Servicing

Lend America, Melville, N.Y., is further expanding its growing servicing efforts by launching a Fannie Mae servicing initiative. The retail lender, which produced over $450 million in new originations during the first quarter of this year, now expects it will be a $1 billion servicer by the end of the second quarter and a $2 billion servicer by year-end. Chief business strategist Michael Ashley said the $2 billion figure represents a 33% increase from the company's previous forecast. Lend America also is a Ginnie Mae servicer and already more than doubled its servicing portfolio in the first quarter 2009 to over $500 million compared to $223 million as of Dec. 31, 2008.

Home values will continue to suffer through year-end 2010 with most metropolitan statistical areas facing an increased risk of lower prices, according to a new report issued by PMI Mortgage Insurance, Walnut Creek, Calif. PMI says 21 of the nation's 50 largest MSAs "are now in the highest risk category, signifying the highest probability of lower house prices by the end of the fourth quarter of 2010" relative to year-end 2008. But there could be some good news, PMI says: 212 MSAs have a "minimal-to-low risk of lower prices in two years." (The U.S. is divided into 381 MSAs.) PMI, the nation's second largest MI as measured by policies-in-force, published its findings in its "First Quarter 2009 Economic and Real Estate Trends Report."

A slight pickup in non-agency residential mortgage-backed securities prices has been seen in response to the government's latest Public-Private Investment Plan and Term Asset-Backed Securities Loan Facility initiatives, but a fair amount of pessimism linked to other issues persists in the market. There has been a pickup in nonagency RMBS and commercial MBS prices as a result of the PPIP and TALF moves that has been more muted on the RMBS side, said Ron D'Vari, chief executive officer and founder of the New York-based New Oak Capital, confirmed on Tuesday. But the gains have not reversed recent declines from uncertainty about government modification and cramdown plans, he said. Non-agency MBS have risen on average about two to four points in price over the last few days due to some optimism that the government is working to bring transparency and liquidity back to the market, Frank Pallotta, executive vice president at Loan Value Group, Rumson, N.J. said Tuesday. However, economic concerns persist, he said. "Nothing is fundamentally different [economically]," said Mr. Pallotta. "I don't think this is a bottoming out."

Thornburg Mortgage Inc., Santa Fe, N.M., has made plans to discontinue operations after winding down through a bankruptcy filing and a series of asset sales and liquidations, ending a struggle to survive the non-agency liquidity crisis that started in 2007. Remaining assets are slated to be sold or liquidated with the assistance of Houlihan Lokey Howard & Zukin Capital Inc. The company already has agreed to transfer its mortgage servicing rights, which were granted to certain Wall Street firm counterparties as security for TM's obligations under their respective financing agreements. The counterparties are JPMorgan Chase Funding Inc. (formerly Bear Stearns Investment Products Inc.), Citigroup Global Markets Ltd., Credit Suisse Securities (USA) LLC, Credit Suisse International, Greenwich Capital Markets Inc., Greenwich Capital Derivatives Inc., The Royal Bank of Scotland plc and UBS AG. The counterparties have agreed to grant the company additional forbearance from demanding payment on deficiency claims under their various financing agreements through April 30, or earlier if certain events occur. But in exchange for the continued forbearance TM has agreed that the remaining counterparties who have not previously taken possession of their collateral under their respective financing agreements may do so at their discretion. The company said it will not be able to make certain senior subordinated notes payments but has a 30-day grace period before it defaults on these. It does not expect to file its 10-K annual report with the Securities and Exchange Commission. Thornburg Investment Management, which is co-located with TM and has the same chairman as TM, is a separate legal entity and said it would not be affected by TM's situation.

Sen. Jon Kyl, R-Ariz., is urging bankers to stand firm and not compromise on cramdown legislation because Senate Democratic leaders don't have the votes to pass it. "There is no reason to concede on cramdowns when you have the votes to stop it," the high-ranking Senate Republican told the American Bankers Association government affairs conference. Sen. Kyl stressed that all 41 Senate Republicans, as well as a handful of Democrats, oppose cramdowns, which would allow bankruptcy judges to reduce the principal amount of a residential mortgage to the fair market value. "You are well aware that such a change to the bankruptcy code would result in higher interest rates for all home mortgages — actually what we don't need now," Sen. Kyl said. Sen. Richard Durbin, D-Ill., has tied a cramdown bill to legislation that increases the Federal Deposit Insurance Corp.'s borrowing authority. ABA members are hoping the Senate will pass the FDIC bill soon. Sen. Kyl assured the bankers the FDIC borrowing bill "enjoys wide bi-partisan support" and the Senate can pass it without the cramdown provisions. "We will stand by you. We have the votes to defeat cramdown," Sen. Kyl said.

