Skip to main content

New Paper Challenges FSOC on Servicers

Phil Hall
Jan 15, 2020
Photo credit: Getty Images/Gordan1

Whalen Global Advisors has published a new working paper that questions the findings of the 2019 Annual Report by the Financial Stability Oversight Council (FSOC) in regard to mortgage servicing companies.
 
The new paper, entitled "Do Non-Bank Mortgage Companies Pose Systemic Risk to the US Economy?," challenges the FSOC’s assertion that the financial system could undergo tumult if “if delinquency rates rise or nonbanks otherwise experience solvency or liquidity strains.” The paper also points to an FSOC observation that “widespread defaults or financial difficulties among nonbank mortgage companies could result in a decline in mortgage credit availability among these borrowers.”
 
The paper criticizes the FSOC, claiming that it fails to present a proper analysis to support its statements regarding non-bank mortgage servicers.
 
“We think that the FSOC report is alarming and badly mischaracterizes the mortgage servicing sector and the risks to commercial banks which provide liquidity to our industry,” said Richard Christopher Whalen, the paper’s author and president of Whalen Global Advisors. “Simply stated, there is no risk to the U.S. financial markets or the U.S. economy from mortgage servicers. The 2019 FSOC report is badly considered and, frankly, an embarrassment to the U.S. Treasury, which chairs the FSOC.”

 
Ocwen Financial To Acquire Reverse Mortgage Servicing Platform

Ocwen Financial Corporation's wholly-owned subsidiary, PHH Mortgage Corporation will acquire RMS' reverse mortgage servicing platform.

Industry News
Jun 18, 2021
UniteCT Emergency Rental Assistance Succeeds

Thanks to the successful launch of the UniteCT program, emergency rental assistance funds are helping Connecticut residents maintain housing.

Industry News
Jun 17, 2021
Angel Oak Mortgage Announces Initial Public Offering

Angel Oak Mortgage announced its initial public offering of 7,200,000 shares of its common stock at $19 per share.

Industry News
Jun 17, 2021
Mortgage Apps Rebound After Three Consecutive Weeks Of Declines

The Mortgage Bankers Association reported the first increase in mortgage applications after a three consecutive weeks on declines.

Industry News
Jun 17, 2021
CFPB New Rule Prevents Predatory Lending To Military Service Members

The CFPB stipulates its authority to examine supervised financial institutions for risk to active duty servicemembers and their dependents.

Industry News
Jun 16, 2021
Inventory Begins A Slow Recovery

Inventory grew 3.9% from April to May, according to Zillow's latest Market Report, after a year of steady decline.

Industry News
Jun 16, 2021