Servicing

Mortgage Contracting Services, a provider of property preservation and inspection services based in Tampa, Fla., has named Michele Struckman as assistant vice president of Tampa operations and Tracy Hager vice president of the company's Dallas operations Ms. Struckman and Ms. Hager join MCS with more than three decades of combined experience in the financial services industry. As assistant vice president of operations, Ms. Struckman is responsible for creating and implementing property preservation strategies, as well as leading operations for one of the company's largest servicing clients. Ms. Struckman was most recently with Countrywide Home Loans, where during her tenure, she worked as a foreclosure manager. In her position as vice president, Ms. Hager leads operations for the company's Dallas office, providing leadership through the day-to-day account team. Prior to joining MCS, Ms. Hager worked as vice president at First American Field Services.

Credit Union National Association officials are saying they support a possible Senate compromise on bankruptcy cramdown legislation, but they continue to oppose a bankruptcy bill that the House of Representatives is slated to vote on this Thursday (Feb. 26). "Senators Evan Bayh (D-Ind.) and Arlen Specter (R-Penn.) appear to agree with the approach that CUNA has advocated for over a year now," a top CUNA official told credit union executives at their annual legislative conference. He noted the two senators are working on a bill that would limit the "scope, application and duration" of bankruptcy mortgage relief. But the bill approved by the House Judiciary Committee, which allows judges to reduce or cram down the principal amount of a residential mortgage, would encourage everyone who has a mortgage to game the system. "The good mortgages you made shouldn't be subject to cramdown," he said.

After earning a profit in the third quarter, Radian Guaranty Inc., Philadelphia, lost $250.4 million in the fourth quarter, an improvement over last year's 4Q loss of $721 million. For all of 2008 the insurer lost $410.6 million ($5.12 per share), versus a loss of $1.3 billion ($16.22 per share) in 2007. In the fourth quarter Radian's mortgage insurance business posted a net loss of $77.0 million, compared to a loss of $336.6 million in the same period one year prior. For the year, the mortgage insurance business lost $784.7 million compared to $695.4 million in 2007. In the fourth quarter Radian wrote $5 billion of primary new insurance, most of it through its flow channel. In the same quarter of 2007, it wrote $13.6 billion of new insurance, $10.4 billion of which was flow. For all of 2008 it wrote $32.5 billion in new MI, compared to $57.1 billion the year before.

Home prices fell 18.2% in the fourth quarter, retreating to their 2003 levels, according to the newly released Standard & Poor's/Case-Shiller housing price index. "This is the steepest rate of decline we have seen," S&P managing director David Blitzer told reporters. The December HPI report shows that average house prices are down 26.7% since the peak in the second quarter of 2006. Wellesley College professor Karl Case noted that Case-Shiller data includes auction sales, which is one reason the index shows steeper price declines than other indexes. "There are very few, if any, pockets of turnaround that one can see in the data," said Mr. Blitzer. However, Boston, Denver, Los Angeles, San Diego and Washington D.C. showed a relative improvement in lesser rates of decline.

Bank of America has decided to combine the wholesale and correspondent lending divisions of Countrywide Home Loans into one unit, placing executive Doug Jones in charge of both. Mr. Jones also will oversee warehouse lending for the bank, said a company spokesman. Todd Dal Porto, executive vice president in charge of wholesale, was named retail sales executive in charge of the Western U.S. In late April the Countrywide Home Loans brand will disappear entirely, replaced with Bank of America Home Loans, which will incorporate all residential lending for BoA and the old Countrywide franchise. BoA bought Countrywide Financial Corp., the parent of CHL, in July of last year. Prior to the purchase, BoA had ceased funding loans through wholesale and correspondent means, but so far has vowed to remain in these third-party lending channels, which Countrywide routinely dominated along with Wells Fargo & Co.

FHA lenders would be reimbursed for losses on any cramdowns under a housing bill pending in Congress. The bankruptcy bill recently approved by the House Judiciary Committee raised concerns that lenders of FHA and Department of Veterans Affairs guaranteed mortgages could suffer losses if a mortgage is crammed down. The housing bill (H.R.1106) that the House of Representatives is slated to vote on this Thursday allows FHA and VA lenders to cover lender losses (principal and interest) due to a bankruptcy cramdown. Despite these changes, the mortgage industry continues to oppose passage of the bankruptcy section of the housing bill. H.R. 1106 also provides legal protections for servicers that engage in loan modifications.

Expecting another big year for the FHA single-family insurance program, House appropriators are increasing the agency's commitment level to $315 billion, a 70% improvement from last year. Lenders originated $171.8 billion in Federal Housing Administration loans in FY 2008, which ended September 30. In the first quarter of FY 2009, FHA single-family endorsements totaled $71.9 billion, compared to $21.4 billion for the same period a year earlier. The House of Representatives is slated to vote on an omnibus appropriations bill this Wednesday (Feb. 25) that increases commitment levels for the Government National Mortgage Association and FHA. Meanwhile, appropriators have allotted the HUD Inspector General an extra $13 million to keep a closer watch on FHA, focusing on new programs, including the 'Hope for Homeowners Now' initiative which helps consumers refinance their underwater mortgages. On Thursday, the House is expected to vote on a bill (H.R. 1106) to make the H4H program more attractive to borrowers and servicers. H.R. 1106 also includes provisions to allow bankruptcy cramdowns, shield servicers engaged in loan modifications from investor lawsuits, and bolster the federal deposit insurance programs for banks and credit unions.

U.S. Mortgage Corp. of Pinebrook, N.J., whose credit union lending affiliate went bust last week, has closed its doors according to industry sources and a posting on its website. Company officials could not be reached for comment Friday afternoon. One loan officer familiar with the company said it may have had a servicing portfolio as large as $1 billion but that figure could not be confirmed. A posting on the lender's website says it has ceased operations "due to unforeseen circumstances." USMC was the parent of CU National Mortgage, a private label funder that served the nation's smaller credit unions. CUNM was founded 13 years ago.

The mortgage insurance industry -- after receiving certain assurances from the nation's GSE regulator -- has signaled its support for a new Fannie Mae and Freddie Mac program to refinance certain high LTV loans without using MI coverage. The refinance program is designed to lower the interest rate on at-risk risk loans that the GSEs already own or guarantee. Federal Housing Finance Agency director James Lockhart assured the Mortgage Insurance Companies of America that the MI exemption is limited and mortgage insurance will continue to be required on notes with loan-to-value ratios above 80% that are sold to Fannie and Freddie, as required by their charters. "We commend director Lockhart for offering this important clarification of the President's housing recovery plan," said MICA president Kevin Schneider. An estimated 4 million to 5 million borrowers who cannot refi because of falling house prices and tighter loan and mortgage insurance standards could be helped by the GSE refinance program. The GSEs can waive private mortgage insurance in refinancing these high LTV loans unless the borrower already has PMI. In that case, they have to "use best efforts to get the mortgage insurance rolled over to the new mortgage," Mr. Lockhart said. "Thus, it would be beneficial to the success of this initiative for the mortgage insurers to work with both companies as they move toward implementation."

Wingspan Portfolio Advisors, which specializes in highly delinquent loans, has launched a new consumer division focused on helping borrowers whose loans are in default. Dubbed "Foreclosure Resolution," the division will reach out to borrowers who are having trouble making payments, have been denied a loan modification, are considering bankruptcy, or who have ARMs balloon payments coming due.