LPS Is Now
Black Knight

Fidelity National Financial Inc. (FNF) has reorganized the former Lender Processing Services Inc. (LPS) businesses into a formation of a wholly owned subsidiary called Black Knight Financial Services Inc. and has issued a 35% interest in each of Black Knight’s two operating subsidiaries, ServiceLink Holdings and Black Knight Financial Services (BKFS), to funds affiliated with Thomas H. Lee Partners LP and certain related entities.

Black Knight, through ServiceLink and BKFS, now owns and operates the former LPS businesses and FNF’s ServiceLink business. FNF’s core operating subsidiaries now consist of Fidelity National Title Group Inc. and Black Knight, according to FNF.

FNF says BKFS comprises LPS’ former technology, data and analytics businesses and the technology offerings previously owned by FNF’s ServiceLink division. Tom Sanzone will be the CEO of BKFS. Sanzone joined FNF in 2013 and has more than 25 years of experience in the financial services industry.

ServiceLink consists of FNF’s former ServiceLink division and LPS’ former transaction services business. ServiceLink provides a suite of origination- and default-related products and services to mortgage originators, says FNF. Chris Azur will be the CEO of ServiceLink and was formerly president of FNF’s ServiceLink division and has more than 20 years of experience in the mortgage transactions services business.

Azur and Sanzone will report to William P. Foley II, chairman of FNF and Black Knight. Additionally, Kirk Larsen will serve as chief financial officer of Black Knight, reporting to Foley. Prior to joining Black Knight, Larsen was corporate executive vice president of finance and treasurer of FIS.

Last May, FNF announced its plans to acquire LPS for $2.9 billion. Several months later in December, LPS stockholders approved the acquisition, and more than 98% of the votes cast at the Special Meeting of Stockholders were in favor of the transaction, representing more than 78% of all outstanding shares.

Shortly after, the bid cleared a major hurdle when the deal won approval from U.S. antitrust regulators.

 

Flagstar Downsizes
Its Workforce

Flagstar Bancorp Inc., the holding company for Flagstar Bank, has implemented an organizational restructuring to reduce expenses and enhance profitability.

As part of the initiative, the company says it will reduce staffing levels across the organization by approximately 600 positions from its Sept. 30, 2013, head-count level.

Flagstar says the restructuring is in light of the current operating environment and is consistent with its previously communicated strategy of optimizing its cost structure across all business lines.

Flagstar expects the restructuring will generate annualized cost savings of approximately $40 million when fully implemented by the end of the first quarter of this year. The company expects to incur a pre-tax charge of approximately $5.2 million related to this restructuring.

“In 2013, we made important progress in resolving certain legacy issues, and we are now focused on further strengthening our financial and operational foundation,” says Alessandro DiNello, president and CEO. “The decision to downsize our workforce was not made lightly but is a necessary step on the path to achieving the company’s long-term goals.” He notes that the changes will not have an impact on its clients.

Flagstar Bancorp recently settled suits with Freddie Mac and Fannie Mae, with total resolution amounts of $10.8 million and $121.5 million, respectively.

 

FirstService Buys
Bristol Management

FirstService Residential, the residential property management business of FirstService Corp., recently acquired Bristol Management Services, a provider of residential property management services in Jupiter, Fla., and surrounding areas.

Steve Inglis, co-founder of Bristol, will continue to lead its day-to-day operations as president.

The acquisition adds a total of 205 properties and 45,000 units to FirstService’s North American platform, which now totals 6,500 properties comprising over 1.5 million residential units throughout North America, according to FirstService.

 

Ellie Mae Acquires
MortgageCEO

Ellie Mae, an automated solutions provider, recently completed its acquisition of substantially all the assets of ARG Interactive (dba MortgageCEO), a provider of customer relationship management (CRM) and marketing automation solutions.

MortgageCEO’s software-as-a-service offering provides mortgage originators an “all-in-one” CRM and marketing platform with lead management, sales automation, email marketing, builder and Realtor referral marketing, and mobile capabilities, according to Ellie Mae.

