Servicing

Steps forward in preserving homeownership combined with macro-market environment improvements suggest the future performance of mortgage loan modifications will depend more on differences in servicer-level performance, according to one forecast.

Servicing quality "will be increasingly important," Barclays Capital analysts said.

Industry examples such as SPS, Wilshire and NatCity modifications that have lower-than-average redefault rates, compared to Countrywide modifications that feature higher-than-average redefault rates illustrate that apprehension.

The expansion of the positive effect of government sponsored loan modifications into the non-governmentally sponsored modifications may also expand their impact --however marginal-- on the housing market recovery.

Insiders expect new expansions to the guidelines on modifications that are not sponsored by the Home Affordable Modification Program or other government options will help additional borrowers and the overall mortgage market.

Moody's analysts maintain these types of loan modifications, along with loss mitigation programs that preclude foreclosures can help preserve borrowers' credit scores and positively impact the housing market recovery in times when stricter credit requirement standards and lending criteria.

Mortgage Banking Solutions of Texas is launching a new service to help residential lenders fight loan buyback requests.

A new government report says delinquencies on permanent HAMP loan modifications that are six months old are much lower than servicers' proprietary loan modification programs.

Tom Wind, CEO of Aurora Loan Services, once the premier mortgage banking arm of Lehman Brothers, is expected to step down from the lender/servicer some time this summer, according to officials familiar with the situation.

Some commercial real estate niche firms are following in the footsteps of their residential real estate counterparts that are keeping up with changing loss risk mitigation needs through partnerships.

Marcus & Millichap Real Estate Investment Services of San Francisco formed a strategic alliance with Property Sciences, a national real estate appraisal and consulting company based in Pleasant Hill, Calif., in an effort to expand the range of portfolio valuation services it provides to lenders and servicers.

"The recent alliance gives lenders the opportunity to analyze and evaluate their commercial real estate portfolios using a new suite of hybrid valuation tools," says Property Sciences vice president Andrew Mekjavich.

Even though mortgage bankers are still enjoying the steepest yield curve in years, lenders saw their average profit per loan fall to $606 in the first quarter, a 40% drop from the same period last year, according to new figures released by the Mortgage Bankers Association.

Mortgage buyers are finding new reasons to make the originators buy back home loans, ensuring that repurchases will remain a burden for lenders for the next few years.

Over the past year, the number of states with programs offering foreclosure mediation has nearly doubled, from 11 to 21, according to the Center for American Progress.

A group of investors led by Residential Credit Solutions, New York, agreed to pay 37 cents on the dollar for an $898 million pool of nonperforming residential loans offered by the Federal Deposit Insurance Corp.