Archive for October, 2011
The Bipartisan Policy Center formed a new housing commission Wednesday that will draft policy recommendations over the next year.
The Washington think tank will be led by Henry Cisneros and Mel Martinez, former secretaries of the Department of Housing and Urban Development, as well as former Sens. Kit Bond and George Mitchell.
"Housing is not only a basic human need," Mitchell, former Senate Majority Leader from Maine, said at a Wednesday press conference. "It is also a critical element of our economy, and now, more than ever, is the time for a fresh look at this issue."
The full commission, which will be announced at a later date, will be mostly made up of housing experts, business leaders, former elected officials and academics. Its first public forum will be in March 2012 in San Antonio.
"Solving these issues and addressing long-term questions on the role of government in housing will be no small stump to jump, but we cannot afford to fail," according to Bond, the four-term senator from Missouri.
The Bipartisan Policy Center was founded in 2007 by Mitchell and former Senator Majority Leaders Howard Baker, Tom Daschele and Bob Dole.
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Tags: Bipartisan Policy Center, Bob Dole, Department of Housing and Urban Development, George Mitchell, Henry Cisneros, housing, housing reform, Mel Martinez, Tom Daschele
Posted in Origination/Lending, Top Stories | No Comments »
MetLife (MET: 35.05 +1.59%) reaffirmed its desire to sell off the company's depository and mortgage origination businesses after the Federal Reserve rejected the insurer's capital distribution plan.
MetLife issues mortgages through MetLife Bank and said it submitted a capital plan to the Fed in hopes of gaining an annual dividend increase and a resumption of stock purchases.
The Fed rejected the plan, prompting MetLife to issue a statement: "We are disappointed that we cannot commence increased capital actions now, as our analysis shows that the company's current capital level and financial strength support capital action increases."
The Fed's rejection of the plan, reaffirmed MetLife's commitment to winding down its status as a bank-holding company.
Still, MetLife said it looks forward "to seeking and gaining approval of our capital plan from the Federal Reserve early next year."
MetLife announced in mid-October that it would sell the bank's mortgage business due to an uncertain marketplace and a changing regulatory environment.
In 2010, MetLife Home Loans ranked as the 11th largest mortgage servicer in the U.S., with its servicing business valued at $115.9 billion in the fourth quarter. The company also ranked 13th on the list of mortgage originators, holding 1.4% of the market and originating roughly $22 billion in mortgages last year.
Write to Kerri Panchuk.
Tags: Federal Reserve, MetLife, MetLife Bank
Posted in Origination/Lending, Top Stories | 1 Comment »
As millions of Americans across the nation migrate from homeownership to rental housing, multifamily property sellers are gaining a new tool that could help landlords screen tenants.
LexisNexis Risk Solutions Wednesday launched a background screening tool that offers rental management companies access to real-time daily reports on potential and current residents living on their properties.
The tool allows customers of LexisNexis Resident Screening instant access to tailored, daily reports on their property portfolio’s performance against benchmarks from the millions of annual resident screening searches done by LexisNexis, allowing them to strengthen their resident business strategy and property portfolio.
"It does that right down the level of credit score, monthly income, landlord debt, eviction hits and also by offense type for criminals," said Kirsten Porter, Lexis Nexis Senior Director of Product Management. "We go right down to the very smallest level of detail that its possible to give benchmarks against."
The launch of the screening service arrives at a time when declining home values are causing millions of Americans to choose rental housing over homeownership.
In the year ending June 2011, the Census Bureau reported a net increase of 1.4 million households that moved into rental housing, a 4% rise in the number of tenant households.
Doug Bibby, president of the National Multi Housing Council President, said by 2025, singles and unrelated individuals living together will comprise 40% of households. By that time, families with children will make up only 20% households, down from 33% in 2000, he added.
"The U.S. is on the cusp of fundamental change in our housing dynamics as changing demographics and changing housing preferences drive more people away from the typical suburban house and toward the type of housing that rental housing offers," Bibby said.
