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What We're Hearing

If residential servicers didn't have enough to worry about (with delinquencies at an all-time high) now they have a new concern: rising prepayment speeds. Refi applications are starting to gather a critical mass, but some servicing analysts are suggesting that speeds may not be all that damaging. Consumers want to refi (hence all those applications) but because of disappearing 'home equity' will they qualify? Stay tuned...

Whether Ken Lewis likes it or not, Bank of America (thanks to its recent purchase of Merrill Lynch & Co.) now has about $142 billion in subprime servicing/subservicing contracts on its books. That figure comes from the Quarterly Data Report. In a few weeks Mortgage Servicing News (a sister publication to National Mortgage News) will publish a story about BoA's platforms. One of the subprime units that BoA inherited from Merrill is Wilshire Credit Corporation of Beaverton, Ore., which was started several years back by industry veteran Jay H. Memmott. Wilshire, though, has been tarred and feathered on the "Ripoff Report" website whose posters have some less than kind things to say about its servicing practices... One bidder that did not win IndyMac was Leon Black's Apollo Group. Black is backing Amy Brandt's new servicing operation. Brandt used to run alt-A/subprime wholesaler WMC Mortgage...

In case you missed it, the publicly traded Ocwen Financial Corp. (stock symbol: OCN) is spinning off its mortgage servicing business to existing shareholders. The servicing business is housed in Ocwen Solutions. Ocwen is one of the largest 'scratch and dent' servicers in the nation, according to the Quarterly Data Report. The company (whose share price has held up nicely) has considered buying a depository so it can tap TARP funds. It has made an offer to Kent County State Bank of Jayton, Texas, according to press reports in Florida. Many moons ago, Ocwen owned a thrift and was also a top ranked subprime lender...

As Citigroup continues to downsize, one rumor making the rounds is that it might try to sell certain assets belonging to old CitiFinancial subprime unit. This could include servicing rights. Earlier in the decade Citigroup bought Associates First Capital Corp., then one of the largest subprime lender/servicers in the nation. In an earlier life Associates was owner by automaker Ford Motors. About two years ago, Citigroup bought part of Ameriquest's subprime operation as well...

Banco Popular of Puerto Rico has agreed to purchase substantially all of R&G Mortgage's residential servicing rights and advances related to mortgage loans owned by Freddie Mac and Ginnie Mae. Details are pending...

REGULATORY-RELATED SERVICING NEWS FROM WASHINGTON: The Mortgage Bankers Association and the Financial Services Roundtable strongly oppose the bankruptcy "cram down" deal Citigroup stuck last week with key Democratic senators. "We remain opposed to bankruptcy cram down legislation because of the destabilizing effect it will have on an already turbulent mortgage market," said MBA chairman David Kittle.

NOTE TO READERS: 'What We're Hearing, the Servicing Edition' is a new feature brought to you from the editors of Mortgage Servicing News and National Mortgage News. If you have any news items or tips on servicing-related companies or issues (residential or commercial) affecting the servicers send an email to: Paul.Muolo@SourceMedia.com

MORTGAGE DATA NOTICE: Need quarterly origination and servicing data? In a few days NMN will send out its 4Q origination and servicing survey. The results will be published in February in the Quarterly Data Report. If you want the QDR order now. Prices are set to increase in late January. For more information send an email to: Deartra.Todd@SourceMedia.com...

DATA NOTICE:: The Mortgage Industry Directory is still available as well as the online version of the book, the eMID. If you need rankings on the top 300 servicers, loan brokers, and much more this could be your product. The MID/eMID also provides executive names and telephone numbers, mailing addresses, delinquency info -- and news updates (the eMID only). Buy the book and receive a free Quarterly Data Report. For more information email: Rebecca.Keen@SourceMedia.com or Delores.Stokes@SourceMedia.com