Servicing

National home prices tracked monthly by Integrated Asset Services LLC's IAS360 House Price Index have ceased falling and stabilized for the first time in 10 months. For the nation as a whole, the index found virtually no change in prices between April and March. The index last registered a month-to-month increase in prices in June 2008 when they rose 0.16%. Since that time home prices nationally have dropped by 13.3%. Within the country's four main regions, only the South saw a slight decline of 0.3% in the latest month-to-month period. Prices in the Northeast jumped the most, at 0.6%, while prices in the Midwest inched up by 0.1% and prices in the West remained stable. "It's too soon to call this a turn in the housing market, particularly given all the political and regulatory uncertainties," said Dave McCarthy, president and chief executive officer of Integrated Asset Services, Denver. "I think that we're still in for some difficult spells ahead, but we are seeing a certain kind of pricing equilibrium in several important markets. That's encouraging for the long term."

Sen. Jack Reed, D-R.I., and 14 other Democrats are urging HUD secretary Shaun Donovan to get tough on servicers that are not responsive to troubled homeowners who need assistance. In a letter to the HUD secretary, the senators cite a recent NeighborWorks America study that found homeowners who reach out for help have to wait (on average) 45 to 60 days for a servicer to respond. "What steps are you able to take to address the concerns raised by our constituents who are unable to access answers or adequate help from servicers? Are there further legislative tools that you require to address this problem, or to meet the broader needs of struggling homeowners?" the June 9 letter says. At press time HUD officials had not commented on the Reed letter. However, Treasury deputy assistant secretary Seth Wheeler told a fair housing conference on June 8 that servicers are required to increase their capacity when they sign up to do loan modifications under the Making Home Affordable program. The Treasury will be tracking their results. "We will have a very frank dialogue about what kind of staffing is realistic," Mr. Wheeler said.

Fannie Mae is bringing the servicing of its 'HomeSaver Advance' program in-house — just weeks after it was revealed that re-defaults on HSA loans are nearing 70%. The government-sponsored enterprise has been using Dyck O'Neal Inc., an Arlington, Texas, collection agency, to service the advances, which are unsecured loans of up to $15,000 that cover past-due amounts on a mortgage. But in a notice to lenders last week, Fannie said that beginning June 9, it will take over the certification, billing and collection on these loans. Brian Faith, a spokesman for the GSE, said that it reviewed its "overall approach to implementing the HSA option and has reorganized some functions in-house versus outsourced." Despite the change, Dyck O'Neal will remain "a valued vendor partner" for other programs, Mr. Faith said. Dyck O'Neal did not return a call seeking comment. Fannie launched the advance program in February of last year to help homeowners catch up with mortgage payments and allow the GSE to avoid the expense of purchasing nonperforming loans out of securitized pools.

Francis Creighton, a top lobbyist for the Mortgage Bankers Association, is departing the trade group to take a job on Capital Hill, National Mortgage News has learned. A source familiar with the matter said Mr. Creighton, a vice president who is MBA's top liaison with elected officials, has accepted a chief of staff position with Rep. Chris Murphy, D-Conn. He informed the trade group of his plans last Friday. He will officially depart MBA within a few weeks. Mr. Creighton was promoted to VP in late 2006. He previously served as director of government affairs for MBA. During his career he also worked as a legislative director to Rep. Steve Israel of New York.

Servicing company employees involved in foreclosure prevention and loan modifications are "understaffed and overworked," according to a survey of housing counselors by NeighborWorks America, a quasi-governmental entity that trains counselors. The most common complaint by counselors involves lengthy response times by servicers. After formulating a workout proposal for a troubled homeowner, some counselors (17%) said it can take servicers 45-60 days to respond. Mortgage Bankers Association vice president Michael Fratantoni said servicers are hiring for open positions. "We are hearing they are having trouble getting qualified personnel," he said. Counselors also note in the survey that servicers repeatedly lose faxes or mailed documents and they end up talking with different representatives each time they call. The NeighborWorks semi-annual report to Congress points out that only 6% of homeowners who receive counseling lose their home in a foreclosure — 74% are still in their homes and 20% sold their homes in a short sale or negotiated a deed in lieu that transfers the property to the lender. Nearly 60% of homeowners seeking counseling pay more than 50% of their income toward housing costs. Nearly half (49%) of homeowners seeking help have lost their job, up from 41% in the previous six-month period ending October 31. "Only 7% reported they were in default because their loan payment increased," the semi-annual report says.

