Commercial REO Brokers Association To Host Commercial REO Training Program and Luncheon: January 23 at Los Angeles Airport MarriottThe Commercial REO Brokers Association, "CREOBA" (www.creoba.com), the exclusive commercial national association dedicated to assisting real estate professionals who want to provide REO services to banks and loan providers, proudly announces its Commercial REO Training Program and Luncheon, scheduled for January 23 at the Los Angeles Airport Marriott on 5855 West Century Boulevard, from 9:00 AM - 5:00 PM PST. The daylong event will include the following courses: Commercial REO 201, Small Cap Asset Management, taught by Miguel Pena; Commercial REO 202, Large Cap Asset Management, taught by Ed Savoy; and a guest speaker during the luncheon, from 12:00 - 1:30.The Commercial REO Brokers Association, "CREOBA" (www.creoba.com), the exclusive commercial national association dedicated to assisting real estate professionals who want to provide REO services to banks and loan providers, proudly announces its Commercial REO Training Program and Luncheon, scheduled for January 23 at the Los Angeles Airport Marriott on 5855 West Century Boulevard, from 9:00 AM - 5:00 PM PST. The daylong event will include the following courses: Commercial REO 201, Small Cap Asset Management, taught by Miguel Pena; Commercial REO 202, Large Cap Asset Management, taught by Ed Savoy; and a guest speaker during the luncheon, from 12:00 - 1:30."This daylong event showcases the knowledge and practical advice from our top instructors, while emphasizing issues concerning the Track 5 part of our courses, including: what the Asset Manager expects from the Broker they have assigned a property to manage and sell, and how the Broker may perform these tasks directly or manage other contractors. I encourage people to become members of CREOBA so they can profit from this advice and join our rapidly growing organization. Indeed, we are leaders in helping our members as they seek ways to succeed in this new economy. For example: With $176 billion in distressed commercial real estate, up from $100 billion this same time last year, our training programs provide the necessary intelligence to thrive in a market that requires innovation and the very support only we have the depth to offer," says Mark Barker, Vice President of CREOBA.
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Read this and more at www.preservationmonthly.com- Further expands ability to provide lending institutions with comprehensive asset management capabilities throughout 2010 -Lenders Asset Management Corporation (LAMCO), a full-service, nationwide default asset management company that offers comprehensive REO services, announced the development of its REO Services Scalability Initiative, the company’s approach to prepare for the mortgage industry’s high volume of foreclosures that are expected to occur throughout 2010.The program involves providing ongoing training to existing staff, hiring new personnel, completing the expansion of its current office space, setting up additional facilities to further accommodate its national coverage and continuing to build up its nationwide network of approximately 25,000 vendors providing REO services.This initiative enables LAMCO to manage its staff and REO vendors in order to achieve maximum levels of performance and collectively leverage skill sets to cost-effectively scale up REO operations to support its current client growth and new customers. This system also ensures data security and full compliance with local and national regulations.“Currently there are approximately 7 million homes in default, that are known as the mortgage industry’s ‘shadow inventory’ of at-risk properties, and when the mortgage resets start hitting in the coming months, the industry can expect many of these homes to go into foreclosure,” said Brandon J. Hawkes, CEO of LAMCO. “In preparation for the anticipated spike in foreclosures, LAMCO has launched our REO Services Scalability Initiative to structure, organize and plan for the expected influx of homes that will face foreclosure and efficiently scale operations to maintain the properties and identify new homebuyers as quickly as possible.”
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read this and more at www.preservationmonthly.comFHA to increase Mortgage Premiums and reduce seller concessionsNew Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved CommunitiesFederal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”Announced FHA Policy Changes:Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lendingThe first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closingThe initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.Update the combination of FICO scores and down payments for new borrowers.New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.Reduce allowable seller concessions from 6% to 3%The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.Increase enforcement on FHA lendersPublicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.Enhance monitoring of lender performance and compliance with FHA guidelines and standards.Implement Credit Watch termination through lender underwriting ID in addition to originating ID.This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring processSpecifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwriteLegislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branchesIn addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.
