Archive for October, 2009
Dallas-based mortgage document software developer MRG Document Technologies added a dashboard feature to its Miracle Online electronic document preparation and compliance software.
The new feature provides a customized, real-time visibility to the flow of document creation or the forward movement of multiple events affecting the status of loans, the company said.
“We created the dashboard feature so lenders can find out exactly at what stage their loans are within the workflow at any given point in time and can share this information with their staff or technology partners,” said Laura LaRaia, an attorney and director of customer service at MRG.
“For example, the dashboard reports let the lender or servicer know if loans are flowing at an optimal speed through the process or the reports may show that there is a backlog of loans that needs to be addressed by adding more staff to an area to handle the slowdown,” she added.
MRG will demonstrate the new feature at next week’s Mortgage Bankers Association (MBA) annual convention.
Write to Austin Kilgore.
Avista Solutions, a Columbia, SC-based loan origination software developer, released a redesigned consumer Web portal the company says will improve the borrowing experience by allowing consumers to navigate mortgage options online.
Avista customizes the Web site for its clients and integrates it into the lenders’ Web site. Tools include payment calculators, loan type scenarios and consumer alerts when rates change.
“Our clients told us that their customers have a strong desire to do more online and not always have to talk to a loan officer in order to learn about their options,” said Avista CEO Mark Phlieger.
“With the new portal, consumers can do as much or as little as they like, and lenders achieve greater efficiency and reduced workloads,” he added.
Write to Austin Kilgore.
Residential Credit Solutions (RCS), a Fort Worth, Texas-based distressed mortgage servicer, implemented its new automated loan modification document services platform.
The new platform integrates software from Dallas-based eMortgage services provider SigniaDocs and Bethesda, Md.-based special servicing software developer Overture Technologies to create electronic mortgage modifications, including those in the Making Home Affordable Modification Plan (HAMP).
SigniaDocs software provides electronic loan modification documents. RCS takes the data from those forms to try to match an appropriate loan program in Overture’s Mozart for Special Servicing (MoSS) module to evaluate a borrower’s options.
The SigniaDocs/Overture partnership aims to help lenders and servicers work quickly and cost-effectively through a backlog of delinquencies and forcelosures, according to a press statement.
“With eModifications, we find that 50 percent of consumers close their modified loans the same day they receive them online,” said SigniaDocs president Tim Anderson. “Over 80 percent are executed within two business days.”
Write to Austin Kilgore.
The Congressional Oversight Panel (COP), which reviews and reports on actions taken by the US Treasury Department, expressed concern about the limitations in both scope and scale of the Making Home Affordable (MHA) program and questioned the Treasury’s approach to permanently modifying mortgages.
MHA’s centerpiece, Home Affordable Modification Program (HAMP), allocates capped incentives to servicers for the modification of distressed loans. The Treasury currently estimates it will spend $42.5bn of the $50bn in funding from the Troubled Asset Relief Program (TARP) for HAMP, an amount that will support nearly 2.6m modifications, according to the COP’s October report.
But the COP warned that if foreclosures continued trending toward 10m to 12m, as it currently estimates, the losses will be “massive,” and that HAMP increasingly appears to target a housing crisis as it existed six months ago, instead of the one raging now.
“Treasury hopes to prevent as many as 3 to 4 million of these foreclosures through HAMP, but there is reason to doubt whether the program will be able to achieve this goal,” according to the report.
When fully operational, servicers participating in HAMP should be modifying 25,000 to 30,000 loans per week. But even reaching its goal may not be large enough to slow the foreclosure crisis, according to the COP.
“Treasury’s own projections would mean that, in the best case, fewer than half of the predicted foreclosures would be avoided,” according to the report.
As of Oct. 1, servicers reached the 500,000-modification milestone that was originally set for Nov. 1, according to an announcement from the Treasury and the US Department of Housing and Urban Development (HUD).
“The COP report correctly recognizes that the Home Affordable Modification program is achieving its intended goal of providing struggling borrowers with more affordable modified monthly payments – giving families an average of $500 a month that they can keep or devote to other important things,” according to a statement from the Treasury.
Even though HAMP is still in its early stages, only a small portion of trial modifications that began three or more months ago reached permanence, according the COP report, and many homeowners will see their payments rise after five years.
“While reaching half a million trial modifications nearly a month ahead of schedule is an important milestone, we recognize that the next challenge is converting borrowers from trial to permanent modifications. We are intently on [sic] working with servicers to ensure that eligible borrowers receive permanent modifications,” according to a statement from the Treasury.
