Servicing

The use of "trigger leads" to solicit mortgage customers is raising concern among state regulators and mortgage lenders, according to William Lund, director of the Maine Office of Consumer Credit Regulation.Mr. Lund told MortgageWire that some complaints have come from mortgage lenders concerned about tactics used by competitors who receive trigger leads from credit reporting agencies. Speaking at the New England Mortgage Bankers Conference in Providence, R.I., Mr. Lund said Maine is considering whether trigger leads should be regulated to prevent misleading solicitations. Trigger leads occur when a credit reporting agency sells information about credit requests from lenders, indicating that a consumer is applying for a mortgage loan. That information, when sold to a competing lender or broker, allows the originator to contact the customer and make a competing offer. Mr. Lund said this does not necessarily violate any rules or ethics. But in some cases, brokers or lenders have been accused of calling consumers and pretending to be their current lender offering a new loan product, or pretending that a referral was made because the original lender cannot fund the loan. Those practices may violate the Federal Fair Credit Reporting Act, he said.

Fieldstone Investment Corp., a real estate investment trust that originates both nonconforming and conforming mortgages, has been given a No. 5 (Strong Sell) rating by Zacks.com, Chicago.Zacks pointed to a drop in analysts' earnings estimates for Fieldstone, which now stand at $0.84 per share, down $0.12 over the past 30 days. Fieldstone missed its earnings estimates for the second quarter by $0.04 per share, and the results were 70% below those of the same period in 2005, Zacks said. Zacks can be found online at http://www.zacks.com.

Rapidly slowing appreciation and declining affordability have produced "a marked increase" in the risk of home price declines in the nation's 50 largest housing markets, according to PMI Mortgage Insurance Co., Walnut Creek, Calif.The average score in the PMI U.S. Market Risk Index rose from 288 to 328 in the third quarter, the company reported. This means the company's estimate of the probability of experiencing a home price decline in the next two years has risen from 28.8% to 32.8% in the 50 largest metropolitan statistical areas. According to the index, there are now 18 markets with a greater than 50% chance of price declines over two years, up from 13 in the second quarter. "No one should be surprised by the slowdown we're seeing," said Mark F. Milner, chief risk officer of PMI Mortgage Insurance. "Over the past five years home prices appreciated much faster than incomes, and that can't continue forever." PMI can be found online at http://www.pmigroup.com.

John Johnson has been elected chairman of MERS, the industry-owned system for tracking ownership of mortgage loans and servicing rights.Mr. Johnson is president and chief executive officer of MortgageAmerica Inc., Birmingham, Ala. He has served as president of the Mortgage Bankers Association of Alabama and was chairman of the national Mortgage Bankers Association's Residential Board of Governors. The announcement of Mr. Johnson's election as chairman of MERS came at the organization's annual Strategic Planning Conference. MERS, based in Vienna, Va., can be found online at http://www.mersinc.org.

The educational wing of the Mortgage Bankers Association has awarded 13 mortgage executives the designation of Certified Mortgage Servicer.The designations were given out during a ceremony at Fidelity National Information Services headquarters in Jacksonville, Fla., on Sept. 15. Graduates received the CMS designation in one of three areas of concentration: loan administration, financial controls/investor administration, and default administration. To be eligible for the CMS designation, which was launched early last year, candidates must amass a total of 63 points through a combination of industry experience and CampusMBA course work. After accumulating the points, candidates must also pass a three-hour online examination.

Fitch Ratings has announced the release of new basis-risk stress criteria for securitizations involving the U.S. dollar London interbank offered rate.The new criteria are expected to have the most immediate effect on consumer asset-backed securities and residential mortgage-backed securities, according to Claire Mezzanotte, an ABS managing director at Fitch. "The majority of U.S. consumer ABS transactions, including credit card receivables, student and home equity loans, are exposed to basis risk due to mismatches between the asset and liability coupon rates," Ms. Mezzanotte said. The criteria were developed in conjunction with Fitch's new interest rate stress criteria, which were published in May. Fitch said it will be updating the interest rate and basis-risk stresses each month. The report, "Basis Risk in Structured Finance Transactions: T-Bill, CP, and Prime versus USD LIBOR," can be found on Fitch's website, http://www.fitchratings.com.

Zacks Equity Research, Chicago, has declared The Mills Corp. its "Bear of the Day" -- a stock expected to underperform the markets over the next three to six months -- for Sept. 18.Mills is an Arlington, Va., retail real estate investment trust that recently received bids from potential buyers and investors. "The company is dealing with myriad problems, including a restatement of its financial results from 2000 through the first three quarters of 2005, failed developments, and executive departures," Zacks said. "Additionally, the company is under investigation by the [Securities and Exchange Commission] for accounting irregularities." Zacks said the company is struggling and noted that the common dividend has been cut "significantly." It predicted much lower-than-expected earnings when Mills releases its 2005 and year-to-date 2006 results. Zacks can be found online at http://www.zacks.com.

Wachovia Securities, with a $187.0 billion portfolio as of June 30, is the largest primary and master servicer of commercial mortgage-backed securities, according to the Mortgage Bankers Association.Capmark Finance Inc., with $140.1 billion, is the second-largest CMBS servicer on the MBA's list. Rounding out the top five are Midland Loan Services, with $115.0 billion; Wells Fargo, with $78.4 billion; and KeyBank Real Estate Capital, with $64.0 billion. LNR Partners Inc. is named as the special servicer on $207.5 billion of CMBS deals, ranking it No. 1 in that category, the MBA reported. The association can be found online at http://www.mortgagebankers.org.

New residential foreclosures fell by 6.7% in August, according to Foreclosure.com, an online foreclosure listing service based in Boca Raton, Fla.There were 26,255 new foreclosed residential properties listed in August, the company reported. Meanwhile, the nationwide active inventory of U.S. residential foreclosures totaled 85,467 properties, down 1.2% from the level recorded in July, according to Foreclosure.com. "We continue to see fluctuations when analyzing data month to month," said Brad Geisen, president and chief executive officer of Foreclosure.com. "But as we near the end of the third quarter, most housing and economic indicators point to a sustained period of increased new foreclosure activity across the country." The company can be found online at http://www.foreclosure.com.

Hurricane Katrina-related delinquencies have dropped to just over a third of their peak but are still 3.5 times higher than pre-storm levels, according to Fitch Ratings.The rating agency said its delinquency index for loans collateralizing U.S. commercial mortgage-backed securities fell 4 basis points, to 0.55%, in August. The majority of outstanding Katrina-related delinquencies are located in Louisiana, mostly in and around New Orleans, as the city's recovery continues to lag well behind that of other storm-affected regions, said Patty Bach, a Fitch senior director. "With New Orleans' population estimated at 215,000, less than 50% of its pre-storm level of 465,000, large sections of the city remain mostly uninhabited as flood-damaged property owners have been waiting for resolution of questions surrounding level protection and financial assistance for rebuilding," Ms. Bach said. Fitch said its seasoned CMBS delinquency index, which omits transactions with less than one year of seasoning, dropped 9 bps, to 0.69%. Fitch can be found online at http://www.fitchratings.com.