Servicing

REDC Auction.com said its 2009 sales of foreclosed properties has topped the $2 billion mark with successful weekend auctions in Dallas, Houston and Seattle. The Irvine, Calif.-based company said it sold just shy of $15 million of REO properties in those three cities. The company has conducted 298 auctions this year, selling 34,600 properties since January.

Triad Guaranty Inc., a mortgage insurer that is in self-liquidation mode, has received a delisting notice from the NASDAQ. The exchange told the nation's smallest MI that it is no longer in compliance with a rule requiring it to maintain a minimum market capitalization (based on common stock value) of $15 million. NASDAQ is giving the Winston-Salem company 90 calendar days, or until Feb. 9, 2010, to regain compliance. Triad, whose shares trade for about 50 cents, lost $102 million in the third quarter. In October Triad agreed to sell its MI platform, including its technology, to Essent Guaranty, a new MI company that hopes to begin writing policies next year. Triad has outstanding coverage on about $57 billion worth of home mortgages, according to the Quarterly Data Report.

Technology Credit Union of San Jose has introduced a new five-year jumbo ARM and is willing to fund mortgages up to $1 million in the high-priced San Francisco Bay Area. Introduction of the new product comes as area homebuyers are having a hard time finding affordable loans over the Fannie Mae/Freddie Mac limit, mainly because the secondary market for these nonconforming mortgages has dried up along with the securitization market. For now, most jumbo loans being funded are held in portfolio at depositories with Bank of America and Wells Fargo being two of the largest players in that market. Technology CU is a $1 billion credit union serving several hundred companies in Silicon Valley. A few months back Kinecta Federal Credit Union of Manhattan Beach, Calif., stepped up its jumbo lending.

The National Association of Insurance Commissioners has selected PIMCO as a third-party modeler that will help state regulators determine the risk-based capital requirements for residential mortgage-backed securities. The new NAIC model is slated to produce expected security-level losses for about 18,000 RMBS owned by U.S. insurers at the end of 2009 so insurers can map their holdings to designations set by the group and those designations' accompanying risk-based capital requirements. The designations in this case will apply only to yearend 2009 reporting.

Green Tree Servicing, St. Paul, Minn., was the winning bidder on a $1 billion package of mortgage servicing rights recently auctioned off by the Federal Deposit Insurance Corp. The agency and company could not be reached for comment at press time. Sources close to the deal confirmed to National Mortgage News that Green Tree was the winning bidder. "The sale has closed," said one source, requesting he not be identified. The servicing rights belonged to Franklin Bank of Texas, which the agency took control of a year ago. Green Tree is a subservicing and specialty servicer.

Residential delinquencies increased for the 11th straight quarter, hitting an all-time high of 6.25% for the period ending Sept. 30, according to new figures released by TransUnion. Basing its findings on a random sample of 27 million credit files, the company found that Nevada leads the nation in delinquencies (14.5%) with Florida a somewhat close second with 13.3%. Year-over-year, mortgage delinquencies are up 58% and are expected to continue rising until the national job picture improves. The credit report agency defines delinquent as any loan where the borrower is 60 or more days past due. The Mortgage Bankers Association, which releases its delinquency figures on Thursday, defines delinquent as 30 days past due or more. According to National Mortgage News and the Quarterly Data Report, there are 60.5 million outstanding residential loans in the U.S. with a face value of $9.86 trillion.

The first new issue of commercial mortgage-backed securities completed under the government's Term Asset-Backed Securities Lending Facility is a step forward on what may be a long journey toward that market's recovery, according to Moody's Investors Service. The first CMBS deal done under TALF is collateralized by a $400 million loan to subsidiaries of Developers Diversified Realty Corp., a retail real estate investment trust. According to combined news reports, the security came to market this week but Moody's notes in a new report that, "significant issues affecting the broader CMBS securitization sector remain unresolved." The rating agency adds, "not all CMBS loan financings will benefit from the program, which has stringent rules."

The yield on the benchmark 10-year Treasury continued its drop Tuesday, suggesting that the recent downward drift in mortgage rates might continue. At press time, the 10-year was yielding 3.3% compared to 3.5% less than a week ago. Rates began to fall after Federal Reserve chairman Ben Bernanke spoke Monday, reaffirming the government's intervention policies in the mortgage market. The Fed is set to end its MBS liquidity program by the spring but the Fed chairman said the central bank might adjust the program, depending on what market conditions call for.

DreamBuilder Investments LLC has purchased a $173 million package of nonperforming second liens after the initial winning bidder on the deal failed to close. According Jaymes Financial of Virginia, which brokered the transaction, the privately held DreamBuilder paid less than one penny on the dollar for the loans, which include both secured and unsecured credits. The seller was The Cadle Co., Newton Falls, Ohio. A Texas company had won the bid a few weeks back but could not close on the transaction, said Andy James, a principal in Jaymes Financial. Several weeks back the privately held DreamBuilder bought a $400 million package of nonperforming seconds that belonged to National City Corp., Cleveland. The seller was PNC Financial Services, Pittsburgh, which bought NatCity late last year. No price was disclosed on the NatCity deal. DreamBuilder has been buying nonperforming second liens since 2002.

Although its portfolio is continuing to perform well, PMC Commercial Trust has seen the weakened economy impact some of its borrowers, according to its third quarter financial results. In addition, the Dallas-based commercial real estate investment trust has taken possession of two properties through foreclosure. "We anticipate the weakness to continue for at least several quarters," said PMC chairman Lance Rosemore in a statement, adding, "our loans are typically real estate secured and, in most cases, the value of the underlying collateral should cover our principal exposure." In response to the current economic conditions, PMC Commercial Trust increased its reserves for loan losses during 2009. Income from continuing operations increased to $1.5 million in 3Q09 from $587,000 during the third quarter of 2008. Net income increased to $1.9 million during the third quarter of 2009 compared to $603,000 for the third quarter of 2008.