Servicing

Freddie Mac has made a $100,000 commitment to the Mortgage Bankers Association's Year 2000 testing plan, the MBA has announced.The MBA Year 2000 Inter-System Readiness Test Plan is a multimillion-dollar voluntary program under which firms will test their systems with those of trading partners in a Year 2000 business environment. "At Freddie Mac, we've made Year 2000 readiness our top corporate priority," said James Cotton, Freddie Mac's vice president of Year 2000 Primary Markets. "We believe that the MBA Inter-System Readiness Test is an important and necessary step toward ensuring readiness for us and the mortgage finance industry." The plan, developed by the MBA Year 2000 Inter-Industry Test Subgroup, has also received $100,000 commitments from Alltel, Fannie Mae, and First American Real Estate Services. It will include test transactions relating to 15 critical business functions in origination, secondary marketing, and servicing, the MBA said. The test is scheduled to begin early next year.

The American Bankers Association has reported that late payments (30 days or more past due) on home equity lines of credit fell 4 basis points in the second quarter to 0.72%.Closed-end home equity loans delinquencies decreased by 8 bp to 1.22% in the second quarter.

G.E. Capital Corp., Stamford, Conn., and BancOne, Indianapolis, are talking to Dallas-based FirstPlus Financial Corp. about a deal, MortgageWire has learned.Sources say that GECC is conducting due diligence on the company and BancOne is scheduled to make a presentation either Thursday or Friday. At deadline time, FirstPlus's shares were trading up $2 or so at $18. FirstPlus, the nation's largest originator and servicer of high-LTV loans, hopes to get $22 a share for the company, said one source familiar with the situation. FirstPlus could not be reached for comment. BancOne is a warehouse lender to FirstPlus. Another large warehouse lender to FirstPlus, Residential Funding Corp., Bloomington, Minn., also has expressed interest in the company. In the first half of 1998, FirstPlus was the high-LTV volume leader with $2.46 billion in production. FirstPlus is being represented by Bear Stearns & Co. Its 52-week trading high was $61 a share.

GE Capital Mortgage Insurance Company, Raleigh N.C., announces several Internet applications designed for its lender and servicer customers.GE Mortgage Insurance Connect (www.gemiconnect.com) provides its Excel lenders with the ability to receive new commitments in a paperless environment. GE Mortgage Insurance Connest's Certiprint feature allows lenders and servicers to print mortgage insurance certificates or commitments for new and existing loans. The company reports that is processes 1,000 transactions per day on Certilink, including servicing transfers, claims, loan status reporting, account maintenance and billing. Certilink is used by more than 200 servicers.

Apollo Real Estate Advisors, San Francisco, a commercial real estate investment firm, will make a "major commitment" to CB Richard Ellis' environmental research initiative, the firms announced recently, increasing the real estate services firm's ability to invest in properties that require mitigation of environmental hazards.CB Richard Ellis, Los Angeles, has more than 9,000 employees worldwide. The company's servicees include property sales and leasing, property management, mortgage banking, investment management, capital markets, appraisal/valuation, and market research. CB Commercial and REI limited, which merged earlier this year to form CB Richard Ellis, had combined 1997 revenues of $848 million.

MGIC Investor Services Corp., Milwaukee, is brokering the sale of $988 million of mortgage servicing rights for an undisclosed Midwestern lender.The offering consists entirely of Fannie Mae and Freddie Mac loans. The weighted average interest rate is 7.44% and the weighted average remaining term is 263 months. The portfolio contains 12,360 loans, 44% of which are in Indiana, 24% in Illinois, 10% in Minnesota, and 9% in Wisconsin. Bids are due Sept. 23.

Advanta Mortgage Conduit Services Inc. has priced a $500 million securitization of floating-rate mortgage loans.The effective pass-through yield on Advanta Mortgage Loan Trust 1998-3 certificates will be 23 basis points above the one-month London Interbank Offered Rate. Advanta Mortgage, a wholly owned subsidiary of Advanta Corp., will retain the servicing on the loans. The lead underwriter is Salomon Smith Barney, with J.P. Morgan, Lehman Brothers, and Prudential Securities as co-managers. The transaction is expected to close on Sept. 23. In other Advanta Corp. news, the company has announced that its board of directors has authorized the formation of an employee stock ownership plan that will buy shares of Advanta's common stock.

Life company mortgage investment delinquencies are at their lowest levels in over 28 years, a survey by the American Council of Life Insurance has found.The rate as of the end of the second quarter was 0.88%, down 6 basis points from the first quarter's 0.94%. Delinquencies on commercial mortgages, which make up 92% of life company mortgage investments, fell 5 bp from the first to the second quarter to 0.80%. This happened in spite of increases in delinquencies in five of the seven types of commercial investments. The delinquency rate improvement can be in part attributed to the foreclosure on $152 million of retail loans previously classified as delinquent, ACLI said.

The Department of Housing and Urban Development has issued an interim rule that sets out the ground rules for its multifamily debt restructuring program.The interim rule, which appeared in Friday's Federal Register, has received generally good marks from housing experts who have seen a draft of the rule. The restructuring program is expected to deal with some 4,000 HUD-insured multifamily properties, and it is scheduled to get under way Oct. 27 if a director for the program is appointed by the president. Otherwise the program will be delayed. But such a delay could give lenders, owners, and other participants more time to get prepared for restructuring. "People are really scrambling now," said Charlie Wilkins, a restructuring consultant with WMF Group, Vienna, Va.

BNC Mortgage Inc., Irvine, Calif., has entered into a $280 million forward commitment with an unnamed New York-based investment bank.BNC will sell subprime mortgages originated between August and November. The pricing structure includes buy-ups and buy-downs for the actual weighted average coupons, margins, and prepayment penalties delivered. BNC in the past has sold $740 million of subprime loans to this buyer. BNC president Kelly W. Monahan said the company entered into this agreement in order to lock in cash premiums on loan sales through the end of this year.