Archive for August, 2009
Oxford, Miss.-based mortgage software developer FNC added debit and credit processing services to its Collateral Management System software under a three-year contract with US Bancorp’s (USB: 27.86 +0.25%) credit card processor unit Elavon.
Mortgage lenders and servicers that use the Collateral Management System may now order regulation-compliant appraisals with credit and debit transactions. The credit card processing functionality was added to ease the process of ordering appraisals, a process whose guidelines changed with the implementation of the Home Valuation Code of Conduct (HVCC).
“FNC has been committed to helping our clients comply with HVCC guidelines since they were first announced last year. This new functionality just further supports those efforts,” Jon Fisher, director of strategic projects at FNC, said in a statement.
Write to Austin Kilgore.
Interactive Mortgage Advisors (IMA) on behalf of an unnamed client is offering a $85.1m bulk servicing offer of Fannie Mae (FNM: 0.00 N/A) loans.
The portfolio bears $85.17m in total principal. The 690 loans involved have an average size of $123,436 and a weighted average interest rate of 5.7%.
The portfolio is 12.6% delinquent with 44 loans 30 days delinquent, 22 loans 60 days delinquent and 21 loans 90 days delinquent. Underwater loans with loan-to-value ratios over 100% accounted for $12.4m of the portfolio.
Of the total portfolio, 68.6% of the loans are single-family with a balance of $59.4m, while manufactured housing, modular housing, town home and condo mortgages account for the remaining balance of the portfolio.
IMA is targeting an August 31 settlement date and due to time constraints will give no official bid date.
Write to Diana Golobay.
Disclaimer: The author held no relevant investments when this story was published.
The Federal Reserve purchased $27.06bn worth of mortgage-backed securities (MBS) from Fannie Mae (FNM: 0.00 N/A) Freddie Mac (FRE: 0.00 N/A) and Ginnie Mae and sold nearly $6.7bn during the week of August 5 to 12, according to Barclays Capital's “Fed Agency MBS Purchases” weekly report.
The Fed has purchased nearly $1.1trn and sold more than $356bn MBS since the beginning of 2009 in its effort to “provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets,” the Federal Open Market Committee said.
The Fed's purchases net of sales so far totals $741.6bn in MBS. Fannie MBS represent nearly 58% of that share, with Freddie accounting for 34% and Ginnie accounting for the remaining 8%.
The majority — 97.3% — of the securities bear 30-year maturities. About 52% of all securities the Fed currently holds have a 4.5 coupon.
The Fed is on target to purchase $1.25trn of agency MBS and up to $200bn of agency debt by the end of 2009.
In addition, the FOMC said the Fed is in the process of buying $300bn of Treasury securities. The FOMC said its decided to slow the pace of the transactions to “promote a smooth transition in markets,” and plans to have the full amount purchased by the end of October.
Write to Austin Kilgore.
The servicing arm of Ocwen Financial Corp. (OCN: 13.96 +1.53%) this week snatched up a servicing agreement on 24,000 non-performing mortgage loans owned by mortgage giant Freddie Mac (FRE: 0.00 N/A).
The interim servicing master agreement between the Ocwen Loan Servicing and Freddie, which took effect August 10, relates to single-family mortgage loans bearing an aggregate unpaid principal balance of $4.4bn, according to a company filing with the Securities and Exchange Commission (SEC) early this week. The outstanding principal balance split among 24,000 mortgages works out to an average $183,300 per loan.
Ocwen Financial made headlines elsewhere this week as it raised private capital through a public stock offering. It priced a public offering of 28m shares of common stock at $9 per share. Ocwen said it expects $239.4m in net proceeds, which it plans to use for general corporate expenses, including acquisitions and working capital.
Write to Diana Golobay.
Disclaimer: The author held no relevant investments when this story was published.
[Update: Date for protests added]
The Association of Community Organizations for Reform Now (ACORN) announced it’s targeting servicers it says aren’t complying with the guidelines of the Making Home Affordable Modification Program (HAMP) in its latest protest campaign.
In the first phase of ACORN’s “Home Wrecker” campaign, it used demonstrations in cities nationwide to protest servicers who hadn’t signed on to HAMP, targeting what it called the “Home Wrecker Four” — OneWest, Litton Loan Services, American Home Mortgage and HomEq — which all eventually signed onto the program.
In phase two, ACORN said it will use the same protesting techniques to target servicers who it claims are continuing foreclosure proceedings on HAMP-eligible borrowers.
ACORN will organize protests on August 19 in Los Angeles, Dallas, Wilmington and New York City, and the campaign may be expanded it include protests in Lansing, Houston, Hartford, Seattle and Little Rock.
While it conducts its protests, ACORN said it will also work with servicers to develop strategies to improve the program’s effectiveness.
Write to Austin Kilgore.
Michigan state regulators ordered Taylor, Bean & Whitaker Mortgage Corp. (TBW) to stop doing business in the state Thursday.
The Office of Financial and Insurance Regulation (OFIR) said TBW originated nearly 4,000 mortgages worth more than $500m in the state.
The office also ordered TBW to file a report detailing each of the more than 10,000 mortgages worth more than $1.2bn it services in the state, along with a list of the names and contact information of each Michigan borrower that closed a residential mortgage with TBW after it lost its status as an approved Freddie Mac (FRE: 0.00 N/A) and Ginnie Mae servicer last week.
The office added that failure to comply with the orders carries a civil penalty of up to $3,000 for each violation, up to $30,000 and/or complete restitution to all persons in the state damaged by the violation
OFIR commissioner Ken Ross added TBW customers should continue to make their regular mortgage payments, and can contact his office with questions.
