Servicing

Woodward Asset Capital LLC, Southfield, Mich. has launched OfferSubmission.com, a web-based software program geared toward firms that want to sell assets, including mortgages. Woodward is marketing the program to banks, servicers, GSEs, private equity firms and hedge funds.

Colonial BancGroup, the nation's largest warehouse lender, said its chairman and CEO Robert Lowder will retire once Taylor, Bean & Whitaker completes its investment in the bank. Mr. Lowder founded the company in 1981. TBW is a mortgage banking firm based in Ocala, Fla. It is paying two-thirds of the $300 million that will be invested in the Montgomery, Ala.-based Colonial. Until the deal is finalized Mr. Lowder will continue on as chairman, director and CEO of the bank. Under his leadership Colonial completed 68 acquisitions and became the top player in residential warehouse finance.

Jon Daurio, chairman and CEO of Kondaur Capital, a mortgage investing vulture fund, says the closing of a private equity firm that pledged up to $1 billion for his investments will not slow his firm's growth, according to a report published in The Orange County Register. "Not in the slightest," Mr. Daurio told the newspaper. The hedge fund is Pequot Capital Management, which recently said it would close because of an ongoing investigation by the Securities and Exchange Commission. To date, Kondaur has invested about $175 million of the $1 billion pledged by Pequot. Recently, the Irvine-based Kondaur was hit with a final cease and desist order by the state of Georgia for engaging in mortgage broker/lending activities without a license or without first obtaining an exemption. Kondaur is a fast growing non-performing loan investor that hopes to triple its workforce to 900 employees by year-end.

With almost a 50% increase in year-over-year sales, the inventory of unsold existing single-family homes for sale in California has been cut in half, from a 9.8 months' supply in April 2008 to 4.6 months' supply this April, the state's Realtors reported. However, while sales were up 49.2% to a seasonally adjusted rate of 540,360 — the eighth straight month above the 500,000 level — the median price of houses sold in the month declined by more than a third, largely because the majority of sales were at the low-end of the market. "Inventory levels for homes in the under $500,000 segment shrank to nearly three months in April, compared with almost 10 months a year ago, while unsold inventory in the more than $1 million segment rose to approximately 17 months, compared with roughly 10 months in April 2008," says California Association of Realtors President James Liptak. "The dramatic difference in inventory exemplifies how the low end of the market is attracting more first-time buyers and investors, creating a shortage of distressed properties for sale." The median price of existing homes sold in the month was $256,700, a 36.5 percent decrease from the revised $404,470 a year ago. But it was 1.4% greater than March's $253,040 median price. CAR's figures are based on data collected from more than 90 local Realtor associations statewide.

Mortgage insurer Genworth Financial in Raleigh, NC saved more than $2 billion of mortgages from foreclosure in the 12 months ending March 31, 2009, according the company's latest Foreclosure Prevention Scorecard, which tracks quarterly progress of the company's Homeowner Assistance program. Genworth and its servicer partners completed nearly 15,000 workouts nationwide. Of that amount, 89% received a "cure" workout, meaning the borrower was able to save their home and become current on their mortgage. The remaining 11% were able to avoid foreclosure through a "non-cure" workout. The report shows more successful workouts were completed in Florida, Texas and Georgia than anywhere else in the U.S. Over a quarter of the total value of foreclosures prevented was concentrated in those top three states ($218 million in Florida, $149 million in Texas and $111 million in Georgia). Nationally, workouts increased year-over-year by 56%, based on the company's data. Rounding out the top 10 states where workouts occurred were Ohio, Michigan, Pennsylvania, North Carolina, Illinois, New York and Arizona. The report shows that the Southeastern region of the country accounted for one-third ($614 million) of all workouts. Florida and Arizona saw triple-digit increases in workouts while Houston and Miami continue to top the list of the leading cities for workouts. Repayment plans accounted for most workouts with 31%, followed by loan modifications (38%), HomeSaver Advance (18%), short sales (11%) and deed-in-lieu of foreclosure (2%).

The Federal Deposit Insurance Corp. reported a surge in single-family originations by banks that contributed to a rebound in earnings for the first quarter. Commercial banks and FDIC-insured savings institutions reported combined earnings of $7.6 billion in 1Q, down 60% from a year ago, but a definite rebound from the $38.6 billion loss posted in the fourth quarter. FDIC officials attribute the first quarter profit mainly to securities trading by the larger banks. But they noted that an increase in refinancing activity also contributed to revenues. Originations by commercial banks and savings banks totaled $369.7 billion in the first quarter, a 72% gain from the previous period. (The total does not include originations by federally chartered S&Ls, which the Office of Thrift Supervision will report on Tuesday, June 2). The FDIC says 836 banks and savings institutions that are heavily committed to mortgage lending and investing earned $1.4 billion in the first quarter, compared to a $4 billion loss in the fourth quarter.