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Read this and more on www.preservationmonthly.comFORMER EXECUTIVE OF FAILED BANK PLEADS GUILTYFormer Bank Official Ignored Disclosure Reporting Requirements That Would Have Alerted Others to Massive Mortgage Fraud at Omni National BankJEFFREY L. LEVINE, 68, of Atlanta, Georgia, pleaded guilty today in federal district court to causing materially false entries that overvalued bank assets to be made in the books, reports and statements of Omni National Bank.Acting United States Attorney Sally Quillian Yates said, “This case demonstratesthe damage that can result when senior bank officials ignore rules and regulationsdesigned to protect a bank by identifying problem loans. Bank executives and those in critical and knowledgeable positions will be held accountable when they deliberately circumvent the systems designed to reveal the true condition of their bank to its regulators, insurers and investors.”Federal Deposit Insurance Corporation (FDIC) Inspector General Jon T. Rymer said, “The FDIC is tasked with liquidating the assets of failed banks such as Omni. Therefore, the FDIC OIG aggressively investigates and prosecutes fraudulent activities that undermine the integrity of the financial services system and impede the FDIC's efforts to maximize recoveries. We are pleased to have partnered with our law enforcement colleagues in bringing about this successful action.”Martin D. Phanco, Postal Inspector in Charge of the Atlanta Division said, “This investigation uncovered a fraudulent scheme which benefitted the defendant and other individuals. The U.S. Postal Inspection Service mission is to protect the U.S. mail system from criminal misuse like that demonstrated in this case.”Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Neil Barofsky said, “There were many reasons for our financial crisis, including fraudulent schemes like the egregious conduct admitted today. SIGTARP is committed to working with its law enforcement partners to root out these crimes whenever they can be discovered.”Department of Housing and Urban Development (HUD) Inspector General Kenneth M. Donohue said, “Families receiving Section 8 rental subsidies should expect safe, decent and sanitary housing. In this case, poor stewardship and management of the properties has negatively affected the neighborhoods and the entire community.”According to Acting United States Attorney Yates, the charges, and other information presented in court, LEVINE was Executive Vice President, the second largest bank shareholder, and head of the Community Redevelopment Lending Department at Omni National Bank from 2000 through October 12, 2007. To keep non-performing loans current on paper, LEVINE and others at Omni failed to disclose many exceptions to their policies and procedures which resulted in Omni being exposed to a greater risk of loss. Practices that went unreported included: diversion of loan proceeds escrowed for rehab; excessive credit concentrations to a single borrower; funding additional loans for Omni foreclosures at ever-increasing amounts; and failing to create sufficient reserves for those questionable loans or to properly record them on Omni’s books and records.Before takeover by the FDIC on March 27, 2009, Omni was headquartered in Atlanta with branch offices in Birmingham, Tampa, Chicago, Fayetteville, N.C., Houston, Dallas and Philadelphia. Omni borrowed Fed Funds at low rates to make high-interest, short-term loans through LEVINE’s Community Redevelopment Department to borrowers with less than stellar credit and often no steady employment or formal education. Such Omni borrowers were supposed to purchase and rehab distressed properties for prompt resale or Section 8 rental in run-down, inner-city neighborhoods.Borrowers were expected to do most of the rehab themselves within a few months of the loan, and qualify for a loan to purchase a second property only when the first property was sold, or ready for sale. Omni, its regulators and investors relied on the expected increased value of the property after rehab to be well in excess of the loan amount. The Redevelopment Department generated a significant portion of the Omni profits reported on its books and reports, although the facts now show that those profits were materially overstated.LEVINE and others were well aware that none of the foreclosed properties could be sold on the open market for the amount of the outstanding Omni loans. A number of foreclosures were never disclosed on the Omni books as required, and some properties were resold up to five times at ever-increasing amounts. The actions of LEVINE and others at Omni resulted in an overvaluation of bank assets, which in turn misled Omni’s outside auditors, its Office of the Comptroller of the Currency regulator, its FDIC insurer,the Securities and Exchange Commission, and Omni shareholders. Such practices contributed to the over 500 foreclosures and an additional 500 non-performing loans, which resulted in at least $7 million in losses to the FDIC. The evidence showed that the HUD Section 8 Program and its tenants also suffered, because many of the Omni-funded distressed properties were not rehabbed, but rather, stood vacant or were inhabited by squatters for years, corrupting other Section 8 properties and the community. Even if rented, the frequent