Archive for December, 2009
Ocwen Financial (OCN: 13.96 +1.53%) launched a new Web site that connects mortgage borrowers with community groups and government agencies that provide assistance for distressed homeowners.
The Web site — at https://www.ocwencustomers.com/ — lists financial counseling resources, as well as sources for job training, food assistance and utility payment assistance for all 50 states, the West Palm Beach, Fla.-based subprime mortgage servicer said. According to a press release, customers can also access the same database of resources by calling Ocwen’s telephone representatives.
“Our goal is to help homeowners, including those experiencing financial troubles, stay in their homes,” said Ocwen president Ron Faris. “One of the multiple ways we do that is to lead customers to resources that can help them manage or solve personal and financial problems that may be at the root of missed or late mortgage payments. Homeowners, communities and our company benefit when mortgages are affordable and sustainable.”
The Web site was created through a partnership with MortgageKeeper Referral Services, which creates and maintains the resource databases with its MKDirect service. The firm’s president, Rochelle Nawrocki Gorey, said when a borrower misses a mortgage payment, it’s generally a symptom of larger, more pressing problems.
“MKDirect increases the likelihood that homeowners will find high quality help to alleviate personal and financial problems — problems that keep them from making their mortgage payments,” Gorey said.
Write to Austin Kilgore.
Property values are down 40% and about $1trn commercial real estate (CRE) equity was lost since the sector peaked in 2007, according to research by Keefe, Bruyette & Woods.
CRE prices are now at their mid-2003 prices, and this deterioration is primarily driven by a sharp decline in property prices, increased commercial mortgage delinquencies and reduced cash flow from lower rents, analysts Bose George and Jade Rahmani wrote.
The analysts added the “primary story” in the commercial mortgage market in the coming years will be upcoming maturities, initially in the CRE market and later, in the commercial mortgage-backed securitization (CMBS) market.
This decline is affecting real estate investment trusts (REITs), the financial services firm said, noting “while the shares of the companies are trading at or just below book value, we believe that investment opportunities in the commercial mortgage space remain only moderately attractive,” the analysts wrote.
REIT initial public offerings in 2009 have seen mixed results and while there is a “significant need” for capital in the CRE market, “expected returns on capital that has been raised to date have been moderate, which is one of the reasons why the several other IPOs were not priced,” George and Rahmani wrote.
Write to Austin Kilgore.
Prepayment rates on UK mortgages may begin to rise if house prices continue to recover and interest rates begin to normalize, according to a report Tuesday by Standard & Poor's Ratings Services.
"Prepayment rates in the UK mortgage market have fallen significantly over the past 18 months, constrained by a combination of borrowers' lack of ability and willingness to switch mortgage products," said credit analyst Andrew South.
If house prices continue their modest rate of recovery from lows seen in early 2009, prepayment rates in UK residential mortgage-backed securities (RMBS) could improve in coming months, he added.
"However, if house prices undergo a 'double dip,' ultimately leading to a 35% peak-to-trough correction some time in 2010, prepayment rates would remain depressed for the foreseeable future, as disproportionate numbers of borrowers struggle with low or negative equity," South said.
The S&P report arrived as Nationwide Building Society said house prices in the UK moved up 0.5% again in November, bringing average prices up 2.7% from a year earlier. The average price is now at £162,764 (US$270,884), similar to early '06 levels.
“Despite continued uncertainties about the future, the better than expected performance of the labor market has probably contributed to the surprise rebound in house prices this year," said Nationwide chief economist Martin Gahbauer in a statement. "Even though workers who have been forced from full-time employment into part-time work will have experienced a reduction in income, the impact has been less severe than it would have been if they had lost their jobs completely."
Gahbauer added: "Together with the fact that mortgage rates have fallen sharply as a result of base rate cuts, this has meant that far fewer borrowers have fallen into arrears than would normally be the case in such a deep recession."
Write to Diana Golobay.
Elbit Imaging and Plaza Centers is entering the US real estate market with the launch of investment venture Elbit Plaza.
