Mortgage Companies JUNE, 2016 GNMA Conference on

Transcript:Mortgage Companies JUNE, 2016 GNMA Conference on:
Mortgage Companies JUNE, 2016 GNMA Conference on Managing Value and Liquidity in Mortgage Servicing, June 24, 2016 Warren Kornfeld, Senior Vice President – Financial Institutions Group 2 Moody’s Stand Alone Credit Assessments of 15 Largest US Banks *CMA's ratings have a negative outlook; KEY's ratings are on review for possible downgrade; Zion's ratings have a positive outlook Source: Moody’s 3 Moody’s Corporate Family Ratings of Rated Mortgage Companies *PHH's ratings are on review for possible downgrade; PMT's, Ocwen's and Altisource's ratings have a negative outlook Source: Moody’s 4 Constrained Profitability Only 5 out of 12 of rated mortgage companies have Net Income / Assets above 1% Source: Company Disclosures and Moody’s 5 Profitability – Excluding MSR Impairments Weak profitability driven largely by rising operating costs Source: Company Disclosures and Moody’s 6 Weak Liquidity Have low levels of liquidity versus facilities maturing over next two years as a result of reliance on 364 day warehouse facilities Source: Company Disclosures and Moody’s 7 Liquidity Warehouse facilities also result in high levels of secured debt Source: Company Disclosures and Moody’s 8 Capital Capital Adequacy Ranges from Weak to Strong Source: Company Disclosures and Moody’s Brian Harris Senior Vice President North America Banking +1.212.553.4705 Brian.Harris@moodys.com Warren Kornfeld Senior Vice President North America Banking +1.212.553.1932 Warren.Kornfeld@moodys.com Gene Berman Assistant Vice President North America Banking +1.212.553.4866 Gene.Berman@moodys.com This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. © 2016 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY’S (“MOODY’S PUBLICATIONS”) MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S