Transactions involving the purchase and sale of residential mortgage loans and mortgage servicing rights (“MSRs”) frequently raise the question of whether they require submitting premerger notification filings to the Federal Trade Commission and the Department of Justice under the Hart-Scott-Rodino (“HSR”) Act. This Legal Update provides an overview of how residential mortgage loans, MSRs and
Lauren Pryor is a Financial Services Regulatory & Enforcement partner and co-head of the Financial Institutions M&A group.
Lauren focuses on M&A in the financial services industry, including complex stock and asset-based transactions, full equity deals, PE investments, JV arrangements and transfers of assets including residential mortgage loans, consumer loans, business purpose loans, mortgage servicing rights and credit card receivables. Lauren frequently represents depository institutions, financial sponsors, mortgage companies and investment funds in such matters.
While residential mortgage lenders are facing tough headwinds driven by rising interest rates and low housing volume, the current market presents opportunities for savvy investors looking at mortgage servicing rights (“MSRs”). The current mortgage market is supported by non-bank mortgage originators and servicers who lack the same access to capital and liquidity as traditional banks.
The use of representations and warranties insurance policies in M&A transactions has grown exponentially in the past decade. While the use of this type of insurance in acquisitions of residential mortgage originators and servicers is less common, there is tremendous opportunity for growth in the mortgage sector. This Legal Update discusses the benefits of these…
Please join Lauren Pryor on Wednesday February 5, 2020 at the IMB 2020 conference to discuss trends in mortgage M&A deals, including structural options, pricing considerations and risk analysis. https://www.mba.org/conferences-and-education/event-mini-sites/independent-mortgage-bankers-conference/schedule?id=12754_690697&expand=true
Freddie Mac is an outlier among the three primary secondary market investors with its mid-month investor reporting cycle. In an effort to standardize the marketplace, Freddie Mac is joining Fannie Mae and Ginnie Mae by shifting its investor reporting cycle to the beginning of each month. In this regard, Freddie Mac is implementing the following changes: (i) the investor reporting cycle will run from the first day of each calendar month to the last day of such month; (ii) Freddie Mac is encouraging daily loan-level reporting, with reporting of at least one loan level-transaction detailing activity submitted no later than the 15th calendar day of each month (or next business day) (the “P&I Determination Date”); (iii) servicers will report the actual principal received and the forecasted scheduled interest based on unpaid principal balance reported at the end of the current one-month period; (iv) Freddie Mac will draft principal and interest from the servicer’s custodial account two business days after the P&I Determination Date; (v) on the fifth business day following a payoff, Freddie Mac will draft payoff proceeds, provided such payoff was reported within two business days of the payoff date, subject to certain requirements; and (vi) Freddie Mac will process and settle loan modifications on a daily basis.
Freddie Mac has released several bulletins outlining the transition (2016-15, 2017-4, 2017-15, and 2018-14), summarized in the following timeline:Continue Reading Freddie Mac’s Investor Reporting Changes