Servicing

Macquarie Research has upgraded Radian Group Inc. - the nation's third largest residential mortgage insurer - to "outperform" from "neutral," saying it expects the company to return to profitability by the second half of 2010. Macquarie analyst Matt Howlett said he sees the Philadelphia-based Radian as not only a survivor "but a leader in an industry poised for a comeback in 2010." Mr. Howlett recently raised the entire mortgage insurance sector to "overweight" from "marketweight." According to the Quarterly Data Report, Radian had $153 billion in "policies-in-force" at the end September, ranking behind MGIC ($216 billion), and PMI ($163 billion). At least two new MI firms are in the process of forming. Radian's shares have been trading at $9 of late compared to a 52-week low of 95 cents and a high of $12.50.

Lenders Asset Management Corp. has launched LAMCO Vendor Management Process, which evaluates, scores and ranks LAMCO-endorsed vendors.LAMCO is an REO management company. LAMCO qualifies new vendors and manages ongoing service provider relationships using the elements of TQRDCEB, a framework developed by Hewlett Packard Co. Vendors are evaluated on technology, quality, responsiveness, delivery, cost, environment and business impact using a scorecard system based on a weighted strength ranking. Service providers are selected as a LAMCO vendor based on their performance within the TQRDCEB system and are routinely evaluated on the same scale to measure performance, identify areas of improvement and promote an environment where the status quo is challenged.

Titanium Holdings Inc. is launching a new business unit, Excellen REO, an REO asset management company that offers a suite of services designed to create a customized property liquidation process for each client. The move will help the Fort Mill, S.C.-based Titanium Holdings, a provider of loss mitigation tools and services, expand client relationships and establish new partnerships. Cary Sternberg is president of the new company. With almost 40 years of experience in asset preservation, management and liquidation, Mr. Sternberg is the former senior vice president of the REO department for American Home Loan Servicing Inc. Excellen REO services include pre-marketing, valuations, marketing and sales negotiation, closing and funding and alternative sales methods. The company will leverage a nationwide network of real estate brokers and local eviction attorneys, as well as property preservation companies.

The inventory of unsold homes in the distressed Las Vegas metro market is at its lowest point in 18 months, according to the Rob Report, a monthly market overview published by luxury real estate broker Rob Jenson of RE/MAX Central. As 2009 drew to a close, there was a 6.1 months' supply of houses for sale in the Vegas-Henderson area. But there was just a 2.8 months' supply if homes under contract but not yet closed are excluded. A total of 10,651 single-family houses are in contingent or pending status, Mr. Jenson reports. Most of the houses on the market at $1 million or less are distressed sales - 10,633 short sales and 4,272 foreclosures out of a total of 18,343. But take-backs are outselling short sales three-to-one, the agent says. In December, 3,071 properties actually changed hands, a 5%, or 151-unit, increase from November. Of those sales, 78% were distressed, including 1,822 foreclosures and 583 short sales.

Fannie Mae beat Freddie Mac by a country mile in the loan modification race by moving borrowers who do not qualify for the government's Home Affordable Modification Program into alternative restructuring plans. Not counting HAMP modifications, Fannie completed 27,700 loan modifications in the third quarter, up 66% from the second quarter. Freddie completed only 9,000 alternative modifications, a 42% decline from the previous quarter. "Freddie has instructed its servicers to fully support HAMP as the primary modification program," said the Federal Housing Finance Agency in its quarterly Foreclosure Prevention and Refinance Report. "While Fannie Mae's primary modification solution is HAMP, it has also focused on putting borrowers who do not qualify for HAMP modifications into other modifications leading to most of this increase in the quarter," said FHFA. The agency's quarterly report does show that Freddie, relative to its size, is more efficient at completing HAMP modifications than its larger competitor. Fannie has completed 11,700 HAMP modifications as of Nov. 30, compared to 10,300 for Freddie.

Approximately 38% of existing home sales in 2009 were distressed sales and 12% were short sales, according to the National Association of Realtors. Foreclosure sales accounted for two-out-of-three distressed sales and the rest were short sales, NAR spokesman Walter Maloney said. The NAR began tracking short sales in October 2008 and by February and March short sales peaked at 18% of sales. Lately, short sales have been averaging 12% to 13% of sales on a monthly basis. In a short sale, the lender or servicer allows the defaulted homeowner to sell the property to avoid a foreclosure. Fannie Mae and Freddie Mac completed 17,400 short sale transactions in the third quarter, up from 4,900 in the same period a year ago. Fannie alone completed 11,100 short sales in the third quarter, compared to 10,400 for all of 2008.

Fannie Mae beat Freddie Mac by a country mile in the loan modification race by moving borrowers who do not qualify for the government's Home Affordable Modification Program into alternative restructuring plans. Not counting HAMP modifications, Fannie completed 27,700 loan modifications in the third quarter, up 66% from the second quarter. Freddie completed only 9,000 alternative modifications, a 42% decline from the previous quarter. "Freddie has instructed its servicers to fully support HAMP as the primary modification program," said the Federal Housing Finance Agency in its quarterly Foreclosure Prevention and Refinance Report. "While Fannie Mae's primary modification solution is HAMP, it has also focused on putting borrowers who do not qualify for HAMP modifications into other modifications leading to most of this increase in the quarter," said FHFA. The agency's quarterly report does show that Freddie, relative to its size, is more efficient at completing HAMP modifications than its larger competitor. Fannie has completed 11,700 HAMP modifications as of November 30, compared to 10,300 for Freddie.

Celink, the nation's largest reverse mortgage subservicer, has been approved by the Government National Mortgage Association to be an issuer of securities backed by home equity conversion mortgages or HECMs. Celink says the approval will allow it to function as a subcontract servicer on any HECM MBS. Celink's reverse mortgage servicing portfolio exceeds $5.8 billion. The company already had approvals to be a HECM participation agent.

Investment funds controlled by Colony Capital, LLC of Los Angeles have agreed to purchase $1.02 billion in troubled commercial loans from the Federal Deposit Insurance Corp., paying just $90.5 million while receiving government funding of $233 million. The sale, a "structured transaction," will give Colony a 40% managing member equity stake in a newly formed limited liability company created to hold the acquired loans. The FDIC will retain the remaining 60%. In total, Colony will gain access to 1,200 commercial real estate loans. Deutsche Bank served as advisor to the FDIC on the sale. Even though Colony is private, it controls Colony Financial, Inc., a publicly traded company. Colony Capital is in the business of acquiring, originating and managing commercial mortgages. As reported by National Mortgage News, the FDIC is contemplating issuing a large security in the first or second quarter backed by delinquent and subperforming residential mortgage assets. Some of these assets could include subprime and/or alt-A MBS, said a source familiar with the plan.

PennyMac may have found a buyer for two different pools of loans it put out for bid in December, according to investment banking sources who work in the nonperforming loan market. The publicly traded REIT declined to comment but acknowledged that it has been trying to sell two loan pools -- a $20 million nonperforming loan package, and a $17 million performing pool. A source said Kondaur Capital of California may have been a bidder on the nonperforming package. Kondaur did not return telephone calls on the matter.