The Federal Deposit Insurance Corp.'s effort to sell troubled bank loans is facing headwinds, including congressional skepticism about the public-private investment funds that would provide government financing for investors, according to agency chairman Sheila Bair. "We are finding both on the buyer and seller side there continues to be discomfort about Congress' review of this program," Ms. Bair told reporters. There are concerns the Congress "could potentially change" the rules, she added. The FDIC chairman also noted that Congress has passed a housing bill (S. 896) that directs the Treasury secretary to craft conflict of interest rules for the PPIF program. Critics of the program are concerned sellers and buyers of the bad assets could game the system and make large profits at the expense of taxpayers. "Banks will not be able to bid on their own assets," the FDIC chairman said. However, Treasury needs to clarify other aspects of the conflict of interest rules mandated by Congress. FDIC is working on the structure of its 'Legacy Loan Program' that will give banks an opportunity to sell troubled real estate loans to PPIF investors. However, a "test sale" may be delayed. "Obviously there are issues we have to look at and take into consideration," an FDIC spokesman said. FDIC has been working toward sending the first sales packages to investors in June.

Freddie Mac's purchases of refinanced mortgages slowed in April despite the launch of the Obama administration's new program to help borrowers with high loan-to-value ratios refinance into lower cost loans. The mortgage giant purchased $43.3 in refinanced mortgages in April, down from $52 billion the previous month. "We began the purchase of refinance mortgages originated under the program in April," Freddie Mac said in its monthly activity report. "Due to the implementation of this program and recent declines in mortgage interest rates, our refinancing activity will likely remain high." Meanwhile, the serious delinquency rate on Freddie Mac-guaranteed single-family loans continues to rise. Loans 90 days or more past due or in foreclosure rose to 2.44% in April, up 15 basis points from the previous month. Issuance of mortgage-backed securities by Freddie Mac also slowed to $51.1 billion in April from $57.7 billion in March. The company also reported that its mortgage portfolio fell by $36.8 billion to $830.3 billion during April.

Foreclosure starts jumped 27% in the first quarter to 1.33% of all outstanding residential loans as state foreclosure moratoriums expired and it became clear that certain at-risk homeowners couldn't qualify for government-mandated loan modification programs. At year-end the foreclosure start rate was 1.08%. According to figures compiled by the Mortgage Bankers Association, 9.12% of all home mortgages were in some stage of delinquency/foreclosure at the end of March. National Mortgage News estimates that consumers owe $9.585 trillion on their loans which means some $874 billion of residential loans are late. Also, one-quarter of all subprime loans ($188 billion, according to NMN) are delinquent, compared to 21.88% at year-end. MBA chief economist Jay Brinkmann said it is the highest jump in foreclosure starts ever, adding that 40% of starts involve vacant homes. Mr. Brinkmann noted that prime mortgages had the largest share (53%) of foreclosures starts. Also, prime adjustable-rate mortgages (which include option-ARMs and Alt-A loans) had a higher foreclosure start and a higher 90-day delinquency rate than Federal Housing Administration-insured mortgages. Meanwhile, the serious delinquency rate (loans 90 days or more past due or in foreclosure) rose 94 basis points in the first quarter to 7.28%. Compared to the fourth quarter, the seriously delinquent rate on prime loans jumped 96 bps to 4.7%. On subprime loans it jumped 177 bps to 24.9% and on FHA loans it rose 30 bps to 7.37%.

In April 2009 HOPE NOW members and the industry at large modified 127,000 mortgages and completed 143,000 repayment plans totaling 270,000 interventions, "the largest number in any month" since the alliance started to compile data. The foreclosure prevention alliance of mortgage servicers, non-profit counselors, and investors said however that the data should be analyzed keeping in mind the difference between modifications and pre-modifications within the context of the Home Affordable Modification Program. For example, the increase in payment plans compared to March -reflects the HAMP requirement that loans are subject to a three-month-trial period before a modification can be completed. Meanwhile these loans are often reported as repayment plans or trial modifications that later are reported as modifications, often after 90 days. Furthermore April data show the number of 60+ days delinquencies was the same in April as in March at just under 3 million. Also, foreclosure starts dropped by more than 16% from 290,000 in March to 249,000 in April, meanwhile foreclosure sales increased, from 53,000 in March to 65,000 in April. According to HOPE NOW executive director Faith Schwartz, as HAMP continues to be implemented going forward many alliance members see it an opportunity to assist a progressively larger number of homeowners in trouble.