Archive for November, 2009
The Florida Association of Code Enforcement approved an upcoming seminar code enforcement seminar hosted by Jacksonville, Fla.-based Lender Processing Services (LPS: 16.78 +1.39%) as a continuing education course.
The summit, held by LPS Field Services and LPS Asset Management Solutions, will educate code enforcement professionals how the field services industry works and build relationships between code enforcement, field services and asset management professionals that work with code enforcement to handle code violation issues, the company said.
The November 12 event, to be held in Orlando, is the fourth such summit LPS will host, after events in Ohio, Texas and California.
With the association’s stamp of approval, code enforcement professionals will be more likely to attend the event, enhancing networking opportunities for default servicing professionals and the code enforcement community, LPS said.
Write to Austin Kilgore.
MBIA (MBI: 12.18 +1.50%) lost $727.8m, or $3.50 per share, during Q309, compared to an $806.5m loss, or $3.42 per share, in Q308.
Results were impacted by a number of losses, including an $810.2m pre-tax unrealized loss on insured credit derivatives, and $238.8m in pre-tax loss and loss adjustment expenses related to MBIA’s insured exposures to second-lien mortgage loan securitizations. Other losses included $171.4m in pre-tax realized losses and other-than-temporary impairments on investments.
The Armonk, N.Y.-based monoline provides financial guarantee insurance, fixed-income asset management, and other financial services.
The Q309 loss comes after a profitable Q209 and Standard and Poor’s lowered its ratings of MBIA Insurance Corp. and the parent holding company at the end of the quarter. President and chief financial officer Chuck Chaplin said gains on debt repurchases could not make up for losses in the insurance business that were above projections.
“The third quarter’s loss is a reminder that the impact of this recession continues to be felt throughout the economy,” Chaplin said.
Write to Austin Kilgore.
The mortgage compliance services and documentation technology of Idaho Falls, Idaho-based DocuTech, is now integrated and accessible though the loan origination software (LOS) of Greenwood Village, Colo.-based Blueberry Systems.
With the new functionality, DocuTech ConformX document and disclosure compliance is now built into Blueberry’s Relay LOS mortgage origination workflow, which eliminates redundant data entry.
“The easiest way to ensure that disclosures and documents are accurate and meet all regulatory guidelines is to ensure the data is correct,” said DocuTech CEO Ty Jenkins. “ConformX's integration into Blueberry Systems' RELAY eliminates the need to separately enter data, providing lenders with one workflow from the initial application to the closing table.”
Write to Austin Kilgore.
Roseville, Calif.-based property valuation and risk management software developer EAS rebranded its business. It is now Valligent.
The company changed names to reflect a change in focus, including additional software offerings, including Collateral Cascade, a new software product that uses measured analytics to determine the appropriate valuation solution based on relative loan risk.
“We’re taking a proactive stance in addressing the lack of trust in property valuations in today’s mortgage industry,” said Jeremy McCarty, Valligent CEO and chief strategy officer.
“Substandard and traditional approaches to property valuations have hurt the lending industry and contributed to the mortgage meltdown, and yet we continue to see many of the same mistakes being made. Now, as Valligent, we intend to provide new leadership and drive confidence back to the lending arena through new, innovative solutions and services,” McCarty added.
Write to Jacob Gaffney.
Housing in the US is on track to lose nearly one-third — or 32% — of its aggregate value from peak to trough, according to Deutsche Bank research on the non-agency residential mortgage-backed security (RMBS) market.
The aggregate value of the US housing market for 75.5m total US homeowners stood at $24trn at its peak in Q206. Price depreciation so far wiped out about $5.7trn in housing wealth as of Q209, reducing US housing market aggregate value to $18.3trn, Deutsche said. And, the market hasn't hit bottom, yet.
In aggregate, 66% of housing wealth destruction so far was concentrated in four states, commonly known as the "sand states": California ($2.58trn), Florida ($815bn), Arizona ($325bn) and Nevada ($179bn).
