Archive for April, 2009
ProVest, a Tampa, Fla.-based national process server provider management company for the mortgage default industry, announced Monday the appointment of Les Zeiter as vice president of operations for its Ohio office. In this position, Zeiter will be responsible for maintaining customer relations with current clients and potential clients and working with clients to enhance efficiencies in service of process and loss mitigation initiatives.
Zeiter brings more than 20 years of industry experience working with consumer and mortgage collections, loss mitigation, bankruptcy, foreclosure and REO’s. He held multiple positions at National City Mortgage including business technology manager, business analyst, default support and project manager and collections manager. He was accountable for daily operations of the LPS (Fidelity) servicing system for mortgages, including Passport, Director, MSP and third-party vendors. He also managed a staff of eight employees, including programmers for visual basic scripts, business system analysts and project managers, the first said.
“We are excited to have Les join our management team, as his experience and relationships will compliment the skills and experience of the growing team we have in Ohio,” said Jim Ward, president of ProVest.
“Les has demonstrated the ability to work effectively with legal firms and lenders. He will continue to support these groups’ efforts to to improve the foreclosure process and keep residents in their homes in every case possible. We are proud to continue to bolster our organization with a leader who shares in our desire to better the mortgage industry.”
Write to Paul Jackson at paul.jackson@housingwire.com.
TSS Software Corporation, which says it is the nation’s largest independent software provider dedicated exclusively to the settlement services industry, said Tuesday that it has named Laura Davis as vice president, accounting and administration. Davis has been with TSS since 2006, the firm said.
In her new position, Davis will oversee all accounting and administrative functions for TSS. The promotion makes her an officer of the company, and part of the senior management group. Davis came to TSS as a senior accountant with 16 years experience in public accounting and financial analysis. She has also served as a controller during her career.
“Laura is an exceptional and reliable professional, and we have come to count upon her skills and advice in numerous ways,” said Barbara Miller, president and chief operating officer for TSS. “Her hard work and dedication to superior customer service make Laura a natural fit with our management team.”
Write to Paul Jackson at paul.jackson@housingwire.com.
BankOwnedBids.com, which bills itself as "the first Michigan-based online auction of foreclosed properties," said it had scheduled its first weeklong auction for Apr. 22.
The company reported reported what it called "heavy traffic" on the property pages since its site launched earlier this month. A 2-week pre-auction period has allowed buyers time to review the listings and visit properties of interest, ranging from a four-bedroom bungalow with a starting bid of $60 to an updated four-bedroom, three-bath suburban trophy home with starting bid of $191,100.
The company did not disclose who it was selling properties for.
"BankOwnedBids.com focuses on helping budget-minded homebuyers and interested investors find a home or property appealing to both their desires and their budget," said Kent Colpaert, founder of BankOwnedBids.com. Colpaert is hoping to offer regional auctions with residential and commercial properties from across the state and, eventually, from across the nation, he says.
Write to Paul Jackson at paul.jackson@housingwire.com.
If anything, the nation's financial crisis has clearly led to some creative ideas around how to prop up ailing financial markets and the institutions that make up much of it: from TALF, to TGLP, to TARP. But as the Troubled Asset Relief Program has gone from savior to what JP Morgan Chase & Co. (JPM: 37.21 -0.75%) chief Jamie Dimon last week labeled a "scarlet letter," officials in the Obama administration have been vexed by how to best continue to aid a financial sector that is still reeling from punches to the collective gut.
The latest idea? Convert preferred shares representing loans from the government into common equity at any of the 19 banks receiving TARP funding thus far that need additional capital; the move would wipe out existing shareholders, of course, but also would recapitalize banks without actually costing the government any more of its precious taxpayer money. Which is good in some regards, since Congressional Democrats have made it amply clear that further funding for a Wall Street bailout is going to be tough to come by.
Not that the plan is without problems of its own; such a move would ostensibly place troubled banks more directly into the lap of taxpayers, and potentially bring about a type of faux nationalization like we've already seen at AIG — and perhaps at Citigroup Inc. (C: 30.87 +1.61%) as well, which recently completed negotiations over a similar swap agreement.
