our steadfast commitment to support the mortgage industry and further expand our product innovation efforts,” said Dennis Gilmore, chief executive officer at First American Financial Corp. “We’re excited to soon welcome to First American the people of ServiceMac, a rapidly growing company recognized for its technology and business leadership.”

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ServiceMac’s mortgage subservicing business will complement First American’s existing capabilities and will enhance First American’s ability to provide lenders and servicers with end-to-end mortgage, settlement, post-closing services and servicing-related products and solutions, the companies said. Meanwhile, ServiceMac will have enhanced access to First American’s property and homeownership data and mortgage solutions products.

 “Joining the First American family accelerates our ability to develop new products and services that benefit our lender customers and their clients, while strengthening our position as a counterparty in the mortgage finance ecosystem,” said ServiceMac President and CEO Bob Caruso. “Our employees will also benefit by being part of a company named to the Fortune 100 Best Companies to Work For list five years in a row.”

ServiceMac’s management team, including Caruso, will continue to lead the company’s operations.

The post First American to acquire subservicer ServiceMac appeared first on HousingWire.

Source: HousingWire Magazine

Fifth Third promotes Tim Spence to president. Is he next CEO?

Spence’s promotion to president could signal that the Cincinnati banking company is grooming him as a potential successor to Chairman and CEO Greg Carmichael.
Source: American Banker

Wells Fargo exploring $1 billion-plus corporate-trust sale

Wells Fargo is exploring a sale of its corporate-trust unit that could fetch more than $1 billion and is considering whether to find a buyer for its student loan portfolio, according to people familiar with the matter.
Source: American Banker

How servicers continue to protect neighborhoods amid COVID

HousingWire recently spoke with MCS CEO Caroline Reeves about self-service technology, the shift to virtual events and how servicers can prepare for post-COVID success by improving processes today.   

HousingWire: What role has technology played in servicers’ ability to react to COVID-19?


Caroline Reeves: Technology has always been critical in our industry. Most recently, we have seen a rise in self-service options. As the new technology has rolled out, borrower interactions have been reduced and the volume of calls has reduced accordingly. Now we are seeing increasing engagement rates from servicers, as they now have more time and resources to devote to each call.

HW: How are servicers preparing for a potential foreclosure wave?

CR: Now is a great time to proactively prepare for the potential foreclosure wave. Servicers are reviewing their top performers as well as those outside of their current network to determine who can best support the additional volume. Many of the current leaders in servicing experienced the housing crisis of 2008, and they clearly recognize the importance of being prepared.

Forward-thinking servicers are also partnering with their vendors, like MCS, to drive innovation through process improvement. That focus on process improvement today will set them up for success when moratoriums are lifted.  

HW: Fall is typically conference season, but live events aren’t feasible right now. How are servicers adjusting?

CR: It has been great to see our industry pivot to ensure that the collaboration of conferences continues. Servicers and vendor partners have shifted to rely heavily on virtual platforms for meetings, presentations and general interactions. The shift to virtual conferences has made attendance easier, which has actually led to participation from some who may not have been involved in the past.

And while networking looks a bit different today, virtual attendance has driven more intentionality. We are seeing more deliberate outreach to start conversations vs. attending a conference with the hopes of meeting a potential business partner.

HW: How has MCS been working with servicers, vendors and all parties involved to continue to protect our neighborhoods during COVID-19?

CR: MCS continues to work tirelessly to ensure the safety and wellbeing of the neighborhoods we serve. We partner closely with collaborative industry groups (MBA, NAMFS, Property Preservation Executive Forum and others) to ensure we are asking the right questions and finding solutions that work for everyone, including agencies and investors. Our executives are actively engaged with field vendors and employees, increasing communication and taking timely and appropriate action to provide support while managing through the challenges of COVID-19.

MCS created and implemented a work order verification hotline allowing local and state officials to confirm employee and vendor essential services credentials. This ensures that orders are completed and deadlines are met. 

MCS continues to be a leader in communicating the ever-changing COVID-19 guidelines and recommendations from local, state and federal authorities. Providing up-to-date, detailed information to vendors and employees allows MCS to maintain a safe working environment within the communities we serve.

The post How servicers continue to protect neighborhoods amid COVID appeared first on HousingWire.

Source: HousingWire Magazine

Heartland reworks AIM Bancshares deal to reflect Fed concerns

The Iowa company said it will pursue a two-step acquisition to address unspecified issues raised by the Federal Reserve as part of its review of the acquisition.
Source: American Banker

Mortgage forbearances down 2 basis points to 5.9%, led by Fannie and Freddie

The U.S. forbearance rate measuring the share of mortgages with suspended payments fell slightly to 5.9% last week, according to the Mortgage Bankers Association.

Though the rate fell 2 basis points, the decline has begun to slow after two weeks of what MBA’s chief economist Mike Fratantoni called “a flurry of borrowers” exiting as they reached the six-month mark.

The decline was largely driven by a 5-basis-point drop in Fannie Mae and Freddie Mac loans that knocked the GSEs’ rate of forbearance down to 3.72% – the 20th consecutive week the enterprises’ rate has fallen.

However, the GSEs’ drop was offset by the rate for Ginnie Mae loans, which include loans backed by the Federal Housing Administration, rising 3 basis points to 8.17%, and the forbearance share for portfolio loans and private-label securities (PLS) increasing by 4 basis points to 8.90%.