GMAC Financial Services has named Jeff Lemieux, a hedge fund executive, senior vice president of fee based servicing. Mr. Lemieux comes to GMAC's mortgage division, Residential Capital Corp., from Cerberus Capital Management, where he oversaw the hedge fund's investment in mortgage and consumer assets. (Cerberus owns part of GMAC.) At ResCap he replaces Tom Donatacci who left a few months ago to work for Clayton Holdings, a due diligence and outsourcing firm. Mr. Lemieux will report to GMAC Mortgage president/ResCap chief operating officer Tony Renzi. He will be based in the firm's Carlsbad, Calif. office. GMAC's fee based servicing unit provides subservicing, private label and other services to third-parties. During Mr. Lemieux's career he also has worked at New Century Financial Corp., Irvine, Calif., a now defunct subprime lender/servicer.

National Asset Direct Inc., San Diego, has acquired United Residential Lending LLC, Scottsdale, Ariz., a Federal Housing Administration, agency and jumbo lender that does business in 18 states. Terms of the deal were not announced. NAD is a service provider to purchasers of performing and distressed residential mortgage loans and assets; among its subsidiaries are iServe Servicing Inc., iServe Real Estate Operations Inc. and iServe Mortgage Co. Inc. United Residential is being renamed iServe Residential Lending LLC, with its co-founder and chief executive Gary Willis remaining onboard as chief operating officer and co-founder Doug Wilson remaining as chief financial officer. A spokeswoman for NAD said United Residential is being integrated as a separate unit to maintain the FHA approvals and state licenses that it holds. Company executives at NAD said the deal takes it from its roots focused on loss mitigation and asset disposition strategies to being able to offer a full spectrum of lending, refinancing, servicing and real estate disposition services.

Servicers participating in the Obama Administration's loan modification program are required to collect "detailed" racial information to make sure the program is reaching minority communities that were targeted by subprime lenders. The 14 servicers participating in the Making Home Affordable program have agreed in their contracts to collect "very detailed information on race and other characteristics," HUD secretary Shaun Donavan told a the National Fair Housing Alliance. The information will allow "us to monitor and ensure that the solution is impacting the communities that were disparately targeted," the secretary said. The Department of Housing and Urban Development secretary noted that 60% of all loans in African-American communities were subprime in 2005.

New mortgage insurance policies written by the nation's seven MI firms fell by 66% in the first quarter to just $25.4 billion, according to figures compiled by National Mortgage News and the Quarterly Data Report. The poor showing, in part, reflects the huge demand for government insured loans, including FHA and VA-backed product. One MI, Triad Guaranty of Winston-Salem, N.C., did not write one new policy during the quarter, but that firm is in self liquidation mode. At the end of March the MI industry had outstanding policies on $1.04 trillion in home mortgages, or 12% of all outstanding mortgages in the U.S. Over the past 12 months there has been no growth in the policies-in-force number, according to NMN/QDR. The PMI Group, San Francisco, ranked first in policies written with $6.47 billion in 1Q.

Two-thirds of the AAA-rated private-label MBS purchased by Fannie Mae and Freddie Mae have been downgraded to "junk," the GSEs' regulator told a congressional panel, and only a small portion is still rated AAA. Federal Housing Finance Agency director James Lockhart told a House Financial Services subcommittee the two government sponsored enterprises have $171.3 billion in PLS backed by Alt-A, subprime and other mortgages in their investment portfolios. Only 3% remain AAA and not on downward watch, Mr. Lockhart said. Another 11% remain AAA-rated but are on downgrade watch as of May 28. Meanwhile, 68% of the private label-MBS has been downgraded below investment grade, which is sometimes referred to as "junk" bonds. An additional 17% has been downgraded but remain investment grade, according to FHFA. "There is no doubt [the credit rating agencies] failed" in rating these securities," Mr. Lockhart said at the June 4 hearing. "We need to reform the rating agencies and we need to get them back to rating and not consulting and getting fees for structuring bonds," he said. Impairments on the MBS resulted in Fannie recognizing $6 billion in losses in the first quarter and Freddie recognizing $7 billion in losses.