Servicing

Chase Home Mortgage, the nation's third largest residential servicer, today declared a three-week moratorium on home foreclosures. A subsidiary of JPMorgan Chase, the lender/servicer said is waiting for the White House to unveil its foreclosure reduction program. According to the Quarterly Data Report, Chase services $850 billion in home mortgages. Meanwhile, JPM opened its first homeownership assistance center in California -- in the town of Glendale -- as part of a plan to open a nationwide network of 24 centers by the end of March. Nine of the HOA centers will be in California to assist borrowers serviced by Chase, Washington Mutual or EMC, which now are part of JPMorgan Chase. "We created these local Homeownership Centers as a place for our borrowers to sit down and discuss their situation face-to-face with trained loan advisors in these challenging times," said David Schneider, head of mortgage servicing at Chase. "They are part of a wide-ranging initiative to help families stay in their homes whenever possible." Three other centers, designed to help families struggling with their mortgage payments, will open soon in the Los Angeles, Orange and San Bernardino County.

First Tennessee Bank said it has sold $14 billion in Fannie Mae/Freddie Mac residential servicing rights to an undisclosed third-party. No purchase price was disclosed. The sale was brokered by Milestone Advisors LLC of Miami. FTB is a subsidiary of the publicly traded First Horizon National Corp. of Memphis. In June of last year Metropolitan Life bought most of FHN's residential origination business, including 230 retail and wholesale offices scattered across the nationwide. The bank, though, continues to originate in its depository footprint and service loans.

MGIC Investment Corp., the nation's largest mortgage insurer, said it will still cover broker-sourced loans but come March 9 will eliminate other products from its menu, including cash-out refinancings. According to a company bulletin, MGIC also will no longer insure second homes, and notes on manufactured housing units. The MI also will not cover any condominium mortgages with LTVs north of 90% in certain "restricted" markets where home prices have fallen dramatically. In regard to broker-sourced loans, the company will continue coverage but is capping LTVs at 90% and FICOs at a minimum of 720. Also, wholesalers must track their MGIC brokers by providing an identification number on these third-party originators. Earlier this week, The PMI Group, said it would no longer cover any type of broker-sourced mortgages.

House and Senate conferees raised the first-time homebuyer tax credit to $8,000 (a $500 increase) during last-minute negotiations on the pending economic stimulus bill. Also, the effective date of the credit was increased by three months to December 1. The final stimulus bill (H.R. 1) also raises the maximum GSE loan limit to $729,720. At press time the House was voting on the $800 billion package. A Senate vote on final passage could come as early as Friday evening or during the weekend. As reported earlier, the conferees cut a $15,000 homebuyer tax credit approved by Senate in half and limited the tax benefit to first-time homebuyers. The final version of H.R. 1 also restores the maximum $729,750 loan limit for Fannie Mae, Freddie Mac and Federal Housing Administration loans for the rest of this calendar year. (The current limit is $625,500.) Reinstating the higher loan limits will "help to reduce inventory and improve liquidity in the overall mortgage market," said Charles McMillan, president of the National Association of Realtors. Although the $8,000 first-time homebuyer tax credit is a disappointment to many in the industry, the tax writers made it a real tax credit so homebuyers do not have to repay it like an interest-free loan. Eliminating the repayment provision should bring more buyers into the market, Mr. McMillan said. The final stimulus bill also raises the loan limit on FHA-insured reverse mortgages to $625,500 from $417,000 for the rest of the calendar year.

Standard & Poor's Corp. has upgraded its reverse mortgage servicing ranking for Celink - a company it said is the largest independent servicer of private label HECMs - based on improvements to its staff and operations. S&P raised the ranking to "above average" from "average," citing "the addition of new experienced management personnel, significantly improved proprietary systems environment, efficient internal controls, superior policies and procedures, additional staff, and an overall increase in the ability to effectively service reverse mortgage loans." S&P also said Celink "remains the fourth-largest servicer of Home Equity Conversion Mortgages."