The venture aims to raise $400m to take advantage of opportunities in the retail sector and appoints industry veteran Alex Berman as CEO. The
Previously an executive at General Growth Properties, Berman will lead strategy, investment activities and operations at the fund.
Elbit Imaging is listed on the Tel Aviv Stock Exchange, is committing a "substantial" amount of seed equity to the fund along with Plaza Centers, which will allow Elbit Plaza to fund property acquisitions valued up to $1bn.
"Elbit and Plaza believe that current dislocation in the US financing and real estate markets has created a unique opportunity to acquire interests in high quality operating properties generating existing income at very attractive valuations, not seen in the recent past, with attractive cash-on-cash returns," Elbit said in a statement Monday.
Write to Diana Golobay.
In January 2010, Encore Multi-Family is scheduled to break ground on Encore at Alsbury, a 200-unit, 12.25-acre apartment development in Burleson, Texas.
Encore Multi-Family, a development subsidiary of Encore Enterprises, will place the three-story complex in a new, strategic location, giving residents access to Burleson’s Transit-oriented Development (TOD) District. The city designed the complex along the planned rail station of a commuter line connecting Fort Worth, Texas and its neighbors to the south.
The Obama Administration has pushed for more developments that allow residents easy access to public transportation. The Encore at Alsbury provides that access and eases the strain that daily commutes puts on expenses.
Burleson’s population has grown 65% since 2000, according to the Burleson Area Chamber of Commerce – a rate that’s twice the national average.
The $18m complex was designed by JHP Architecture, a Dallas-based architecture firm.
"The vision and positive energy surrounding Burleson's Transit-oriented Development District in conjunction with the North Central Texas Council of Governments makes this a great location for the Encore at Alsbury property," said Steve Mentesana, president of Encore Multi-Family. "We are excited to be a part of this sustainable urban community project.”
Write to Jon Prior.
The New York Federal Reserve Bank said it will in coming weeks test an exit strategy from its portfolio of more than $1trn of mortgage-backed and agency debt securities.
The tests come in advance of any decision by the Federal Open Market Committee to begin the exit process.
The strategy employs triparty reverse repurchase agreements — to be listed on the Fed's balance sheet — where the Fed essentially lends out securities. These agreements are typically overnight sell and buyback deals with set interest rates, the term triparty references the presence of a third party arbitrator. However, specifics on the Fed transactions are not publically available.
The Fed plans to conduct a round of small-scale, real-value transactions with primary dealers in a way that limits the material impact on the availability of reserves. The deals, to be marked to market, will involve relatively small aggregate amounts of outstanding transactions compared with the level of excess reserves.
"Like the earlier rounds of testing, this work is a matter of prudent advance planning by the Federal Reserve," the NY Fed said in a statement Monday. "It does not represent any change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future."
The tests will gauge the level of preparedness at the Fed, the triparty repo clearing banks and primary dealers.
Write to Diana Golobay.
Real Estate Disposition (REDC) will hold foreclosure auctions from coast to coast on Dec. 5-6.
More than 600 foreclosed homes will be auctioned during the coast-to-coast series, which begins in Miami, Sacramento and Richmond, Virginia on Dec. 5. The Dec. 6 auctions take place in Orlando, Santa Clara, Calif. and Washington DC.
All auctions begin at 9:30 a.m., and the Florida auction tour will finish in Fort Myers and Jacksonville on Dec. 7.
The properties being auctioned include a 12,500-sq. ft. mansion in Boynton, Fla., previously valued at $2.2m. The opening bid will be $149,000. Another is a 4,695-sq. ft. mansion in Orlando, Fla. with a previous value of $1.25m, and the starting bid is $379,000.
REDC has conducted 302 auctions this year, selling off 35,900 properties, including foreclosed homes and commercial and builder properties. REDC’s sales for 2009 reached $2bn.
Write to Jon Prior.
A class action lawsuit filed against Toll Brothers (TOL: 22.47 +1.81%) in Pennsylvania Tuesday, seeks damages from the builder and its mortgage lending subsidiary for originating mortgages in the state without the proper license.
