Servicing

Homesaledirectory.com, a Flagstaff, Ariz.-based home for sale listing website for buyers and sellers, has formed a strategic partnership with RealtyTrac, in which RealtyTrac will power a nationwide foreclosure home search on Homesaledirectory.com. Said Jason Dittberner, president of Homesaledirectory, "Home buyers and investors are searching for the best buying opportunities available and this partnership adds yet another valuable resource." With real estate in a downturn in most markets nationwide, the foreclosure marketplace is one of the few growing areas in real estate. More than 750,000 homes received a foreclosure notice in the third quarter of 2008, up 71% from the third quarter of 2007, according to the RealtyTrac U.S. Foreclosure Market Report. Said Ari Monkarsh, vice president at RealtyTrac, "We look forward to providing Homesaledirectory.com and its customers the most comprehensive foreclosure data available on the Internet."

Columbus, Ga.-based Synovus is taking a fourth quarter loan loss provision of $350 million with a charge-off ratio of 3.2% due to residential real estate credits in the Atlanta market. The financial services company had originally issued a press release on Jan. 2, which incorrectly stated loan loss provision as $250 million with charge-off ratio of 2.2%. Synovus, with $34 billion in assets, is assessing its goodwill for potential impairment during the fourth quarter. The company plans to release fourth quarter 2008 earnings on Thursday, Jan. 22. For more information, go to http://www.synovus.com.

First American Outsourcing and Technology Solutions has developed a new auditing solution designed to reduce the cost and risk of servicing, acquiring and selling adjustable-rate mortgage portfolios. The solution identifies data issues with existing ARM portfolios and can "scrub" loan-pool acquisitions during the transfer and boarding process or as pre-sale due diligence. The new service can correct errors uncovered by the audit and re-post the changes to the servicer's system. Specifically, the solution can re-amortize and repair loan files and customer histories and automatically generate corrected borrower loan statements. The highly automated, scalable solution identifies exceptions and provides comprehensive loan work-ups for clients. Audits can be conducted 24 hours a day, six days a week and maintain a 99.97% data accuracy rate. The ARM Audit and Repair offering includes triple-key data auditing, historic re-amortization of ARMs, forensic loan history analysis, and due diligence and pre-acquisition or pre-sale scrubbing. "Industry-wide as much as $350 billion of unsecuritized ARMs are still held in portfolios," said Scott Brinkley, executive vice president of First American Outsourcing and Technology Solutions. "Whether they are traded or retained by the servicer, there are significant data issues that can result in incorrect rate adjustments, defaults, foreclosures and lawsuits."

The Tennessee Commissioner of Commerce and Insurance is now requiring fingerprints from certain license and registration applicants, including mortgage lenders, brokers, servicers and loan originators. According to written analysis from iComply, which is authored and published by a team of mortgage banking attorneys, there must be provisional authorization for mortgage loan originators to conduct business while awaiting registration approval from the commissioner. The requirement became effective on January 1. In other regulatory news, with the start of the new year North Carolina is requiring mortgage servicers to be licensed by the its Commissioner of Banks before acting as a servicer. The bill also changes the "brick-and-mortar" requirements for mortgage brokers to specify that a broker's physical location in North Carolina may not be a home or residence.

Now that GMAC Financial Services has received both bank holding company approval and a $5 billion investment from the U.S. Treasury, one of its next moves will be to ramp up its deposit gathering capabilities. A spokeswoman for the company said GMAC's bank, GMAC Bank of Utah, will remain as an online bank. She said marketing plans regarding deposits could be announced over the next few weeks. GMACFS also controls Residential Capital Corp. of Horsham, Pa., a $391 billion servicer. In late December the Treasury invested $5 billion in GMACFS, by purchasing preferred stock that carries an 8% yield. "The overall health of GMAC has greatly improved," said the spokeswoman. The company recently completed a note exchange offer that fell short of its goals but the government investment in the company boosted its immediate financial outlook. The warehouse lending platform of GMAC is housed in its bank.

Federal Housing Administration lender Shore Mortgage, Birmingham, Mich., which is licensed in 25 states, said it is planning to significantly grow its origination staff due to rate-driven increases in its business and its reputation for swift mortgage closings. President Robert Rahal said in a prepared statement that the company is seeking to hire an additional 80 to 100 new employees and has a training program for those lacking experience. He said positions the company is seeking to fill include loan officers (10-20 people per month for the next three months), underwriters, processors, closers, post-closing specialists and account executives. The company is licensed to do business in Alabama, Arkansas, Arizona, Florida, Georgia, Illinois, Indiana, Maine, Michigan, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Utah, Virginia, Washington and Wisconsin.