White House chief of staff, Rahm Emanuel, made waves this weekend by confirming that a preferred-into-common strategy was in the works for some banks. “We believe we have those resources available in the government as the final backstop to make sure that the 19 are financially viable and effective,” Emanuel said in an ABC interview on Sunday. “If they need capital, we have that capacity.”
Those banks that need capital will largely be determined via much-criticized "stress tests" being conducted by the Treasury, to determine what level of losses banks can withstand should the economy continue to deteriorate. It's unclear just how the government will choose to release the results, scheduled for early May, however. Both the criteria for the stress tests as well as what some see as a lack of transparency involved in the process have been the subject of intense criticism from those within and outside of the mortgage banking industry. Critics suggest the criteria have not been stringent enough, while others are pushing for a complete release of results; Obama officials have allegedly told banking officials not to release results of the tests, out of concern that banks receiving lower marks would be targeted for a bank run.
“Not surprisingly, different banks are in different situations; they are going to need different levels of assistance of taxpayers,” Obama told a press conference at a summit in Trinidad on Sunday, according to a report in the Financial Times.
National Economic Council director Lawrence Summers told various press last week that banks needing capital would need to go to private markets first in an attempt to raise any needed funds before any further government funds would be committed; of course, such a move would suggest that banks needing capital are signaling weakness, raising fears among some that doing so might actually cause a run on deposits.
The stigma now attached to government funding via TARP has led more than a few banks to decide to wriggle out of the restrictions now being placed on firms that have received funding via the $700bn program. Both Goldman Sachs (GS: 111.77 +2.96%) and JP Morgan are pressing to repay the funds they've received. Such repayments could help the government channel funds to more problematic banks, but also are a signaling tool that allow banks to suggest to the market that they are healthier than their government-funded counterparts.
As a result, Obama officials say they are likely to put conditions on any repayment of TARP funds, according to published reports.
Write to Paul Jackson at paul.jackson@housingwire.com.
Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.
Another two bank failures announced late Friday pushed the running total to 25 banks shut down by federal regulators so far this year, marking a substantial increase from the pace of bank failures seen last year. As of April 2008, regulators had closed only two banks, demonstrating the continued effects of deteriorating financial markets on U.S. banks. Friday’s bank failures will cost an estimated $84m to the Federal Deposit Insurance Corp. (FDIC) insurance fund. The failures put a total $452m in combined assets on the line for purchase or disposition.
The Office of Thrift Supervision closed Sugar Creek, Mo.-based American Sterling Bank, naming FDIC as receiver. The FDIC entered a purchase and assumption agreement with Lee's Summit, Mo.-based Metcalf Bank, which agreed to purchase all of the failed bank's deposits. American Sterling, the 24th bank to fail in '09, had $181m in total assets and $171.9m in deposits as of late March. Metcalf agreed to purchase some $173.6m of the bank's total assets and enter a loss-sharing transaction with the FDIC on approximately $100m in assets. As receiver, the FDIC said it will retain the remainder of American Sterling’s assets after Metcalf's purchase for later disposition, and will absorb an estimated $42m cost to the Deposit Insurance Fund.
Read the FDIC’s press statement on American Sterling.
The Nevada Financial Institutions closed Elko, Nev.-based Great Basin Bank of Nevada, naming FDIC as receiver. The FDIC entered a purchase and assumption agreement with Las Vegas-based Nevada State Bank. Great Basin, the 25th bank to fail in '09, had $270.9m in total assets and $221.4m in deposits as of year-end '08. Nevada State Bank agreed to purchase all of the failed bank's deposits and $252.3m of the bank's total assets and enter a loss-sharing transaction with the FDIC on approximately $143.4m in assets. As receiver, the FDIC said it will retain the remainder of Great Basin’s assets after Nevada State's purchase for later disposition, and will absorb an estimated $42m cost to the insurance fund.
Read the FDIC’s press statement on Great Basin.
Write to Diana Golobay at diana.golobay@housingwire.com.