Omni foreclosures resulted in unstable housing for Section 8 tenants, as well as increased crimes resulting from the vacant properties and transient tenants.LEVINE was charged in a Criminal Information on December 22, 2009, with making, and causing others to make, materially false entries that overvalued bank assets, in the books, reports and statements of Omni National Bank, and today pleaded guilty to this charge. He could receive a maximum sentence of 30 years in prison and a fine of up to $1,000,000. In determining the actual sentence, the Court will consider the UnitedStates Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. Sentencing is scheduled for March 23, 2010, at 2 p.m., before United States District Judge Jack T. Camp.Additional Omni-related prosecutions to date include:MMARK ANTHONY MCBRIDE, 43, of East Point, Georgia, who pleaded guilty on April 4, 2009, to fraudulently obtaining millions of dollars in mortgage loans from Omni and other lenders. MCBRIDE is scheduled to be sentenced on March 2, 2010 at 2 p.m., before United States District Judge Jack T. Camp. MCBRIDE remains in jail while awaiting sentencing.MBRENT MERRIELL, 37, of Atlanta, Georgia, was indicted on December 15, 2009, with six counts of aggravated identity theft and false statements in connection with his request to the FDIC for permission to “short sale” 14 properties for $2.2 million less than the Omni funded outstanding loans. MERRIELL was facing foreclosure on each of the properties when the charges allege that he submitted “short sale” requests supported by forged and counterfeited sales contracts and loan commitments in the names of four people whose identities had been stolen. MERRIELL has pleaded not guilty to the charges and remains in jail awaiting trial. No trial date has been set.MDELROY OLIVER DAVY, 37, of Lithonia, Georgia, was charged in a Criminal Information on December 18, 2009, with bank fraud and conspiracy to commit bank, mail, and wire fraud in connection with a scheme to fraudulently obtain millions of dollars of mortgage loans from Omni and other lenders. At his initial appearance DAVY waived indictment and announced his intention to plead guilty to those charges in January 2010. The plea hearing will be before United States District Judge Jack T. Camp. The hearing date has not yet been set.These cases are being investigated by Special Agents of a Mortgage Fraud Task Force for Omni-related cases, which includes FDIC-OIG, HUD-OIG, the Postal Inspection Service, the SIGTARP, and the FBI. The Task Force is continuing a number of Omni-related investigations, including inquiries related to Omni’s application for Troubled Asset Relief Program (TARP) funds.Assistant United States Attorneys Gale McKenzie and Christopher Bly are prosecuting the case.For further information please contact Sally Q. Yates, Acting United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
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read this and more at www.preservationmonthly.comHUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERSMeasure to help bring stability to home values and accelerate sale of vacant propertiesIn an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes."As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization."With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties."This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities."FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website.
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Come read this and more at www.preservationmonthly.comReal Estate Systems (RES.NET) Launches Accelerated Management Platform (AMP) for Real Estate Agents NationwideRES.NET is proud to announce their January 2010 launch of Accelerated Management Platform (AMP). Until now, Real Estate Agents were forced to manage their properties through separate processes and systems. RES.NET has changed all that with its Accelerated Management Platform (AMP). AMP will improve operational efficiencies by managing tasks, storing data, organizing prospects and contacts and give you global oversight of all of your listings and historical data. This platform will also give Real Estate Brokers and Agents maximum exposure to Industry service professionals within the RES.NET community.RES.NET, a Software application company established in 2003, by its parent company US Real Estate Services, Inc., created an REO management application for asset managers to manage real estate assets and connect with the entire supply chain. "RES.NET recognizes the real estate agent as the core element in any real estate transaction. Offering a full scale application to the agent was key in continuing to build RES.NET's community not only for today's business, but for tomorrow as well," said Todd Mobraten, US Real Estate Services Chief Operating Officer.RES.NET has diversified its applications by adding Property Valuation, Short Sale and the now the agent focused platform AMP. RES.NET's cutting edge technology brings the industry professionals together by connecting them with investors, closing companies, title agencies, property preservation organizations, attorneys and appraisers, just to name a few. RES.NET has and will continue to build its community by increasing connections, enhancing relationships, and accelerating businesses across the nation.
