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MortgageDaily.com provides free FHA Hope for Homeownership Program Explanation

MortgageDaily.com provides free FHA Hope for Homeownership Program Explanation:

http://www.mortgagedaily.com/WbskH4hReport101008.asp

Mortgage Servicing News Reports That Spanish Bank Acquires Top 40 Servicer

Spanish Bank Will Buy Rest of Sovereign, a Top 40 Servicer

October 13, 2008

Spanish bank Banco Santander SA is in advanced talks to buy Sovereign Bancorp of Philadelphia, a top 40 ranked residential servicer. Santander already owns 25% of Sovereign, which had $18.9 billion in residential servicing rights on its books at mid-year, according to the Quarterly Data Report. The Pennsylvania-based lender is also a larger player in the multifamily and HELOC markets. On Monday Santander released a statement confirming that it was talking to the thrift, which could turn out to be America's largest depending on what the new owners of Washington Mutual, Countrywide, and Wachovia FSB do with their thrift charters. Santander's bid is valued at $3.81 a share. On Monday Sovereign's shares were trading at $3.74, giving the company a market capitalization of $2.45 billion. Its 52-week high is $17.35.

Mortgage Servicing News Reports that Wells Has Acquired Wachovia

Wells Will Get Wachovia After All, Increasing Its Mortgage Empire

October 10, 2008

Wells Fargo & Co. will wind up as the owner of Wachovia Corp. after all, a purchase that will help the San Francisco-based bank battle Bank of America for control of the residential lending and servicing arenas. Late Thursday Citigroup ended its pursuit of the ailing Wachovia but said it will follow through on a $60 billion damage claim against Wells for striking a deal after it had already agreed to buy the company. (The Federal Deposit Insurance Corp. had sanctioned Citi's purchase in late September -- but that was before Wells made a higher bid.) With Wachovia under its belt, Wells will control 17.65% of the $9.6 trillion housing receivables market compared to Bank of America's 21.06%. In lending, Wells/Wachovia will have an origination share of 17.73% to BoA's 19.99%. (The market share figures are based on June 30 data and take into account BoA's July 1 purchase of Countrywide Home Loans.) The deal also gives Wells a major retail deposit base in the mid-Atlantic where the housing market has held up well compared to states like California, Florida, and Nevada. Wells' takeover price for the Charlotte-based bank is valued at just under $6 a share.

Housewire.com reports that Treasury is hiring asset managers for TARP

Look Who’s Hiring: Treasury Seeks Asset Managers

By: DIANA GOLOBAY
October 6, 2008

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The U.S. Department of the Treasury announced Monday that it plans to add new staff members to manage the troubled assets bought through the Emergency Economic Stabilization Act signed into law Friday by President George W. Bush.

The Treasury will hire managers for mortgage securities separately from managers who will handle whole mortgage loans, the government said. Securities asset managers will deal with prime, Alt-A and subprime residential MBS as well as commercial MBS. Whole loan asset managers, on the other hand, will handle a range of products spanning residential first mortgages, home equity loans, second liens and commercial mortgage loans, according to the Treasury.

Interested “Financial Institutions,” defined in the Act as banks, savings associations, credit unions, security brokers or dealers or insurance companies “established and regulated under the laws of the United States,” should submit a response to the public notice issued on the Treasury’s Web site.

The Treasury said it will select qualified candidates to advance in the selection process and provide additional information and qualifications. The Treasury will also provide the opportunity for small and minority- and women-owned financial institutions that don’t meet requirements to enlist as sub-managers within the troubled asset portfolio.

“Given the urgent need to implement the Troubled Assets Relief Program quickly, the selection process for asset managers may involve extremely short deadlines for submitting information and for traveling to Washington, D.C. for meetings or interviews,” the Treasury said in a media statement.

Read the Treasury’s full list of asset manager hiring guidelines >>

Hours after the Treasury’s open asset manager announcement, Treasury Secretary Henry Paulson appointed close adviser Neel Kashkari to a lead position on the $700 billion rescue effort. An assistant secretary or international economics, Kashkari will take on the title of interim assistant secretary for financial stability, according to a report by Market Watch.

Editor’s note: To contact the reporter on this story, email diana.golobay@housingwire.com.

North Carolina Mortgage Servicer License

NMLS begins managing North Carolina Mortgage Servicer License
The North Carolina Mortgage Lending Act was amended by S.L. 2008-228 (BB 2463) to include a Mortgage Servicer License type. Companies will need to submit a Form MU1 through NMLS and choose the Mortgage Servicer License type to apply for this license. NC licensed Mortgage Lenders are authorized to service loans under their current mortgage lender license and therefore are not required to obtain a separate Mortgage Servicer License. For more information, see the North Carolina Requirements Page. The full text of this regulation and a summary are available on NC’s website at: www.nccob.org.