The search is over. The Obama administration has tapped now-former Fannie Mae (FNM: 0.00 N/A) CEO Herb Allison to replace Neel Kashkari as head of the government's $700bn Troubled Asset Relief Program, effectively granting him the title assistant secretary for the Office of Financial Stability — so long as he is confirmed by Congress.
Treasury secretary Timothy Geithner has been searching for months for someone to run TARP, but has seen senior posts become increasingly tough to fill, as candidates withdraw or don’t pass muster in the vetting process. Last month, hedge-fund manager Frank Brosens — largely expected to take Kashkari’s now-temporary role — withdrew for what has only been described as “personal reasons.”
Allison, 65, is the former chairman of investment company TIAA-CREF and was a longtime Merrill Lynch & Co. executive. He was appointed as chief executive at Fannie Mae after the government placed both mortgage finance giants into conservatorship last year. The GSE thanked Allison today for his "tremendous contributions to Fannie Mae."
"He has guided the company most ably through a very challenging period. We wish him all the best in his new position," said Philip Laskawy, chairman of the board at Fannie Mae.
Fannie Mae also said today that Michael J. Williams has been appointed to succeed Allison as president and CEO. Williams most recently served as executive vice president and COO at the GSE.
Write to Kelly Curran at kelly.curran@housingwire.com.
Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.
The nation's recession may continue through the summer, but the intensity is likely to ease, according to The Conference Board, whose Leading Economic Index released today showed a 0.3% decline in March.
"There have been some intermittent signs of improvement in the economy in April, but the leading economic index and most of its components are still pointing down," says Ken Goldstein, economist at the Conference Board. The index has not risen in nine consecutive months.
Building permits, stock prices, and the index of supplier deliveries made large negative contributions to the index in March, more than offsetting continued positive contributions from real money supply and the yield spread, the board said in its report.
In the six months through March, the index fell 2.5%, faster than the decrease of 1.4% for the previous six months. And the weaknesses among the leading indicators have remained widespread in recent months.
“The economy is at an inflection point but has not yet reached a turning point,” Sara Johnson, an economist at IHS Global Insight and chairman of NABE’s industry survey committee told Bloomberg News. “Key indicators — industry demand, employment, capital spending and profitability — are still declining, but the breadth of the decline is narrowing.”
The Conference Board's Coincident Economic Index for the U.S. declined 0.4% in March — following a 0.6% decline in February — driven by the number of employees on nonagricultural payrolls and industrial production, while The Board's Lagging Economic index fell 0.4%.
Write to Kelly Curran at kelly.curran@housingwire.com.
Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.
Pittsburgh-based ServiceLink, a provider of origination and default services, has launched its Appraiser Panel Management (APM) product line, which the company says enables mortgage lenders to leverage ServiceLink's management staff and technologies to certify their compliance with the Home Valuation Code of Conduct (HVCC), while continuing to leverage the lender's own experienced appraiser panel.
HVCC is a new code of conduct mandated by the Federal government and is scheduled to become effective on May 1, 2009. "The intent of our APM product is to provide lenders with an appraisal valuation solution that fully complies with the HVCC, while not forcing the lender to abandon the individual appraiser relationships that they have developed over years of trusted service," says Jeff Coury, president and CEO of ServiceLink.
ServiceLink's APM solution allows the lender to upload their trusted panel of appraisers into a lender specific instance of the Vision software that is managed and operated by ServiceLink. All appraisal management processes including lender contact, borrower contact, appraiser contact, performance evaluation, transaction payment and quality control reviews are performed by a lender focused group within ServiceLink.
http://www.servicelinkfnf.com/home.aspx
FICS' Mortgage Servicer to Assist with Ginnie Mae Reporting
Financial Industry Computer Systems, Inc., a mortgage technology provider that offers in-house residential origination, servicing technology and commercial servicing technology, announced today the implementation of Mortgage Servicer at Mesa, Ariz.-based Cascade Financial Services.
Cascade Financial Services is a full service mortgage bank that specializes in providing land/home-lending solutions for the manufactured housing industry. The company had a goal to move away from delivering loans on a flow basis to financial institutions that purchase loans on a correspondent basis. This enables the organization to be completely independent of secondary investors utilizing its status as an issuer of Government National Mortgage Association (Ginnie Mae) securities, the company said in a press release.
