Origination

FNC Inc., a real estate collateral technology provider based in Oxford, Miss., has hired Glen Evans as president. Most recently, he was a senior vice president at FTN Financial, a subsidiary of First Tennessee Bank. Mr. Evans, who has been in the business for 25 years, will report directly to FNC CEO and co-founder, Bill Rayburn. "FNC has grown beyond its start-up phase," Mr. Rayburn said. "Glen's background and industry knowledge will help us expand our mortgage clients and our business." FNC's new president previously ran FTN Financial's correspondent services division. The company said Mr. Evans' primary goal will be to help the firm meet its revenue goals.

A continuing rise in negative home equity and unemployment has led to rating actions on 581 prime residential mortgage-backed securities transactions issued between 2005 and 2008, according to Fitch Ratings, New York. "While actual loan losses to date remain low on average for the transactions reviewed (36 basis points), average delinquency has almost doubled since the start of the year to 11% and continues to grow due to high average roll-rates from performing to delinquency," Fitch said in a report. About 45% of the borrowers in the private-label MBS reviewed by Fitch owed more on their mortgages than their homes were worth, according to Grant Bailey, a senior director at the rating company.

The Government Accountability Office, in a new report, has entered into the debate over the future of Fannie Mae and Freddie Mac, blistering some of the most widely discussed options for revamping the two. Though the watchdog agency did not take a formal position on what policymakers should do with the GSEs, it essentially declared two ideas unworkable — fully privatizing Fannie and Freddie or turning them into public utilities. Those options could spur inefficiencies, raise mortgage rates and take banks out of the business of offering traditional mortgages, the GAO concluded. The report offered detailed pros and cons of other options including nationalizing Fannie and Freddie, simply restoring the firms to their previous status, breaking them up into multiple entities or turning them into cooperatives. In the year since the federal government seized the GSEs, options for how to deal with them have multiplied, even though the Obama administration has said it will not deal with the issue until 2010. While many Republicans and other conservatives have pushed for years to privatize the GSEs or eliminate them, the GAO found only one benefit to such an approach: enhanced market discipline. But the agency warned that it was not clear if privatized GSEs could support the mortgage market during a crisis.

Introduced earlier this year as part of the president's economic stimulus bill, the $8,000 first-time homebuyer tax credit, to date, has prompted 314,000 additional consumers to get off the fence and purchase a home, according to new figures released by the White House. The National Association of Realtors estimates that the tax credit will boost home sales by an additional 350,000 by the time it expires on December 1. Overall, 1.8 million first-time homebuyers may take advantage of the tax credit, according to NAR economists. Meanwhile, homebuilders, Realtors and other housing groups are trying to get the word out that buyers must go to closing by November 30 to take advantage of the tax credit. In mid-October, housing groups will mount a public campaign to extend and increase the tax credit and possibly expand it to all homebuyers. But for now, the lobbying is low key so potential first-timers won't get the idea they can sit back and wait for an extension. In July, 30% of existing home sales were by first-time buyers.

Caliber Funding, which is controlled by private equity firm Lone Star Funds, has agreed to acquire what it calls "certain technology and operational assets" from StoneWater Mortgage for an undisclosed sum, according to a source close to the deal. Both non-depository lenders are based in Arizona. Caliber expects to retain most of StoneWater's employees. No further information was available on the deal, including figures on the firms' origination and servicing volumes. A spokesman for Caliber confirmed the transaction. The Dallas-based Lone Star has been bottom fishing in the mortgage market the past year. A year ago the private equity firm made headlines when it paid 22 cents on the dollar ($6.7 billion) for $30.6 billion in mortgage CDOs held by then struggling Merrill Lynch & Co. (This was prior to Merrill's sale to Bank of America.) The PE firm also bought CIT's home lending business.

