Archive for March, 2011
Mortgage Cadence has a new loan origination system for lenders that responds to regulatory changes within 24 hours, reduces pricing variances and secures data integrity.
The Denver-based mortgage technology company said its Symphony product meets the needs of any size financial institution. But the system specifically fills a gap for small and mid-tier lenders, who are under "enormous pressure … to manage a more complex mortgage process," according to Mortgage Cadence.
"All but the nation’s largest lenders have had to settle for substandard loan origination automation for far too long,” said Chuck Kimball, executive vice president at Mortgage Cadence. "Lenders of all sizes deserve an LOS that offers them all of the compliance support, time-saving features and reliability that the nation’s Top-100 lenders have come to expect. With this offering, we’re giving it to them."
The company said new federal and state regulations, more stringent investor guidelines and reduced margins are hurting mid-tier lenders. And the Symphony application helps them improve processes through "collaborative process capabilities, real-time data access, a branded Web site and a redundant infrastructure providing 24/7 availability, security and disaster recover."
Write to Jason Philyaw.
Tags: loan origination system, Mortgage Cadence, mortgages, Symphony
Posted in Origination/Lending, Top Stories | No Comments »
A Los Angeles Superior Court jury ruled against Wells Fargo (WFC: 29.345 +1.02%) Thursday in a mortgage discrimination case, awarding borrowers $3.5 million.
The class-action lawsuit alleged the bank knowingly discriminated against borrowers in minority neighborhoods. As a result, borrowers were charged more for their loans than those in predominately white areas of Los Angeles County, the court ruled.
The 880 borrowers participating in the class-action case will receive $4,000 each in damages. Plaintiffs originally asked for $24 million total for an original 7,000 plaintiffs. Those participating the class received first-lien mortgages of more than $150,000 between May 2002 and December 2005.
Plaintiffs alleged that in 2002, Wells introduced a computer program called "Loan Economics" that they said gave loan officers the ability to offer applicants lower pricing on a loan. However, branch managers in minority neighborhoods disallowed the use of the program.
Wells Fargo said in a statement Thursday that the program was an internal tool only that helped staff determine commission accounting, not loan pricing.
"We are disappointed with the jury’s decision, and we do not believe that it is in line with the law and the facts of this case. We are evaluating our post-trial options. And, as we have said from the beginning, Wells Fargo is committed to serving all customers responsibly and fairly," Wells said. "Pricing decisions were left to the discretion of loan officers, who were always free to offer borrowers lower prices."
A. Barry Cappello, a partner at Cappello & Noël and the attorney for the plaintiffs, said the jury found that race, color and national origin was a "motivating reason" for how Wells treated these customers.
"The culture at Wells Fargo Bank only pays lip service to fair lending," Cappello said. "No systems are in place to prevent managers from engaging in the most insidious form of discrimination against customers who are least equipped to deal with it."
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
Tags: discrimination, Los Angeles, mortgage, plaintiffs, Wells Fargo
Posted in Origination/Lending, Slider | 1 Comment »
Investor confidence in mortgage-backed securities is not dependent on the presence of government guarantees on loans, the American Enterprise Institute for Public Policy Research said Thursday.
An AEI research team advocating for a more robust housing market supports proposals to privatize the entire mortgage market.
Despite a belief investors will only feel secure buying MBS backed by the government, AIE analysts said the opposite is true since "government market interventions have led to large-scale taxpayer bailouts twice in the last generation."
The research team — Peter Wallison, Edward Pinto and Alex Pollock — made that conclusion in their latest AEI white paper, titled Taking the Government Out of Housing Finance: Principles for Reforming the Housing Finance Market.
The key is to concentrate on prime mortgages and only allow those loans to be securitized, the AEI research team said.
"The very low delinquency and default rates on prime mortgages will be attractive investments for institutional investors and will enable the housing finance secondary market to function effectively with no government support," the researchers wrote. "This will eliminate the potential for additional taxpayer losses in the future; reduce the likelihood and severity of housing price booms, busts, and attendant bubbles; and allow the eventual elimination of the GSE charters of Fannie Mae and Freddie Mac."
At the same time, critics have bashed proposals to eliminate all government guarantees on the grounds those plans would scare aware investors and increase the cost of homeownership.
Write to Kerri Panchuk.
Tags: Fannie Mae, freddie mac, mortgage-backed securities, mortgages, securitization
Posted in Secondary Market/Investors, Top Stories | 2 Comments »
Freddie Mac told servicers managing its loans this week that they can no longer foreclose in the name of Mortgage Electronic Registration Systems.
The directive came in a bulletin issued Wednesday and takes effect April 1.
The bulletin from the government-sponsored enterprise also gives guidance in several other areas. Servicers now may postpone foreclosure sales handled by designated counsel as long as the newly scheduled foreclosure sale date is within Freddie Mac’s foreclosure timeline. The bulletin also advises on changes to requirements on foreclosure and bankruptcy referrals, reimbursable expenses, and property preservation.
