Archive for October, 2009
Two former Capmark Investment executives will head up a new residential and commercial real estate funds management and distressed asset management and disposition firm.
Scott Roth and Patti Unti, former co-heads of the Capmark Investments securities team will lead Ventras Capital Advisors, a subsidiary of MBH Enterprises, a Denver-based holding company that specializes in the financial services and infrastructure services industries.
Ventras is currently raising third-party funds to invest in commercial mortgage-backed securitizations (CMBS).
“Over the next two to three years, there will be intense interest in opportunistically investing in distressed residential and commercial assets,” said MBH managing partner Steve Gutterman. “We are uniquely positioned to do well in this market while helping to provide much-needed disposition solutions to banks and borrowers at the same time.”
Write to Austin Kilgore.
UK house purchases in August showed signs of recovery similar to those seen in US housing data, although refinancing continued to fall, according to the Council of Mortgage Lenders (CML), a trade association for the mortgage lending industry.
Although the number of house purchases in August dropped 5% from July to 52,700, the activity marked a 29% increase from one year earlier. The total is still lower than the August average in the previous seven years, but the monthly total has nearly doubled since the start of the year, according to CML.
Gross mortgage lending, which includes house purchase, refinancing and buy-to-let loans, declined 36% to £12.3bn from August 2008, according to CML.
First-time buyers signed 19,200 loans and 33,400 borrowers moved into a new home. House purchase activity totaled £7.2bn ($11.3bn) in August, accounting for its largest portion of the UK housing activity since 2002, according to CML.
Refinancing continued to decline amid low interest rates as lending criteria tightened, according to CML. In August, 32,000 mortgage loans refinanced, a 22% drop from July and a 57% decrease from August of last year.
“House purchase activity has revived from its moribund state at the beginning of the year. It will be a drawn out recovery process with seasonal ups and downs, but house purchase activity is now on a firmer footing,” said CML analysts. “But remortgaging [refinancing] demand has fallen away in the low interest rate environment and this is dragging down gross lending levels overall.”
Write to Jon Prior.
The Lenders One Mortgage Cooperative entered into a partnership with subservicing firm Cenlar that will allow its members to maintain servicing rights on loans they originate.
Ewing, NJ-based Cenlar is a wholesale bank that operates in all 50 states in the US. Under the partnership, Cenlar will provide Lenders One members with customized subservicing for a wide variety of mortgage products, all private-labeled under each lender’s name and logo, Lenders One said.
“Loan servicing is quickly emerging as a trend — as well as necessary business component — for independent mortgage bankers, and we want our members to be on its forefront,” said Lenders One CEO Scott Stern. “Partnering with Cenlar benefits our members with timely, scalable term and interim mortgage servicing. These benefits are then translated to borrowers in the form of a more diverse, quality loan offering.”
Lenders One is a St. Louis-based national cooperative of small and community lenders.
Write to Austin Kilgore.
First American Credco released Encore, a consumer credit report software that provides Fair Credit Report Act-compliant risk analysis for elements of the mortgage application and servicing processes.
The software uses thousands of consumer data points covering 99% of the population, over 100m active loans and more than 600m consumer data records to compile reports on the risk view of the consumer and lending transaction, Credco said.
“Dramatic shifts in the economic environment along with estimated annual fraud losses reaching $25bn have forced mortgage professionals to reevaluate how consumer and collateral data is qualified,” said John Bauer, executive vice president of business development for First American Credco. “Encore satisfies a very timely and critical need for accurate, reliable and thorough decisioning data that lenders and servicers can use to quickly evaluate and help mitigate risk on every loan transaction or portfolio.”
Encore reports are derived by public, private and proprietary data sources to create various reports, including an at-a-glance summary of consumer and mortgage factors, property status, credit information and identity and income verification.
Credco is the credit reporting business unit of First Advantage (FADV: 0.00 N/A), a subsidiary of the First American Corp (FAF: 14.98 +0.07%).