The nation's homeownership rate fell to 66% in the second quarter, down from 66.4% in the first quarter and 66.9% in the second quarter a year earlier, according the the Census Bureau.
Each 1% decline in the homeownership rate represents a shift of one million households to rentals.
And lenders are taking notice.
Multifamily lenders increased financing for apartments containing five or more rental units by 31% in 2010, the Mortgage Bankers Association said in a report earlier this month.
The number of renters swelled by 4 million from 2005 to 2010.
Write to Justin T. Hilley.
Follow him on Twitter @JustinHilley.
Tags: census bureau, Lexis Nes, LexisNexis, National Multi Housing Council, rental, rental housing
Posted in Origination/Lending, Top Stories | 1 Comment »
Two Texas counties are contemplating a lawsuit against Mortgage Electronic Registration Systems for an alleged failure to pay mortgage assignment recording fees to local clerks' offices.
If Bexar County, which includes San Antonio, and Hidalgo County, which borders Mexico in South Texas, decide to sue, three Texas counties will have brought lawsuits against Reston, Va.-based MERS.
Harris County, the third-most populous in the country and home to Houston, is looking into a similar lawsuit, and the Dallas County DA Craig Watkins already filed suit.
Watkins sued MERS in September, claiming the mortgage registry owed the county $50 million to $100 million in mortgage transaction filing fees.
In the suit, Dallas County alleges MERS, its parent company Merscorp Inc., and others acted as a shadow recording system to avoid county recording fees. MERS became a critical part of the mortgage boom and securitization process, as the registry allowed financial firms to re-assign mortgages by making updates to the system and foregoing new recordings at local counties.
Bexar County is now considering similar claims, but remains in the investigatory stages, sources said.
Edward Schweninger, who leads the Bexar County DA's civil division in San Antonio, said, "We are looking into that issue."
But, Schweninger said it's still unknown who the potential defendants will be at this point. He said the county is working with attorneys to evaluate all of the potential claims, as well as similar cases filed in other counties.
Schweninger said he may raise the issue with Bexar County commissioners next week to obtain approval to hire outside counsel to probe the issue.
Arturo Guajardo, the Hidalgo County clerk, said the issue recently came to his attention, and his county is also talking to outside counsel to evaluate its position in relation to MERS.
"I am keeping my eyes open and waiting," said Guajardo when asked about the next step in the process.
When the Harris County DA's office said it would consider a lawsuit similar to the one filed in Dallas County, MERS said it could not comment on cases that have yet to be filed.
After Harris County started looking into the possibility of suing for filing fees, a MERS spokesperson released a statement: "I reiterate that MERS complies with the recording statutes and mortgage regulations in Texas (as well as other states) and the legality of MERS' business model has already been affirmed in numerous cases decided by Texas courts and by federal courts. Should any new litigation be filed, we will defend the merits in the appropriate venue."
Write to Kerri Panchuk.
Tags: Bexar County, county clerk, Dallas County, Dallas County DA Craig Watkins, filing fees, Harris County, Hidalgo County, lawsuits, MERS, Merscorp Inc., mortgage assignments, Mortgage Electronic Registration System, mortgages
Posted in Secondary Market/Investors, Top Stories | 3 Comments »
Freddie Mac CEO Charles "Ed" Haldeman will step down some time in the coming year.
Federal Housing Finance Agency Acting Director Edward DeMarco requested Christopher Lynch, the incoming chair of the Freddie board of directors and the current chair John Koskinen to work on a succession plan to Haldeman.
Koskinen and Robert Glauber will step down from the board in February 2012 as they reach the mandatory retirement age.
"Ed Haldeman has brought strong leadership to Freddie Mac," DeMarco said. "I appreciate his commitment to leadership stability during the upcoming transition."
The FHFA said the board will begin the process of finding a successor shortly. Haldeman told the board and FHFA he would remain CEO until the transition took place.
Haldeman joined Freddie in July 2009 after leaving the investment advisor firm Putnam Funds, where he was chairman for one year. He became CEO of Putnam in 2003 to reorganize the firm and improve policies after a series of probes into its business practices.
