Servicing

The extensive foreclosure efforts on the part of lenders and government agencies appear to have impacted the January foreclosure numbers with REOs, which represent completed foreclosure sales, down 15% nationwide from December, according to RealtyTrac. In its January 2009 U.S. Foreclosure Market Report, the company showed foreclosure filings were reported on 274,399 properties, a 10% decrease from December but still up 18% from January 2008. CEO James Saccacio pointed out that the Fannie Mae and Freddie Mac moratorium on all foreclosure sales that was extended through the end of January had an impact on the data along with Florida's voluntary 45-day freeze on all new foreclosure actions. Nevada foreclosure activity in January decreased 4% from December, but the state continued to register the nation's No. 1 foreclosure rate. Filings were reported on 14,444 properties in January, up 137% from January 2008. California posted the second highest rate with one in every 173 housing units receiving a filing, and Arizona was third with one in every 182 housing units. Despite a 20% month-over-month drop in foreclosure activity, Florida posted the fourth highest rate, with one in every 214 housing units. Filings were reported on 76,761 California properties, the most of any state despite a 14% decrease from December. Florida's 40,770 properties receiving filings in January was the second highest total of any state.

Golden Globe and Grammy Award winner and Oscar nominee Queen Latifah joined multi-platinum recording artist and actor Wyclef Jean and New York and New Jersey radio personality and actress Angie Martinez to help raise awareness about foreclosure and homeownership issues through a bus tour sponsored by the Hope Now Alliance that started Tuesday in Newark, N.J. The campaign will continue in Atlanta, Miami and Cleveland and Hope Now executive director, Faith Schwartz stressed that such efforts are important in foreclosure risk mitigation because half of foreclosures happen to people who never ask for help and may not know to. The bus tour is combined with a roundtable discussion with industry insiders who will discuss how the crisis is affecting the area. It offers information about refinancing and loan modification options and how homeowners can contact HUD approved counselors in their area for advice. Information about online resource also is provided.

Reverse Mortgage Solutions, Spring, Texas, said it has grown notably over the last 18 months since it was founded to the point where it has become the largest privately-held subservicer of reverse mortgages. The company said it recently has been boarding in excess of 22,000 loans, which suggests this is relatively high volume in the government program-dominated and demographically-promising but complex market for these loans, which are designed to allow seniors to derive cash flow from their properties while still living in their homes. In addition to its acting as a subservicer, RMS offers a Web-based front-end loan origination system and a secondary market structure through which it said it has provided servicing, subservicing and master servicing on over 40% of the Ginnie Mae securitizations of government reverse mortgages that have been issued to date.

Subsidiaries controlled by BlackRock Financial have increased their stake in PHH Corp., Mt. Laurel, N.J. -- a top 10 ranked residential servicer -- to 9.67%, according to a new filing with the Securities and Exchange Commission. Previously, BlackRock affiliates controlled about 5% of PHH's outstanding common stock. The new SEC filing says the investment-banking firm now owns 5.27 million shares of PHH's common stock. Previously they owned 2.5 million common shares. At press time spokespersons for both PHH and BlackRock had not returned telephone calls about the investment. The publicly traded BlackRock owns the stake on behalf of five different advisory subsidiaries, all of which carry the BlackRock name. PHH Mortgage, the nation's largest private label lender, services about $146 billion in home mortgages. Based in New York, BlackRock is headed by Larry Fink, a pioneer in the mortgage-backed securities market.

Moody's/Economy.com is forecasting the housing market will hit bottom by the end of this year and house prices will remain flat in 2010. "By the end of this unprecedented downturn, house prices will have declined by double digits peak to trough in nearly 62% of the nation's metro areas. In about 10% of metro areas, price declines will exceed 30%," according to the Moody's latest forecast. Senior director for housing economics Celia Chen noted many of the imbalances in the housing market have corrected. The excess supply of unsold homes for sale has nearly stabilized and housing affordability has been restored in most markets. The Obama administration is working on foreclosure mitigation, she said, which should keep foreclosures at 1.5 million in 2009, compared to 1.4 million in 2009. In addition, the housing market will benefit from the economic stimulus package in terms of adding jobs and boosting confidence. "Policy makers are fully engaged and working hard to turn the economy around with the stimulus package," Ms. Chen said. At the same time, the Federal Reserve and Treasury Department are working to "pull down" mortgage rates.

