Archive for October, 2010
Lender Processing Services (LPS: 16.78 +1.39%) began reducing its foreclosure signing services back in 2008 and stands by its mortgage processing services. Further, when the firm caught a manager robo-signing foreclosure documents, the only such case it says it found, that manager was immediately dismissed and documents remediated.
"We believe we have taken appropriate steps and we do not believe it resulted in any wrongful foreclosures," said LPS CEO Jeff Carbiener in a third-quarter conference call to investors Friday. "We no longer provide foreclosure document services."
Carbiener also said that his company does not participate in fee-splitting or revenue-sharing with lawyers, another recent charge against the company.
"We are not an equity owner in any law firm," he said.
LPS, a mortgage and real estate technology and services provider, reported net earnings of $78.7 million or 85 cents per share, in the third quarter of 2010, up from $75.5 million or 78 cents per share, in last year's quarter.
JPMorgan Chase (JPM: 37.21 -0.75%), Bank of America (BAC: 7.29 -0.14%) and Wells Fargo (WFC: 29.60 +1.89%) also now use LPS desktop management software for dealing with clerical issues when it comes to mortgages, the CEO said.
This means that nearly all of the top 20 mortgage servicers use some form of LPS desktop systems.
"The trend towards outsourcing lender processing continues," said Carbiener in a third quarter conference call to investors Friday. "We continue to gain market share across all key businesses."
Write to Jacob Gaffney.
The author holds no relevant investments.
Tags: fee splitting, LPS, robo-signing
Posted in Servicing/Default, Top Stories | 3 Comments »
Moody's Investors Service placed Wells Fargo's (WFC: 29.60 +1.89%) servicer rating up for review a day after the bank said it would resubmit 55,000 foreclosure affidavits in 23 states.
The rating agency did the same for Ally Financial (GJM: 22.57 0.00%), Bank of America (BAC: 7.29 -0.14%) and JPMorgan Chase (JPM: 37.21 -0.75%) after those banks suspended foreclosures to refile affidavits. Moody's has yet to take action on those banks.
During the review Moody's will determine any irregularities to the Wells Fargo foreclosure and REO timelines. It will also oversee the servicer's quality control processes and the its foreclosure document execution department.
The bank currently holds a SQ1 primary servicer rating for both prime and subprime mortgages, the highest rating under Moody's system.
Wells Fargo said the move to replace the affidavits was a cautionary one and would be completed by the middle of November.
Write to Jon Prior.
Tags: Ally Financial, Bank of America, foreclosure, JPMorgan Chase, Moody's, Wells Fargo
Posted in Servicing/Default, Top Stories | 4 Comments »
Lender Processing Services, Inc. (LPS: 16.78 +1.39%) Thursday named Tom Schilling as executive vice president and chief financial officer. Schilling will be responsible for managing all aspects of the company's finances, as well as select internal operations.
Schilling joins LPS with more than 20 years of experience both as a CFO and chief operating officer at companies including USA Mobility, Cincinnati Bell's Broadwing and MCI.
"Tom's business development acumen and extensive financial and operational management experience make him an outstanding choice for our management team as we balance the execution of new growth opportunities with appropriate financial discipline and compliance," said Jeff Carbiener, LPS president and chief executive officer. "I am confident that LPS will benefit from Tom's wealth of experience as we move forward."
Francis Chan, who previously held this position, will serve in a consulting role with LPS and will assist the company with special projects.
LPS is a leading provider of integrated technology and services to the mortgage and real estate industries. The company also announced net 3Q earnings of $78.7 million on Thursday.
Sarah Mueller is an editorial assistant with HousingWire.
Tags: LPS, mortgage
Posted in Servicing/Default, Top Stories | 1 Comment »
MGIC Investment Corp. (MTG: 4.14 +6.98%) will insure 97% loan-to-value ratio mortgages for existing homebuyers effective Nov. 1.
The mortgage insurer currently insures such loans for first-time homebuyers only. Qualifying mortgages are written in non-restricted markets and hold a maximum loan amount of $417,000. The buyers must have a minimum credit score of 700.
"For sometime now, at least back to May 2010, we offered insurance on 97% LTV but limited to first-time homebuyers," an MGIC spokesman said. "In order allow more borrowers to take advantage of the benefits of Private MI (mortgage insurance) versus FHA we removed that restriction."
Loan-to-value is a measurement of the property's value versus the amount of the loan. A 97% LTV mortgage means the property is worth three percentage points more than the loan, usually after a downpayment.
Through the third quarter of 2009, MGIC held $196.9 billion of primary insurance in force, down 9% from a year ago. Of the loans it insures, 15.1% were reported delinquent, down 35 basis points from last year.
The company did lose $51.5 million for the quarter, but it's an improvement from the more than $1 billion in losses a year ago.
"The underwriting guidelines that are currently producing better performing business as we reflect in our portfolio supplement we publish each quarter," the spokesman said. "As Standard and Poor's and Moody's Investors Service have both recently published, and as we have disclosed in our filings, we continue to believe that MGIC has sufficient claims paying resources to meet its claim obligations."