He was brought in to do the same at Freddie Mac, which was taken into conservatorship in September 2008.
"The search and selection of the successor is a very important next step for the GSE," said Kevin Brungardt, chair of Roundpoint Financial and former vice president of servicing at Fannie Mae. "The individual selected will be a glaring indicator of what the government plans for the future of the GSEs."
Freddie declined to comment.
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Tags: DeMarco, FHFA, freddie mac, GSE, haldeman
Posted in Secondary Market/Investors, Top Stories | 7 Comments »
The September median home price in Las Vegas fell 11.5% from one year ago and remains 63% below the peak, according to analytics firm DataQuick.
A home that sold for $312,000 during the peak of the housing bubble in November 2006 is now worth $115,000. September was the 12th straight month the median home price fell from the year before.
The decline has fallen to levels not seen since the mid-1990s, DataQuick said.
"This can be attributed to several factors: home price depreciation; robust sales of low-cost foreclosures; robust sales to investors, who mainly target low-cost properties; extraordinarily low new-home sales (new homes tend to sell for more than resale homes); and higher-than-usual condo resales (condos tend to be the least expensive homes)," DataQuick said.
President Obama gave a speech Monday in Vegas, promoting changes to help more underwater borrowers refinance announced the same day. The Federal Housing Finance Agency will waive some representation and warranty risk, appraisal requirements, and negative equity caps for the Home Affordable Refinance Program.
How effective the program is remains in question for the nearly 4 million Fannie Mae and Freddie Mac borrowers underwater. In Vegas, 80% of the local homeowners owe more on their mortgage than the home is worth, according to RealtyTrac.
Principal reduction remains the largest tool yet to be taken up by the largest banks or by any government agency on a large scale to combat the negative equity problem in the U.S.
Department of Housing and Urban Development Secretary Shaun Donovan said principal reduction will be a major function of the still pending attorneys general settlement with the largest mortgage servicers.
Many Republican AGs and lawmakers say such lengths would only promote strategic default, not entice more people to stay current on their mortgage.
Meanwhile, the number of default notices in Vegas increased 190% from July to August, according to DataQuick. More than 4,700 default notices were filed, led by Bank of America (BAC: 7.225 -1.03%), the same findings states along the West Coast found.
"It is unclear whether the higher levels of NODs seen in August and September are the beginning of a longer-term upward trend in default filings, which could mean far more distressed properties on the market and more downward pressure on home prices," DataQuick said.
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Tags: AG, Bank of America, DataQuick, Donovan, Fannie Mae, foreclosure, freddie mac, HARP, home prices, HUD, Las Vegas, Nevada, obama, RealtyTrac
Posted in Servicing/Default, Slider, Top Stories | 3 Comments »
Special servicers resolved more than $63.5 billion in distressed commercial mortgage-backed securities from January 2010 to June 2011, Fitch Ratings said in a report Wednesday.
Since 2007, Fitch said special servicers have resolved more than $82 billion in distressed CMBS, reporting an average recovery rate of 86%.
For most of the larger loan balances, servicers are using modifications to fix those situations.
"Special servicers are still wading through a formidable backlog of underperforming loans that are in need of a workout," said Stephanie Petosa, managing director at Fitch.
The average modified loan is valued at $28.6 million compared to $9.6 million on liquidated loans, according to Fitch.
"It is too early to determine what effect these modifications will have on final CMBS loan resolutions," said Petosa.
Write to Kerri Panchuk.
Tags: CMBS, commercial mortgage-backed securities, loan modifications
Posted in Servicing/Default, Top Stories | No Comments »
FirstService Corp. (FSRV: 29.43 -0.41%) earned $5 million in the third quarter, or 17 cents per share, down 7% from the $5.3 million reported one year ago.
Revenue for the three months ended Sept. 30 for the the parent company of several property management firms such as Field Asset Services increased 10% to $585 million from $530 million last year. But the property services segment showed declines.
