Archive for July, 2009
Freddie Mac (FRE: 0.00 N/A) offers comprehensive two-year home warranties for buyers of single-family homes as a primary residence through HomeSteps, and will temporarily pay up to 3.5% of the sales price in buyers' closing costs.
HomeSteps, which markets Freddie Mac-owned homes, began its SmartBuy offer on July 17 in an effort to promote purchases through the program and will expire its offer on Oct. 30, 2009. The closing cost promotion could save qualified buyers thousands of dollars in transaction costs, according to a corporate release.
"This unprecedented offer will enable HomeSteps buyers to protect against unexpected repair costs which could interfere with their ability to meet their mortgage obligation," said Chris Bowden, vice president of HomeSteps.
Cross Country Home Services provides Home Protect, the two-year warranty, which will cover electrical, plumbing, air conditioning and heating systems. Ductwork and major appliances such as water heaters, stoves, washer and dryers, dishwashers and refrigerators all fall under the warranty plan as well, according to the release. Buyers will have an option to extend it beyond its expiration date.
The warranty is applicable if the home sells as a primary residence for a minimum $25,000. Homes in Alaska and Hawaii are not eligible. The closing cost offer is applicable on initial purchases made by Oct. 31, 2009, with deals closed by Dec. 31, 2009.
Write to Jon Prior.
Efforts by federal regulators to promote liquidity in the asset- and specifically mortgage-backed securities market has overall helped mortgage borrowers, according to a second-quarter report by the Financial Stability Oversight Board on the Treasury Department's implementation of the Troubled Asset Relief Program (TARP) and other programs within the Emergency Economic Stabilization Act of 2008.
In particular, the purchase of agency MBS by the Federal Reserve beginning this year coincided with a drop-off in average interest rates on 30-year fixed-rate mortgages. In the second quarter, the Fed and Treasury held down the rise of these interest rates to only 60 bps, despite larger increases in yields on reference Treasury securities, according to the report (which can be downloaded here).
The narrowing of the spread between Treasury yields and Freddie Mac (FRE: 0.00 N/A) current coupon 30-year MBS yields that resulted has more closely aligned the spread with historic levels, the board's report says.
"The Oversight Board also believes that actions taken by Treasury under the TARP and under other authorities, together with those taken by the Federal Reserve, continued to aid the housing market and mortgage borrowers during the period by further relieving strains in the functioning of credit markets and aggressively supporting the demand for mortgage-backed securities," the report reads, in part.
During the second quarter, higher borrowing costs "reduced the attractiveness" of refinancings but had little effect on overall demand for purchase mortgages, the board notes.
The financial system continued to experience significant strains during the second quarter, despite the $203bn in capital injections provided by the Treasury so far. The injections, made to 649 financial institutions across 48 states, reflect the reach of the TARP's Capital Purchase Program as of June 30.
The Oversight Board noted the Treasury extended more than $23.9bn of loans under Term Asset-Backed Securities Loan Facility, which has supported the issuance of approximately $32.9bn of asset-backed securities. It also also noted efforts to support the restructuring of domestic auto companies and to monitor executive compensation among TARP fund recipient corporations.
Write to Diana Golobay.
Dallas-based software developer MRG Document Technologies announced it upgraded its Web-based eConsent electronic disclosure delivery system to comply with the upcoming expansion of the federally mandated truth-in-lending disclosures.
The new regulations, which take effect July 30, require additional disclosures for refinanced mortgages and loans on dwellings other than a borrower’s primary residence.
According to MRG, its upgraded eConsent system can speed the delivery of these mandatory disclosures to three days.
“Speeding up the closing process is a benefit to both lenders and borrowers,” MRG attorney Marsha Williams said in a corporate release. "For lenders, it locks in interest rates, prevents borrowers from switching to another lender and generates interest sooner. By delivering the revised disclosures electronically, borrowers close their loans sooner.”
Write to Austin Kilgore.
AllRegs, an information provider for the mortgage industry, released its pre-written policy and procedure manual templates to help businesses align quality control practices in origination.
The templates cover quality control policies from anti-predatory lending practices to identity theft plans.
A one-time purchase delivers the templates as a customizable Microsoft Word document. Corporations can add logos, brands and their own policy and procedures, according to a corporate release.
AllRegs is currently developing manuals and guidelines regarding broker approval and monitoring, consumer privacy and information security, quality control for conventional loans and loan operations.
Write to Jon Prior.
Equity National, a Rhode Island-based title insurance and closing service provider, acquired Secure Collateral to expand into the valuation field, according to a corporate release.
Jacksonville-based Secure Collateral will continue to provide valuation, field and loss mitigation services. According to the release, Secure Collateral plans to expand its workforce in the near future and will retain its name.
