Servicing

Fidelity National Financial Inc., Jacksonville, Fla., has announced the addition of new reporting capabilities and a search feature to its BuyBankHomes.com Web portal on foreclosed properties.The new reporting capabilities enable financial institutions to obtain information on their listed properties, including the number of times a property has been displayed or e-mailed to an interested party. The search feature allows brokers to locate properties that have not been distributed to other brokers or agents, FNF said. The portal can be found at http://www.buybankhomes.com.

The Chicago Federal Home Loan Bank is looking for new ways to fund and capitalize mortgage acquisitions under its mortgage partnership finance program and to resell MPF loans.The changes to the MPF program are part of a new capital and business plan that has been accepted by the FHLBank's regulator. Under the plan, the Chicago bank said it "will explore alternative methods of capitalizing and funding MPF assets including techniques to liquefy MPF assets, creating additional capacity for the bank and other FHLBs." The Chicago bank has used excess or "voluntary" stock to capitalize its MPF loan portfolio. It has to reduce its reliance on voluntary stock as part of the capital plan. The Chicago bank remains committed to the MPF program, according to president and chief executive J. Mikesell Thomas. But MPF assets are expected to remain flat or decline gradually during the capital restructuring period. "Paydowns of existing MPF assets will create capacity for the bank to serve the needs of participating members," the Chicago FHLBank said.

Analysts at Sanford C. Bernstein & Co., New York, have downgraded their ratings on Freddie Mac, Radian Guaranty, and PMI Group.All three are now rated "market perform" instead of "outperform." Analysts Jonathan Gray and Adam Weinrich added that, "There are few mortgage finance stocks that we remain very interested in owning" in a recent report, citing political and economic pressures that might hurt the stocks. The downgrade of Freddie Mac reflects the stock's price, the analysts said. Fannie Mae remains rated "outperform" with a "moderate 20% upside." The analysts also are not keen on the mortgage insurance sector, saying that business growth will be unexciting and that possible home price declines "would terrify investors and damage relative valuations for the MIs."

The Department of Housing and Urban Development has program approval authority over Fannie Mae and Freddie Mac but has rarely denied them any new activities, assistant housing secretary John Weicher told the Senate Banking Committee on Thursday. Mr. Weicher noted that the last time HUD turned down an application for a new GSE activity was in the early 1990s when Fannie Mae tried to launch a product "that seemed to go into the business of making advances" to seller/servicers. The granting of advances is a bread-and-butter activity of the Federal Home Loan Bank system. Mr. Weicher told policy makers that he usually hears word about a new GSE product "when I read about it in a press release." New program activity approval was an important issue in last year's debate over a GSE bill and is likely to be again as the House and Senate try to construct passable legislation. The assistant HUD secretary testified before the panel, highlighting Fannie and Freddie's inability to "lead the market" in affordable housing loans, citing figures published in the Bush Administration's 2006 budget.

Radian Group Inc., Philadelphia, has completed a structured finance transaction to help manage nonprime credit risk that is the second of its kind.The transaction, Smart Home Reinsurance 2005-1 Ltd., was funded through the sale of $98.5 million of credit-linked notes backed by a pool of $1.68 billion of Alt-A mortgages that were insured by Radian. Roy J. Kasmar, president and chief operating officer of Radian, said the nonprime segment of the mortgage insurance market "is profitable, but it also requires a disciplined approach to risk management. Radian's experience in mortgage insurance and structured finance has enabled us to create a risk management solution so that we can continue to take advantage of growing opportunities in the [nonprime] market." The first structured transaction of this kind, Smart Home Reinsurance 2004-1, was completed in August 2004 and involved $882 million of first-lien, nonprime residential mortgages.

Prepayment rates for 30-year Fannie Mae mortgage-backed securities decreased in January, while 30-year Freddie Mac MBS speeds declined even more sharply, according to Bear Stearns.For Fannie 30-year MBS issues, the aggregate prepayment rate decreased by over 21% in January, compared with a decrease of almost 30% for Freddie Mac issues, Bear Stearns analyst Dale Westhoff reported. "Given that mortgage rates were almost seasonally unchanged from December to January, the bulk of the decline in prepayments can be attributed to seasonal declines in housing turnover activity and the reduced refinancing application activity during the Christmas/New-Year holiday season," Mr. Westhoff said. Meanwhile, Ginnie Mae speeds "slowed less than their conventional counterparts in January." Bear Stearns can be found online at http://www.bearstearns.com.

Two classes of Comfed Mortgage mortgage pass-through certificates backed by adjustable-rate mortgage loans have been placed on review for possible downgrade by Moody's Investors Service.The affected classes are: class A of series 1987-01 and class A of series 1988-01. The actions stemmed from weak performance by the underlying loans, which have taken greater-than-expected losses and are expected to continue to do so, Moody's said. The classes have both taken writedowns. Moody's can be found on the Web at http://www.moodys.com.

HomeBanc Corp., the parent company of Atlanta-based HomeBanc Mortgage Corp., has priced a public offering of 9.5 million shares of common stock at $9.10 per share.HomeBanc said it has granted the underwriters an option to buy up to 1.425 million additional shares of common stock to cover any overallotments. The shares are being sold through J.P. Morgan Securities; Friedman, Billings, Ramsey & Co.; A.G. Edwards & Sons; William Blair & Co.; Flagstone Securities; and Jackson Securities. HomeBanc can be found on the Web at http://www.homebanc.com.

The Federal Housing Administration cannot accurately predict losses on the single-family loans it insures or demonstrate its ability to reduce fraud, according to the president's fiscal year 2006 budget request to Congress."FHA will continue current efforts to develop a credit model that more accurately and reliably predicts defaults," a budget document says. The Office of Management and Budget annually predicts FHA claims on loan defaults and foreclosures will decline, but they don't. In the fiscal year 2005 budget proposal, OMB predicted claims would decline to $4.5 billion. Now OMB estimates the claims will total $5.9 billion when the FY 2005 ends Sept. 30. For FY 2006, OMB projects that FHA claims will decline to $5.4 billion.

The Bush administration will continue to push for a federally insured zero downpayment program for borrowers with strong credit histories and a payment incentives program for borrowers with limited or weak credit histories, despite resistance in Congress and concerns about high default rates and costs."To remove two large barriers to homeownership -- downpayment and impaired credit -- the budget proposes two mortgage programs," the president's fiscal year 2006 budget proposals says. The administration proposed the two Federal Housing Administration loan program in last year's budget. Legislation to create the FHA zero down program was approved by a House committee last year but the bill was stopped in its tracks when the Congress Budget Office estimated the new program would incur $125 million in losses annually. However, the President's budget estimates the zero down program would generate $231 million in revenues annually and help over 200,000 families purchase their first home. The payment incentives program, which is essentially a subprime program with higher FHA premiums, did not get any traction in Congress last year.