WestStar Mortgage Bought by JG Wentworth for $54M

Category: National Mortgage News
Published: Saturday, 14 March 2015
Written by Admin
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Audit Slams Ginnie Mae for Accounting Lapses in Failed TBW Loans

Category: National Mortgage News
Published: Sunday, 01 March 2015
Written by Admin

In a written response included in the audit, Ginnie Mae Chief Financial Officer David Fender acknowledged the OIGs findings present serious and specific accounting challenges, and pledged to strengthen its accounting practices.

At issue in the audit are departures from generally accepted accounting principles, also known as GAAP, a Ginnie Mae executive said in an interview with National Mortgage News.

Were not overstating our earnings in our standpoint here, but certainly the IG thinks that were not following GAAP. We were taking the more conservative approach in our belief, said John Getchis, Ginnie Maes senior vice president of capital markets.

The important thing is this does not affect our explicit government guarantee, he added.

The auditors attributed flaws they found in reporting to inadequate monitoring; oversight and governance of accounting and reporting by the executive management team; loss of several key financial personnel; and the inability to track accounting transactions and events at a loan level due to system limitations.

The valuation concerns reflect defaulted loans which were removed from securitized pools. Ginnie Maes government guarantee ensures investors continue to receive payments when issuers who sell its securities fail. It has been set up more to examine risk at the issuer level than the loan level, but will be working to change that, Getchis said.

Ginnie Mae is not designed to manage individual loans. We delegate out, but we do not mirror, loan-level activity on our own system, he said.

However, the audit is critical of this.

As Ginnie Mae intended to keep the servicing of these loans only on a short-term basis, it decided not to make the appropriate changes in its internal processes and information systems to accommodate the significant changes. This was not a prudent decision as Ginnie Mae’s inappropriate response to the changes contributed to the financial reporting problems facing Ginnie Mae in fiscal year 2014, they said in the report.

Ginnie Mae has been working on getting a better handle on its counterparty risk and this week issued a new issuer scorecard. It previously faced criticism of its handling of counterparty risk related to notorious issuer TBW, a leading mortgage wholesaler that folded in 2009 after a Federal Bureau of Investigation raid. TBW is the main issuer involved in the concerns in the audit, Getchis said.

Our audit recommendations are directed toward strengthening Ginnie Mae’s governance of its financial operations, the auditors said in the report.

Thats what we will endeavor to do, said Getchis, but he questioned whether the government agency currently has the budget to do so.



Five Can't-Miss Sessions at MBA Servicing

Category: National Mortgage News
Published: Sunday, 22 February 2015
Written by Admin

There are more than 20 speakers and panels scheduled at the Mortgage Bankers Associations National Mortgage Servicing Conference Expo. Heres a preview of some of the most interesting and important presentations on the agenda, as selected by the editors of National Mortgage News.

 

Preview of Ginnie Maes New Issuer Operational Performance Profile

Ginnie Mae is developing a monthly scorecard and rating system to monitor its issuers compliance with a series of operational and default management metrics. Ahead of the spring 2015 launch of the Issuer Operational Performance Profile, Ginnie Mae senior mortgage banking analyst Rene Mondonedo will preview the new tool and provide an overview of its methodology.



MBA Servicing Conference Preview

Category: National Mortgage News
Published: Sunday, 22 February 2015
Written by Admin

The Mortgage Bankers Association National Mortgage Servicing Conference Expo will be held Feb. 23-26 at the Gaylord Texan Hotel Convention Center in the Dallas suburb of Grapevine, Texas. National Mortgage News is previewing the conference with a special package of content online and in print.

Below is a roundup of links to the conference preview coverage. Check back on this page regularly to read more content as its published.

How North Texas Became a Magnet for Mortgage Servicers

Tough Choices for Servicers After Tenant Foreclosure Law Expires