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Editor's NoteUsing BPOs ... CautiouslyBy Amilda Dymi 
Saying that the mortgage industry is way too engaged in implementing a better-safe-than-sorry philosophy may be an understatement, especially when dealing with property valuations. Insiders see valuations as one of the most critical issues faced by servicers today. "This year servicers and investors will order millions of BPOs as they work through loss mitigation scenarios and attempt to value portfolios and distressed assets," says Joni Pierce, division senior vice president of Dallas-based First American Valuation and Property Solutions. Featured StoryGoldman Sachs Gives MIs a Neutral RatingBy Brad Finkelstein 
NEW YORK-Goldman Sachs has initiated coverage of the mortgage insurance industry, having a "neutral" view, noting, "We believe mortgage insurance has a necessary place in the U.S. economy. "Thus, our neutral coverage view reflects the capital level of the companies - not a negative view on the viability of the industry," said the report. The purpose of its report, Goldman Sachs said, is not to take a view on the future of the mortgage insurance industry, especially in light of the future of Fannie Mae and Freddie Mac. The analysts at Goldman Sachs believe the mortgage insurers will have elevated losses over the next two years as defaults on prime-grade mortgage loans peak and the companies have to increase their reserves for loans already delinquent. Generic Servicing Assets
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Free NewsletterSign up for our complimentary email newsletterEnter your email here to sign up for Mortgage Servicing News Bulletin, our free semimonthly email newsletter. Inside TakeTMS Has Big Plans — Can It Pull Them Off?By Paul Muolo 
John Walsh, who owns and operates Total Mortgage Services, is a confident young executive of 43 but has one central fear: “I’m worried that while everyone is running away from the fire, I might be running into it.”
The fire he speaks of is wholesale lending, a business that has been steadily dying since early 2008 but has shown some recent signs of revival, albeit minor. A handful of medium-sized depositories has entered the sector in the past year but few have made a big splash. Over the next few weeks TMS — which has been in business since 1997 — plans to roll out wholesale lending programs in its home state of Connecticut. From there the company hopes to fan out into Massachusetts and New Jersey and then seven other states.
Executive ViewChanging Borrower Contact to Meet Loan Mod RealitiesPerspectives by Jay A. Loeb 
It seems lately that just about every time a government edict or regulatory requirement aimed at the mortgage sector comes rolling out of Washington, D.C., industry practitioners are left scratching their collective heads, wondering: "How are we going to comply?" It is not that these professionals - many with decades of experience and an honored sense of doing what's right - do not want to be good citizens and follow these directives. Often it is a case of not having the resources or necessary information to do so. Case in point: The multiple loan modification initiatives intended to help burdened borrowers suffering a loss of income or other interruption in their ability to make mortgage payments, remain in their homes under new terms agreeable to them and their lenders. Servicing HeadlinesBusinessman Sues FDIC Over His Investment in a Now-Defunct BankFebruary 5, 2010 A Chicago entrepreneur is suing the Federal Deposit Insurance Corp. to win back capital he invested in a bank in the months before it failed. Click here for more.FTC Proposes Ban on Upfront Fees for Loan ModsFebruary 5, 2010 The Federal Trade Commission is proposing a ban on companies charging consumers upfront fees for loan modification services. Click here for more.GMAC Chief Says ResCap's Bleeding has StoppedFebruary 5, 2010 GMAC Inc.'s chief executive Michael Carpenter sought to reassure investors — as his predecessor Alvaro de Molina did before him — that the bleeding at its Residential Capital LLC unit has stopped. Click here for more.BoA Origination Executive Named Short Sales/REO HonchoFebruary 5, 2010 Bank of America Home Loans, Calabasas, has named an origination executive, Matt Vernon, to lead its effort in residential short sales and REO dispositions. Click here for more.Analysts: GSE Buyout Risk Fails to Materialize in JanuaryFebruary 5, 2010 A wave of GSE buyouts of delinquent loans widely expected to affect higher-coupon agency mortgage-backed securities this year failed to materialize in 2010's first month of prepayment data, according to Wall Street research reports. Click here for more. |
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Pessimists vs. Optimists
Are Trial Modifications Just Another Moratorium?
The mortgage marketplace, especially servicers, are continually engaged in loss mitigation processes that entail new legislation, counseling, data analytics systems, technology, and other tools designed to ease the crisis. Related issues within the mortgage servicing space are subject to debate and grounds for differing opinions. Insiders’ pros and cons to current market changes reflect how experts see the future of their industry, how soon they expect to see the light at the end of the tunnel — and whether they are more optimistic about the present.
Moratoriums already have received negative press. Many disagreed with the idea calling it a political measure disconnected with market reality that simply postpones the inevitable. The inevitable being: a borrowers inability to pay the mortgage either willingly or unwillingly. That discourse has died down. New market developments, including the Home Affordable Modification Program and its trial modification requirement are now at the forefront. And the 90-day trial period before a loan modification is officially recorded on the books as successful, besides complicating data reporting and overall delinquency statistics, reminds one of a moratorium. If unpredictable factors such as job loss, health issues and natural disasters are taken out of the equation, there is little borrower information, if anything left to add to justify the prolonged suspense.
Is the trial-modification period worth it, or is it just another moratorium that postpones the inevitable?
Managing REO
Click the image above to start a video of editor Jennifer Harmon introducing the latest issue of Managing REO. |
Headlines from the Current Issue of Managing REOMBA MERS Initiative Makes A Difference A unique collaboration between MERS, the Mortgage Bankers Association, and the CEO of Safeguard Properties has changed the way vacant properties are registered with cities across the country. 'Cross-Qualifying' Helps Banks Poach REO Loans Discover the controversial tactic of "cross-qualifying" that some lenders are engaging in to unload bank owned assets. Tool Responds to Loan Portfolio Toxicity XSite's Loan Portfolio Toxicity Analysis Report enables mortgage lenders and servicers to analyze, stabilize and ultimately revitalize their commercial loan portfolios. |
