Mr. Cooper CFO: We’re “comfortably in compliance” with looming FHFA changes
There wasn’t much said about this week’s earnings report from the major nonbank mortgage lender and servicer, Mr. Cooper. There also isn’t much being reported on the FHFA proposed requirements for nonbanks.
The good news is that the nonbank posted a profit for the second quarter in a row. All of its segments performed well enough, especially originations and servicing. Even XOME is making money now. Not much, but hey, a profit is a profit, right?
Currently, the FHFA is considering stronger liquidity requirements for servicing mortgages at nonbanks. The big change for Mr. Cooper would come for its nonperforming loan portfolio. The CFO is not concerned.
“As some of you noticed, the FHFA recently came out with proposed new requirements for nonbank mortgage servicers,” said Chris Marshall — Vice President and Chief Financial Officer (Here is the earnings call transcript). “We are comfortably in compliance with these proposals. And if they’re implemented, we don’t expect any impact to our business.”
US Bank, Old National & TIAA are only mortgage lenders on “Most Ethical Companies” list
Oh, deary me. Mortgage lenders as a whole still aren’t considered ethical. There’s a company called Ethisphere and according to these folks, in 2020, 132 companies warrant recognition for setting the global standards of business integrity and corporate citizenship — the Who’s Who of ethical companies, if you will.
A handful of real estate companies made the list: Realogy, JLL, CBRE as well as several financial services firms. But guess what? No big banks, nonbanks, or other types of major mortgage lender made the list, except for US Bank, Old National Bank and TIAA, which counts mortgage services among its many offerings.
Ethisphere’s World’s Most Ethical Companies list recognizes organizations for exemplifying and advancing corporate citizenship, transparency and the standards of integrity. The companies on the list have met rigorous criteria across five categories covering the quality of their ethics and compliance program, organizational culture, corporate citizenship and responsibility, governance, and leadership and reputation.
Congratulations to the companies in our space that made the list. But for the mortgage lenders who did not, you could help us elevate our global reputation. Let’s figure out how to get that done and change this list in 2021.
What’s the bigger picture behind Intuit buying Credit Karma?
Earlier this week we learned that Intuit planned to acquire Credit Karma for $7 Billion. Credit Karma is an aggregator of home loan offers. Does this mean that Intuit sees money in mortgages? In the press release announcing the planned acquisition, it’s noted that mortgage debt makes up the largest share of the nation’s debt, by far. Take that into account when considering the CEO’s comments and you might surmise that we could see more on the mortgage lending front coming from this acquisition.
“We wake up every day trying to help consumers make ends meet,” said Sasan Goodarzi, CEO of Intuit. “By joining forces with Credit Karma, we can create a personalized financial assistant that will help consumers find the right financial products, put more money in their pockets and provide insights and advice, enabling them to buy the home they’ve always dreamed about, pay for education and take the vacation they’ve always wanted.” Second, the deal is prompting Lending Academy to declare (at the end of this link) that 2020 is quickly becoming the year of fintech acquisitions: “We started in January with Visa acquiring Plaid in January and while not really considered a fintech E*Trade is being acquired by Morgan Stanley and now Credit Karma with Intuit,” the article states. “With the public markets looking less attractive I expect we will see many more deals like this as the year goes on.”