Foreclosures across the U.S. plummeted by more than 25% in January, with many of the hardest-hit states seeing dramatic drops in the number of homes repossessed by lenders, according to the latest U.S. Foreclosure Index released by the Sacramento-based ForeclosureS.com. Nationally, the number of completed foreclosures dropped from 97,841 in December to 72,694 in January 2009. Pre-foreclosure filings also dropped 12% from 190,467 in December to 166,860 in January. Foreclosures in California dropped more than 31% in January to 14,351, less than half the 31,851 properties foreclosed in the peak month of September 2008. In Florida, there were 10,007 foreclosures completed in January, down from 12,786 in December. Nevada fell from 4,039 in December to 3,207 in January. Arizona, Texas, Georgia, and Ohio also experienced declines in completed filings. Among states with the most pre-foreclosure filings, only Texas and Michigan saw increases. "Efforts last year by government and industry to lay the groundwork for housing recovery finally are yielding the hoped-for slowdown in the foreclosure hemorrhage," said Alexis McGee, president of ForeclosureS.com. With the amount of both state and federal government foreclosure intervention programs and mortgage lenders who are finally starting to be more accommodating on their loan modifications to avoid foreclosure, Ms. McGee expects the growth of 2009 foreclosures to be much less than many experts are predicting.

Private investors are interested in purchasing highly illiquid mortgage assets from banks and other financial institutions with the aid of long-term government financing, according to Treasury Department officials. There is "tremendous interest" in purchasing these assets but currently the investors can only secure short-term financing, a Treasury official told reporters. Providing longer-term financing will make it more "comfortable" for them to buy and hold these assets, he said. Treasury secretary Timothy Geithner said the Obama administration is willing to put up $500 billion in financing capacity and possibly expand it to $1 trillion if this private/public partnership program is successful in cleansing banks of bad assets. It is one part of the administration's plan to stabilize the financial system and increase the flow of credit. Treasury officials are still working on the structure of these partnerships, which would allow the government to share in the upside, if the investors make an attractive return. Treasury is not planning to shield investors from losses through insurance or guarantees - at least initially. "The program will evolve," the Treasury official said. But that is "not our intent at the moment."

Sixty-two of 79 newly renovated lofts in the historic Rowan building in downtown Los Angeles sold for a total $21.8 million on Feb. 8 in the largest-ever simultaneous electronic auction of residential properties. Winning bids ranged from $207,000 for a studio to $534,000 for a two-bedroom/two-bathroom penthouse loft. Unlike conventional auctions, where items are sold one after another in a high-pressure environment with the auctioneer calling the shots, the Intellimarket Internet-based auction system used at the Rowan sells all units simultaneously with the bidders determining the auction's pace and length. At the Rowan, bidders were able to see the amount others were offering for every unit on large bidding screens or on their own computers through a secure website. The auction clock reset every time a new bid was received so bidders had ample time to consider their next step. The auction ended when there had not been a bid submitted on any of the properties for five minutes, or about three hours after its start. More than 250 pre-qualified buyers registered to participate. "The success of this auction confirms that there are plenty of prospective buyers sitting on the sidelines because they are uncertain of values in this real estate market," said William R. Stevenson, president of Intelligent Market Systems, which developed the proprietary software used in the auction.

First American Information and Outsourcing Solutions segment, a member of The First American Corp, in Dallas, has hired Sandy Hildreth as vice president of REO Westlake Operations for the segment's Outsourcing and Technology Solutions business line. . In her new role, she will be responsible for the day-to-day operations of First American's REO location in Westlake, Texas, and is charged with expanding the company's operations in Westlake to handle the growing demand for outsourced REO services. In addition to its Westlake location, First American also has REO operations in Denver, Colo., and Anaheim, Calif. Ms. Hildreth most recently was an assistant vice president at Litton Loan Servicing where she created the company's REO quality control department that was responsible for vendor scoring and performance management. Earlier, she led REO operations at Fremont Investment & Loan and joined Litton following the Fremont portfolio acquisition. During her 15-year career, Hildreth has held senior REO and operations positions at Centex Home Equity and Associates Financial Services. She has also completed the American Financial Services Association's management development program. To find out more about the company, visit www.firstam.com.

The American Securitization Forum has begun its next phase of a project aimed at restoring investor confidence in the moribund market for mortgage- and asset-backed securities that includes a proposal for monthly servicer reporting on deals through maturity. The group, as part of its ongoing Project on Residential Securitization Transparency and Reporting, released a request for comment on its new residential MBS reporting package for the securities that sets guidelines aimed at making the performance of their underlying loans easier to track. The reporting package consists of a proposed package of data fields set to be updated monthly by RMBS servicers throughout the life of an RMBS deal and distributed to investors and credit rating agencies. The ASF, in conjunction with its conference in Las Vegas, also has released for comment a revised version of last year's proposed RMBS disclosure package, a 135-field package of pool and loan-level information that was designed to be used when RMBS deals are initiated and aimed at allowing investors to more easily compare loans and transactions across all issuers and perform some key loan-level analysis. The ASF said it also has issued a set of recommended data fields for manufactured housing securitizations and addressed issues involving information about modifications, second liens, fraud, the definition of "full documentation" and standard terms and identifiers designed to avoid confusion. Both packages include similar recommendations for file naming conventions and were designed to complement each other.