Mortgage – HousingWire

Interactive Mortgage to lay off 51 amid heavy losses
Ocwen delivers $18M profit in 2021
FHA launches new partial claim payoff portal
UWM sues two more broker shops for working with Rocket & Fairway

Interactive Mortgage to lay off 51 amid heavy losses

Posted: 25 Feb 2022 03:41 PM PST

California-based mortgage lender WinnPointe Corporation, doing business as Interactive Mortgage, has started a reduction in its workforce of around 180 employees, after suffering more than $1 million dollars in losses.

The company announced that, in the last 12 months, it laid off 128 employees, including underwriters, loan officers, processors, administrative and funders. However, pink slips will start arriving to more 51 employees by April 7.

WinnPointe sent a Worker Adjustment Retraining Notification (WARN) to the California Employment Development Department in early February disclosing its layoff plans.

"In part due to the economic collapse triggered by the Covid-19 pandemic as well as the dramatic recent increase in interest rates, the company has suffered more than a million dollars in losses," the lender said in the WARN notice.

According to the company, which is helmed by Evette DeLong, the layoffs are permanent and will continue to happen as determined by the needs of management.

"The decision on who to layoff will not be based exclusively on seniority, but we may use seniority as a basis."

The company did not return HousingWire’s request for a comment.

According to the WARN notice, 128 employees have been laid off over the last year, including six underwriters, 20 LOs, 26 processors, 51 admins, and 25 funders. Of the 51 employees who will be laid off in April, three are underwriters, 15 are LOs, 11 are processors, 19 are admins, and three are funders, the WARN notice says.

The company says on its website that it provides a "full range of low-rate options: FHA, VA, and conventional loans for purchase and refinances."

The layoffs at Interactive Mortgage are but one example of the recent bloodletting in the mortgage business. Homepoint, the nation’s second-largest wholesale lender, laid off about 10% of its employees last summer to control rising expenses. Consumer direct lender Wyndham Capital Mortgage announced the layoff of 35 LOs in January, while refi shops Better.com and Interfirst mortgage both laid off significant portions of their workforces. Santander Bank announced earlier this month that it would be shutting down its mortgage lending business and laying off its divisional staff.

Those industry layoffs mostly occurred before mortgage rates really jumped in February. The average 30-year-fixed mortgage rate averaged 3.89% for the week ending Feb. 24, compared to 2.97% at the same time last year. Borrowers not buying points are seeing rates in the low-to-mid 4% range.

The post Interactive Mortgage to lay off 51 amid heavy losses appeared first on HousingWire.

Ocwen delivers $18M profit in 2021

Posted: 25 Feb 2022 01:57 PM PST

Nonbank mortgage lender and servicer Ocwen Financial Corporation improved its performance in 2021, despite a deterioration in its earnings during the last three months of the year.

The company reported on Friday a $18 million profit in 2021. Ocwen posted a net loss of $40 million in 2020.

For the full year, the company’s servicing portfolio grew 42% to $268 billion. Meanwhile, the origination volume increased 93% last year to $2.8 billion. Reverse originations, boosted by the acquisition of Reverse Mortgage Solutions, increased from $942 million in 2020 to $1.5 billion in 2021.

The performance last year was consistent with the company’s expectations, according to Glen Messina, president and CEO. “We remain focused on prudent growth by expanding our client base, products, services and addressable markets,” the executive said in a statement. He added the company will pursue competitiveness through scale and low cost.

The company reported a $2 million loss in the fourth quarter, reversing a $21.5 million profit in the previous three months, partially due to the RMS platform’s acquisition. In the fourth quarter of 2020, the company’s losses were higher, at $7 million.

In October, Ocwen Financial Corporation announced its subsidiary PHH Mortgage Corporation completed the acquisition of RMS. The transaction had a $15 million impact in expenses in the fourth quarter, increasing the total operating expenses to $174 million in the period, a 21% year-over-year increase.

Presented by: Wolters Kluwer

In February, Lopa Kolluri, principal deputy assistant secretary at the FHA, acknowledged that there have been delays, mainly impacting FHA’s Catalyst program, but said that the administration is back on track with their modernization initiative.

"I feel really good about where we are with FHA Catalyst," she told HousingWire.

