Servicing

Fitch's latest 12-month forecast for rate recasts on prime and alternative-A credit residential mortgage-backed securities indicates that more than $47 billion of collateral could be affected by rate shock. The forecast pertains to prime and alt-A RMBS slated to convert from interest-only payments to full principal and interest payments. "Sixty-day delinquency rates have risen over 250% in the 12 months following previous recasts for prime and alt-A loans," said Fitch managing director Roelof Slump. He said Fitch's current ratings consider the risks of upcoming IO recasts but mortgage pools with "significant" IO concentrations still could be downgraded "if performance is worse than anticipated."

Invesco Mortgage Capital Inc., Atlanta has priced its public offering of 7 million shares of common stock at $21.25 per share. The transaction will give the company gross proceeds of nearly $149 million. In addition, the underwriters have a 30-day option to purchase up to an additional 1 million shares to cover over-allotments. The offering is expected to close early next week. Invesco, a real estate investment trust that focuses on financing and managing residential and commercial mortgage-backed securities and mortgage loans, expects to use the proceeds to acquire residential and commercial MBS (and loans) on a leveraged basis, and to invest in a public-private investment fund managed by Invesco Advisers Inc. Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. are acting as joint book-running managers for the offering. Invesco's shares have been trading for about $22 each of late.

Jaymes Financial of Virginia is offering a $61 million portfolio of delinquent residential loans -- an auction that is actually a "re-trade" of an earlier sale. Jaymes Financial principal Andy Jaymes declined to identify the seller but noted that the $61 million is part of a $365 million sale of nonperforming loans sold by DebtX of Boston on behalf of the Federal Deposit Insurance Corp. A majority of the package being offered by Jaymes Financial includes Florida condominium loans.

Standard & Poor's Ratings Services has lowered its ratings on 99 classes from six residential mortgage-backed securities transactions. The securities, issued between 2005 and 2007, are backed by U.S. subprime and alternative-A credit mortgages as well as prime credit jumbo loans. S&P said 42 of the 99 classes were on its CreditWatch list for possible downgrades and now have been removed from that list. The credit rating agency also affirmed its ratings on 31 classes from four affected MBS and removed two of the affirmed ratings from its CreditWatch negative list.

Macquarie Research has upgraded Radian Group Inc. - the nation's third largest residential mortgage insurer - to "outperform" from "neutral," saying it expects the company to return to profitability by the second half of 2010. Macquarie analyst Matt Howlett said he sees the Philadelphia-based Radian as not only a survivor "but a leader in an industry poised for a comeback in 2010." Mr. Howlett recently raised the entire mortgage insurance sector to "overweight" from "marketweight." According to the Quarterly Data Report, Radian had $153 billion in "policies-in-force" at the end September, ranking behind MGIC ($216 billion), and PMI ($163 billion). At least two new MI firms are in the process of forming. Radian's shares have been trading at $9 of late compared to a 52-week low of 95 cents and a high of $12.50.

Lenders Asset Management Corp. has launched LAMCO Vendor Management Process, which evaluates, scores and ranks LAMCO-endorsed vendors.LAMCO is an REO management company. LAMCO qualifies new vendors and manages ongoing service provider relationships using the elements of TQRDCEB, a framework developed by Hewlett Packard Co. Vendors are evaluated on technology, quality, responsiveness, delivery, cost, environment and business impact using a scorecard system based on a weighted strength ranking. Service providers are selected as a LAMCO vendor based on their performance within the TQRDCEB system and are routinely evaluated on the same scale to measure performance, identify areas of improvement and promote an environment where the status quo is challenged.

Titanium Holdings Inc. is launching a new business unit, Excellen REO, an REO asset management company that offers a suite of services designed to create a customized property liquidation process for each client. The move will help the Fort Mill, S.C.-based Titanium Holdings, a provider of loss mitigation tools and services, expand client relationships and establish new partnerships. Cary Sternberg is president of the new company. With almost 40 years of experience in asset preservation, management and liquidation, Mr. Sternberg is the former senior vice president of the REO department for American Home Loan Servicing Inc. Excellen REO services include pre-marketing, valuations, marketing and sales negotiation, closing and funding and alternative sales methods. The company will leverage a nationwide network of real estate brokers and local eviction attorneys, as well as property preservation companies.

The inventory of unsold homes in the distressed Las Vegas metro market is at its lowest point in 18 months, according to the Rob Report, a monthly market overview published by luxury real estate broker Rob Jenson of RE/MAX Central. As 2009 drew to a close, there was a 6.1 months' supply of houses for sale in the Vegas-Henderson area. But there was just a 2.8 months' supply if homes under contract but not yet closed are excluded. A total of 10,651 single-family houses are in contingent or pending status, Mr. Jenson reports. Most of the houses on the market at $1 million or less are distressed sales - 10,633 short sales and 4,272 foreclosures out of a total of 18,343. But take-backs are outselling short sales three-to-one, the agent says. In December, 3,071 properties actually changed hands, a 5%, or 151-unit, increase from November. Of those sales, 78% were distressed, including 1,822 foreclosures and 583 short sales.

Fannie Mae beat Freddie Mac by a country mile in the loan modification race by moving borrowers who do not qualify for the government's Home Affordable Modification Program into alternative restructuring plans. Not counting HAMP modifications, Fannie completed 27,700 loan modifications in the third quarter, up 66% from the second quarter. Freddie completed only 9,000 alternative modifications, a 42% decline from the previous quarter. "Freddie has instructed its servicers to fully support HAMP as the primary modification program," said the Federal Housing Finance Agency in its quarterly Foreclosure Prevention and Refinance Report. "While Fannie Mae's primary modification solution is HAMP, it has also focused on putting borrowers who do not qualify for HAMP modifications into other modifications leading to most of this increase in the quarter," said FHFA. The agency's quarterly report does show that Freddie, relative to its size, is more efficient at completing HAMP modifications than its larger competitor. Fannie has completed 11,700 HAMP modifications as of Nov. 30, compared to 10,300 for Freddie.

Approximately 38% of existing home sales in 2009 were distressed sales and 12% were short sales, according to the National Association of Realtors. Foreclosure sales accounted for two-out-of-three distressed sales and the rest were short sales, NAR spokesman Walter Maloney said. The NAR began tracking short sales in October 2008 and by February and March short sales peaked at 18% of sales. Lately, short sales have been averaging 12% to 13% of sales on a monthly basis. In a short sale, the lender or servicer allows the defaulted homeowner to sell the property to avoid a foreclosure. Fannie Mae and Freddie Mac completed 17,400 short sale transactions in the third quarter, up from 4,900 in the same period a year ago. Fannie alone completed 11,100 short sales in the third quarter, compared to 10,400 for all of 2008.