"We have updated the guide to eliminate the option for the foreclosure counsel or trustee to conduct a foreclosure in the name of MERS," the bulletin states. The directive is effective for mortgages registered with MERS that are referred to foreclosure on or after April 1, Freddie Mac said.
"Servicers must prepare an assignment of the security instrument from MERS to the servicer and instruct the foreclosure counsel or trustee to foreclose in the servicer's name and take title in Freddie Mac's name," the bulletin says.
"Servicers must record the prepared assignment where required by state law. State mandated recording fees are not reimbursable by Freddie Mac, are not considered part of the Freddie Mac allowable attorney fees and must not be billed to the borrower," the GSE said.
After June 1, servicers must perform an interior property inspection on abandoned properties, as per the bulletin. The inspection must occur upon confirmation the property has been abandoned; and within 30 days prior to a scheduled foreclosure sale, Freddie said.
Although the new interior property inspection requirements are not effective until June, servicers are being encouraged to begin them as soon as possible.
Click here to read the entire bulletin.
Write to Kerry Curry.
Follow her on Twitter @communicatorKLC.
Tags: foreclosure, freddie mac, MERS, Mortgage Electronic Registration Systems, property inspection, servicers
Posted in Servicing/Default, Top Stories | 4 Comments »
Fitch Ratings withdrew ratings on 80 subprime bonds within 36 transactions of residential mortgage-backed securities.
The ratings agency said the deals no longer held a proper amount of loans. According to Fitch policy, ratings will be withdrawn when the pool of collateralized mortgages falls below 50.
It is possible for bonds within the same transaction to maintain their rating as long as the pool of loans stays above 50.
On average, the latest rating withdraws come on classes that were issued more than 13 years ago. Mortgages within the pools have been paid down to less than 2% of their original balances.
Most of the loans falling out of these bonds liquidated during the foreclosure crisis following the housing collapse in 2008. In February, Fitch reported between 60% and 70% of the subprime mortgages that manage to avoid foreclosure through modification will redefault within one year.
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
Tags: bonds, Fitch, foreclosure, modification, RMBS, subprime
Posted in Secondary Market/Investors, Top Stories | No Comments »
A Texas state bill aimed at preventing homeowners associations from foreclosing on active military personnel passed the Senate on Thursday.
S.B. 101, sponsored by Sen. Leticia Van de Putte (D-San Antonio), is designed to add protections to the Service Member's Civil Relief Act, a federal law that protects active military personnel from foreclosure.
An identical companion bill in the House, H.B. 1397, written by Rep. Joe Farias (D-San Antonio), has been referred to the House Defense and Veterans Affairs Committee.
Texas — and homeowners associations — got a black eye last year when a Dallas-area HOA foreclosed on Mike Clauer while the Army National Guard captain was serving in Iraq. The foreclosure — for a $300,000 home that was fully paid for — was to settle a debt of about $3,500 in overdue HOA fees, according to media reports at the time.
Clauer's wife learned of the foreclosure after the home had already been sold on the courthouse steps, according to news reports. The couple eventually got the house back.
The case spawned intense media scrutiny of homeowners associations and the power they wield to launch foreclosure actions for unpaid dues.
In the case of Clauer, the HOA didn't know Clauer was serving in the military, according to a bill analysis by the Senate Research Center. That communication breakdown resulted in the home being put into foreclosure, according to the analysis.
S.B. 101 amends two portions of the state's property code to require the servicer of debt to recognize military service and comply with the federal SCRA. Also under the bill, notices of HOA debts will now have to carry "a statement that is conspicuous, printed in boldface or underlined type" that notifies homeowners that active military (or their spouses) should send written notice of the active service to the debt servicer immediately.
If passed by both Houses, the law takes effect Sept. 1.
Write to Kerry Curry.
Follow her on Twitter @communicatorKLC.
Tags: foreclosure, HB 1397, HOA, Homeowners Association, House Bill 1397, Joe Farias, Leticia Van de Putte, SB 101, Senate Bill 101, Texas Legislature, Texas Senate
Posted in Servicing/Default, Top Stories | 1 Comment »
The Philadelphia Sheriff's Office will resume foreclosure sales on April 4 after a three-month moratorium.
When the Philadelphia Unemployment Project, a local consumer advocacy group, petitioned the city's court, a 30-day hold on sales began Dec. 23. The group claimed that foreclosures shouldn't be carried out until $106 million from the Department of Housing and Urban Development's new mortgage assistance program for the unemployed reaches local homeowners.
HUD is set to release up to $1 billion nationwide through interest-free loans for unemployed homeowners. HUD was going to begin accepting applications for the Emergency Homeowner Loan Program this spring, but House Republicans recently voted to end the program through a bill President Obama said would be vetoed should it reach his desk.
