Servicing

The Trump administration's Justice Department was expected to be less aggressive in its pursuit of False Claims Act cases against the mortgage industry. Instead, its focus has shifted to Federal Housing Administration-insured reverse mortgages.

Seeking to stay below $50 billion, the regional is selling its origination and servicing businesses.

State regulators felt they were strung along by the mortgage servicing giant Ocwen Financial after years of promises that were never fulfilled, resulting in successive enforcement actions against the company.

Ocwen Financial and its subsidiaries faced a slew of accusations from federal and state regulators on Thursday, which raised questions about whether the firm could survive.

Speaking at a town hall event in Washington, JPMorgan Chase CEO Jamie Dimon said that post-crisis regulations have made mortgages too costly for consumers — and made homeownership unattainable for borrowers with low incomes or blemished credit histories.

Rising interest rates have slowed a recent run of unexpectedly high prepayments of government-insured mortgages, making servicing rights for loans held in Ginnie Mae securities more attractive to investors.

The mortgage servicer will pay at least $25 million in cash and provide some $200 million in debt relief to borrowers to resolve a range of alleged violations. But Ocwen will also be allowed to resume acquiring servicing rights in the nation's largest state.

Citigroup's plan to sell a $97 billion mortgage servicing portfolio and subservice its remaining accounts highlights the growing prevalence of nondepository servicers and raises questions about how much capacity exists for these institutions to absorb more large deals.