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Loss Mitigation Solutions Provider Expands Presence in to REO SpaceTitanium Holdings, Inc., the parent company of Titanium Solutions, Inc., a provider of loss mitigation solutions, recently announced the launch of a new business unit, Excellen REO. Excellen REO is a full service REO asset management company that offers a complete suite of services designed to create a customized property liquidation process for each client.“As the mortgage industry faces various challenges during this economic downturn, the success we have experienced with Titanium Solutions for more than a decade has uniquely positioned us to understand and respond to the changing needs of our clients,” Patrick Carey, CEO of Titanium Holdings, explained. “We have made a number of strategic decisions during the past year and the launch of Excellen REO is the latest result of that effort. Excellen REO will help us expand the client relationships that we have built over the years and establish new partnerships as we offer a comprehensive solution to all of their property liquidation needs.”Cary Sternberg, president of the new company, leads Excellen REO. With almost 40 years of experience in asset preservation, management and liquidation, Sternberg is the former senior vice president of the REO department for American Home Loan Servicing, Inc. In this position Sternberg managed more than 200 employees and 33,000 assets. His previous titles also include first vice president of home loan servicing and REO of Indymac Bank FSB, national REO manager of Ocwen Federal Bank FSB, president of Virginia Commonwealth Realty and senior vice president of American Family Homes.“We have assembled a staff that leverages decades of experience in REO management and key business partners across the country,” Sternberg said. “Titanium Holdings has created a formidable reputation in the industry and I look forward to garnering that same level of trust for Excellen REO.”Excellen REO services include pre-marketing, valuations, marketing and sales negotiation, closing and funding and alternative sales methods. The company will leverage a nationwide network of real estate brokers and local eviction attorneys, as well as property preservation companies.
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Mortgage Fraud - Mortgage Broker sentenced to a five-year termViktor Kobzar, a Federal Way mortgage broker, and six others were arrested in March on allegations of mortgage fraud. On Friday the leader Viktor Kobzar was sentenced to a five-year term in federal prison for his part in the $47 million mortgage fraud scheme.According to court documents, those involved used businesses as fronts to take out exorbitant loans on behalf of "straw buyers." They augmented the good credit of those buyers with falsified income documents to obtain the loans, from which they then siphoned money before attempting to resell the homes.The homes were resold to others within the conspiracy at inflated prices, with the conspirators taking the profits.At least 68 loans were secured through "straw buyers" and otherwise unqualified purchasers, representing at least $46 million in loan proceeds, based on false and fraudulent representationsKobzar obtained a $1.2 million loan for a house cleaner earning less than $20,000 annually to buy a tiny Medina home. On paper, the cleaner purchased the home from another straw buyer who'd bought the home six months earlier for $775,000.Another purchaser, a janitor who earned about $16,600 in 2006, saw his income falsely inflated to $385,000 for that year.While those behind the scheme are alleged to have provided false information to lenders, former U.S. Attorney for Seattle Jeffrey Sullivan said previously that the banks extending the loans -- chiefly Washington Mutual and ING Bank -- could have prevented the fraud by conducting "a little more due diligence."Defendants in the case are forfeiting to the government a 2004 Lamborghini Gallardo, a 2006 BMW 750, a 2007 BMW X5, a 31 foot Bayliner yacht, and several bank and investment accounts totaling approximately $2.4 million.The sentence was handed down in U.S. District Court in Seattle after Kobzar's convictions for conspiring to commit bank fraud, mail fraud, wire fraud and filing a false personal income tax return.At Kobzar's sentencing, U.S. District Judge Marsha Pechman said, "This is a very serious crime and many, many people were harmed."She said Kobzar and his co-defendants "bear a huge responsibility for the financial meltdown that harmed many people."Last month co-defendant Vladislav A. Baydovskiy was sentenced to five years in prison.Four other defendants in the case were sentenced in December 2009:• Camie Byron, 28, of Renton, a loan officer, was sentenced to two years in prison.• Alla Sobol, 28, of Renton, a mortgage broker, was sentenced to two years in prison.• Sobol's husband, David Sobol, 40, of Issaquah, a real estate agent, was also sentenced to two years in prison.• Sandra Thorpe, 55, of Shoreline, an accountant who falsified income statements and employment verification letters, was sentenced to probation and 200 hours of community service
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LAMCO Implements Vendor Management Process- REO asset management company vets service providers with measurable standards, continual performance checks -Lenders Asset Management Corporation (LAMCO), a full-service, nationwide REO management company, announced the formal development of its LAMCO Vendor Management Process, which evaluates LAMCO-endorsed vendors using several measurable qualifications, facilitating a foundation of long-term, mutually beneficial relationships with its service providers.LAMCO qualifies new vendors and manages ongoing service provider relationships using the elements of TQRDCEB, a framework developed by Hewlett Packard Company. Vendors are evaluated on technology, quality, responsiveness, delivery, cost, environment and business impact using a score card system based on a weighted strength ranking. Service providers are selected as a LAMCO vendor based on their performance within the TQRDCEB system and are routinely evaluated on the same scale to measure performance, identify areas of improvement and promote an environment where the status quo is challenged.Each area of the TQRDCEB management process includes expectations and best practices that must be demonstrated by vendors, such as meeting or exceeding service level agreements (SLAs), demonstrating quality and reliability with all work orders, and maintaining familiarity with LAMCO technology and system requirements. By scoring well within the TQRDCEB process and meeting the expectations set forth by LAMCO, vendors increase the opportunity for repeat business, resulting in increased sales and profits.“By developing and maintaining strong relationships with its vendors during the course of 20 years, LAMCO has been able to work on process improvements that continually add value, reduce costs, mitigate risk and enable LAMCO to adapt to market conditions and client needs,” said Brandon J. Hawkes, CEO of LAMCO. “Service providers are selected based on sound qualifications and must maintain a high level of service monitored through repeat evaluations in order to continue as a LAMCO vendor.”