Colonial BancGroup, the nation's largest warehouse provider, has received a $300 million capital commitment from mortgage banker Taylor, Bean & Whitaker and other investors, an infusion that will aid in the bank's near-term survival. Described as the lead investor in the deal, TBW is also a warehouse lending customer of Colonial's. The deal was announced late Tuesday afternoon and no other details were released concerning the other investors. Based in Ocala, Fla., TBW is a privately held S&L holding company. According to the Quarterly Data Report, TBW is the nation's eighth largest lender overall and second largest wholesaler. The Alabama-based bank needs to raise $300 million in private equity before it can become eligible for $550 million in Federal TARP funds. According to a statement released by the bank, TBW's investment is contingent upon the Treasury agreeing to infuse the $550 million into Colonial. Once the deal is completed the investor group led by TBW will control 75% of the Alabama bank. On Tuesday, National Mortgage News reported that Colonial had been approaching "mortgage banking companies" about being part of the investor group.

Colonial BancGroup, the nation's largest warehouse provider, has received a $300 million capital commitment from mortgage banker Taylor, Bean & Whitaker and other investors, an infusion that will aid in the bank's near-term survival.Described as the lead investor in the deal, TBW is also a warehouse lending customer of Colonial's. The deal was announced late Tuesday afternoon and no other details were released concerning the other investors. Based in Ocala, Fla., TBW is a privately held S&L holding company. According to the Quarterly Data Report, TBW is the nation's eighth largest lender overall and second largest wholesaler. The Alabama-based bank needs to raise $300 million in private equity before it can become eligible for $550 million in Federal TARP funds. According to a statement released by the bank, TBW's investment is contingent upon the Treasury agreeing to infuse the $550 million into Colonial. Once the deal is completed the investor group led by TBW will control 75% of the Alabama bank. Yesterday National Mortgage News reported that Colonial had been approaching "mortgage banking companies" about being part of the investor group.

Single-family homes in January continued to see broad based declines in pricing across the U.S. with 13 of the 20 largest metro areas showing record rates of annual decline, and 14 reporting declines in excess of 10% compared to the same month last year, according to the new Standard & Poor's S&P/Case-Shiller Home Price Index. "Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and nine of the MSAs falling more than 20% in the last year," said David M. Blitzer, chairman of the index committee at S&P. Seven metro areas reported declines in excess of 4% in January. Phoenix had the worst decline with -5.5%. On a marginally positive note, S&P/Case said Cleveland, Los Angeles and Las Vegas are reporting a relative improvement in year-over-year returns, in terms of lesser rates of decline than last month's values. The two worst performing cities, in terms of annual declines, were Phoenix (-35%), and Las Vegas (-32.5%). Dallas, Denver and Cleveland fared the best in terms of annual declines, falling 4.9%, 5.1% and 5.2%, respectively.

Prior to the recent sale of the government-owned IndyMac FSB to an investor group, Fannie Mae settled a $1 billion-plus buyback dispute with the thrift but all the parties involved are keeping the settlement secret.Representatives from IndyMac's new owners (Dune Capital), the Federal Deposit Insurance Corp., and Fannie all confirmed that the dispute was settled but have declined to say on what terms. A source familiar with the matter said the amount of loans Fannie wanted IndyMac to repurchase totaled about $1 billion. Loan buyback requests typically come about when a buyer of mortgages discovers that the portfolio acquired has early payment defaults or higher-than-anticipated delinquencies.

Colonial BancGroup, the nation's largest warehouse provider, is talking to an investor group that includes some of its mortgage customers about supplying much-needed capital to the bank, a source familiar with the matter told National Mortgage News. The Alabama-based bank needs to raise $300 million in private equity before it can become eligible for $550 million in Federal TARP funds. The source, requesting anonymity, said Colonial is approaching "mortgage banking companies" about being part of the investor group. The Wall Street Journal reported that non-bank lender Taylor Bean & Whitaker, Ocala, Fla., is part of that group and that TBW has a thrift affiliate that would be part of the deal. The newspaper says that the plan would be to convert Colonial from a commercial bank into a thrift. At press time officials from both Colonial and TBW declined to comment or had not returned telephone calls about the matter.