What You Missed at MountainView’s MSR Tax and Accounting Webinar

Posted on May 14, 2018 in Uncategorized | Add Your Voice

What You Missed at MountainView’s MSR Tax and Accounting Webinar

It’s crucial for holders of residential mortgage servicing rights (MSRs) to constantly be measuring the profitability of their MSR portfolios.

That conclusion was offered by Jennifer Hanna, assurance partner at Richey May, a provider of assurance, tax and business advisory services with a specialization in the mortgage banking industry, during a May 9 webinar hosted by MountainView Financial Solutions, a Situs company.

“It’s very important for you, considering the complexity of the asset, to accurately determine your return on investment,” said Hanna. “Continuous analysis of your portfolio should be performed to inform all of your decisions.”

Attractive yields and the opportunity to have a meaningful financial relationship with customers are two of the primary reasons to hold a portfolio of residential MSRs, but with these benefits come challenges in managing, valuing, buying and selling. Tax and accounting issues are intertwined with these challenges, and in the webinar, holders of MSRs received answers to some commonly asked questions.

Among the topics discussed were reserve requirements included in fair-value determination, reserves for FHA loans in lower-credit buckets, projecting losses on servicing advances, how tax deferral applies to MSRs, accounting vs. tax recognition of excess servicing, and tax implications from the bulk sale of a MSR portfolio.

Hanna also shared the key categories, factors and metrics they recommend clients include for measuring profitability.

The webinar was a special addition to a monthly series produced by MountainView. The firm has made the webinar presentation available for download on its website.

Amazon Shows Off Alexa-Filled Homes of the Future

Amazon and home-builder Lennar are opening staged-homes filled to the brim with Alexa-powered smart-home products. Anyone can visit these new “Amazon Experience Centers” to see what it’s like to yell at a speaker to open the blinds, or push a button to order more toilet paper from Amazon Prime. The companies are launching the houses in 15 cities across the United States to start.

Lennar already has Amazon’s Alexa smart assistant pre-installed in all of its new homes. The company includes an Echo Show and an Echo Dot so homeowners can lock doors, change temperatures, and turn off lights with voice commands.

Its houses have a number of other smart-home gadgets to get people started, including a Sonos One speaker, a Ring video doorbell, smart locks, a connected thermostat, and a Samsung SmartThings hub.

Lennar announced the Echo integration last summer as part of the its “everything included” approach to selling houses.

Read more: CNN

Will Non-Prime Mortgages Increase in 2018?

Non-prime borrowers are likely to get more access to mortgage loans as the mortgage market continued to perform well in the first quarter of 2018 according to the latest quarterly TransUnion Industry Insights Report released last week. The report features data and insights on consumer credit trends including mortgages, credit cards, auto loans, and personal loans.

The report revealed that while balances rose in aggregate for the year, average new mortgage loan balances declined from $235,361 in Q1 2017 to $229,538 in Q1 2018 as a result of a deceleration in refinancing activity and a lower share of super prime loans.

The shift in new origination mix, as a result, pushed subprime and near-prime originations to 16 percent in the last quarter of 2017 from 14.4 percent in the last quarter of 2016. TransUnion said that originations were viewed one quarter in arrears to account for reporting lag.

Read more: MReport

Teachers Can Afford Only 9% of the Homes in Miami, New Study Says

There’s a reason why people are seriously considering having Miami teachers live at school.

Miami area teachers can now only afford 9 percent of area homes, according to new data from Trulia.

That’s down 9.7 percentage points in just one year, thanks to a 5.9% decrease in overall teacher wages, according to the latest Bureau of Labor Statistics data, and a 12.8% increase in list prices. Trulia said the median income for Miami teachers is now $49,013, while the median home price in the Miami metro area is $450,000.

Last year, the Herald reported on the struggles area teachers face in finding workforce housing, citing a study that ranked the city 47th out of 50 metros in affordability.

Read more: Miami Herald

White House Looks to Extend Mulvaney’s CFPB Tenure

The White House is dragging out the nomination of a permanent director for the Consumer Financial Protection Bureau to ensure that acting CFPB Director Mick Mulvaney calls the shots at the agency until the end of the year or longer, according to sources.

President Trump is expected to name J. Mark McWatters, the chairman of the National Credit Union Administration, as his CFPB nominee close to June 22, according to sources familiar with the situation.

McWatters’ nomination has long been rumored, but waiting until late June would also maximize the tenure of Mulvaney, who has moved aggressively to reshape the agency. Under the Federal Vacancies Reform Act, Mulvaney can only serve for six months — a deadline up in late June — unless a permanent successor is nominated. Once that nomination is made, however, the acting appointee can stay in office as long as it is pending, a period that could extend for months.

Read more: American Banker

Reverse Mortgage Market Takes a Fall

After a rough March for home equity conversion mortgage (HECM) originations, April’s numbers became even more dire, according to the latest statistics from Reverse Market Insight. Just how bad did the HECM market get in April 2018? RMI reports a 22.2 percent month-over-month drop in HECM originations in April.

That amounted to only 3,345 HECM originations from FHA-approved lenders in April, according to RMI data. For March, that number was 4,300; for January 2018, it was 6,313. January also marked the highest reverse mortgage volume since 2011. January also saw 48 new lenders enter the reverse mortgage lending field. Now, however, the market has clearly taken a turn for the worse.

“HECM volume is seriously hurting after the October 2, 2017, changes from the FHA,” stated RMI’s release. That is referring to changes instituted last fall that lowered principal limits and imposed a new mortgage insurance premium structure.

Read more: MReport

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