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Clear Capital™ Reports 2009 Year-Over-Year Home Price Decline Smallest in Three YearsWith December numbers in, 2009's national home prices rebound from slow start to post modest -1.3% yearly price change; Detroit's 17.4% quarterly home price gain continues to lead major U.S. markets; and Las Vegas sees first positive quarterly price gain (1.1%) in more than three years.Clear Capital (www.clearcapital.com), a premium provider of data and solutions for real estate asset valuation, investment, and risk assessment, today released its Home Data Index™ (HDI) Market Report. Patent pending rolling quarter technology significantly reduces the multi-month lag time associated with other indices to help investors, loan servicers and individual buyers and sellers make more informed, timely and profitable decisions. This month's report features data compiled through Dec. 24, 2009.Report highlights include:· National / Four Region Overview: National quarterly price gains remain positive (1.7%) this month, as did the Midwest (4.1%), South (1.2%), West (1.2%), and Northeast (0.4%) regions. Yearly national home prices rebounded from a dismal 2008 (-20.4% price change year-over-year) to post a modest yearly price change of -1.3 percent in 2009. The national REO saturation rate also dropped 16 percentage points from the beginning of the year, to 25.5 percent at the release of this report.· Metropolitan Statistical Area (MSA) drilldown: Detroit, Mich. followed up its strong performance last month to once again lead the highest performing markets with a 17.4% gain. Overall, home prices continue to improve with seven of the fifteen highest performing markets posting positive yearly gains. Compare that to this time last year, when only one market returned positive year-over-year marks.· Micro Market Analysis: The Las Vegas, Nev. MSA turned in its first positive quarterly price gain in more than three years (1.1%). While its yearly price decline (-27.4%) is still high, Las Vegas is showing signs of transitioning from home-price free-fall, to more traditional trends.The Clear Capital HDI Market Report offers the industry, investors and lenders a near real-time look at pricing conditions not only at the national and metropolitan level, but within local mar-kets. Clear Capital data is built on the most recent data available from recorder/assessor offices, and then further enhanced by adding the Company's proprietary market data for the most comprehensive geographic coverage available."After watching home prices plummet the past three years, it is encouraging to see the year close with minimal price declines," said Kevin Marshall, Clear Capital President. "The stronger positive gains we saw this summer have softened into the fall and early winter, but it's good to see that they've remained in positive territory. It's remarkable that home prices for the nation as a whole were generally flat for 2009, given this year's volatility that included record declines early in the year, followed by the gains of summer and fall."National/Four Region Market Overview (Nov. 25, 2008 - Dec. 24, 2009)As 2009 draws to a close, national price gains remained positive, returning a 1.7 percent change this quarter. Regional quarterly results remained positive as well, with the Midwest returning 4.1 percent gains, followed by the South and West (1.2%), and Northeast (0.4%).The financial turmoil that began this year has been replaced with a dose of incentivized optimism. Homebuyer credits mixed with low interest rates have helped return homebuyers to the marketplace. At the same time, loan modification programs have helped regulate the new supply of distressed properties. Throughout 2009, these factors contributed to the national REO saturation rate dropping from 41.5 percent in the first quarter, to 25.5 percent at the release of this report. While remaining high by historic standards, this downward swing in REO saturation helped drive prices up during the summer months, stabilizing home prices from the -20.4 percent yearly change experienced in 2008.After sustaining early losses in the winter months of 2009, national home prices rebounded to post a modest yearly price change of -1.3 percent. Stronger summer gains, followed by continued, albeit softening, quarterly gains in the fall and early winter helped make up most of the losses sustained in the first quarter of this year.Continued improvement from the double-digit yearly losses reported in all regions earlier this year is clearly visible—especially the Midwest (4.4%) which experienced a positive bounce off earlier lows. Additionally, the South closed in on positive yearly gains (-0.8%); the Northeast (-2.4%) was able to retain most of its value with improved gains the last half year; and even the more substantial losses in the West (-7.5%) were an improvement from the same time a year ago.Metro Markets (Nov. 25, 2008 - Dec. 24, 2009)This list of the highest performing major markets is quite an improvement over what the markets were experiencing