But the declines in house prices, aggravated by sweeping foreclosures and the significant shadow inventory set to depress prices further, looks to continue well into 2010. Deutsche estimates the aggregate US housing value will lose another $2trn of from Q209 to Q210, based on metropolitan statistical area-level house price outlooks as of September 14.
Based on that projection, the aggregate US housing value may bottom at $16.3trn in Q210 — 32% below the Q206 peak.
Write to Diana Golobay.
National home prices fell 0.6% from August to September in Integrated Asset Services’ (IAS) monthly house price index.
It’s a relatively small decline, IAS said, compared to 2008’s shift from August to September of 3.1%. The default management and residential collateral valuation analytics service provider said the results indicate the decline in prices that traditionally occurs as the summer months wind down was delayed this year.
However, the national results are somewhat skewed, as substantial price increases in large concentrated areas of California offset declines in other regions of the country, IAS said.
The West region experienced a 1.1% increase compared to declines in the Northeast (3.1%), Midwest (2.1%) and the South (1.2%).
“The number of transactions is generally up in all geographic areas,” said IAS president and CEO Dave McCarthy. “It’s very interesting that activity is more pronounced in areas with declining prices. This indicates to me that there is some bargain hunting going on.”
The September results were also impacted by a belief in September that the first-time homebuyer tax credit would end at its previously scheduled Nov. 30 expiration. Now that the credit is extended, it could continue to impact sales, McCarthy said.
“Along with extensions in unemployment benefits, the tax credit could prop up the market for a time,” McCarthy said. “But in my opinion the government’s intervention will ultimately delay a final recovery.”
The IAS index is a measure of non-conforming, bank owned, and conventional sales transactions as well as those insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA).
Write to Austin Kilgore.
The rate of non-current loans, a combination of foreclosures and delinquencies as a percent of active loans, reached 12.49%, a record high in the US, according to a report from Lender Processing Services (LPS: 16.78 +1.39%).
LPS manages loan-level residential mortgage data and performance information from more than 40m loans.
LPS’ Mortgage Monitor report also showed the nation’s September foreclosure rate jumping to 3.12%, a 2.6% increase from the previous month and an 88.9% hike from last year. Florida led the way with 10.4% of loans in foreclosure, and more than 22% of loans reported as non-current.
The total US delinquency rate stands at 9.37%, according to the report, and the number of loans sinking further into delinquent status more than doubled the amount of foreclosure starts. Nearly 33% of foreclosures remain in pre-sale status after 12 months, double the amount from last year. The six-month deterioration ratio rose in the past two months to 300%, meaning that for every loan that improves in status, three more deteriorate further, according to the report.
This large “shadow” inventory of foreclosures and real estate-owned (REO) inventory indicates another onslaught of troubled loans in an already backed-up pipeline, according to the report.
Florida, Nevada and Mississippi lead all states with the most non-current loans. North Dakota, South Dakota and Wyoming have the fewest non-current loans.
Write to Jon Prior.
Servicers have started 650,994 three-month trial modifications for borrowers under the Home Affordable Modification Program (HAMP) since its launch in March 2009, according to an updated servicer performance report by the US Treasury Department.
Through HAMP, the Treasury allocates capped incentives to participating servicers for the modification of loans on the verge of foreclosure. The Treasury began releasing progress reports after the Obama Administration set a goal of reaching 3m to 4m homeowners over the next three years.
The updated report, which measures performance through October from the Treasury, indicates:
Saxon Mortgage Services continues to lead all services by starting trial modifications for 44% of its 80,477 eligible portfolio of 60-plus day delinquent loans, an increase from 39% from the September report.
Bank of America (BAC: 7.29 -0.14%) started 136,994 trial modifications, the most on a gross volume basis, which is 14% of its eligible portfolio, an increase from 94,918 started through September or 7% of its portfolio. The bank also holds 990,628 eligible loans in its portfolio, the most for any participating servicer.