MortgageCEO is currently integrated into Ellie Mae’s Encompass through Ellie Mae’s Software Development Kit. Ellie Mae says it intends to strengthen the integration between MortgageCEO and Encompass this year.

Jaret Christopher, founder and CEO of MortgageCEO, says, “Strengthening MortgageCEO’s integration with Encompass will help lenders improve compliance and customer service, reduce sales and marketing costs, and take their origination efforts to the next level with just one system.”

 

Citi Puts $10.3B
Of MSRs On The Block

Citigroup in January announced that it had sold mortgage servicing rights (MSRs) for about 64,000 Fannie Mae residential first-mortgage loans with about $10.3 billion in unpaid principal balances.

Fannie Mae acquired the rights and was to transfer the servicing to Andrew Wilson Financial Services, according to a Bloomberg News report. Terms of the deal weren’t specified. The MSRs primarily reside in Citi Holdings.

“This transaction advances Citi’s ongoing objective to reduce assets and expenses within Citi Holdings and more efficiently aligns Citi’s mortgage servicing operations with current business needs,” the bank said in a statement.

The sale is part of an overall trend among the larger banks, which have been divesting themselves of their MSRs due to implementation of the Basel III rules, which will require banks to hold more capital in their reserves to cover potential losses on the mortgage loans they service.

In October, Citi announced that it was gearing up to sell MSRs on $63 billion in loans it held in its portfolio. At the time, those MSRs represented about 21% of the bank’s total contracts as of midyear. More than 80% of those loans were reportedly performing.

In the case of this most recent sale, the MSRs represent mostly delinquent loans serviced by CitiMortgage for Fannie Mae. They represent about 20% of the total loans serviced by CitiMortgage that are 60 days or more past due, the bank said in its statement.

As part of the agreement, Citi and Fannie Mae substantially resolved pending and future compensatory fee claims related to Citi’s servicing practices on these loans.

Citi adds that the deal helps it reduce assets and expenses within Citi Holdings and more efficiently aligns the bank’s mortgage servicing operations with its current business needs.

The transfer of servicing is expected to commence in the first quarter and will continue into the third quarter of this year.

In recent months, other major banks including Wells Fargo, Bank of America and Ally Financial have been selling their MSRs as they seek to get out of the servicing business ahead of implementation of the Basel III regulations. Some are getting out simply because servicing now represents a shrinking part of their business.

Meanwhile, private equity firms, hedge funds and other servicers have been snapping up MSRs as they seek to get a larger slice of the $10 trillion mortgage servicing market.

Citigroup had reduced assets in the Citi Holdings portfolio to $122 billion at the end of September, Bloomberg News reports. The bank said in its statement that it plans further reductions in Citi Holdings.

 

MIAC Puts MSRs
Up For Sale

Mortgage Industry Advisory Corp. (MIAC) is overseeing the sale of $669.22 million in Fannie Mae and Ginnie Mae mortgage servicing rights (MSRs), the company announced in January.

Most of the properties in the portfolio are located in the Northeast.

The portfolio consists of all fixed-rate loans, with an average loan size of $185,071.

About 47% of the loans in the portfolio are Fannie Mae, while about 51% are Ginnie Mae. The remainder are warehouse loans waiting for delivery.

The portfolio also boasts a weighted average delinquency rate of 2.27% and a weighted average interest rate of 3.93%. Most of the properties are concentrated in New York.

Earlier in January, MIAC announced that it was overseeing the sale of $24.96 million in Fannie and Ginnie MSRs in a separate portfolio being offered by a mortgage company that originates loans across a national geographic footprint. MIAC noted that this portfolio is being sold without full representations and warranties for the loans included.

The portfolio also consists of all fixed-rate loans, with an average loan size of $190,504.

About 80% of the loans are Ginnie Mae while the remainder are Fannie Mae.

The portfolio has a weighted average interest rate of 4.52% and a weighted average delinquency rate of 0.76%.

Again, most of the properties are concentrated in New York.

Also earlier in January, MIAC announced that it was putting a $509 million Fannie Mae/Freddie Mac mortgage servicing portfolio up for sale. s

FYI

LPS Is Now Black Knight

 

 

 

 

 

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