at the end of 2008. All major markets from this month's list experienced positive quarterly price changes, averaging 5.7 percent. Detroit was once again this month's quarterly top performer with price gains of 17.4 percent. Detroit's market continues to be driven by REO sales (50.6%), where prices continue to rise from their steeply discounted levels of early 2009.Seven of the 15 markets posted positive yearly results as well. When you remove the 63.8 percent yearly gains of Cleveland, Ohio (which was subject to dramatic price shifts among its large REO segment), the remaining 14 markets averaged a nearly flat yearly return of -0.3 percent.Compared with this time last year, only one major market (Rochester, N.Y.) saw positive yearly price gains, and all of the highest performing markets were experiencing quarterly losses. Further, Atlanta Ga.; Minneapolis, Minn.; Phoenix Ariz.; Riverside, Calif.; San Francisco, Calif.; and San Jose, Calif.; all on this month's highest performing major market list, were among the lowest performing major markets one year ago. This volatility is largely a reflection of heightened REO influences that continues today.Such swings in price change have made it difficult for nearly everyone, from policy makers to banks and investors, to keep an accurate account of current trends. This has hindered the ability to set policy, adjust REO strategy, price collateral and/or judge the success of loan modification and moratorium programs. While heightened REO activity will continue into next year, the pause in price declines during the second half of 2009 has allowed all parties to gain perspective on current trends, and be better prepared for whatever the market brings in 2010.All markets on both the lowest and highest performing major market lists experienced improved yearly price changes compared to last month, with the exception of Baltimore, Md., which saw its yearly price change slightly drop another 0.1 percentage points to end up at -8.8 percent. Similarly, all markets saw REO saturation rates decline (generally considered an improvement) since last month, except for two—Raleigh, N.C. and Columbus, Ohio. In contrast to the yearly improvements, quarterly prices softened, a continuation of the trend reported last month and a sign of the typically slower winter months.The larger quarterly declines in Milwaukee, Wis. and New Haven, Conn. were more closely aligned with the broader slowing reported last month, as heated summer sales were replaced by more muted sales of fall. However, the changes for all 15 of the lowest performing markets are modest compared to the summer run-up, and the declines have slowed compared to last month's report. With holiday foreclosure moratoriums and the extension of the homebuyer credit now secure, it's less likely a significant upwards swing in REO rates will occur next month.At the end of 2008, the fifteen lowest performing markets posted double-digit quarterly declines, and yearly declines between 20 and 40 percent. The dire straits experienced in 2008 are put into perspective when compared to the conditions at the end of 2009. As of this report, quarterly declines are now all less than four percent, and yearly price changes are a mix of modest gains and, except for Orlando, Fla. (-25.8%), sub-twenty percent losses.Micro Markets (Nov. 25, 2008 - Dec. 24, 2009)This section highlights a single market every month with a deeper dive into how the micro and macro-markets relate to each other.After home prices peaked in mid 2006, Las Vegas saw its percentage of REO sales grow to dominate the market, easily surpassing the 50 percent mark by mid-2008. Las Vegas has seen few signs of hope as home prices have fallen 63.7 percent since their peak, and the city has faced oversupply from new construction and near-new construction re-entering the market as short sales and REOs.Today, while Las Vegas maintains a 53.3 percent REO saturation rate, home prices have flattened with the first quarterly price gain (1.1%) in more than three years. While still considered a distressed market (yearly price change of -27.4%), the transition of home prices from a free-fall to almost flat has been gradual over the past six months for the market in its entirety. The flattening of home declines was fueled by the attractiveness of reduced prices and an inventory shift to short sales. Short sales, generally less attractive to purchasers due to the complexities and timeframes of the process, have made the steeply discounted REOs more attractive to home buyers.While no micro market within the Las Vegas metropolitan area has seen yearly price declines better than ten percent, there are variations in loss severity throughout 2009. Just off the Las Vegas strip, ZIP 89109 was the hardest hit micro market, posting a yearly price change of -45.1 percent. This area suffered from a large supply of investor-driven condominiums (nearly three-out-of-four sales were REO) built just prior to the market's peak. The oversupply of condominiums, combined with limited financing options, prevented any