At the time Cascade Financial Services did not have an in-house servicing operation and in order to be a Ginnie Mae issuer, an organization must have servicing capabilities or outsource the servicing to a third party; therefore, Cascade Financial Services selected FICS' residential mortgage servicing system to serve as the backbone of its servicing operation because of its ability to meet its specific requirements.
"Moving away from secondary investors was a critical part of our business plan," says George Dover, CEO of Cascade Financial Services. "Secondary investors are very particular when it comes to Manufactured Housing. Due to this niche we operate in being able to securitize our retail originations through Ginnie Mae and the ability to service those loans was critical to us."
http://cascadeloans.com/
Sollen Celebrates
Sollen Technologies, an Internet-based application services provider of product, pricing and execution capabilities, has recently celebrated its 10 year anniversary delivering product and pricing engine technology to mortgage originators.
In business since February of 1999, Sollen Technologies was formed with one thing in mind, to solve the complex problem of mortgage pricing and communications between the broker/correspondent and the lender, the company said in a press release.
Most recently, Sollen has reformulated its core product, Lender Online. The latest version fosters improved functionality and easier navigation that allows customers "superior processes and enhanced flexibility, which tailors the system to the way they do business," according to the company.
http://www.sollen.com/
More Lenders Prefer All Inclusive Origination Systems
Thanks to significant improvements in "end-to-end" technologies, more lenders are opting to employ all-inclusive origination systems that tend to save lenders time, money and a great deal of effort, said an industry insider this morning.
Kevin Smith, CEO of Mortgage Builder Software cites a number of reasons that the controversy between “best of breed” componentry and “end-to-end” solutions is drawing to a close, most of them having to do with technology advances and cost considerations. “The days when you had to research and test each individual component of the origination system, then spend large amounts of time and money making them work with your core systems are pretty much over,” says Smith. “Not only is it unnecessary these days, but also few companies have that kind of money to spend in today’s market.
Lenders are finding that having someone else host and maintain those systems is a far more economical way to go, and the systems have become as sophisticated as anything the largest lenders can build, Smith says.
PMI Expands Access to e-PMI Ordering System
PMI Mortgage Insurance Co. announced this morning that its e-PMI online mortgage insurance ordering system now accepts mortgage insurance submissions from all lenders. Previously, only lenders with delegated authority to underwrite the mortgage insurance themselves benefited from the electronic ordering process.
With this announcement, lenders who rely on PMI's insurance underwriting can also utilize e-PMI's streamlined online submission process, the company said in a press release.
"This e-PMI(R) enhancement makes it possible for all lenders to enjoy the benefits of electronic origination by eliminating the need for paper insurance applications, and enabling the lender to upload document images, monitor transactions, and access approved mortgage insurance certificates within seconds," says John Ryan, PMI's vice president of E-Commerce & Technology Product Management.
http://www.pmi-us.com/resourcecenter/technology.html
AllRegs Enhances State Compliance Package
AllRegs, an information provider for the mortgage lending industry, announced three new, key features have been added to the State Compliance Package accessed through AllRegs Online.
State Compliance Package subscribers currently benefit from online, searchable access to plain language interpretations, links to supporting laws and regulations, English and Spanish language disclosures and more for all 50 states. Now enhanced, subscribers have access to loan file checklists, disclosure matrices and permissible fee matrices for each of the 50 states.
"These documents can be printed and inserted into the front of every loan file, or used as a reference for state compliance," says Dan Thomas, AllRegs senior vice president. "Mortgage professionals will be able to ensure that their loan files are complete and compliant by using these new checklists and matrices, streamlining processes and promoting accuracy." Each product is an instant-print worksheet that is continually updated by AllRegs, the company said in a press release.
http://www.allregs.com/home/default.aspx
Write to Kelly Curran at kelly.curran@housingwire.com.
Editor’s note: Tech Roundup runs every Monday, and offers a look into the various technology that makes the entire mortgage market work — whether origination or default, through to secondary market operations. If you’ve got a tech bit that we should know about, email the reporter above.
