Servicing

PHH Corp., Mt. Laurel, N.J., has rescheduled an investor call on its corporate "transformation initiative" until next Tuesday due to blizzard conditions in the mid-Atlantic. A top-10 ranked lender/servicer, PHH said the transformation initiative is centered on making it a "more successful, more efficient and more customer-focused company." PHH Mortgage is one of the largest private-label lender/servicers in the United States. Jerry Selitto, president and CEO, will host the conference call along with Mark Danahy, EVP in charge of mortgages, and others.

The Federal Deposit Insurance Corp. is pushing back its plan to securitize troubled mortgage assets into the second quarter, according to officials close to the situation. "It's still very much in process," said one source speaking on background, "but it won't happen in the first quarter." The FDIC recently confirmed that it is working on securitizing certain mortgage assets but has offered little guidance to date. The agency and some of its advisors are exploring ways to issue bonds backed by troubled residential loans that are subject to "loss sharing" agreements. There also has been talk in the market place of FDIC doing a "re-REMIC" of outstanding MBS or ABS. At press time, a telephone call to the FDIC's press office had not been returned. The federal government was officially closed for business Wednesday because of a snowstorm.

PHH Corp., Mt. Laurel, N.J., said it will hold an investor call on Wednesday afternoon to provide an update on its previously announced "transformation initiative." No further details were available at press time. PHH's largest corporate share holder is Black Rock Financial, New York. Its mortgage unit ranks among the top ten in both lending and servicing, according to the Quarterly Data Report.

GMAC Financial Services says it remains committed to its Ditech brand, even as it shifts most of its Costa Mesa, Calif. operations to Fort Washington, Pa. GMAC said Ditech, "was not performing up to expectations in its previous configuration." By being moved to Fort Washington, GMAC hopes to gain efficiencies by sharing common infrastructure with Ditech and GMAC Mortgage. A GMAC spokeswoman said there are 269 employees affected by the move, including 119 loan officers that have been let go. All new applications are already being handled in Fort Washington. Another 150 back office employees remain working out of Costa Mesa for the next 60 days to clear the pipeline of loan originations generated before the announcement. There will be approximately 30 employees left at Costa Mesa to support mortgage servicing. During the heyday of subprime and home equity lending, Ditech was known for its marketing prowess and cable TV ads. In a statement GMAC said it would continue to support Ditech "with a dynamic mix of marketing and advertising designed to reach its target customers, and this mix may include direct marketing, digital advertising and more traditional forms of advertising such as television spots."

Wells Fargo & Co. is actively marketing a $416 million portfolio of nonperforming payment option ARMs — legacy loans it inherited when it bought Wachovia Corp. last year. According to one investor familiar with the offering, some of the mortgages have loan-to-value ratios of up to 105%. He also said Wells, initially, is asking 70 cents on the dollar for some of the pools. A hedge fund manager, requesting anonymity, said he is reviewing the Wells offering and thinks eventually it could sell for 40 cents on the dollar. He described the portfolio as "not very good." A spokesman for Wells confirmed to National Mortgage News that the portfolio is out in the market, but declined to provide specifics. (For the full story see the weekly paper edition of NMN.)

Select Portfolio Services, Salt Lake City, has agreed to pay roughly 77 basis points for an $11 billion package of jumbo servicing rights belonging to the bankrupt Thornburg Mortgage. According to a new Securities and Exchange Commission filing by Thornburg, PennyMac — the vulture fund managed by former Countrywide president Stanford Kurland — came in second and was declared the "back-up" bidder. SPS, a subsidiary of Credit Suisse, ranks first among all subprime subservicers in the nation, according to figures compiled by the Quarterly Data Report. In agreeing to buy the Thornburg receivables for roughly $85 million, SPS said it would continue to use Cenlar as the subservicer of the loans. At press time, both SPS and PennyMac had not returned telephone calls about the auction. Interactive Mortgage Advisors was the investment banker on the deal. Thornburg filed for Chapter 11 bankruptcy protection in early 2009. A publicly traded REIT, it was once one of the largest lender/servicers in the jumbo and "super" jumbo market.

Equity National has released PACEplus, a predictive valuation tool intended to combine data and human analysis to ensure a more accurate measurement of a distressed property's true market value. Specifically, PACEplus combines quantitative data collection and analysis with human evaluation. The tool uses public and private housing, economic, and market data. The human element is still present, however, as this information then undergoes analysis, combining expert human review and field data collection, a questionnaire and photos.

Senate Banking Committee chairman Christopher Dodd, D-Conn., said his talks with the ranking committee Republican have reached an impasse and he wants to move ahead with financial regulatory reform legislation. "While I still hope that we will ultimately have a consensus package, it is time to move the process forward. I have instructed my staff to begin drafting legislation to present to the committee later this month," Sen. Dodd said. The chairman wants to strengthen consumer protections and supports the Obama administration's proposal to create a separate agency to protect consumers from abusive mortgage lending and credit card practices. Sen. Richard Shelby, R-Ala., opposes a separate agency that would strip the federal banking regulators of their consumer protection function. "I fully support enhancing both consumer protection and safety and soundness regulation. I will not support a bill that enhances one at the expense of the other, however," Sen. Shelby said. The Alabama senator said he hopes to reach bipartisan agreement in other areas, including derivatives regulation and corporate governance. "I remain willing to work with Chairman Dodd to see whether that is possible," Sen. Shelby said. Despite the impasse, Sen. Bob Corker, R-Tenn., said he would continue to work with Sen. Mark Warner, D-Va., on a bipartisan approach to dealing with the failure of large financial institutions and other systemic risk issues. "Chairman Dodd has assured us that our work will be included in the bill," Sen. Corker said.

U.S. prime jumbo delinquencies have been climbing and could be as high as 10% as early as next month, according to Fitch. In January, 60-plus day prime jumbo delinquencies rose to 9.6%, up from 9.2% in December. "The new year has brought no relief from declining jumbo loan performance," said Fitch managing director Vincent Barberio. Serious delinquencies have been climbing for 32 consecutive months and even those underwritten before 2005 are starting to show some potential strain, Fitch said. Although only 5% of prime jumbo senior residential mortgage-backed securities classes have been downgraded, about 40% have a negative rating outlook due to weakening collateral performance.

Lenders originated $86.1 billion in FHA-insured single-family loans in the fourth quarter, up 21% from same quarter in 2008. The Federal Housing Administration reported that 60% or $51.8 billion of the endorsements involved home purchase loans during the final quarter of calendar year 2009. Meanwhile, FHA insurance-in-force grew by 24% during in the calendar year to $752.6 billion as of Dec. 31. But the percentage of singe-family loans 90 days or more past due grew by 34%. FHA ended the year with a 9.12% default rate, up from 6.82% at yearend 2008. Housing officials are raising the FHA upfront mortgage insurance premium 50 basis points to 2.25% this April to cover rising claims and losses. Foreclosures involving FHA-insured loans totaled 20,650 in the fourth quarter, up 41% from the same quarter in 2008. The use of short sales to avoid foreclosure shot up 140% from a year ago to 2,925 in the fourth quarter of 2009.