Investor Wilbur Ross, one of the most active bidders on distressed mortgage assets, is gearing up to make a run at mortgage insurance giant United Guaranty Inc., a unit of American International Group, according to MI and investment banking sources. One investment banker described Mr. Ross — a principal in WL Ross & Co., New York — as the leading bidder on UGI, the nation's fifth largest MI in terms of policies-in-force. (Figures courtesy of the Quarterly Data Report.) However, it's unclear if Mr. Ross is bidding on all or part of the company and whether he has partners on the deal. Spokespersons for both AIG and UGI had no comment. Mr. Ross had not returned a telephone call as National Mortgage News went to press. Over the past 18 months he has acquired two large non-prime residential servicing portfolios. Ross was part of an investor group that bought failed Florida bank BankUnited FSB, a large player in the payment option ARM market. He also recently hired James Lockhart, former director of the Federal Housing Finance Agency, who is familiar with the MI industry and its role in guaranteeing loans sold to Fannie Mae and Freddie Mac. "Ross' interest in the MI business is very important," said one MI executive. "It shows the importance of this business. He can be an important part of the MI business moving forward."

DebtX is selling $788 million in loan participations held by failed Silverton Bank of Georgia for the Federal Deposit Insurance Corp. The 344 participations are from commercial real estate and commercial and industrial loans and are being offered on an individual basis. It includes both performing and non-performing assets from 27 states, with the largest concentrations in Georgia, Alabama, Florida, Ohio and Washington. The largest loan is a $20.7 million participation in a loan secured by residential lots in Las Vegas. More than 140 of the participations are less than $1 million. Kingsley Grassland, chief executive of DebtX said the sale is getting investor interest, especially from community banks, the traditional buyer of loan participations.

Mario Bernadel, a real estate investor from Phoenix, has been convicted of running a mortgage fraud scheme involving at least 32 residential properties in the greater Phoenix area. According to John J. Tuchi, interim U.S. attorney for the District of Arizona, participants in the scheme recruited unqualified straw borrowers, submitted fraudulent loan applications on their behalf, obtained mortgage loans in excess of the selling price and then took the excess amount of the loans out through escrow. Bernadel recruited and trained mortgage brokers, straw buyers and an escrow officer in the scheme and, following the funding of the loans, received cash back. The homes purchased through the scheme have been foreclosed or sold at a loss. Seven other co-conspirators were also charged and have pleaded guilty and await sentencing. The scheme resulted in $20 million in loans obtained by fraud and a loss of more than $2 million. Bernadel's conviction is part of "Operation Cash Back," in which 40 defendants were indicted and arrested. Bernadel is the 20th defendant to date who has been convicted. U.S. District Judge Stephen M. McNamee set sentencing for Nov. 30.

Generation Mortgage Co., Atlanta has named Scott Peters president and chief executive, replacing Joe Morris. Mr. Morris, who served as president and CEO since the company's inception in 2006, will take on the role of executive director, industry relations, where he will represent Generation Mortgage as an industry advocate to play a stronger role with organizations such as the National Reverse Mortgage Lenders Association, lend support to wholesale relationships and will also be active legislatively. Mr. Peters joins Generation Mortgage from Nortel Networks Corp., where he led the Global Business Services division. He also held senior leadership positions within General Electric Capital Corp., MassMutual, BellSouth Corp., The Profit Recovery Group International and CompuCredit Corp.

The Federal Reserve, in its new Beige Book report, says home sales are increasing somewhat in the Boston, Chicago, Richmond and San Francisco districts but the housing sector in general is not out of the woods yet. The St. Louis area has seen no noticeable improvement in housing conditions and most Fed districts reported that sales were "below the levels of a year earlier." The central bank noted that housing demand "remained stronger at the low-end of the housing market." As for home construction, the news is bleak with only Chicago and Dallas reporting small increases in housing activity. In the commercial real estate market, construction remained at low levels overall, "although Chicago and Dallas reported a small increase in activity" the Fed said. Overall, the central bank said economic activity is stabilizing or improving in the vast majority of the country and that the worst recession since the 1930s may be over.