“Secure Collateral and Equity National are a natural combination, and we share a deep commitment to exceptional service and quality,” said James Dammerich, president of Secure Collateral.
With the acquisition, Equity can now service lenders from valuation to closing, according to the release.
Write to Jon Prior.
Dallas-based electronic mortgage services provider SigniaDocs expanded its offerings to facilitate electronic modifications.
The company expanded its paperless "eModification" services aim to cut down on paper usage and transportation time of sensitive modification documents. The modification varieties these electronic services apply to include custom lender modification agreements, multiple-step modifications, short sales, refinances, deferrals, repayment solutions and adjustable- to fixed-rate transactions.
A focus on online modification platforms should streamline the process and allow for rapid turnaround time in loan modifications. The company says initial data shows that 50% of eModifications are completed the same day they are approved, and over 80% are executed within two business days.
Write to Diana Golobay.
Bensalem, Pa.-based software developer ISGN is beta testing a new Web-based loss mitigation technology that only charges servicers when they close a loan.
The yet-to-be-named “pay-per-loan” software is in beta testing and will go live in September. It will allow servicers to evaluate pools of loans, create customized evaluations based on user-generated objectives along with other steps in the modification process, but will only charge servicers when they complete a loan.
The software will be compatible with the Home Affordable Modification Program.
The product will facilitate backlogs of current defaults and delinquencies faced by servicers, and will provide analytics that can help prevent future defaults, according to Chetan Patel, ISGN executive vice president.
Write to Austin Kilgore.
Carrollton, Texas-based Wingspan Portfolio Advisors launched a new Web site to provide distressed borrowers with foreclosure prevention education, the company announced Monday.
Betterborrowers.com provides information to help borrowers potentially avoid foreclosure, including homeowner rights and duties and resources for mortgage modification and refinancing.
The site will feature a number of regular columnists and social networking tools like discussion boards for borrowers. In addition, the site has a lender’s forum for industry professionals to anonymously write about the industry and receive feedback from the general public.
“There are few times in a person’s life when they feel more vulnerable than when they are in danger of losing their home — their biggest asset,” Procopia Skoran, a former Bankrate.com executive and now vice president and publisher of BetterBorrowers.com, said in a statement. “We’ve created BetterBorrowers.com to be a place of refuge packed with straightforward information essential for getting back on track and staying there.”
Wingspan, a loan servicer for distressed mortgages, joins First American in launching Web sites geared toward home owners and borrowers.
Write to Austin Kilgore.
Asset-based investment management company Fortress Investment Group (FIG: 3.56 +2.30%), which manages private equity and hedge funds, appointed the former head of mortgage giant Fannie Mae (FNM: 0.00 N/A), Daniel Mudd, as CEO.
Mudd also served as CEO of GE Capital in Japan and held positions in financial services and management consulting at the World Bank, Ayers Whitmore and Co. and Xerox Corp.
"We have known Dan since 1997 when he was at GE, and have had worked closely with him as a valued member of our board," said Wesley Edens, the new co-chairman of the Fortress board of directors, in a corporate release. "Dan is a seasoned investment professional with deep operational and leadership skills and we are excited to have him join our firm."
Fortress partnered Edens and Peter Briger as co-chairmen of the board as part of their upper management restructuring. Fortress principals will continue to head their investment businesses and serve on the board, but the new management will allow them to focus on managing investment opportunities, according to the release.
"I have known the principals for a long time, have worked with them as a partner and a board member, and I have great respect for what they have done to build Fortress thus far,” Mudd said in the release. “I look forward to helping the team manage and grow this institution."
Write to Jon Prior.
Imagine the pilot episode:
Ty Pennington surprises a tearful family in their recently renovated home while a voice-over fills in the audience: The Smith family was in dire straights when the "Extreme Makeover: Home Edition" team re-did their run-down 1970s home, unintentionally jacking up property taxes and pushing utility bills through the roof. Now the "Extreme Makeover: Mortgage Edition" team is going to step in to relieve them of some of the financial burden.
The show could even team up with national servicers and government-sponsored entities to promote the use of Home Affordable modifications and refinancings.
That is, of course, if there's a mortgage still attached. Some of the families featured on the shows enjoy the charity of local communities that band together to pay off the existing mortgage on the property, like one north Texas family whose home makeover was completed recently.
A Dallas Morning News article explored the issues surrounding this family and a second north Texas family whose property taxes rose to $8,000 from $1,500 after the team made sweeping rennovations to their home late last year. Utility bills skyrocketed from the use of the house's new features, including extra lighting installed for the show's premier.
It's a testament to the financial burdens of home ownership as the American Dream that are often overlooked. Even charitable efforts to make life better for already financially-challenged home owners (usually with other circumstantial hardships piled on) have left them possibly more burdened than they were before.
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