Write to Austin Kilgore.
[Update 1 clarifies timeline of trial modification data]
Of the total amount of loans converting from the Home Affordable Modification Program’s (HAMP) three-month trial period into permanent modification status, Ocwen Loan Servicing’s modifications counted for nearly half.
Ocwen Loan Servicing is the principal subsidiary of Ocwen Financial Corp. (OCN: 13.96 +1.53%).
Through HAMP, the US Treasury Department allocates capped incentives to servicers for the modification of distressed loans and adjusts those caps based on performance. According to a report from the Congressional Oversight Panel (COP), HAMP servicers converted 1,711 loans , or 1.26% of the trials, into a permanent modification since the program’s launch in March 2009 to September 2009.
In order for a servicer to convert a modification into permanent status, the servicer must gather and verify all documentation required of the homeowner under HAMP and receive three payments on the modification for three months.
Ocwen converted 763 trial modifications, or 13.9% of all its trials, into permanency, which is 44.6% of HAMP’s total as of September 1, according to a release.
"Our technology and analytics-based approach to prudent modifications is paying off, as shown by the proportion of permanent HAMP modifications completed for Ocwen customers,” said Ocwen president Ronald Faris. “We believe it's better for our business, and better for struggling homeowners, for us to do the difficult, detailed re-underwriting work up front. We're committed to modifications that stick; those are the ones that help homeowners for the long run, mitigate the mortgage crisis and, importantly, generate incremental revenue for our shareholders.”
Through August 2009, Ocwen started 4,785 trial modifications, or 8% of the 57,203 in its total eligible portfolio, according to the September 9th HAMP progress report released by the Treasury.
HAMP reached a milestone last week, when servicers started 500,000 trial modifications one month ahead of its goal set in July.
Write to Jon Prior.
The AllRegs LoanLibrary is now accessible within the LoanSifter Web-based loan product eligibility and pricing platform as a result of a partnership between the two software developers.
Eagan, Minn.-based AllRegs is a mortgage information and regulation service provider. Appleton, Wis.-based LoanSifter produces a pricing engine and underwriting software platform.
The loan library is a listing of 2,000 mortgage products and 60 investors. LoanSifter users can search that database through a Web-based interface without leaving the LoanSifter platform and is similar to other product integration partnerships LoanSifter has with Zillow and Lending Tree, among others.
“Combining our resources with LoanSifter’s unique technology provides loan officers with the ability to better manage their loan products, search them in seconds, and view all the investor guidelines they need to choose the appropriate products for their customers,” said AllRegs senior vice president Dan Thoms.
Write to Austin Kilgore.
First American CoreLogic, the real estate and mortgage data business unit of the Santa Ana, Calif.-based First American Corporation (FAF: 14.98 +0.07%), released two products to monitor and detect potential mortgage fraud against consumers and loan originators.
LoanSafe Fraud Manager is a software product for loan originators that, based on comparisons from a database of previous loan data, alerts originators of potential fraud cases. First American CoreLogic said in product testing of this latest version of the software, it identified two times more fraud and early payment default risk than alternative anti-fraud products and fewer false-positive results.
“LoanSafe Fraud Manager is the technology solution powering our recently introduced 2X mortgage fraud guarantee, which assures current and prospective clients that they will identify twice the level of fraud exposure compared to any other mortgage fraud product or there will be no charge for the measurement time period,” said First American CoreLogic senior vice president of fraud analytics Tim Grace. “This new release of LoanSafe Fraud Manager incorporates our unique and patented technology and reinforces our clear leadership in the area of mortgage fraud prevention.”
First American CoreLogic is launching a second product, eProperty Watch, a free service for homeowners that provides regular e-mail with property value updates, recent sales, price trends and foreclosure activity in their neighborhood as well as public filings against their property.
First American CoreLogic said its product can help homeowners detect potential “house stealing” scams — a type of identity theft where a thief fraudulently assumes the homeowners identity to transfer title of a property away from its rightful owner.
