Servicing

Southern California-based REOTrans has launched the RT Certified Agent Program, an online training regimen that educates agents in the REO-sales process. REOTrans has been providing basic training on the use of the workstation free of charge at various industry meetings, but the sessions were constantly overbooked, so the company decided to create an online series of courses. The company offers three levels of certification.

The National Credit Union Administration has approved 'shared appreciation' loan modifications in which a credit union can share in the appreciation of any property for which it refinances a loan. The ruling — which came in a recently issued legal opinion — comes as millions of CU borrowers are at risk of foreclosure and are seeking to refinance their mortgages. Under a proposal emanating out of the Michigan Credit Union League, a member would agree to share any future increase in the home's appreciation with the credit union, in exchange for a reduction of the principal balance of the troubled borrower's outstanding loan. Shared appreciation would be based on a predetermined calculation and occur upon the sale of the property at a future date.

Kondaur Capital of Irvine, CA is working on a deal to buy "several thousand" non-performing mortgages, said company president Jon Daurio. In an interview with National Mortgage News Mr. Daurio declined to say who the seller or sellers might be. The NPL (non-performing loan) investor currently holds about 2,000 mortgages and has the financial capacity to increase its portfolio to 10,000 loans. Even though one of Kondaur's backers (hedge fund Pequot Capital) is closing down some of its funds, Mr. Daurio said Kondaur will not be affected financially. (For the full story see the Monday print version of NMN.)

Because of inaccurate information provided by a Fannie Mae spokesman, a June 9 news brief misstated Fannie's plans for the HomeSaver Advance program. It is only taking on certification and custodial duties; collection agency Dyck O'Neal Inc., Arlington, Texas, will continue to service the unsecured loans.

The newly released Home Data Index from Clear Capital, Truckee, Calif., shows small local areas of price stabilization are appearing even within largely troubled markets such as Cleveland. According to Clear Capital president Kevin Marshall, these data are fueling expectations that there will be more neighborhood-by-neighborhood-based pricing recovery that will renew strategic investor interest in these areas. For example, a specific segment within Cleveland in the index has "returned the first quarter-over-quarter gain since its downturn began in mid-2005, signaling some very specific investment activity," Mr. Marshall said. Another example is Sacramento, one of the hardest hit areas in California, where several of its MSAs are now outperforming not just that region but the national trend as well. In addition, Clear Capital said that although price declines continue across the country, they appear to be slowing down — especially in the Midwest and South. Clear Capital's index report includes a national and regional overview and ranking of the country's 15 highest and lowest performing metropolitan statistical areas. Highlights include quarter-over-quarter price gains of 8.9% in Birmingham, Ala., and 6.7% in Cleveland. The biggest losses were seen in Phoenix, Ariz., (17%) and Las Vegas, Nev. (15.5%).

The downward slide in new home sales in California lessened in April for the third consecutive month, a sign that the state's home builders say is an indication that the market is stabilizing. According to the monthly report from the California Building Industry Association, sales in projects of 10 or more units in April were still 31% below what they were a year earlier. But that's an improvement from the 44% decline registered in March and the third month in a row for that trend. "We're definitely headed in the right direction," said Jonathan Dienhart of Hanley Wood Market Intelligence, Costa Mesa, which compiles the figures for CBIA. "Aggressive pricing by builders and tax incentives seem to be helping stabilize the pace of new home sales despite substantial competition from the resale market in the form of foreclosures." In April, 2,771 new houses and condominiums were sold in the subdivisions tracked by HWMI compared to 3,989 in April 2008. CBIA President Robert Rivinius attributed much of the gain to California's $10,000 tax credit, which is on top of the $8,000 federal tax credit for first-time buyers. More than 8,500 buyers have taken advantage of the state credit since it went into effect March 1, with applications for the credit totaling more than $82.5 million. To date, the state has allocated $100 million for the credit, but the builder group is trying to persuade lawmakers to triple the original outlay.

