Atlantic Gets Top Loss Mit Score

Of its 11 largest servicers, the Federal Housing Administration has awarded a subsidiary of ABN Amro Mortgage Group its highest loss mitigation score.

Atlantic Mortgage and Investment, Jacksonville, Fla., which services 109,600 FHA loans, is now entitled to receive higher reimbursements for foreclosure costs than most other FHA servicers, plus an additional $100 bonus for providing special forbearance to troubled borrowers.

Three other "high volume" servicers - Bank of America, Charlotte, N.C., Citimortgage Inc., O'Fallon, Mo., and Principal Residential Mortgage, Des Moines - made the cut and they will receive the loss mitigation incentives also. (Citimortgage recently completed its acquisition of Principal.)

In 2003, Bank of American had the highest score, followed by Midland Mortgage Co., Oklahoma City, and Wells Fargo Mortgage Corp., San Francisco. But Midland and Wells Fargo did not make the cut this year.

FHA Mortgagee Letter 2004-30 contains the loss mitigation scores for 193 servicers and breaks them into five groups based on the size of their FHA servicing portfolios.

Many servicers are not very comfortable with FHA's loss mitigation scoring system because it is complex, if not incomprehensible, and the companies cannot manage their servicing operations to improve their scores.

FHA bases the score on the ability of the servicers to control defaults and to control their costs. However, the scoring system also considers geographic and others factors for comparability reasons. Servicers also get bonus points for servicing first-time and minority homeowner loans, as well as loans made in underserved areas. FHA uses a separate "tiered rating" system to measure regulatory compliance with its loss mitigation requirements.

The Virginia Housing Development Authority, Richmond, received the highest loss mitigation score in the "medium high" volume group - companies that service 10,000 to 100,000 FHA loans.

The VHDA along with 12 other servicers in the medium-high group made the cut, so they will be reimbursed for 75% of their foreclosure costs, as opposed to the standard 67% reimbursement.

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