Of the 75.6m owner-occupied residences in the US, 68% of them, or 51.6m carry a mortgage. Since 2007, 5.4m of these homes slipped into foreclosure, and without a significant recovery in the economy, 3.5m more could foreclose by the end of 2010, according to the COP report.
“The result for many homeowners could be that foreclosure is delayed, not avoided,” according to the COP.
Write to Jon Prior.
Behringer Harvard, a Dallas-based commercial real estate investment firm, acquired some senior mortgage debt of the Palms of Monterrey, a Fort Myers, Fla. resort-style multifamily community.
The investment was made through the company’s public non-listed real estate investment trust (REIT), Behringer Harvard Opportunity REIT II, in partnership with real estate developers DeBartolo Development and Christian Tyler Properties.
Built in 2001, the 408-unit development is a collection of 17 three-story buildings located on a 28-acre site on Florida’s southwest coast. Amenities at the commercial property include a clubhouse with a business center, a fitness center with racquetball facility, a lighted tennis court, a playground, two heated pools and a poolside hot tub.
“A previous owner of the property obtained the senior mortgage on the Palms of Monterrey to fund a conversion of the apartment community into condominiums,” said Samuel Gillespie, the REIT’s chief operating officer. "However, changing market conditions subsequently interfered with the borrower’s plans, and the completed condominium units were never sold."
Gillespie added: “This situation enabled us to acquire the senior mortgage debt at a discount and refocus the property as rental apartments."
Write to Austin Kilgore.
SharperLending, a Spokane, Wash.-based mortgage software developer, added a new feature to its appraisal management software that provides oversight of communication between appraisers and loan originators.
A new message management feature in the Home Valuation Code of Conduct (HVCC)-compliant Appraisal Firewall software allows for compliance reviews of appraisal orders by aggregating all anonymous messages between appraisers and originators on all appraisal orders into one place, the company said.
“Now that HVCC has settled out a bit, the lender's real needs are becoming clear,” said Dave Black, SharperLending president and CEO.
“With lenders responsible for their own compliance, lenders need access to easy-to-use compliance features, which Appraisal Firewall continues to implement to lessen the impact of HVCC on their business,” he added.
Write to Austin Kilgore.
United Residential Lending (URL), the lending affiliate of San Diego-based National Asset Direct (NAD), will open five new branches.
The mortgage banker sells Federal Housing Administration (FHA), agency and jumbo loans in 19 states and will open offices in Sacramento, San Ramon and Ripon, Calif., Albuquerque, NM and Arlington, Texas.
Parent company NAD serves as an advisor and portfolio manager to buyers of performing, sub-performing and non-performing residential mortgage loans and assets.
“The addition of these offices will allow us to expand our footprint and strengthen our ‘one-stop shop’ model while filling the void left by players who have exited the origination market,” said Jeffrey Kaplan, NAD president and CEO.
To head these new branches, URL placed two new regional managers and five new branch managers:
Ken Michael will serve as URL’s Southeast regional manager, where he will foster relationships with new communities, develop strategic programs and initiatives to accelerate growth and profitability in the local markets and recruit new branch managers.
Ken Stiles will serve as South Central regional manager. He most recently served as president of Medallion Mortgage Corporation.
Veronica Gomez is the Albuquerque branch manager. Prior to joining URL, Gomez ran a mortgage brokerage firm, Sol Financial, where she was responsible for overseeing the firm’s day-to-day operations, managing employees and loan officers, and marketing the firms’ products.
Anthony Deffina is the San Ramon branch manager. He joins from CharterHouse Financial Services, a mortgage brokerage firm, where he was sales group manager.
John Killingbeck is the Ripon branch manager. He joins from Lamarsh Financial, where he was a loan officer.
Susan Sieve is the Sacramento branch manager. She most recently served as a mortgage broker for Barons Mortgage, a firm she founded.
Debra Stiles is the Arlington branch manager. She joins from AmeriCare Investment Group, where she was a branch manager.
Write to Austin Kilgore.
The amount of commercial mortgage loans entering special servicing swelled 6% in August as 103 loans totaling $1.8bn joined the ranks of specially-serviced loans within the commercial mortgage-backed securities (CMBS) Fitch Ratings reviews. The total percentage of Fitch's CMBS portfolio in special servicing is now 14%.
The month's largest addition — the $375m One Park Avenue loan securing a New York City office property — entered special servicing due to imminent default after the property's second-largest tenant vacated, the ratings agency said in a structured finance report.
Specially-serviced loans still in performing status continue to outweigh those considered non-performing — by 59% to 41% respectively. This trend may continue through 2009, according to senior director Adam Fox.