Other notable performances include: CitiMortgage starting trial modifications for 40% of its 221,916 eligible loans, up from 23% through September and the second highest percentage of the servicers; GMAC starting 35% of its 65,946 eligible loans, the third highest percentage; Wells Fargo (WFC: 29.60 +1.89%) starting 29% of its 323,198 eligible loans, an increase from 11% through September; Litton Loan Servicing starting 12% of its 10,496 in eligible loans, up from 3%.
California leads all states with 134,609 active trial modifications. Florida came in second with 82,614 trial modifications, and Arizona rounded out the top three with 34,424 trial modifications.
According to the latest Troubled Asset Relief Program transaction report, 72 servicers receive more than $27bn in allocated cap incentives.
Write to Jon Prior.
The portion of lenders that increased standards for prime residential mortgages and revolving home equity lines of credit increased slightly this quarter, according to the Federal Reserve’s October 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices.
Demand for prime residential real estate loans was strong for the third consecutive quarter, the lenders reported, while demand for construction and industrial (C&I), commercial real estate (CRE) and nontraditional mortgages weakened over the past three months the survey covered.
The rate of banks that reported tightening lending standards for prime residential real estate loans was 25% in October, up slightly from 20% in the July survey, the Fed said. The current rate is well below the peak of 75% reported in July 2008.
About 30% of lenders reported tightening standards on nontraditional mortgages, a decline of 15 percentage points from the July survey.
In addition, 30% of respondents reported tightening standards for revolving home equity lines of credit, about even from July. Also, about 30% of banks reported weaker demand for home equity lines of credit, up from 15% in July.
The rate of lenders that tightened standards for CRE loans decreased from 45% in July to 35% in October. Demand for CRE loans was weaker for 45% of respondents, down nearly 20 percentage points from July.
Write to Austin Kilgore.
Four homeowners from Queens and Brooklyn filed a federal class action lawsuit against Aurora Loan Services – a subsidiary of Lehman Brothers – for allegedly not considering their loans for modification under the Home Affordable Modification Program (HAMP).
Under HAMP, the US Treasury allocates capped incentives to participating servicers for the modification of loans on the verge of foreclosure. Aurora receives a potential cap of $447m under HAMP.
The Legal Aid Society in New York City represents Doreen Edwards, Olubukola Keshinro, Garry Brewster and Maria and Thomas Vellucci in the lawsuit filed Friday.
The suit also charges: Timothy Geithner, the secretary of the Treasury; Herb Allison, the assistant secretary of the Treasury; Edward DeMarco, director of the Federal Housing Finance Agency (FHFA); the Federal National Mortgage Association (Fannie Mae) (FNM: 0.00 N/A); Michael Williams, the CEO of Fannie Mae; and Eric Schuppenhauer, the vice president of Fannie Mae.
In the suit, attorneys for the plaintiffs claim that those parties allegedly failed to ensure that homeowners were afforded their full due process rights as stated in the US Constitution.
The suit cites that Aurora allegedly violated the Fifth Amendment that states, “No person shall…be deprived of life, liberty, or property, without due process of law…”
The plaintiffs request a preliminary and permanent injuction, preventing Aurora from engaging in unjust and unreasonable practices and seeks a court order to Aurora to provide a meaningful notice of HAMP denial, the specific reasons and a process to challenge the denial.
According the most recent data released by the Treasury, Aurora has started trial modifications on 33% of its eligible portfolio for HAMP, the third highest of any participating servicer.
“By launching HAMP, the Obama Administration took a significant step to stem the devastating effects foreclosures have on families and their communities. However, in order for the program to achieve its purpose and prevent foreclosures, mortgage servicers must be required to properly implement the program,” said Oda Friedhelm, an attorney with the Legal Aid Society’s Civil Law Reform Unit and lead counsel for the case.
A spokesperson for Aurora was not immediately available for comment. The Treasury declined to comment on the case.
Write to Jon Prior.
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