Servicing

Freddie Mac has announced a three-month suspension of mortgage collections for mortgage borrowers in major disaster areas designated by the Federal Emergency Management Agency in the wake of Hurricane Katrina.Freddie said it is instructing its servicers to suspend mortgage collections for the months of September, October, and November. "This temporary suspension will apply to every borrower with a Freddie Mac-owned single-family mortgage in these FEMA-designated zones, regardless of the condition of their home," said Richard F. Syron, Freddie's chairman and chief executive officer. After the three months, servicers will have the discretion to continue suspending or reducing payments for an additional nine months on a case-by-case basis, depending on each borrower's circumstances, according to an advisory letter sent to Freddie Mac's 2,300 single-family servicers. Other newly announced policies allow servicers to return September mortgage payments that have already been made but not reported to Freddie; instruct servicers not to report to credit bureaus any reversed and suspended payments on Freddie-owned loans as a result of Katrina during the suspension period; and instructs them to suspend all late fees, collection, and foreclosure activities in the storm-affected areas during the suspension period.

Mortgage Assistance Center Corp., Dallas, has announced the acquisition of 100% of the capital stock of Mortgage Assistance Corp. in a reverse merger transaction.The transaction, which took effect Aug. 22, included the issuance of approximately 11 million shares of MACC common stock to three shareholders of Mortgage Assistance Corp. who currently own 87.1% of the company's stock. Mortgage Assistance Corp. is a specialty financial acquisitions company that buys nonperforming mortgage promissory notes at a discount and then re-performs, manages, and resells the notes or the underlying real estate to unaffiliated investors. Dale J. Hensel, president and chief executive officer of MACC, said his company "sees great opportunity in the nonconforming and subprime mortgage assets that have become problems for mortgage bankers, commercial banks, and other financial institutions. As more traditional financial institutions have moved aggressively into subprime mortgage lending in recent years, they are inevitably discovering nonperforming loans, delinquencies, and foreclosed properties in their loan portfolios that do not meet regulatory standards or the requirements for securitization." MACC can be found online at http://www.mac-tx.com.

Ginnie Mae has announced that in December it will begin disclosing more comprehensive information about its securities.The agency said it will report the number and the unpaid principal balance of loans that are paid off in full, repurchased by issuers due to delinquency, or liquidated from the pool due to foreclosure. Ginnie Mae will also disclose information regarding loans that are 30, 60, or 90 or more days delinquent and include the number and unpaid principal balance of interest rate buydown loans backing its mortgage-backed securities. Ginnie Mae noted that since February 2004 it has moved from quarterly to monthly disclosures and has begun reporting the loan-to-value ratio, purpose, property type, original loan amount, and year of origination for loans backing its securities. "Our investors have been asking for more details," said Steve Ledbetter, Ginnie Mae's director of securities, policy, and research, who is leading the disclosure initiative. "We believe these enhancements will greatly increase understanding of our securities and lead to better pricing in the secondary market." Ginnie Mae can be found online at http://www.ginniemae.gov.

The Appraisal Institute has announced a Web board to enable members in areas affected by Hurricane Katrina to discuss appraisal issues online and find publications related to appraising property after a natural disaster.The organization said it has organized a bibliography of articles and publications on the subject that can be accessed in the members-only section of its website. The institute is offering a 40% discount on its publications to members located in Louisiana and Mississippi, and to members in other affected states on a case-by-case basis. The trade group can be found on the Web at http://www.appraisalinstitute.org.

New York-based Time Equities, an investor in real estate, development, and property management, will donate shelter to at least 200 people left homeless by Hurricane Katrina in its vacant apartments in the Dallas-Fort Worth area.Francis Greenburger, chief executive officer of Time Equities, said the victims will receive shelter with no rent or utility payments for three months while they make plans to rebuild their lives. Thousands of Louisiana residents recently fled to Texas to escape Katrina's wrath. "It might be easier to simply donate money, but we in the real estate industry have something tangible to offer -- shelter, and we should do all we can to help those left homeless by the hurricane," said Mr. Greenburger. The company will work with the local Dallas chapter of the American Red Cross and other relief organizations to shelter the displaced in two apartment complexes in Fort Worth and Mesquite, a suburb of Dallas.