Write to Jon Prior.
Tags: FHA, homes, insurance, MGIC
Posted in Origination/Lending, Top Stories | 3 Comments »
Lender Processing Services (LPS: 16.78 +1.39%) a mortgage and real estate technology and services provider, reported net earnings of $78.7 million or 85 cents per share, in the third quarter of 2010, up from $75.5 million or 78 cents per share, in last year's quarter.
LPS reported total revenue of $626 million, compared to $619.4 million a year ago.
"Third quarter and year-to-date 2010 results were strong and, while the broader economic environment remains difficult and some of our markets continue to present challenges, LPS, with its solid market presence, remains well positioned for a strong finish in 2010 and to continue to grow revenue and earnings in 2011," said LPS CEO Jeff Carbiener.
"Based on year-to-date trends and the outlook for the fourth quarter for the origination and default markets, we expect fourth-quarter adjusted earnings to be in the range of 90-92 cents per diluted share," he adds. "For full year 2010, we expect revenue to grow 3 to 4% compared to 2009 and adjusted earnings to be in the $3.48-$3.50 per diluted share range."
Adjusted net earnings for the third quarter of 2010 were $82.2 million, or 89 cents per share, compared to $80.2 million, or 83 cents per share in the third quarter of 2009 and, were higher primarily due to growth in operating income, reduced interest expense and a lower share count. Adjusted net earnings in the current quarter include an adjustment for purchase price amortization of 4 cents per diluted share and the prior year quarter included a similar adjustment of 5 cents per diluted share.
LPS said it delivered a strong third quarter despite a very difficult environment in the origination market, sluggish conditions in the default market and an ongoing challenging business environment. Lee Kennedy, executive chairman of LPS, said in a statement he is expecting a stronger fourth quarter for the company.
Operating income of $144.3 million in the quarter increased from $143.6 million in the third quarter of 2009.
Year-to-date adjusted free cash flow (operating cash minus certain expenses and purchases) for 2010 was $207.6 million compared to $231.6 million for the first nine months of 2009 primarily due to higher capital expenditures as well as from changes in working capital.
Write to Jacob Gaffney.
The author holds no relevant investments.
Tags: earnings, Lender Processing Services, LPS, third quarter
Posted in Servicing/Default, Top Stories | 3 Comments »
MetLife (MET: 35.52 +2.96%) earned $286 million in the third quarter ended Sept. 30, or 32 cents per share, benefiting from improved investment income and strong U.S. annuity sales.
The insurance giant lost $650 million during the same quarter a year ago, or 79 cents a share. The company reported third-quarter revenue of $12.44 billion up from $10.24 billion in the year-ago period.
Operating earnings were 99 cents per share, up 14% from 87 cents in the year-ago period, but missing analysts' consensus estimate of $1.03 a share.
MetLife said it had strong U.S. annuity sales of $5 billion, up 25% from the third quarter of 2009. Premiums, fees and other revenue for insurance products were $5 billion, down slightly as growth in the group life and nonmedical health businesses was offset by lower individual life revenue.
For the nine months ended Sept. 30, earnings were $2.62 billion, compared to a loss of $2.66 billion in the year-ago period. Revenue for the first nine months was $39.89 billion, compared to $28.72 billion for the first nine months of 2009.
Write to Kerry Curry.
The author holds no relevant investments.
Tags: 3Q, earnings, MetLife
Posted in Origination/Lending, Top Stories | 2 Comments »
Nearly a month after the expiration of the Troubled Asset Relief Program, the Treasury may be able to exit its investments in General Motors and its former lender GMAC Inc., now Ally Financial (GJM: 22.57 0.00%) perhaps even with profit margins above 2%.
On Thursday, the Treasury accepted an offer from GM to repurchase the $2.1 billion of preferred stock issued under TARP. According to the Treasury, the repurchase will mean a $9.5 billion return to taxpayers through repayments, interest and dividends. The automaker emerged from bankruptcy in July 2009.
The Treasury invested a total of $49.5 billion into GM as part of the bailout, and after the repurchase there will be roughly $40 billion left in arrears. According to the Treasury, the deal reduces its interest in GM to 60.8% of the company, but expects to earn its investment back plus an additional 2% in profit.
As for GMs former lender, Ally Financial, Joseph Mason, a finance professor at Louisiana State University said Thursday the Treasury can expect profits from that bailout as well.
"With the markets topping 11,000 points and pent-up demand among investors to acquire new debt, valuations are supportive for the U.S. Treasury to get out of Ally without a loss – and most likely, with a sizeable gain," Mason said.
The Treasury currently holds $18 billion worth of stock in Ally Financial for which it paid $17.2 billion for, according to the Special Inspector General for TARP's report to Congress released this week. As for the Treasury's holdings in AIG (AIG: 25.25 +0.44%), SIGTARP and the White House sparred over potential loss estimates.