According to court documents, Toll Brothers’ mortgage business TBI Mortgage, formerly Westminster Mortgage, let its mortgage license expire, but advertised that it was still a licensed lender and continued to originate mortgages for borrowers purchasing homes in the builder’s developments in 2005 and 2006, a violation of the state’s Mortgage Bankers and Brokers Consumer Protection Act.
In a deal reached with the Pennsylvania Department of Banking Bureau of Compliance, Investigation and Licensing in 2008, Toll Brothers paid a $50,000 fine and agreed to stop originating loans without a license to avoid further prosecution.
This agreement is the basis for the lawsuit. The lead plaintiff, Joan McClure, claims she purchased a Toll Brothers home in 2006 with first- and second-lien loans TBI Mortgage originated for $624,975. Since the company was not properly licensed, the suit alleges, she is the victim of a third-degree felony.
The suit claims McClure was not informed that Toll Brothers was allegedly engaged in a third-degree felony and was in violation of the state’s Unfair Deceptive Trade Practices Consumer Protection law. The suit seeks to have McClure’s mortgage voided and removed from her title, as well additional punitive damages, known as treble damages, in the amount of three times the value of her mortgage.
The suit also seeks damages on behalf of 1,358 Pennsylvania borrowers with mortgages originated by the company during the period that it was unlicensed. McClure’s lawyer said assuming those borrowers have an average mortgage of $400,000, it is seeking more than $543m in voided mortgages.
A Toll Brothers spokesperson declined to comment on the pending case, citing company policy.
Write to Austin Kilgore.
RealtyBid.com, online home auction company, discounted its standard listing fee from $150 to $25 through the end of December.
Real estate agents looking to market property listings through an online auction can take advantage of the offer. If the property sells, RealtyBid.com will cut its sales fee, or the buyer’s fee, from 1% to a flat fee of $500.
According the release, a promotional code is available to interested agents.
RealtyBid.com’s executive vice president Mike Keracher said that real estate professionals are beginning to understand the auction marketing value.
“As the acceptance of real estate auctions has continued to grow and the use of the Internet has become integral to our lives, more and more real estate professionals have added Internet auction marketing to their arsenal of tools,” Keracher said.
Write to Jon Prior.
As HousingWire first reported, the US Treasury Department will launch the Home Affordable Foreclosure Alternatives Program (HAFA) in 2010.
HAFA will complement the Home Affordable Modification Program (HAMP) by providing financial incentives to servicers, borrowers and investors to go forward with short sales or a deed-in-lieu, according to a Treasury announcement late Monday (available to download here).
In a short sale, the bank sells the property for a price short of the balance owed on the property’s loan.
Under HAMP, the Treasury allocates capped incentives to servicers for the modification of loans on the verge of foreclosure. Borrowers must be HAMP-eligible to qualify for HAFA and must be considered for the new program within 30 days of failing to qualify for or complete a HAMP trial.
Borrowers must be able to provide the buyer of the home with a clear title. Any subordinate liens must be paid off in full. The borrower can also negotiate with the holder to release the liens before the closing date.
HAFA allows the borrower to receive pre-approved short sale terms before the property is listed and frees them from future liability for the debt. Also, servicers utilizing the program are prohibited from requiring a reduction in the real estate commission agreed to in the listing agreement.
The borrower also receives a $1,500 incentive for relocation after the transaction. The servicer receives a $1,000 incentive to cover administration and processing costs, and investors will be paid a maximum of $1,000 for allowing up to $3,000 in short-sale proceeds to be paid out to subordinate lien holders. In total, each transaction under HAFA will cost the Treasury up to $3,500 of incentive payments.
HAFA will officially launch on April 5, 2010, but servicers can implement the program prior to that date. However, in order to participate in the program, the servicer must have signed a HAMP servicer participation agreement by Dec. 31, 2009.
HousingWire first reported on HAFA’s forthcoming launch in October, when the chief of the Homeowner Preservation Office at the Treasury, Laurie Maggiano, released information on HAFA when she spoke at the Mortgage Bankers Association’s annual convention in San Diego.
Two weeks later, Herb Allison testified before the Congressional Oversight Panel (COP), which reviews actions taken by the Treasury, and indicated guidelines were being developed.
Write to Jon Prior.
