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Executive View

Determining Value is the Key to Maximizing New Programs

Perspectives by Bill Sullivan

Bill Sullivan

- Lenders Can Maximize Revenue From Government Investment and Modification Programs by Automating Valuations -

The first quarter of 2009 was marked by the release of many programs and proposals from the government designed to protect homeowners, restore capital to banks and kick-start lending. Three new announcements in March will have a particular impact on servicers and lenders.

The Public-Private Investment Program (PPIP), announced March 22, promises to kick-start investment into troubled or toxic loan portfolios. Related to PPIP, the Federal Standard Accounting Board (FASB) announced changes to mark-to-market accounting standards, which outlines methods banks could revalue assets to more closely reflect their pre-recession value. Finally, all participants in the government's Troubled Asset Recovery Program (TARP) will be required to apply Net Present Value (NPV) tests for any home at risk of foreclosure.

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Featured Story

Maguire Negotiates Property With Servicer

By James Comtois

James Comtois

LOS ANGELES-Maguire Properties, a real estate investment trust here, and its joint venture partner, Macquarie Office Trust, have entered into negotiations with the special servicer under the CMBS financing covering the Quintana campus in Irvine, Calif., in anticipation of a possible payment default.

According to the REIT, the Federal Deposit Insurance Corp., as receiver for Washington Mutual Bank, relinquished the majority of its Quintana lease effective March 2009 and was not obligated to pay any rent or other compensation in connection with the lease termination.

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Generic Servicing Assets

MIAC's Generic Servicing Assets (GSAsTM)
Sample GSAsMultiple on 07/02/2009Change from 07/01/2009
Agency_ARM_CMT1Y_6.00_2002 1.982 -0.05%
Agency_ARM_Hy5/1_5.50_2007 1.854 0.05%
Agency_FRM_C30_4.00_2003 5.465 5.17%
Conduit_ARM_Hy3/6_5.00_2006 1.564 0.29%
GNMA I_FRM_G15_6.00_2003 1.853 -0.63%
Private_S/S_FRM_J30_7.00_2006 1.876 1.93%
FHSMB228 2.602 -1.38%
FNMA308 2.849 -0.18%
FNMA371 2.726 -0.18%
Source: MIAC
The GSAsTM represent MIAC's opinion of the market value of various representative MSR assets.

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A Day in the Life of a...

Mortgage Executive, Foreclosed Pet Rescuer

By Amilda Dymi

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Like most of us, Cheryl Lang looks forward to her Saturday mornings. Unlike most of us, the president of Houston-based Integrated Mortgage Solutions and founder of "No Paws Left Behind" - who has the passion and dedication to simultaneously run two businesses - starts her workweek on Saturday.

Cheryl's everyday life has been busier and more rewarding than ever since she founded No Paws Left Behind (www.nopawsleftbehind.org) in 2008.

Between IMS, her asset management for-profit company, and the nonprofit organization dedicated to rescuing foreclosed pets, her days are filled with fast decision-making activity. It was during her work with IMS, trying to help homeowners facing foreclosure and foreclosure risk, that she realized nobody was coordinating that effort with assistance for the pets they willingly, or unwillingly, left behind.

Cheryl initiated the nonprofit using IMS systems. "Information coming to us from our field reps indicated there was some sort of a pet crisis going on once the owners evicted the property and nobody knew exactly how to deal with it."

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Inside Take

Obama Plan Comes with Fees

By Paul Muolo

Paul Muolo

The last thing in the world mortgage bankers want right now is to pay millions of dollars in assessments to fund a new regulatory agency that will tell them to watch their "P's and Q's" when it comes to originating loans. Then again, it can be argued that if lenders - and their investment bankers on Wall Street - had been carefully underwriting nontraditional loans during the boom of 2003 to 2007 the proposed Consumer Financial Protection Agency wouldn't be on the birthing table.

But it is. So, what to make of the CFPA, an idea unleashed by the White House last week? First off, let's state the obvious to readers who don't know how things work inside the Beltway: the president proposes a massive restructuring of something (in this case the financial regulatory structure of our nation's lenders) and then lobbyists start working their contacts on Capitol Hill and in the administration to defeat the parts they don't like (which is most of it).

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Editor's Note

Modifications: Still Quantifying What is Doable

By Amilda Dymi

Amilda Dymi

The Home Affordable Modification program is challenging lenders and servicers with the goal to assist up to 9 million distressed borrowers. Is this number realistic or misleading?

Market veterans like Tim Anderson, president of Houston-based e-mortgage services provider SigniaDocs, are a little skeptical about the scale of modifications.

"The numbers will vary depending upon the type of modification, how they [borrowers] were contacted and most importantly, how easy it was to execute once received," he said.

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Servicing Headlines

Cal Pension Group Seeking Servicer for Mortgage Program

The California State Teachers' Retirement System is searching for a master servicer for its home loan program.

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Fannie Mae/Freddie Mac Get OK on 125% LTV

Fannie Mae and Freddie Mac have received the green light from their regulator to refinance underwater homeowners with loan-to value ratios as high as 125%.

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Relatively Few First Quarter 2008 Mods Found Current

Less than three in 10 mortgages that were modified by servicers in the first quarter of 2008 are still current, according to a new "mortgage metrics" report released by the Comptroller of the Currency.

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Trial Period May Be Reducing Number of Modifications

The number of completed loan modifications has fallen in April and May as servicers put more loans through a 90-day trial period as required by the Obama administration's Home Affordable Modification program.

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Freddie Mac Seen Awaiting Approval of New Chief Executive

Freddie Mac's board of directors has selected Charles E. Haldeman Jr., a top executive at Putnam Investments, to be its next chief executive, according to a source familiar with the matter.

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Managing REO

Click the image above to start a video of editor Jennifer Harmon introducing the latest issue of Managing REO.

ManagingREO.com

Headlines from the Current Issue of Managing REO

  • The Dirt On Cleaning House

  • Read about specific steps asset managers take to keep an REO property in tip-top shape.

  • An Asset Reality Check

  • Michael Newman, president and CEO of Golub & Co., shares his take on how loan servicers or workout specialists should actively work with ownership to know a collateralized asset from the inside-out.

  • Confused About the Rescue Plan?

  • Servicers are complaining that the Obama administration is restructuring its housing rescue plan so that servicers are required to compare modifications to short sales as well as foreclosures.