sustained reduction of REO properties.The best performing micro market (ZIP 89134) lies northwest of downtown Las Vegas, in an attractive area west of Interstate 95 and north of Summerlin Parkway. While the area's 48.4 percent REO saturation rate is not considered healthy, it's largely free of the downtown condominium supplies, and since late 2008, has managed to slowly improve its REO picture. Composed largely of decade-old single family residences which many find attractive, this area saw prices change only -14.5 percent for the yearthe smallest loss among the Las Vegas metropolitan area.It will take some time for the REO saturation picture to improve for the greater Las Vegas area, and prices will continue to be subject to its influence. However, the home price stabilization experienced in 2009 improved the sellers' ability to move certain inventories, a hopeful sign that any future introductions of REOs to the marketplace might be better absorbed than in recent years.
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Fannie Mae has a new policyFannie Mae has adopted a new policy in which it may accept offers to purchase homes it has repossessed without notifying loan servicers.Fannie Mae can request Loan Servicers to reimburse them for a loss if the original mortgage on the home did not meet its underwriting requirements and or eligibility requirements.Loan servicers had the option of trying to find a better offer or buy it themselves rather than reimburse Fannie Mae for any loss, only after the allowed 15 days to turn over loan files for review if there was a question over whether a mortgage on a repossessed property met all the requirements."If, after completion of the review, Fannie Mae determines that the mortgage loan did not meet its eligibility or underwriting requirements and Fannie Mae has incurred a loss by selling the property, the lender will be required to fully reimburse Fannie Mae for its loss," the company said in a bulletin to loan servicers.Read the Bulletin:Amends these Guides: Servicing Miscellaneous Servicing Policy ChangesIntroductionThis Announcement contains several updates and clarifications to various servicing policies, as itemized below:Temporary Review Period for Active HAMP Trial Modifications Scheduled to Expire on or before January 31, 2010On December 23, 2009, the Treasury Department issued Supplemental Directive 09-10: Home Affordable Modification Program – Temporary Review Period for Active Trial Modifications Scheduled to Expire on or before January 31, 2010, implementing a temporary review period for all active HAMP trial modifications scheduled to expire on or before January 31, 2010. Effective immediately, Fannie Mae servicers are required to comply with the requirements of Supplemental Directive 09-10 for all conventional mortgage loans with active trial periods scheduled to expire on or before January 31, 2010 that are either held in Fannie Mae’s portfolio, part of an MBS pool that is serviced under the special servicing option, or a shared-risk MBS pool for which Fannie Mae markets the acquired property.Clarification on the Retirement of Risk Profiler Servicing Guide, Part VII, Section 209: Using Risk ProfilerIn Announcement 09-22, Miscellaneous Servicing Policy Changes, Fannie Mae announced that Risk Profiler, Fannie Mae’s behavioral scoring model that predicts the likelihood of default,Announcement 09-38 Page 1would no longer be available on or after October 1, 2009. Servicers were instructed to service all mortgage loans owned or securitized by Fannie Mae by using the servicing guidelines as outlined in the applicable sections of the Servicing Guide.Effective immediately, a servicer may choose to use a model to assist the servicer in predicting the likelihood of default or foreclosure, and to use the results of the model to target its collections and default management practices as long as the servicer's collections and default management practices meet or exceed the minimum standards as outlined in the applicable sections of the Servicing Guide.Quality Assurance Reviews for Acquired Properties Servicing Guide, Part I, Section 301.02: Fannie Mae’s Quality Assurance Reviews; and Part VIII, Section 303: Consideration of Purchase OrdersFannie Mae is announcing a recently implemented change regarding quality assurance reviews. When Fannie Mae is notified that a property has been acquired, Fannie Mae begins the disposition process by obtaining opinions on the market value of the property, preparing the property for sale, and listing it with a real estate broker. If Fannie Mae has required a file for review, Fannie Mae will begin the process of reviewing the file to determine whether the mortgage meets Fannie Mae’s requirements.When Fannie Mae receives an offer to purchase a property that is also subject to an underwriting or servicing review, Fannie Mae may accept the purchase offer without first notifying the servicer, whether or not a final decision has been reached with respect to the review. If, after completion of the review, Fannie Mae determines