Radian Guaranty Inc., a Philadelphia-based provider of mortgage insurance, has announced that it will support more flexible mortgage payment terms to accommodate homeowners in the areas affected by Hurricane Katrina.Radian said its forbearance guidelines will enable loan servicers to apply Fannie Mae's and Freddie Mac's special relief provisions to mortgage loans for which Radian has insured the first-lien portion. In addition, Radian will make the guidelines available to servicers of private-label mortgage-backed securities and nonconforming loans that Radian has insured. Under these provisions, loan servicers and lenders will have the flexibility to offer various resolution scenarios, including suspension of mortgage payments for up to six full payments; repayment plans of up to 24 months; loan modifications to help bring delinquent loans current; and suspension of pending foreclosures for up to three months. Radian Guaranty, a subsidiary of credit enhancement provider Radian Group Inc., can be found online at http://www.radian.biz.

The new Federal Housing Administration director for multifamily housing, Charles H. Williams, is heading to Baton Rouge, La., along with 50 Department of Housing and Urban Development employees to help victims of Hurricane Katrina find temporary housing.The HUD contingent led by Mr. Williams will be assisting the Federal Emergency Management Agency in the relief effort. Mr. Williams, a HUD deputy assistant secretary, was previously in charge of HUD's Office of Affordable Housing Preservation, which is responsible for restructuring expiring federal rent subsidy contracts on privately owned multifamily properties. Meanwhile, the FHA has identified 3,410 foreclosed single-family houses in five Gulf Coast states that might provide shelter for families displaced by the hurricane and flooding. "We are currently inspecting our properties" to determine their condition, a HUD spokesman said.

The Department of Veterans Affairs has identified 5,100 of its foreclosed properties nationwide that can be used to shelter victims of Hurricane Katrina.The VA is currently working with the Federal Emergency Management Agency and other organizations to house as many displaced persons as possible, according to Keith Pedigo, director of the VA loan guarantee program. "At this point, we are in the very early stages of identifying the people that we might be able to accommodate," Mr. Pedigo said. The VA also has 300 foreclosed properties in the states hit hardest by Katrina, but the department said it suspects that many were damaged in the hurricane and that it will be a while before inspectors can get in to make an assessment. Like the Federal Housing Administration, the VA has established a 90-day moratorium on foreclosures in the designated disaster areas and is urging lenders to exercise forbearance on VA loans. The VA has 116,000 guaranteed loans in Mississippi, Louisiana, and Alabama totaling $9.4 billion. The FHA has 203,000 insured loans totaling $13.5 billion in the three Gulf states.

Thirteen classes from two Lehman manufactured housing securitizations have been downgraded by Fitch Ratings.The downgrades were as follows: class I-A-1 of Lehman ABS Corp. series 1998-1 group I, from AA to A-plus, and classes II-A-1 and II-A-2 of series 1998-1 group II, from B to B-minus; and Lehman ABS Corp. series 2001-B, classes A1 to A6, from AAA to AA, class M1, from AA to BBB-plus, class M2, from A to BB, and class B1, from BB to B-minus. Fitch also affirmed the ratings on four classes from the transactions. The downgrades in series 2001-B were attributed to deterioration in the relationship between credit enhancement and expected losses, and those in 1998-1 were attributed to the likelihood of interest shortfalls on the underlying classes. Fitch can be found online at http://www.fitchratings.com.

United Financial Mortgage Corp., Oak Brook, Ill., a fast growing, publicly traded lender, has agreed to sell its business to the Airlie Group, a private investment fund based in Greenwich, Conn.Airlie affiliates ARH Mortgage and Airlie Opportunity Master Fund have agreed to pay $5.64 a share for UFMC, a 30% premium from its share price when the market closed Sept. 2. National Mortgage News broke the news in its Sept. 5 issue that Airlie was talking to UFMC about a deal. For its fiscal year ending April 30, UFMC funded $2.7 billion in loans. It has 50 branch offices, compared with 35 a year ago. Founded almost 20 years ago, UFMC has a $1.7 billion mortgage servicing portfolio and $258 million in assets, according to documents filed with the Securities and Exchange Commission. (See NMN for more details.) UFMC can be found online at http://www.ufmc.com.