Recent Servicing Headlines

Cal Pension Group Seeking Servicer for Mortgage Program

Fannie Mae/Freddie Mac Get OK on 125% LTV

Relatively Few First Quarter 2008 Mods Found Current

Trial Period May Be Reducing Number of Modifications

Freddie Mac Seen Awaiting Approval of New Chief Executive

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Pessimists Vs. Optimists

By Amilda Dymi

The mortgage marketplace, especially the servicing arena, is being bombarded with new default management options that include new legislation, counseling, data analytics systems, technology, and other tools designed to ease the crisis. And talking about the crisis, related issues within the servicing space are subject to debate and differing opinions. Their pros and cons reflect how servicing experts see the future of their industry.

In this issue we inquire how are servicers dealing with mounting regulatory pressure since now they are required by law to engage in many largely untraditional activities for this market segment. Today's servicers need wear many hats to survive. For example, recent regulatory changes are pressing lender-servicers of investment loans on multifamily unit properties at risk of or facing foreclosure to offer property management assistance, which includes overseeing tenants. Before these renters actually leave, accept a cash-for-keys option or wait for a solution, their tenant rights need be respected. To servicers in that situation it all turns into a matter of how fast and how well they can learn the do-s and don'ts of being a landlord, or outsource. As new federal policies come up with best ways to protect everyone's interests the list of such burdens keeps piling up on servicers. Some would argue that it could turn into a situation where certain responsibilities eventually turn into the straw that breaks the camel's back. How much is too much for servicers to handle? Is the Obama Administration keeping it real?

Is it a good idea or a bad idea to add such servicer responsibilities, and why?

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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.

What's a Servicer To Do In Today's Demanding Market?

By Rick Seehausen

A recent report of housing counselors by NeighborWorks America, a non-profit organization created by Congress, provided additional confirmation of what everyone in the industry already knows: servicers are overwhelmed.

According to the report, the number one complaint of NeighborWorks America counselors is the response time of servicers. Some counselors said it took as long as 45 to 60 days to receive a response after the workout proposal was formulated. Servicers' employees are described as overworked, counselors reported that documentation had to be resent on some occasions and that they had to work with different representatives. These factors are seriously slowing down and deterring the process of keeping troubled borrowers in their homes.

The boom in servicer business is the result of the Home Affordable Modification Program and the Home Affordable Refinance program that were announced by the President in February 2009.

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Servicing Statistics

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LPS Launches New Home Price Index

By Anthony Garritano

Lender Processing Services Inc., Jacksonville, Fla., believes that it has the right method for evaluating property value changes. The company will use its technology to create its proprietary Home Price Index (HPI).

This HPI, developed by LPS Applied Analytics, measures changes in property values of residential real estate at various geographic levels, including state, metropolitan area, county and ZIP code; property types; loan types and transaction types. The LPS Applied Analytics HPI touts that it is unique in that it provides the option to include or exclude REO sales.

How does HPI work? HPI leverages LPS' own public records real estate database that compiles data directly from the County Recorder and Assessor offices. LPS Applied Analytics' public records real estate database includes property characteristics and ownership transfers pertaining to 80 million owner-occupied residential parcels, covering 92% of housing activity in the country.

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