FAS and other property services subsidiaries handle many foreclosure proceedings. While the home sits vacant, upkeep such as lawn maintenance and winterization is needed. Third-quarter revenue for this segment dropped 2% to $123.8 million from more than $126 million last year.
"Revenues in property services were down slightly as the property preservation and distressed asset management operations were impacted by continued government regulation and other constraints preventing banks and other mortgage servicers from taking action on their properties in distress, slowing the flow of new properties coming under management," said FirstService CEO Jay Hennick.
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Tags: Asset Management, Field Asset Services, FirstService, foreclosure, forelcosure, lawn maintenance, property services, revenue, winterization
Posted in Servicing/Default, Top Stories | No Comments »
The rate of seriously delinquent mortgages held by Freddie Mac inched higher in September to 3.51% from 3.49% in August, the government-sponsored enterprise said Wednesday.
In the same month, the aggregate unpaid principal balance of mortgage-related investments at the GSE fell to $1.4 billion, and the single-family loan guarantee volume reached $19.5 billion in September, making up 60% of its purchase and issuance portfolio.
Overall, the GSE's mortgage-related securities and guarantees fell at an annualized rate of 2.6%, according to its monthly summary report.
Freddie Mac modified 6,465 loans in September and 90,126 through the first nine months of the year.
The company ended September with a total mortgage portfolio balance of $2.11 trillion, down from $2.19 trillion a year earlier.
Write to Kerri Panchuk.
Tags: freddie mac, government-sponsored enterprise, GSE, loans, MBS, mortgage, mortgage-related securities, Single-family delinquencies
Posted in Secondary Market/Investors, Top Stories | No Comments »
Lender Processing Services (LPS: 16.87 +1.93%) Chief Financial Officer Tom Schilling said in a conference call with investors Wednesday that the negotiations with the remaining state attorneys general is moving toward resolution.
"We can't get into a lot of the details, but we're happy with the progress made in the last 90 days to bring that to a head," Schilling said. "I think there is more clarity now than there was 90 days ago."
New York AG Eric Schneiderman said Tuesday night he expects a "meaningful resolution" to the problems.
The largest mortgage servicers and LPS were found to be signing large numbers of foreclosure-related affidavits and misfiling them with state courts around the country in October 2010. Since then, the combined investigative force of federal regulators, state supervisors and the AGs fractured, resulting in a series of consent orders, negotiation panels and even possible felony charges.
DocX, owned by LPS, prepared and executed assignments of mortgage and lien releases, but has since been shut down. The documents DocX handled were found to be signed en masse and by several unauthorized employees.
The firm faces an ongoing lawsuit with LPS client American Home Mortgage Servicing, which Schilling said should be resolved through arbitration and is currently being negotiated.
"We're in conversations with a number of the states," Schilling said. "We hope to bring those to a head sooner rather or later. It's not the easiest process to manage. We may have an approach that may bring some of this stuff to a head."
In an interesting twist, LPS is seeing increased revenue from the mortgage servicing problems, especially from the consent orders, as the largest servicers deal with new regulations, Hugh Harris, the new CEO of LPS, said the company re-directed more than 200 employees toward compliance alone.
Its technology division houses the mortgage servicing desktop software the largest mortgage firms in the country use to service 80% of the mortgages outstanding in the U.S. While LPS third-quarter earnings were cut in half from a year earlier, this division saw revenue rise 3% to $193.7 million.
"The regulatory environment is creating opportunities for us more so than handcuffing us," Harris said.
Schilling clarified that the consent orders from the largest regulators may actually affect the industry more, but as soon as both these new rules and the settlement are cleared, the foreclosure process will restart and the market can move more quickly through its crippling inventory.
When asked for a specific resolution date the settlement, Schilling said he didn't know.
"Sitting here in October 2011, we're well passed what everyone thought it would reasonably take," he said.
Write to Jon Prior.
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Tags: AG settlement, consent orders, DocX, felony charges, foreclosure, fractured, LPS, mortgage, regulators, robo-signing, Servicing/Default, technology
Posted in Servicing/Default, Slider, Top Stories | No Comments »