Many Federal Reserve district banks are seeing an increase in home sales, according to the Fed's Beige Book. "A number of districts reported an uptick in home sales, and many said that new home construction appeared to be stabilizing at very low levels," the Beige Book says. The reporting district banks cited seasonal factors, low interest rates and declining house prices as well as the tax credit available for certain first-time homebuyers. They noted that, "much of the sales increase was found in the lower-priced end of the market." The New York and Cleveland Federal Reserve banks said they saw "strong demand" for refinancings. But the Richmond bank indicated there has been "waning" demand due to rising interest rates. Commercial real estate markets continued to "weaken," the Beige Books says, as rising vacancy rates have been putting downward pressure on rents.

May foreclosures marked the third straight month where the total number of foreclosure filings exceeded 300,000, according to the May 2009 U.S. Foreclosure Market Report from RealtyTrac. Default notices, scheduled auctions and bank repossessions, were reported on 321,480 U.S. properties, a decrease of 6% from April but an increase of nearly 18% from April 2008. "Bank repossessions or REOs were up 2% thanks largely to substantial increases in several states, including Michigan, Arizona, Washington, Nevada, Oregon and New York," said James Saccacio, chief executive officer of RealtyTrac. "We expect REO activity to spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end." The top 10 states accounted for nearly 77% of foreclosure activity. California reported 92,249 properties with foreclosure filings in May, the highest total of any state, up 23% from a year ago. REOs in California were down 1% from April and defaults were down 18%, but scheduled auctions were up 18%. Filings in Florida were down compared to April, but the state still posted the nation's second highest number of properties with foreclosures: 58,931, up 50% from May 2008. Nevada documented 17,157 properties with filings, the third highest total of any state, up nearly 83% from May 2008. A 23% increase in REOs helped push Nevada foreclosure activity up 5% from April. Rounding out the top 10 were Arizona (16,865), Michigan (13,891), Ohio (11,360), Illinois (10,942), Georgia (10,516), Texas (9,813) and Virginia (5,385).

The average weekly Freddie Mac rate for a 30-year fixed rate mortgage has risen to a seven-month high of 5.59%, up from 5.29% the previous week but down from 6.32% a year ago. Last time the 30-year rate was that high was the week of Nov. 26, 2008, when it was 5.97%. The 15-year FRM rate was 5.06%, the highest it has been since the week of Dec. 11, 2008 when it averaged 5.20% and up from 4.79% the previous week. But the 15-year rate still remained lower than it was a year ago, when it was 5.93%. The average rate for five-year hybrid Treasury-indexed adjustable-rate mortgages was even higher than the rate for 15-year product at 5.17%, up from the previous week's 4.85% but down from 5.51% a year ago. The average rate for one-year Treasury ARMs was 5.04%, up from the previous week's 4.81% and down just slightly from 5.09% a year ago. Points for 30- and 15-year FRMs, as well as for one-year Treasury ARMs, averaged 0.7. Points for five-year hybrid Treasury ARMs were 0.6.

The Department of Housing and Urban Development has suspended three lenders from originating Federal Housing Administration single-family loans while the agency completes investigations of their lending practices. HUD's Mortgagee Review Board placed Golden First Mortgage Corp. of Great Neck, N.Y., Great Country Mortgage Bankers, Inc. of Coral Gables, Fla., and Beneficial Mortgage Corporation of San Juan, P.R., on suspension. The board cited Golden First Mortgage and Beneficial Mortgage for failing to notify HUD of investigations of their operations by other regulators. Golden First Mortgage's president David Movtady is the subject of an Office of Thrift Supervision investigation, HUD said. Mr. Motvady, who is also the chairman of Golden First Bank, a $27.4 million-asset thrift, said the OTS allegations are "unfounded" and he continues to contest them. However, Golden First Mortgage has surrendered its FHA license and will suspend lending operations "until further notice," he said. Beneficial Mortgage failed to notify HUD of an investigation and sanctions imposed by the Puerto Rico commissioner of financial institutions, including revocation of license to originate mortgages, HUD said. In an audit of Great Country Mortgage Bankers, HUD said it discovered multiple violations of FHA requirements, including failure to ensure that employees worked exclusively for GCMB; failure to disclose business affiliations between GCMB and real estate and title service providers; and failure to properly verify key credit information in 55 FHA-insured mortgage loans. Executives from Beneficial Mortgage and GCMB did not return phone calls.