that the mortgage loan did not meet its eligibility or underwriting requirements and Fannie Mae has incurred a loss by selling the property, the lender will be required to fully reimburse Fannie Mae for its loss.LIBOR Index Servicing Guide, Part IV, Section: 201, Monitoring the Index; and Section 202: “Look-Back Period”Fannie Mae is clarifying that servicers must use the LIBOR index values in the print edition of The Wall Street Journal to determine an interest rate change. Servicers must establish procedures to monitor the index to ensure that the correct index value is used in determining the new interest rate.Servicer Reporting of Address Changes to Fannie Mae Servicing Guide, Part X, Section 203: Transaction Type 82 (Loan Address Change Record)Fannie Mae’s servicer and investor reporting platform captures loan-level detail on mortgage loans that are serviced on behalf of Fannie Mae. It is critical that Fannie Mae have the most up-to-date and accurate information on these loans, and there are established transaction types thatAnnouncement 09-38 Page 2Announcement 09-38 Page 3are used by servicers to transmit updated data to Fannie Mae. These transaction types are described in Part X, Chapter 2 of the Servicing Guide.Effective with this Announcement, servicers are required to transmit property address updates to Fannie Mae using Transaction Type 82 (Loan Address Record Change) to correct not only renumbered or renamed streets or zip code changes due to postal realignments, but also to correct any errors in the property address transmitted to Fannie Mae at the time of delivery, e.g., misspelled street names or missing unit numbers. In addition, Fannie Mae is clarifying that addresses that include a post office box are not acceptable.In accordance with Fannie Mae’s DU Refi Plus™ and Refi Plus™ products that provide expanded refinance opportunities for existing Fannie Mae borrowers, it is imperative that servicers consistently update property address in a timely manner. Fannie Mae will use this information to ensure the existing mortgage is owned or securitized by Fannie Mae, and confirms that the existing loan is eligible for these refinance flexibilities. When the information is not accurate, borrowers may experience delays in the refinance process until such time as the information is updated or eligibility is confirmed through other means.
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Premiere Provider of Collateral Valuation for Residential Mortgage Backed Securities Now ASF LINC™ CompliantClear Capital (www.clearcapital.com), a data and solutions leader for real estate asset valuation, investment and risk assessment, today announced the company has updated its systems to accept the American Securitization Forum Loan Identification Number Code (ASF LINC™)—a new standardized universal code that creates greater data transparency at the collateral level. ASF LINC, jointly developed by ASF and Standard & Poor’s Fixed Income Risk Management Services (FIRMS), is designed to identify crucial information about individual loans that are securitized in the mortgage- and asset-backed securities markets.Clear Capital’s use of the most progressive technology available and its speed-to-service mindset enables the Company to respond quickly to industry needs such as integrating ASF LINC data into its systems. “We’re eager to work with the industry to help facilitate a new generation of more transparent reference data for origination and securitization models,” said Kevin Marshall, Clear Capital President. “We strive every day to offer deeper levels of transparency at the loan level while providing intelligent valuation solutions for residential mortgage backed securities.”The sixteen-digit ASF LINC captures the loan type, origination date and country of origin, as well as randomized alphanumeric data, to create a unique ID for a wide range of loans that may be pooled and sold into the capital markets.A sample of the code can be found at the ASF website:http://www.americansecuritization.com/uploadedFiles/ASF_LINC.pdfRead more…
Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit but remains comfortably above a year ago, according to the National Association of Realtors®.The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 16.0 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for the tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.The PHSI in the Northeast dropped 25.7 percent to 74.4 in November but is 14.7 percent above a year ago. In the Midwest the index fell 25.7 percent to 82.0 but is 9.2 percent higher than November 2008. Pending home sales in the South fell 15.0 percent to an index of 97.8, but are 14.7 percent higher than a year ago. In the West the index declined 2.7 percent to 124.6 but is 21.4 percent above November 2008.Yun projects an additional 900,000 first-time buyers will qualify for the extended tax credit in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit.“Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.
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