“There continues to be a steady improvement for Fannie Mae and Freddie Mac loans, but the forbearance share for Ginnie Mae, portfolio, and PLS loans all increased. This is further evidence of the unevenness in the current economic recovery,” Fratantoni said. “The housing market is booming, as shown by the extremely strong pace of home sales last week. However, many homeowners continue to struggle, as the pace of the job market’s improvement has waned.”

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In a recent bid for stability, the FHA extended its initial forbearance request for single-family homeowners through Dec. 31. The Federal Housing Finance Agency followed suit, announcing it would continue to buy qualified loans in forbearance through Nov. 3.

According to the MBA report, an estimated 3 million homeowners are in forbearance plans, with approximately 25.02% of total loans in forbearance in the initial stage and 73.14% in a forbearance extension. The remaining 1.84% are forbearance re-entries, the MBA said.

The volume of calls from mortgage borrowers to the servicers handling their home loans increased last week to 8.9%, measured as a share of overall servicing portfolio, from 8.2% in the prior week, the MBA report said.

The post Mortgage forbearances down 2 basis points to 5.9%, led by Fannie and Freddie appeared first on HousingWire.

Source: HousingWire Magazine

Succession plan in the works at American Southwest Credit Union

Jay Williamson will take over at the Sierra Vista, Ariz.-based institution after Brian Barkdull retires.
Source: American Banker

Townstone Financial files motion to dismiss CFPB redlining lawsuit

On Monday, Townstone Financial Inc., a Chicago-based nonbank retail mortgage lender, filed a motion to dismiss a lawsuit the Consumer Financial Protection Bureau filed against the company in July.

The July 15 complaint alleged that Townstone violated the Equal Credit Opportunity Act (ECOA) and Regulation B by engaging in discriminatory mortgage-lending practices and that those violations also constituted violations of the Consumer Financial Protection Act.

Townstone moved to dismiss the lawsuit based on expressive action that the CFPB attempted to expand the reach of the ECOA to “prospective applicants,” which the company said is not regulated under ECOA.

The CFPB’s suit alleges that, from 2014 through 2017, Townstone engaged in practices that illegally discouraged prospective African-American applicants from applying to Townstone for mortgage loans as well as practices that discouraged prospective applicants living in African-American neighborhoods in the Chicago MSA from applying to Townstone for mortgage loans.

“The scope of liability created by an expansion of ECOA to include ‘prospective applicants’ is unreasonable and unworkable. Such an absurd result cannot have been intended by Congress,” the motion to dismiss states.

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According to the motion, the complaint also attempted to expand ECOA by imposing requirements to target advertising to specific racial or ethnic groups after the bureau accused Townstone of redlining violations based on political speech and social commentary broadcast on a conservative radio station. The CFPB’s complaint alleged that statements made about crime in Chicago and support for police discouraged African Americans from applying for loans with Townstone.

In response, the dismissal cited the first amendment, stating the CFPB sought to punish Townstone based on its speech surrounding the issue of crime in Chicago and the benefits of policing – issues the company says it is well versed in and has every right to comment on.

The dismissal also states that the CFPB attempted to expand ECOA by imposing a demographic hiring quota as well as a requirement to have business success with specific racial or ethnic groups. In response, Townstone reiterated that ECOA’s scope is limited to regulating behavior between creditors and applicants.

“The Bureau seeks to redefine ECOA obligations on a case-by-case litigation basis. The result is predictably unpredictable,” the motion said. “As it is, no mortgage lender has any certainty regarding how to comply with the Bureau and Reg. B’s alleged affirmative obligations. Further, any ‘business success’ test is tantamount to a ‘disparate impact’ theory of discrimination, which is unavailable under ECOA. Congress never intended such a result.”

Townstone is represented by James Bopp, Jr., founder of The Bopp Law Firm in Terre Haute, Indiana and most famous for his role in the landmark Citizens United vs. the Federal Election Commission case. That case, which the Supreme Court ruled on in 2010, overturned restrictions on spending by corporations and labor unions to support or defeat political candidates. In 2019 Bopp was retained as special counsel by the campaign to re-elect President Donald Trump.

Following the original complaint against Townstone, Bopp charged in a written statement that “The CFPB has long been controversial and just lost a case in the United States Supreme Court for being improperly structured. They have been waiting years to file a case on the eve of a Presidential election to damage conservative voices. This is another federal agency weaponized to attack conservatives that needs to be stopped.”

Townstone’s counsel alleged that the case “will have chilling effects on free speech for those in the financial services industry” leading up to the November presidential election.

HousingWire has reached out to the CFPB for comment and will update the story with that information.

The post Townstone Financial files motion to dismiss CFPB redlining lawsuit appeared first on HousingWire.

Source: HousingWire Magazine

Should banks be worried about skyrocketing fintech valuations?

Speculation is part of the reason for the growing differential in market capitalization between legacy financial institutions and upstarts. But one venture capitalist says it’s “a call to action” for traditional banks to match fintechs’ all-digital, customer-friendly services.
Source: American Banker

Agenda is full for ABA’s new chairman, but it all starts with COVID

The Paycheck Protection Program and encouraging digital innovation are top priorities for James Edwards, CEO of United Bank in Georgia. He also expects the American Bankers Association to promote diversity and regulatory reform in the next year.
Source: American Banker