Archive for October, 2009
Lender Processing Services (LPS: 16.78 +1.39%) launched its latest property automated valuation model (AVM) this week.
The LPS AVM creates automated reports compiled from public records data, analytics and modeling resources.
Information in the reports includes the estimated value of a property, up to 10 comparable sales listings with a location map, a history of subject property transactions and finance activity, and regional price trends.
LPS is a Jacksonville, Fla.-based integrated mortgage technology and services firm.
Write to Austin Kilgore.
EquiTrax Asset Solutions, a Santa Barbara, Calif.-based national property valuation firm, announced it joined a consortium of companies that serve as a clearinghouse for short sale opportunities to mortgage servicers.
Led by Irvine, Calif.-based REsource Asset Management, the free service connects servicer/lenders to real estate agents, homeowners, title/closing agents, valuation companies and other parties required to structure, process and close a short sale.
As a member of this consortium, Equi-Trax will provide broker price opinions (BPOs) other valuation services to the consortium and its clients.
Typical procedures or lender loss mitigation departments call for the worst cases to be handled first, leaving distressed borrowers who might otherwise be eligible for a short sale waiting for an overworked staff to address their cases. But according to REsource Asset Management data, short sales can reduce investor losses by up to 25% over traditional real estate owned (REO) recoveries.
“Financial institutions are poorly equipped to accomplish short sales, even though they know it will reduce the loss severity in almost every case,” said Guy Taylor, EquiTrax CEO.
“Servicers are dealing with hundreds of short sale requests daily and most companies operating in the space are not experienced or well qualified. Servicers need a proven workflow to deal with this and the REsource clearinghouse provides it,” he added.
Write to Austin Kilgore.
MERSCORP Inc. and risk mitigation and regulatory compliance tool provider Interthinx launched a national fraud database at the Mortgage Bankers Association's (MBA's) 96th Annual Convention and Expo in San Diego.
The MERS FraudALERTSM, powered by Interthinx, will allow lenders to seek, identify and share suspected fraudulent activity from the point of origination. The database provides access to more than 62m loans currently registered on the MERS System.
Lenders using MERS FraudALERTSM can submit loan application data as well as incident reports with either suspected or confirmed fraudulent activity into a single database. The system will notify other lenders with loans potentially connected to the fraudulent data.
The system should instill some clarity and communication and help industry participants catch instances of fraud usually overlooked "because no one is speaking to each other," according to MERS president and CEO R.K. Arnold.
He added: “Only by creating a collaborative industry wide fraud prevention database can this activity be stopped."
The fraud database will be available in Q409, and lenders that register loans on the MERS System will gain immediate access.
"[O]ur technologies are most effective when they have access to more data,” said Kevin Coop, president of Interthinx. “Through this database, we will be even better at helping lenders detect fraud before loans are funded."
Write to Diana Golobay.
A new law signed Monday by California Governor Arnold Schwarzenegger — SB 291 — will give regulatory relief to mortgage insurers and greater discretion to regulators in the state.
Existing laws require a mortgage guaranty insurer to cease new business if it cannot maintain the required amount of policyholders surplus. The new law excludes the outstanding principal balance of any loan in default for which the insurer has established a loss reserve.
The new law, which takes effect Jan. 1, 2010, gives regulators other discretions to permit mortgage insurers to continue with new business despite capital shortfalls below required levels.
This should provide insurance regulators greater flexibility to assess the strength of mortgage guaranty insurers, as well as support housing recovery in California, according to a statement from PMI Mortgage Insurance Co.
“A guiding principal of the mortgage insurance industry is supporting sustainable homeownership and the ability to write new business is a critical factor in the recovery of the US housing market,” PMI Group (PMI: 0.00 N/A) chairman and CEO Steve Smith said in September regarding a similar law in Arizona.
Write to Diana Golobay.
Technology-focused appraisal management company (AMC) Solidifi gained compliance with the upcoming Federal Housing Administration (FHA) appraiser independence and appraiser engagement regulations mandated by the Department of Housing and Urban Development (HUD) ahead of the forthcoming deadline.
The regulations are similar to those in place through the Home Valuation Code of Conduct (HVCC) for agency-purchased mortgages that were enacted to create a barrier between appraisers and loan originators, but apply to FHA-insured loans. The new FHA loan rules take effect Jan. 1, 2010.
Solidifi said its appraisers are geographically competent and are paid market rates for their services, ensuring compliance with the new regulations and accuracy in the appraisals.
“We allow lenders to set their minimum performance and credential levels of an appraiser they want to work with — including geographic competency, which can be as specific as setting a tolerance of a 20 mile radius of the property,” said Solidifi executive vice president of sales and marketing Loren Cooke.
Write to Austin Kilgore.
As the US government begins to scale back its mortgage-backed securities (MBS) purchase program, the Australian government on Sunday announced plans to extend a residential MBS (RMBS) investment program.
The Australian Office of Financial Management (AOFM) will invest up to another AU$8bn (US$7.25bn) in triple-A-rated RMBS in an effort to support competition in Australia's mortgage market.
"The Government's temporary extension of the program will help smaller lenders to continue to issue RMBS in the short term as the securitization market recovers from the impacts of the global financial crisis," said Wayne Swan, Treasurer of the Commonwealth of Australia, in a statement.