Real estate economists Michael Sklarz and Norm Miller, co-founders of Collateral Intelligence, say the widely followed Case-Shiller home price index has exaggerated home price declines for most homeowners. In a white paper, they argue that the Case-Shiller methodology -- which mixes distressed and non-distressed home sales -- has overstated price declines in most areas. They also say that as foreclosure sales have increased, the discounts associated with foreclosure prices, historically about 22% below normal market sales, have increased to 25% to 50% in many markets. The Collateral Intelligence (www.co-intel.com) executives say that because of the widening foreclosure discounts, distressed sales should be examined separately from non-distressed sales when evaluating market conditions and likely future movements in home values. The Case-Shiller index was created by economists Robert Shiller and Karl Case. The two men could not be reached for comment.

Fannie Mae bought just $29.65 billion in mortgages from its seller/servicers in November, its worst purchase month of the year. The government sponsored enterprise also issued $23.8 billion in mortgage-backed securities during the month, a low for the year as well. Its commitments plunged to a yearly low of $21.19 billion in November too. However, since November ended mortgage rates have plunged and the GSE's December commitments should show an increase. Fannie, and its sister company, Freddie Mac, have been operating under a government conservatorship since September.

A consortium of private equity investors led by Dune Capital Management has agreed to pay $13.9 billion to acquire IndyMac and its $158 billion servicing portfolio from the Federal Deposit Insurance Corp. The new owners of IndyMac -- which also includes J.C. Flowers & Co., Paulson & Co. and others -- will control the nation's 10th largest servicing company, according to figures compiled by National Mortgage News and the Quarterly Data Report. Besides the servicing portfolio and platform, Dune and its partners will take control of: a $16 billion loan portfolio, $6.9 billion in securities, the Freedom Financial reverse mortgage business (including $20.2 billion in receivables) and 33 retail branches. The sale is not without risk to the government. FDIC has agreed to share losses on some of the thrift's loans and will be on the hook for $2 billion in construction and other loans made by the Pasadena-based IndyMac. The investors formed IMB Management Holdings to buy the thrift, which will be structured under a holding company called IMB HoldCo LLC. Steven Mnuchin, chairman and co-CEO of Dune, will be chairman and CEO of IMB. The sale was announced Friday afternoon. At least one other bidder -- also a private equity consortium -- was vying for IndyMac, which was created by Countrywide Home Loans in the 1980s as a non-conforming loan conduit. The investor consortium will capitalize the institution with $1.3 billion in cash. IMB will continue IndyMac's much ballyhooed loan modification program where troubled mortgages are restructured, providing consumers with easier payment plans.

The Federal Deposit Insurance Corp. has trimmed the final list of IndyMac bidders down to two private equity consortiums: Dune Capital Management and one other, according to investment banking sources. The identity of the other consortium could not be ascertained at press time. "The deal still isn't done," said the source. "We could hear today or any time over the next few days." The FDIC declined to comment. One source, requesting anonymity, said Apollo Management is out of the running as a bidder. The agency prefers to sell IndyMac FSB of Pasadena, Calif. in a whole bank transaction instead of the government retaining some of its troubled assets. The agency, noted one investment banker, is very focused on getting private equity investors to put as much money as possible at the bank holding company level in the event more cash is needed at an institution. "The problem with private equity investors is that they want as much control as possible but they want limited liability in case something goes wrong," said the investment banker. The FDIC had hoped to complete the deal by year-end but has not. Complicating the sale of IndyMac's $180 billion residential servicing portfolio is large buyback requests forced upon the failed thrift by Fannie Mae. Fannie said it is waiting on "information from the FDIC with regard to servicing valuations and confirmation of the identity and eligibility of the proposed buyers in order to finalize an agreement." Fannie, which is operating under a federal conservatorship itself, added that it "will continue to work constructively with the FDIC and IndyMac Federal Bank to reach a resolution in the near term that is in the best interest of all parties involved." IndyMac was taken over the government last summer and has operated under a conservatorship ever since.