As for how it will liquidate that holding, Mason said the Treasury needs to relinquish control "while the going is good, convert the government's preferred stock to common equity and sell that to the public in conjunction with an IPO and requisite secondary public offerings."
The Treasury and Ally Financial did not immediately return requests for comment.
Write to Jon Prior.
Tags: AIG, Ally Financial, bailout, General Motors, TARP, Treasury
Posted in Origination/Lending, Top Stories | 2 Comments »
The National Credit Union Administration is coming to market with about $2.82 billion of 10-year notes backed by assets in commercial mortgage-backed securities acquired from two failed corporate credit unions.
Barclays Capital will lead the negotiated sale that may price as soon as next week.
The NCUA put the two largest corporate credit unions in the nation – US Central Federal Credit Union and Western Corporate Federal Credit Union – in conservatorship in March 2009.
The coming offering continues the NCUA plan to divest about $50 billion of troubled assets the federal regulator acquired upon placing the two corporate credit unions, and three other credit unions, into conservatorship.
The securities come to market backed by the full faith and credit of the U.S. government. The securities have an initial guarantee for timely payment of interest and principle from the NCUA.
A few weeks ago, the NCUA received confirmation from the Federal Reserve, Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision of the federal backing for the notes. The confirmation enables the NCUA to offer the notes without first registering them with the Securities and Exchange Commission. The NCUA said its funding approach also allows it to avoid full-market losses on the legacy assets.
In March, the FDIC completed the first sale of this type of government-backed RMBS with a $1.8 billion issue of bonds secured by loans from seven failed banks.
The NCUA, which holds about 98% of the troubled assets in the space, plans to bring roughly 10 more MBS sales to market in the coming months as it moves through the troubled assets.
Write to Jason Philyaw.
Tags: CMBS, NCUA
Posted in Secondary Market/Investors, Top Stories | 1 Comment »
Corvisa and Sollen Technologies entered into a strategic partnership Thursday in an effort to support the latest module of the CorvisaOne mortgage management suite, CorvisaOne LeadMonitor.
Corvisa is a mortgage management software provider. Sollen Technologies produces product pricing software for the mortgage industry.
Corvisa said Sollen's product and pricing engine is a fundamental piece for the new module. The LeadMonitor product enables loan officers and brokers to monitor mortgage rates for each loan in a portfolio. Based on a borrower's loan data and personal savings preferences, lenders will be able to notify and engage with a borrower when the rate is ideal for a purchase or refinance.
"Loan officers will be using CorvisaOne LeadMonitor as a go-to tool for tracking and optimizing their loan opportunities so reliable, easy access pricing data is critical to enabling their success," said Corvisa president Matt Lautz.
Corvisa will release a beta program for CorvisaOne LeadMonitor, beginning Nov. 1. The company said the program will be available to the entire industry by the end of the year.
Write to Christine Ricciardi.
Tags: Corvisa, CorvisaOne LeadMonitor, software, Sollen Technologies
Posted in Origination/Lending, Top Stories | 1 Comment »
A longtime Florida judge is confirming that previously reported problems with process serving is cropping up in the state's courtrooms.
Circuit Court Judge Jennifer Bailey hears thousands of foreclosures cases each month in Miami-Dade County, an area hit hard in the foreclosure crisis. She also served on the Florida Supreme Court's mortgage foreclosure task force in 2009.
The judge, who has spent 17 years on the bench, said she believes some process service companies are lying on the affidavits based on borrowers' contentions of never having been served.
Service of process is a legal requirement in which the homeowner is notified in writing of the lender's intention to start foreclosure proceedings.
Document problems in foreclosure cases have led to revelations about people "robo-signing" documents, a 50-state investigation by state attorneys general and a brief foreclosure moratorium by banks Ally Financial (GJM: 22.10 -0.05%), JPMorgan Chase (JPM: 37.56 +0.05%) and Bank of America (BAC: 11.545 +0.04%).
"Service of process is an essential act to commencing a lawsuit," Bailey said. "When people lie to us about this, judges tend to get extremely concerned."
In most cases, the borrower only appears in court 5% to 7% of the time, Bailey said, but noted that in recent weeks more borrowers have been showing up for court hearings although she didn't say whether she thought that was due to increased media attention on problems with foreclosure documents.
When they don't show up, the judge relies on the affidavit submitted by the process server verifying service was done. If false information is contained in the affidavit, the judge would have no way of knowing, she said. The only way to catch these issues is when the homeowner appears in court.
Eric Johnson, past president of the Texas Process Servers Association and current chairman of the group's legislative committee, said recent negative media reports about problems don't reflect the industry as a whole.
"There's a lot of dedicated people in this industry," Johnson said. "All it takes is one person to give a black eye to the industry."
The TPSA is under the authority of the Texas Supreme Court and Johnson said the review board deals with violations harshly. They can also be referred to district attorneys for possible prosecution.
Sarah Mueller is an editorial assistant with HousingWire.
Tags: Florida, foreclosures, Jennifer Bailey, process servers, process serving, service of process
Posted in Servicing/Default, Top Stories | 2 Comments »