Write to Austin Kilgore.
Twenty-five groups of employees laid off by Taylor, Bean & Whitaker mortgage corporation filed a lawsuit against their former employer for a violation of the Worker Adjustment and Retraining Notification Act (WARN), according to a release from the law firm representing the group.
The layoffs occurred in the wake of the Federal Housing Administration’s (FHA) suspension of the Florida-based company from originating and underwriting new FHA-insured mortgages.
TBW was unavailable for comment. A recording at their office said that all origination and underwriting had been suspended at all branches.
According to a release from Outten & Golden, the firm representing the employees, management reassured employees in a meeting the morning of the suspension that their jobs were safe. After their lunch break, employees were informed that they were terminated.
“The Taylor Bean flip-flop is a dramatic instance of what we call 'pump-and-dump'. Employers get the hopes and spirits of employees up in bad times by telling them not to worry – they won't be fired. The next thing you know, the employer is frog-marching the same employees out the door,” says Jack Raisner, a partner in the firm, in the release.
The WARN Act requires that employees receive a 60 day advance written notice that they will be losing their jobs in a mass layoff or shutdown.
Write to Jon Prior.
Ginnie Mae's president, Joseph Murin, will leave the mortgage agency Friday, according to one of HousingWire's sources familiar with the matter.
His resignation from Ginnie is part of a move that has been in the works "for a while," the source said on condition of anonymity. Murin plans to transition into the private sector, but will remain involved in housing, according to the source.
The departure arrives on mutually friendly terms, says the source, although Ginnie has yet to name a formal replacement. A spokesperson from Ginnie could not return requests for comment before this story was published.
Murin oversaw significant growth in Ginnie's market presence since becoming president more than a year ago. Ginnie's issuance swelled, culminating ina record $43.5bn in mortgage-backed securities (MBS) issued during June, the first time in the agency's 41-year history that the monthly issuance surpassed $40bn.
Write to Diana Golobay.
[Update 1: Clarifies the share of HARP refis over 80% LTV]
Mortgage giants Fannie Mae (FNM: 0.00 N/A) and Freddie Mac (FRE: 0.00 N/A) as of July refinanced more than 2.9m mortgages so far in 2009, according to a new monthly report by the Federal Housing Finance Agency (FHFA).
The government-sponsored enterprises (GSEs) refinanced 1.9m mortgages through the Home Affordable Refinance Program (HARP) since its inception in April. Of these HARP refinances, less than 61,000 — or 3.2% — were refinancings of mortgages with loan-to-value (LTV) ratios between 80% and 105%.
“Borrowers refinancing their loans are enjoying significant interest rate reductions refinancing through the GSE streamlined refinance process with an average rate reduction of 1.3%," said director James Lockhart. "Importantly, over 60,000 borrowers with mortgage loans that exceed 80% of the house value up to 105% have been refinanced."
Fannie refinanced 1.7m loans as of July, 32,000 of which bore the high loan-to-value (LTV) ratios between 80% and 105% urged under HARP. Freddie refinanced 1.2m loans, 29,000 of which bore high LTVs.
"We are now seeing significant results from the HARP and the Home Affordable Modification Program (HAMP), but much more work needs to be done," Lockhart adds.
Regulators recently expanded HARP to allow refinances on mortgages up to 125% LTV. Fannie begins accepting those refinances on September 1 and Freddie plans to follow a month later.
Write to Diana Golobay.
Angela Logan saved her New Jersey home from foreclosure with apple cakes.
According to a CNN report, Angela Logan, an actress, fell behind on her mortgage when her talent agency closed without paying her for commercial work. To make things worse, her entire second floor is bare except the beams and some plastic wrapping after a contractor took her money and never finished.
To catch up, she turned to her other talent: baking her family’s favorite apple cakes. She set a goal to sell 100 of her delicacy, named Mortgage Apple Cakes, in 10 days at $40 a piece, which would reach her monthly payment and qualify her for the Making Home Affordable (MHA) program.
Friends and family responded, and she sold 200 cakes to make the payment and qualify for the program. Her new mortgage decreased by 20%, and she’s back on track.
It's a unique solution to the foreclosure problem facing US homeowners, although not all borrowers show the same drive to meet servicers half way on workout programs. Logan may have pulled herself up by her bootstraps — or oven mitts — to make Making Home Affordable work for her, but she seems to be the exception.
HousingWire has received numerous e-mails from borrowers that say their lenders are unwilling to work with them at all on the HAMP program because it presents a slimmer profit to them than the HARP program, in which they legally can charge borrowers fees.
While the CNN article did not specify whether Logan received a Making Home Affordable modification or refinance — although the money she raised indicates an up-front fee common with refinancings — it presents a financing solution the industry could learn from.
It would be interesting to see other borrowers join in, buying and selling apple cakes in order to afford mortgage payments. Perhaps lenders could get in on the game, lending apple cakes and then bundling them in whole apple cake pools or securitizing them on the secondary market.
Investors could made millions trading the hot commodity. Rating agencies may even place them into triple-A status based on their extra apple flavor.
Assuming the apple cakes don't share the same shelf life of a 30-year mortgage, however, the apple cake bubble may soon burst. Lenders will be forced to foreclose if unemployment rises any faster than the dough. If the securitizations crumble, we may enter the worst Apple Cake Recession in generations.
Fortunately, the Administration may form the Making Apple Cakes Affordable program (MACA) to make apple cakes affordable to everyone.
Write to Jon Prior.
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