Servicing

Freddie Mac late last week loosened some of its underwriting guidelines to help lenders better serve homebuyers in disaster areas affected by hurricanes Katrina and Rita.The mortgage investing giant told its seller/servicers that temporary income -- including severance pay and unemployment assistance -- can be used to qualify borrowers as long as their income will "likely" be restored to a level supporting "the long-term obligations" of a mortgage. On a negotiated basis, Freddie also will allow for higher loan-to-value ratios. For Hurricane Katrina victims the changes only apply to mortgages with note rates dated on and after Aug. 30 through Oct. 3. For Rita victims, the eligible note dates are on and after Sept. 25 through Oct. 3. Freddie Mac can be found online at http://www.freddiemac.com.

CUNA Mutual Group, Madison, Wis., has signed a letter of intent to sell most of its mortgage operations to PHH Mortgage, Mt. Laurel, N.J., for an undisclosed amount.News of a possible sale was first reported by National Mortgage News in its Oct. 3 issue. According to a statement released by CUNAMG, PHH will acquire "certain mortgage-related assets, and assume origination, servicing and sub-servicing contracts" for CUNA Mutual Mortgage Corp. Over the past 12 months, CUNA Mutual Mortgage funded $1 billion in residential loans -- mostly through wholesale and correspondent relationships. At deadline time it was unclear who would wind up with CUNAMMC's $11 billion in servicing rights.

Thornburg Mortgage Inc., Santa Fe, N.M., has completed a $140 million issuance of 30-year unsecured junior subordinated notes in a private placement.The notes bear interest at 7.40% for the first 10 years, and thereafter at a variable rate equal to the London interbank offered rate plus 2.65%, Thornburg said. Net proceeds from the transaction will be used mainly to fund mortgage loans originated by the company and to buy additional adjustable-rate mortgage securities, the company said. Thornburg can be found online at http://www.thornburgmortgage.com.

Exposure to properties in Gulf Coast counties affected by Hurricane Katrina totals 0.37% for Bear Stearns private-label prime residential mortgage-backed securities and 1.16% for its subprime RMBS securitizations, according to the company.Bear Stearns said the percentages reflect the outstanding principal balance of deals exposed to properties in counties designated for assistance by the Federal Emergency Management Agency as of Sept. 15. The exposure percentage for private-label prime RMBS is 0.37% for both jumbo and alternative-A deals, Bear Stearns reported. The company can be found online at http://www.bearstearns.com.

Bimini Mortgage Management, Vero Beach, Fla., a real estate investment trust that invests in mortgage-backed securities, has agreed to purchase Opteum Financial Services, Paramus, N.J., a top-40-ranked mortgage banker.The deal, valued in excess of $100 million, includes the payment of Bimini common and preferred stock to Opteum's shareholders, a repayment of existing debt, and a cash earn-out of up to $17.5 million. A privately held company founded by former Chase Home Finance executive Peter Norden, Opteum is on track to fund $7.4 billion in residential mortgages this year. Bimini's adviser on the deal was Deutsche Bank. Classic Strategies, New York, advised Opteum. (See the Oct. 3 issue of National Mortgage News for more details.)

Fannie Mae shares rose 3.5% in morning trading Sept. 29 after falling almost 11% Wednesday in the wake of a critical news report.In heavy trading volume, Fannie Mae shares rose by $1.56 and stood at $43.27 shortly after noon. Almost 11 million shares had traded hands Thursday morning, making Fannie Mae one of the New York Stock Exchange's volume leaders. Dow Jones had published an article online Sept. 28 citing unnamed sources saying that Fannie Mae's accounting scandal might be more widespread than previously reported, touching off Wednesday's selloff of the stock.

Mortgage Guaranty Insurance Corp., Milwaukee, has announced a donation of $119,090 to the American Red Cross for hurricane relief.The amount includes $57,995 donated by MGIC employees, a matching amount from the company, and $3,100 from non-MGIC employees, the company reported. MGIC, the principal subsidiary of MGIC Investment Corp., can be found on the Web at http://www.mgic.com.

Fannie Mae has announced that it will extend the same mortgage relief provisions to victims of Hurricane Rita as it has in place for Hurricane Katrina.Donald M. Remy, a senior vice president and New Orleans native, is coordinating the company's response to the hurricanes. Under the relief measures, lenders make case-by-case assessments of the relief that is needed and may suspend mortgage payments for up to three months and reduce them for up to 18 months. Fannie Mae also announced a special volunteer policy to give employees more time and flexibility to help victims of the two hurricanes. Employees now have five additional days of volunteer leave that can be used exclusively to help with hurricane relief efforts, the government-sponsored enterprise said. Fannie Mae can be found online at http://www.fanniemae.com.

Freddie Mac has announced an easing of certain policies in order to purchase an estimated $300 million in single-family mortgages that were closed between June 1 and Aug. 29 and are secured by properties in areas heavily damaged by Hurricane Katrina.The government-sponsored enterprise said the announcement is aimed at helping lenders with loans in their pipelines that may no longer be eligible for sale because of potential property damage or income loss caused by the storm, even though the lenders complied with Freddie Mac's seller/servicer origination guidelines. The loans will be purchased for Freddie's retained portfolio "to provide lenders with immediate liquidity relief," although none of the loans will be placed into mortgage pools backing Freddie Mac Mortgage Participation Certificates, the GSE said. The purchase offer expires Oct. 31. "By purchasing these loans we can expedite payments to our lenders, who need additional funds for storm recovery activities, while simultaneously protecting the loan pools backing Freddie Mac PCs from Katrina's impact," said Richard F. Syron, Freddie's chairman and chief executive officer. Mr. Syron thanked the GSE's regulators -- the Department of Housing and Urban Development and the Office of Federal Housing Enterprise Oversight -- for "expeditiously reviewing" the policy.

In response to hurricanes Katrina and Rita, HUD will allow Federal Housing Administration servicers to advance up to 12 monthly mortgage payments to homeowners in disaster areas who are temporarily unemployed or who are living in rental housing while their homes are being repaired."It is FHA's equivalent of unemployment insurance that will allow [servicers] to keep mortgagors current who are not able to go back to work," said FHA Deputy Director Laurie Anne Maggiano. The monthly advances will be covered by a note that must be paid off when the property is sold. In addition to making advances, servicers can modify the loan and reduce the monthly payments if the FHA borrower has to accept a lower-paying job. The Department of Housing and Urban Development will be issuing a mortgagee letter soon that spells out the new advance and loan modification policy, Ms. Maggiano told an FHA conference sponsored by the National Real Estate Development Center.