“We want to do everything we can to help homeowners protect their investment in their home,” said First American CoreLogic CEO George Livermore.
“In this difficult real estate market, homeowners have become keenly aware of the need to monitor the value of their home, watch for real estate trends that affect their community and protect themselves against fraud. This is an easy way for homeowners to make sure they’re on top of the activity affecting the value and security of what is, for most people, their largest investment,” he added.
Write to Austin Kilgore.
Freddie Mac (FRE: 0.00 N/A) priced its offering of structured pass-through certificates, or K Certificates, that consist of multifamily mortgage-backed securities (MBS).
The mortgage giant said late last week the $1.06bn in K Certificates — offered in late September — are likely to settle around Oct. 22. The certificates, priced at $101 apiece, garnered significant investor support and ultimately oversubscribed, according to Michael Cosgrove, a Freddie spokesperson.
The investor interest comes at a time when there have been few multifamily deals. Freddie set out to fill that need by putting multifamily loans traditionally held in its mortgage-related investments portfolio into a new securitization vehicle, and the K Certificate was born.
"We're always looking to support the market," Cosgrove told HousingWire. "We began an effort to make sure at origination that multifamily loans would be suitable for securitization."
The efforts are paying off as investors oversubscribed on the latest K Certificates offering.
The issue priced at subscription levels from 1.7x to 2.4x, meaning significant investor interest resulted in over-subscription by 70% to 140% beyond the expected levels, depending on certificate class. Investors included large money managers, life insurance companies and pension funds including overseas accounts, according to a corporate statement.
Last week's announcement looks similar to another K Certificates offer settled in June that also involved multifamily MBS. That K Certificates offer, also backed by approximately $1.06bn of multifamily loans, settled on June 18.
Write to Diana Golobay.
Higher-priced houses are taking a greater share of foreclosure activity, with houses priced in the top tier accounting for nearly one-third of all foreclosures in July 2009, according to new data from Zillow.com.
"Top-tier" homes in terms of local values accounted for 30% of foreclosures in the month.
Houses in the bottom third and middle third of values took an equal share — 35% each — of foreclosures in July, while the highest tier of values claimed the rest.
Compared to 2006, top-tier homes now make up nearly twice the proportion of foreclosures, according to Zillow.com. At the height of the real estate bubble, properties in the lower one-third of home values made up 55% of all foreclosures, while homes in the medium range accounted for 29%. The top one-third represented only 16% of foreclosures, according to the data.
Zillow defines the tiers based on the ratio of the current house value and the current level of the Zillow Home Value Index for the property’s county. The bottom tier bears a ratio in the 33rd percentile, middle-tier homes have a ratio between the 33rd and the 66th percentile, and top-tier homes take a ratio greater than the 66th percentile.
The combination of heightened delinquency rates in Prime, Alt-A and Option adjustable-rate mortgages (ARMs), along with declining cure rates of borrowers improving in delinquency status, causes more foreclosures for borrowers outside the subprime mortgage market, according to Zillow analysts.
Data from Amherst Securities showed a strong link between increased negative equity and the decreased probability of improving the delinquency status.
At the end of Q209, Zillow estimated 23% of single-family homes are underwater on their mortgages. Because of this analysts expect cure rates to remain low.
Write to Jon Prior.
Griff Straw joins Solidifi, a Chicago-based property valuation and collateral risk management service provider, as president.
Straw’s more than 30 years of experience include serving in several senior level positions at United Guaranty, where he oversaw the company’s relationships with Fannie Mae (FNM: 0.00 N/A) and Freddie Mac (FRE: 0.00 N/A), where he previously held management positions.
In his new position, Straw will lead the five-year-old company’s growth initiatives and report to Solidifi CEO Jason Smith.
“I am very pleased that Griff will be heading up our growing US business,” Smith said. “His extensive experience in the mortgage banking industry and reputation for being an innovative leader will be a great asset to our company and our clients.”
Write to Austin Kilgore.