In January, President Judge Pamela Dembe of the Court of Common Pleas in Philadelphia issued another moratorium for both the February and March monthly auction sales.
Sheriff sales are similar to normal foreclosure auctions; certain states around the country, however, require that a sheriff preside over the sale.
Local attorneys in Philadelphia estimate more than 3,000 properties will go on the auction block in April. In all of 2010, more than 36,000 properties in the Philadelphia area received a foreclosure filing, according to RealtyTrac.
Protesters organized by the Philadelphia Unemployment Project plan to march Thursday both at the sheriff's office and at the HUD regional headquarters in Philadelphia.
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
Tags: foreclosure, HUD, Philadelphia, RealtyTrac, sheriff, unemployment
Posted in Servicing/Default, Top Stories | No Comments »
Mortgage rates rose this week on inflationary and geopolitical concerns, Freddie Mac said in its latest Primary Mortgage Market Survey.
The 30-year, fixed-rate mortgage increased to 4.81% for the week ending March 24 from 4.76% last week. That's still lower than the 4.99% recorded a year ago. Meanwhile, the 15-year, fixed-rate mortgage hit 4.04%, compared to 3.97% a week earlier and 4.34% a year ago.
Freddie said the five-year, Treasury-indexed hybrid mortgage rate averaged 3.62%, up from 3.57% seven days prior and down from 4.14% last year. In addition, the one-year ARM climbed to 3.21% in the most recent survey, up from 3.17% last week.
Frank Nothaft, Freddie Mac vice president and chief economist, outlined some of the inflationary pressures that buoyed mortgage rates.
"The 12-month growth rate in the consumer price index rose 2.1% in February, compared to 1.6% in January; however, most of the increase was due to food and energy prices, which tend to be volatile. The core index rose 1.1%, slightly up from 1% in January," he said.
Bankrate also released mortgage rate data Thursday, showing the 30-year FRM now sits at 4.96%, up from 4.91% a week earlier. The 15-year FRM inched up to 4.16% from 4.12%, and the 5/1 ARM rate hit 3.78%, up from 3.74%.
"Mortgage rates increased, but only slightly, as investors digest world events and assess the potential impact on global economic recovery," Bankrate said. "The outlook for economic growth, inflation, and a desire to avoid market volatility are the key drivers of bond yields and mortgage rates on a day-to-day basis. Mortgage rates are closely related to yields on long-term government bonds."
Write to Kerri Panchuk.
Tags: Bankrate, freddie mac, mortgage rates
Posted in Origination/Lending, Top Stories | No Comments »
Analytics firm CoreLogic (CLGX: 14.57 +0.69%) rolled out IntelliMods Thursday, a new Web-based application that aims to expedite the loan modification decision-making process.
CoreLogic says the tool allows servicers to bypass manual loan modification calculations by submitting borrower profiles through IntelliMods, which is designed to determine a borrower's loan modification eligibility.
CoreLogic touts the tool as one that "allows clients to build unlimited sets of investor and servicer-specific cascades." The application can process a single loan or a batch of loans at the same time, CoreLogic said.
The tool takes into account government regulations and provisions related to loan modifications.
The application is rolling out at a time when government officials are pushing for more loan modifications nationwide.
"Although servicers offered more than 1.7 million HAMP (Home Affordable Modification Program) trial modifications in 2010, there are still millions of loans more than 90 days delinquent," said Scott Brinkley, senior vice president of outsourcing and technology solutions for CoreLogic. "As regulatory pressures and 'second look' reviews continue to increase, there is still a significant need to speed the loan modification process and an even greater need to provide audible, defensible decisioning."
Some 11.1 million residential properties, or 23.1% of all U.S. homes, were in negative equity at Dec. 31, up from 10.8 million, or 22.5%, the prior quarter, according to CoreLogic data.
Write to Kerri Panchuk.
Tags: CoreLogic, HAMP, loan modifications
Posted in Top Stories | 1 Comment »
The number of initial jobless claims filed by unemployed Americans fell 1.3% last week to 382,000 claims submitted on a seasonally adjusted basis, the Labor Department said Thursday morning.
That compares to the revised figure of 387,000 filings for a week earlier.
Overall, the number of initial jobless claims fell by 5,000 for the week ended March 19, making it the second consecutive decline in the past two weeks.
The four-week moving average hit 385,250, down 1,500 from the previous weeks average of 386,750.
"Fewer and fewer Americans are claiming unemployment benefits in a developing trend that will boost expectations for accelerating payroll growth," analysts with Econoday said Thursday. "These are the best readings of the recovery." Analysts surveyed by Econoday were expecting jobless claims of 385,000 last week with a ranges of estimates between 378,000 and 390,000.
Write to Kerri Panchuk.
Tags: jobless claims, labor department, unemployment
Posted in Secondary Market/Investors, Top Stories | 1 Comment »