So far, the investment program is nearing completion of an AU$8bn RMBS investment initiative announced in late September and in October of 2008. The initiative helped five non-major Australian banks, along with building societies, credit unions and lenders to raise more than AU$10.4bn of funding.
"This supported competition in the mortgage sector at a time when the private securitization market had collapsed and the global financial crisis brought banking systems around the world to their knees," Swan said. "Specifically, the Government's investments in RMBS has enabled smaller lenders to lend at competitive rates of interest and maintain a higher level of lending and market share than would otherwise have been possible. It has also helped to maintain the operation of the RMBS market and preserve its infrastructure, which will help its recovery as investor sentiment turns."
Write to Diana Golobay.
Avista Solutions' automated underwriting system is now interfaced with the Federal Housing Administration’s (FHA) Technology Open to Approved Lenders (TOTAL) Scorecard platform, allowing lenders that use Avista’s software to speed up FHA approvals.
FHA-approved Avista users enter the borrower’s data into the underwriting software, and it is directly transferred to the TOTAL Scorecard, where it is automatically evaluated for a risk classification of “approve” if it’s accepted or “refer” for manual underwriting.
“The lending community understands the benefits of technology and process automation better now than ever before,” said Avista CEO Mark Phlieger.
He added: “FHA has a redefined mission these days and we are preparing for the technology innovations to come that will make dealing with HUD faster, easier and more efficient. Making the TOTAL Scorecard seamlessly available to our users is just the first step in that journey."
Write to Austin Kilgore.
Federal Reserve purchases of agency mortgage-backed securities (MBS) continued last week to support the agency MBS market while prepayment speeds for both agency and private-label MBS slowed in September.
The Fed's net purchases of MBS from mortgage giants Freddie Mac (FRE: 0.00 N/A), Fannie Mae (FNM: 0.00 N/A) and Ginnie Mae remained at $20bn in the week ending October 7, unchanged from a week earlier but lower than recent weekly transactions. The Fed is on track to buy $1.25trn in agency MBS, and intends to wind down the purchasing program before its anticipated conclusion at the end of Q110.
A key challenge facing the Fed into 2010 is the task of scaling back its purchases of agency MBS in a way that transitions the market back to a state of being supported through private demand, according to a securitized products research note from Barclays Capital (BarCap).
"While it has recently taken steps to ensure an orderly transition by extending its purchase program through Q110, its success will ultimately depend on the willingness of the private sector to step up and be the marginal buyer of MBS," BarCap researchers wrote in the report Friday.
Meanwhile, the private MBS market remains subdued with little investor interest, declining prepayment speeds and a rising balance of non-performing loans to nearly $600bn — while more than $1trn remains performing — according to an Amherst Securities Group mortgage market monitor report through September.
Prepay speeds fell across the board last month as fewer loans refinanced, a process through which loans in a securitization enter prepayment status although the loans do not disappear and may likely appear in another securitization.
A UBS investment research note pointed out several reasons for the slowdown in prepay rates among agency loans. Interest rates did little to entice borrowers last month, UBS said, indicating rates may not have fallen enough. UBS researchers also pointed to rising unemployment as a deterrent to refinancing, along with potential holdups at the lenders.
"[W]e believe banks remain understaffed and are preoccupied with initiating trial [Home Affordable Modification Program] modifications, so their capacity (in addition to their willingness) to lend is also low," UBS researchers wrote.
Under HAMP, the Treasury Department allocates capped incentives to servicers for the modification of distressed loans. Those caps are adjusted based on the servicer’s performance. Treasury reported last week the program reached a new milestone of 500,000 loan modifications in progress.
Write to Diana Golobay.
Kroll Factual Data released a new software product that provides an additional layer of verification for correspondent lenders of Federal Housing Administration (FHA)-insured loans.
Under new FHA guidelines, brokers won’t be required to receive independent FHA approval for origination eligibility. Brokers will instead be required to originate through an FHA-approved lender, leaving the liability of underwriting quality control and borrower’s ability to repay a broker-originated loan in the hands of the lender.
Kroll's Independent Verification software can verify a borrower’s ability to repay a loan, in addition to other customizable verifications and risk assessment analytics a lender requires.
Loveland, Colo.-based Kroll Factual Data is a mortgage lender business information provider and a unit of risk-consulting company Kroll, a subsidiary of Marsh & McLennan Companies (MMC: 31.77 0.00%).
Write to Austin Kilgore.
Stewart Lender Services (SLS) restructured its operation to expand its service offerings and grow its business, the company announced at this week’s Mortgage Bankers Association (MBA) annual conference and convention.
Business centers in Dallas, San Diego, Irvine, Calif. and Phoenix are now open to complement the previous operations in Houston and Tampa, SLS said. Additionally, a loss mitigation call center in San Diego supplements the Houston call center and existing asset management operations in Tampa have been bolstered by a new Irvine-based operation.
The expanded offices will aid in the company’s goal of supporting national lenders, investors, and servicers throughout the lifecycle of a loan, SLS said.
“Stewart has made a significant commitment to our continued growth in serving the real estate finance market,” said SLS president and CEO Jason Nadeau.
SLS is a wholly-owned subsidiary of Houston-based Stewart Title Company [[STC].
Write to Austin Kilgore.