In 2020, HUD's Office of the Chief Information Officer (OCIO) developed a roadmap for the department to modernize its outdated IT systems. The FHA, Office of Public and Indian Housing (PIH) and mainframe modernization were placed as top priorities.

So far, Congress has allocated $20 million per year from fiscal year 2019 to 2021 to fund FHA's single family housing modernization.

Meanwhile, in a 2022 president's budget, HUD requested $323.2 million to fund maintenance and operations of its IT systems, up $23.2 million from the year prior. Of the total, $25 million is being requested to continue FHA's modernization initiatives.

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UWM sues two more broker shops for working with Rocket & Fairway

Posted: 25 Feb 2022 08:17 AM PST

United Wholesale Mortgage (UWM) just sued two more broker shops that allegedly violated its controversial broker agreement by sending loans to rivals Rocket Mortgage and Fairway Independent Mortgage.

The Pontiac-based wholesale lender filed two lawsuits on Wednesday in Michigan federal court accusing broker partners of breach of contract for originating mortgages to its competitors. The disputes involve Californian brokerage shops Kevron Investments Inc. and Mid Valley Funding & Inv. Inc and a request of $420,000 in damages.

In March 2021, UWM imposed on brokers its “all-in initiative,” ending its business relationship with partners who chose to continue sending loans to Rocket or Fairway for review, underwriting, purchase and funding. Brokers who did so would face fines upwards of $5,000 per loan or $50,000, whichever violation sum was greater.

UWM knew the ultimatum could result in the lender losing broker partners, the company said in the lawsuits. However, the lender said it was necessary to protect the long-term viability of the wholesale mortgage channel. A warranty in the addendum said that if brokers submitted loans to Rocket or Fairway, it would constitute a breach of contract.

HousingWire sent messages to Kevron Investments and Mid Valley seeking comments, but they did not immediately return the requests. The case was first reported by The Detroit News.

According to the lawsuit, independent mortgage broker Kevron, which started originating loans to UWM in July 2019, submitted at least 22 mortgage loans to the competitors since the ultimatum. Meanwhile, Mid Valley Funding, which started doing business with UWM in June 2015, sent at least 62 mortgages to Rocket and Fairway, the lawsuit claims.

UWM is demanding that Mid Valley Funding pay $310,000 and Kevron Investments $110,000 in liquidated damages, attorney fees and other expenses.

UWM claims in the lawsuit that it provides brokers “considerable resources” to grow their businesses, such as technology, marketing materials, compliance support and training. As a result, the broker’s success is partially attributed to the lender, UWM argued. However, submitting loans to competitors damaged the company in various ways, including taking advantage of UWM’s investments in the channels and undermining the agreement.

So far, three lawsuits regarding the “ultimatum” have become public in February. Earlier this month, HousingWire reported that UWM sued in Michigan federal court America’s MoneyLine, a high-volume mortgage shop based in Southern California, saying it owes $2.8 million for repeatedly violating the terms of the agreement.

On Friday, America’s MoneyLine countersued on the grounds that UWM’s “all-in” initiative is illegal and anticompetitive. AML argued that the ultimatum prevents brokers from working with Rocket Pro TPO, which offers loan options to potential borrowers who have credit scores between 580 and 600, whereas UWM “has little, if any actual options for such borrowers.” “A broker like AML is thereby losing the ability to provide financing to 5%-10% of the market of possible borrowers by excluding Rocket Pro from its lendings options and would be failing to reach clients that UWM is not even pursuing.”

In a statement to HousingWire, a spokesperson for UWM said all of the lender’s clients are aligned with the “all-in” initiative, but a few brokerages have breached the agreement.

“After further investigation into each breach and following a conversation with them, they continued to submit loans to UWM and Rocket Mortgage. Therefore, UWM is moving forward with legal action enforcing the penalties laid out and agreed to in the contract,” the spokesperson said.

Many brokers are critics of the ultimatum, even some who signed the addendum. They complain that it cuts at the identity of a mortgage broker – being able to offer consumers the greatest range of mortgage options was central to their mission. In August, a Florida mortgage broker named Dan O’Kavage filed a class-action-seeking lawsuit that targets the ultimatum on the grounds that it violates the Sherman Act.

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Loans And Mortgage

Saturday, February 26, 2022