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After months of investigation, federal banking regulators issued a final cease and desist order against the 14 largest servicers that will require them to overhaul their operations.
April 13 -
While the regulatory order requires the servicers to overhaul their operations, it also bolsters a key bank defense — namely, that the significant problems uncovered in the process have not led to improper foreclosures.
April 13 - PH
Frustrated by the lack of a global settlement between state attorneys general and top mortgage servicers, federal banking regulators are expected to move forward with their ...
March 31 - PH
The 27-page term sheet handed to the five largest mortgage servicers last week is a detailed, dense list of requirements that, if implemented as proposed, would fundamentally change the relationship between servicers, investors and borrowers.
March 7 -
EverBank Financial Corp., one of Florida's largest homegrown banks, plans to go public by raising up to $200 million of common stock, according to a registration filed Friday with the Securities and Exchange Commission.
October 8 -
EverBank has thrived as one of the most profitable banks in Florida by becoming a dominant player in the online banking realm. Last week, though, the Jacksonville company made a detour into brick-and-mortar banking by acquiring three failed Bank of Florida franchises, snapping up 13 branches across the state and increasing its assets by 15%, to $11 billion.
June 3 -
Though other banks have worked out deals with the Federal Deposit Insurance Corp. that improved their capital positions through payments to take over a failed bank, few private deals have had such a dramatic effect on a company's capital as Everbank's purchase of Tygris, industry watchers said.
February 17
EverBank Financial Corp.'s mortgage servicing unit is bringing the company some unwanted attention.
The Jacksonville, Fla., company has done relatively well the past few years, surviving its home state's considerable economic woes and even planning an initial public offering. But EverBank also stands out as one of the 14 national mortgage servicers recently directed by regulators to tighten foreclosure practices.
Industry observers believe the order could delay EverBank's IPO, which has been planned since October, given the likelihood that the Securities and Exchange Commission will require more disclosures. A delay would also raise doubts about EverBank's growth strategy, specifically around buying failed banks.
EverBank filed for its IPO three weeks before a competitor, BankUnited Inc. in Miami Lakes, Fla., did. BankUnited went public after raising $783 million in January. EverBank, however, has yet to provide a targeted offer price.
"It's evident that something is up," said Dory Wiley, the president and chief executive of Commerce Street Capital LLC. He said the regulatory order must be holding EverBank up "because the market has been pretty receptive to doing deals."
Industry observers said they still believe EverBank will hold an IPO, though it may face delays.
"I would not expect the IPO to be derailed by this event," said Christopher Marinac, an analyst at FIG Partners LLC. "More disclosure will be necessary to inform investors of the development."
The company and its unit, EverBank, were both issued a consent order by the Office of Thrift Supervision to bolster deficiencies in its loss-mitigation program, foreclosure processes and risk management. Servicers must hire an independent firm to review their foreclosure actions in 2009 and 2010.
EverBank declined to comment beyond a statement that it is "fully committed to cooperating with the agencies to ensure that our standards meet the requirements of the consent order."
Some observers took the order's timing as a good sign for EverBank. They argue that it's better to settle now so the market is not questioning where regulators stand on the issue when EverBank does go public.
"It's funny the way bad news is good news," said Kip Weissman, a partner at Luse Gorman Pomerenk & Schick. "You could make the argument that the order is good because there is more certainty as to what happens to them as a result of the foreclosure crisis."
Michael Reed, a partner at DLA Piper in Washington, said that in cases where there are blanket orders involving multiple financial institutions, some of them are more so a matter of being "guilty by association."
EverBank, which began as a mortgage lender, became strongly associated with other mortgage servicers as it aggressively expanded into the mortgage business five years ago. Industry observers said such expansion likely contributed to some of the foreclosure issues.
In 2007, EverBank bought about $700 million of mortgage assets from NetBank Inc. after shying away from buying the entire company. (NetBank, of Alpharetta, Ga., failed in September 2007.) EverBank also bought BNY Mortgage Co. in 2007 to grow reverse mortgages and apartment lending.
Despite this, EverBank has kept its thrift heavily capitalized; total equity at Dec. 31 was $1.1 billion.
There are still other complications for EverBank. Of the financial companies that filed for IPOs last October — EverBank, BankUnited and Circle Bancorp in Novato, Calif. — EverBank is the only one that has not publicly disclosed corporate financials since the third quarter of 2010.
Industry observers, while confident that the company's IPO would move forward, expressed concerns about the impact an regulatory order could have on acquisitions.
EverBank, which has a history of growing with acquisitions, added assets of more than $1.4 billion last May when it bought three Bank of Florida units from the Federal Deposit Insurance Corp.
Reed said that the servicing issues, though addressed in the order, could be "significant enough to potentially have an impact on winning failed banks."
The order "very well could limit them … if problems persist or get worse," Wiley said. "If EverBank wins another failed bank, there would be lot of criticism. So they've got to convince the regulators that they've got [their problems] contained."
The OTS would also have to sign off if the company was poised to win another failed-bank bid.
Bill Ruberry, an OTS spokesman, declined to discuss specific thrifts. He said that in general the agency takes "enforcement orders against an institution into consideration when assessing any application by that institution to acquire another institution."
"The weight given to the enforcement order would depend on the order and other particular circumstances of the case," Ruberry said in an emailed response.
Some analysts, however, said EverBank may have de-emphasized its plans to buy failed competitors.
The company's thrift grew rapidly last year, its assets rising nearly 50%, to $12 billion. With that increase it became the biggest banking company based in Florida, edging ahead of the $10.9 billion-asset BankUnited.
"Frankly at this point, EverBank has plenty to do internally with respect to integration such that additional FDIC deals may not be their first agenda item," Marinac said.