Credit Suisse Group's saw 2.3 billion Swiss francs ($2 billion) in U.S. residential and commercial mortgage-related writedowns during the fourth quarter, a period when it took a net loss of 6 billion Swiss francs ($5 billion). The Zurich, Switzerland-based group said 1.3 billion Swiss francs ($1.1 billion) of the writedowns stemmed primarily from exposures to residential mortgages and subprime collateralized debt obligations and the remaining balance stemmed from warehouse exposures in the securitized commercial mortgage sector. The company said it is making progress reducing its exposure to these problematic asset classes.

The extensive foreclosure efforts on the part of lenders and government agencies appear to have impacted the January foreclosure numbers with REOs, which represent completed foreclosure sales, down 15% nationwide from December, according to RealtyTrac. In its January 2009 U.S. Foreclosure Market Report, the company showed foreclosure filings were reported on 274,399 properties, a 10% decrease from December but still up 18% from January 2008. CEO James Saccacio pointed out that the Fannie Mae and Freddie Mac moratorium on all foreclosure sales that was extended through the end of January had an impact on the data along with Florida's voluntary 45-day freeze on all new foreclosure actions. Nevada foreclosure activity in January decreased 4% from December, but the state continued to register the nation's No. 1 foreclosure rate. Filings were reported on 14,444 properties in January, up 137% from January 2008. California posted the second highest rate with one in every 173 housing units receiving a filing, and Arizona was third with one in every 182 housing units. Despite a 20% month-over-month drop in foreclosure activity, Florida posted the fourth highest rate, with one in every 214 housing units. Filings were reported on 76,761 California properties, the most of any state despite a 14% decrease from December. Florida's 40,770 properties receiving filings in January was the second highest total of any state.

Golden Globe and Grammy Award winner and Oscar nominee Queen Latifah joined multi-platinum recording artist and actor Wyclef Jean and New York and New Jersey radio personality and actress Angie Martinez to help raise awareness about foreclosure and homeownership issues through a bus tour sponsored by the Hope Now Alliance that started Tuesday in Newark, N.J. The campaign will continue in Atlanta, Miami and Cleveland and Hope Now executive director, Faith Schwartz stressed that such efforts are important in foreclosure risk mitigation because half of foreclosures happen to people who never ask for help and may not know to. The bus tour is combined with a roundtable discussion with industry insiders who will discuss how the crisis is affecting the area. It offers information about refinancing and loan modification options and how homeowners can contact HUD approved counselors in their area for advice. Information about online resource also is provided.

Reverse Mortgage Solutions, Spring, Texas, said it has grown notably over the last 18 months since it was founded to the point where it has become the largest privately-held subservicer of reverse mortgages. The company said it recently has been boarding in excess of 22,000 loans, which suggests this is relatively high volume in the government program-dominated and demographically-promising but complex market for these loans, which are designed to allow seniors to derive cash flow from their properties while still living in their homes. In addition to its acting as a subservicer, RMS offers a Web-based front-end loan origination system and a secondary market structure through which it said it has provided servicing, subservicing and master servicing on over 40% of the Ginnie Mae securitizations of government reverse mortgages that have been issued to date.

Subsidiaries controlled by BlackRock Financial have increased their stake in PHH Corp., Mt. Laurel, N.J. -- a top 10 ranked residential servicer -- to 9.67%, according to a new filing with the Securities and Exchange Commission. Previously, BlackRock affiliates controlled about 5% of PHH's outstanding common stock. The new SEC filing says the investment-banking firm now owns 5.27 million shares of PHH's common stock. Previously they owned 2.5 million common shares. At press time spokespersons for both PHH and BlackRock had not returned telephone calls about the investment. The publicly traded BlackRock owns the stake on behalf of five different advisory subsidiaries, all of which carry the BlackRock name. PHH Mortgage, the nation's largest private label lender, services about $146 billion in home mortgages. Based in New York, BlackRock is headed by Larry Fink, a pioneer in the mortgage-backed securities market.