Bank of America Corp. (BAC: 7.29 -0.14%) earned $4.2bn net income — or 44 cents per share after preferred dividends including $402m to the U.S. government — in Q109, compared with the fourth-quarter $1.79bn net loss reported in mid-January. The Charlotte, N.C.-based bank's Q1 profit more than matched the earnings posted for all of 2008, but credit loss and a weak mortgage business erased much of BofA's $36.1bn net revenue.
The Merrill Lynch purchase from January 1 contributed $3.7bn to BofA's net income. But the merger came with its negative contributions, as well. The acquisitions of both Merrill Lynch and Countrywide added $6.4bn to the increase of no-interest expenses from $9.3bn in Q108 to $17bn in Q109. BofA also strengthened its loan loss reserves to $13.4bn from $8.5bn in the previous quarter, adding to the offset in revenue.
"The fact that we were able to post strong, positive net income for the quarter is extremely welcome news in this environment," said chairman and CEO Kenneth Lewis. "However, we understand that we continue to face extremely difficult challenges primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment."
BofA’s Mortgage, Home Equity and Insurance Services reported a net loss of $498m in the quarter, narrowed from $2.5bn in the previous quarter. Higher credit costs and no-interest expense offset the increased net revenue. The provision for credit losses rose to $3.4bn on the heels of housing market weakness, while no-interest expense increased to $2.7bn after the Countrywide acquisition, BofA officials said in the earnings statement.
BofA funded $85bn in first mortgages and provided more than 382,000 borrowers with either purchase or refinance mortgages in the quarter. The bank made an estimated $16bn of these originations to 102,000 low- and moderate-income borrowers. BofA modified 119,000 home loans in the quarter, part of its commitment announced last year to modify more than $100bn in loans held by some 630,000 borrowers.
To meet administrative needs associated with high demand for refinancing and first mortgage application volume, the company said it is in the process of adding approximately 5,000 positions. The company also touted more than 6,400 associates already in place to address increasing customer needs for loan modification assistance.
BofA shares fell 15.76% and traded at $8.93 by mid-morning after the announcement.
Write to Diana Golobay at diana.golobay@housingwire.com.
Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.
Tampa, Fla.-based Walter Investment Management Corp. (WAC: 18.25 -0.33%) begins trading today on the New York Stock Exchange, after former finance business of Walter Industries Inc. has completed its merger with Hanover Capital Mortgage Holdings Inc. and formed the new firm.
The company is the latest addition to a growing field of mortgage servicers and investors specializing in managing subprime, non-conforming and other credit-challenged mortgage assets; it currently manages a $1.8bn portfolio, but expects to grow that total through acquisitions, it said in a press statement on Monday morning. The firm also offers full loan sale advisory and valuation services for private companies and government agencies through Hanover Trade, as well as insurance services focused on property casualty lines supporting the mortgage servicing business.
"We are excited about these next steps for Walter Investment Management Corp. and the opportunities available to us," said chairman and CEO Mark J. O'Brien. "We have a strong, seasoned management team in place and expect our $1.8 billion mortgage portfolio to return a stream of steady dividends to our shareholders for years to come."
Though many lenders have struggled in the current environment, O'Brien stressed that Walter Investment has continued to generate strong, stable performance.
"Our mortgage portfolio is almost entirely fixed rate and was originated with a consistent, disciplined underwriting approach," he said. "With our high-touch mortgage servicing platform, the result is a 30-day delinquency rate that has remained well below six percent."
The company maintains servicer ratings of "Average/Select Servicer" from Standard and Poors and "RPS 3-" from Fitch.
Like many other firms in its space, Walter Investment is looking to pursue what it calls "opportunities to leverage its asset management capabilities and unique servicing platform" — in other words, the firm will look to acquire servicing rights and/or whole loans to expand its current portfolio.
"Our approach has a track record of producing prime results from sub-prime assets and we believe there is a tremendous need for that capability in today's environment," said O'Brien.
For more information, visit http://www.walterinvestment.com.
Write to Paul Jackson at paul.jackson@housingwire.com.
Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.