Performance of commercial mortgages continued to worsen in September as commercial loans faced appraisal reductions and deteriorating delinquency status, according to CMBS and commercial mortgage information provider Trepp.
Newly reported appraisal reductions occurred on $4.29bn of loans in September, the firm said in market commentary Thursday. This figure is up 74% from August. There were 219 loans with new, first-time appraisal reductions last month.
In September, $3.25bn of loans indicated improving delinquency status, so the net deteriorating over improving was $8.56bn, Trepp said. More than 1000 loans with a total balance of $11.81bn were deteriorating in delinquency status in the month.
Write to Diana Golobay.
On the heels of the disclosure that the Federal Housing Administration’s (FHA) mutual mortgage insurance (MMI) fund may dip below the Congressional-mandated 2% capital reserve threshold, some are warning the FHA may need a taxpayer bailout to stay afloat.
But FHA commissioner David Stevens, appearing before a House Financial Services subcommittee, discounted those claims and said the fund can return to required levels without intervention within three years.
During a Subcommittee on Housing and Community Opportunity hearing Thursday, Stevens said the independent, non-governmental actuarial review of the MMI fund is based on conservative estimates for the future of the housing market’s recovery. While the capital reserve account (the account that’s required to stay at or above 2%) may dip below the required level, he indicated the total FHA reserve is projected to be higher than its ever been.
“Let me simply state at the outset that based on current projections, absent any further catastrophic home price decline, FHA will not need to ask Congress and the American taxpayer for extraordinary assistance – we will not need a bailout,” Stevens told the subcommittee.
New business is coming in to the FHA at record levels, and with stricter underwriting, Stevens said. As the new business continues to build, it will outpace the poor quality loans from 2007 and 2008.
But other witnesses seemed less optimistic. Edward Pinto, the former chief credit officer at Fannie Mae (FNM: 0.00 N/A), projected a far worse scenario for FHA. In his written testimony for the committee, Pinto said FHA “appears destined for a taxpayer bailout in the next 24-36 months.”
During questioning, Stevens addressed the impact of the increase to the conforming loan limit for high-cost markets. While loans more than $417,000 represent only 2% of FHA’s portfolio, Stevens said in California, FHA loans make up 13% of these mortgages, helping qualified homeowners obtain financing for more expensive homes.
A representative from the National Association of Realtors (NAR) also called for making the loan limit increase permanent.
“In today’s real estate market, lowering the loan limits further restricts liquidity and makes mortgages more expensive for households nationwide," said Boyd Campbell, a NAR spokesperson and managing partner-associate broker of Century 21 in Lanham, Md. "FHA and GSE mortgages together continue to constitute the vast majority of home financing availability today, which makes it particularly critical to extend the current limits.”
Write to Austin Kilgore.
The Home Affordable Modification Program (HAMP) reached a new milestone of 500,000 loan modifications in progress, according to an announcement from the US Treasury Department and the US Department of Housing and Urban Development (HUD).
Under HAMP, the Treasury allocates capped incentives to servicers for the modification of distressed loans. Those caps are adjusted based on the servicer’s performance.
The 500,000-modification milestone comes one month before the Nov. 1 benchmark set in July. Since then, servicers pushed their implementation and sustained a faster pace of the modifications, according to the Treasury.
As of Oct. 1, servicers participating in HAMP offered 757,955 trial modifications, up from 570,000 trial modfications offered by the end of August 2009, according to the latest performance report from the Treasury.
The report also indicates:
Saxon Mortgage Services leads all servicers for the back-to-back months by starting trial modifications for 41% of its 79,921 eligible 60+ day delinquent loans. The percentage increased from 39% in August.
JP Morgan Chase (JPM: 37.21 -0.75%) started 117,196 trial modifications, the most on a gross volume basis, which is 27% of its eligible portfolio. The number of initiated trial modifications increased from 106,288 in August.
Bank of America (BAC: 7.29 -0.14%) still holds the most eligible loans, 875,917, but has started trial modifications on 11%, up from 7% a month ago.
Other notable performances in the progress report include: CitiMortgage starting trial modifications on 33% of its portfolio, up from 23% in August; Litton Loan Servicing starting 2% of its eligible loans, down from 3% in August; and GMAC Mortgage starting 26% of its portfolio of 73,498.
Wells Fargo (WFC: 29.60 +1.89%) started trial modifications on 20% of its eligible portfolio, and the 62,989 trial modifications doubled from August, according to the report.
Using its own programs, Wells Fargo has done 292,005 trial and completed loan modifications, totaling 354,993 modifications this year, according to a release.
Write to Jon Prior.