Mortgage Servicing Companies Cannot Engage in Servicing without Mortgage Servicing Licenses

As the Subprime Meltdown takes it effect and over 263 Mortgage Companies have imploded, critical liquidity  is entering the industry through hedge funds purchasing distressed mortgage pools containing both performing loans and nonperforming "scratch and dent" loans.  These passive investment pools are required by law to obtain from 11 to 15 mortgage lender licenses [where lender is defined broadly to include "acquire"] to be legal and eliminate regulatory liablilty to its investors.  These "scratch and dent"morgage pools are being purchased at major discount allowing room for foreclosure prevention through loss mitigation [both repayment plans and loan modifications] and resale of the reperforming loans at significant profit.  Some are also employing refinance as a way to rehabilitate loans and increase their resale value.  This additional capability will require mortgage lender licenses. 

Companes are also building their own mortgage servicing platforms rather than trying to purchase existing servicing platforms.   Pure servicing companies require 34 mortgage servicer licenses and 16 collecion agency licenses to avoid regulatory shut downs.  Mortgage servicers with refinance capabilities require an additional 35 mortgage lender licenses for a total of 85 licenses in order to be fully regulatory compliant.  We are the leading mortgage licensing company assisting mortgage servicers obtain the necessary licenses in the shortest amount of time by using an automated online mortgage licensing engine. We are currently engaged in 13 national mortgage servicer licensing projects each of which are pursuing between 50 and 80 licenses 

Housing Wire Magazine says: Origen Completes Sale of Servicing Portfolio to Green Tree

July 2, 2008   Origen Financial, Inc. (ORGN: 1.31, +5.65%) said Wednesday that it had completed a previously-announced sale of its servicing platform assets to Green Tree Servicing LLC, a well-known servicer of manufactured housing loans, other residential and consumer loans. The deal involves approximately $1.6 billion of manufactured housing loans, Origen said in a press statement. Green Tree will also assume the lease for Origen’s Fort Worth, Texas-based servicing facility. Specifics of the transaction were not made public, but Origen said in a press statement that it used proceeds from the sale to retire a $15 million loan, to partially repay a $46 million secured loan facility entered into in April 2008, and for working capital. “With the agreement to sell our servicing platform, we are focused on trying to sell our origination platform assets and right size our employee and cost structure to accommodate the continued management of our $1 billion securitized loan portfolio,” Origen CEO Ronald Klein said in May, when the deal was first announced. Shares in Origen had fallen 3.62 percent to $1.33 in afternoon trading when this story was published.

Housing Wire Magazine says: Fasthold Capital Rolls Out Advisory Service for Distressed Mortgages

July 2, 2008   As the number of sub- and non-performing residential mortgages continue to grow on the balance sheet of banks and other financial institutions nationwide, one of the larger hindrances to a sale of any mortgage pool has been uncertainty over pricing. After all, just what is a troubled mortgage really worth, when the value of the of the collateral securing it is losing more value by the day? Orange Calif.-based Fasthold Capital, Inc., which specializes in structuring the sale of residential, commercial and consumer loan portfolios, said Tuesday that it had launched a loan advisory service targeting the whole loan trade in distressed mortgages that will try to solve the pricing conundrum that investors say is holding up an increasing number of deals. The service is based on what the company is branding as the Settlement Optimization Process, or SOP. Fasthold said it designed the process in an effort to eliminate common concerns associated with marketing and liquidating distressed assets — in particular, eradicating any fade in price that might occur from the time an indicative bid is made to the final settlement on a pool of loans. “With the state of the market today, it is important to offer our customers the most effective and efficient means of liquidating their assets,” said Michael Castanon, managing partner at Fasthold Capital. “One of the biggest concerns our customers face is not having accurate information or experiencing a reduction in price from bid to settlement.” Castanon said that the firm’s SOP method “completely erases those concerns.” As part of its approach, the company will commit to purchase any or all assets at a stated price to assure the seller that all assets can be traded; Fasthold also performs independent due diligence on loan pools for trade and provides the diligence data to both sellers and qualified principal buyers, as well as providing sellers with an expected settlement range. The company also manages the entire settlement process from start to finish in-house, it said. Sources that spoke with HW thought the idea was intriguing. “Soup-to-nuts advisory in whole loan distressed mortgage trades makes a bunch of sense right now,” said one source, a fund manager that asked not to be identified. “The only question I’d have is whether we’re talking about a committed sale or not, and of course how the loan-level backstop is priced.” In plain English: Fasthold’s SOP means that the company will agree to purchase any assets that don’t close in a trade at a stated price (the “loan-level backstop”), which makes the question of what price Fasthold commits to a pretty relevant one for any potential seller.  “Everything comes down to price on execution,” the source said, noting that it’s still pretty common for the so-called bid-ask spread — the difference between what sellers want to get and what buyers want to pay — to remain wide. Sellers often want more than many buyers feel the loans are worth, while buyers may be attempting to low-ball a seller in an effort to juice returns, he said. Fasthold said it, in part, will look to get around such “ambiguities” in collateral valuation by gathering all due diligence materials independently and providing the data to both seller and buyer, so that each ostensibly is starting from a similar baseline and using the same data to value a loan pool for liquidation.

Housing Wire Magazine says: Direction of Mortgage Applications Clouded by Data Differences

July 2, 2008    Two different indexes tracking mortgage activity yielded wildly different conclusions Wednesday, leaving some investors to conclude that the number of distressed borrowers may yet be understated in key industry statistics. A widely-watched index released by the Mortgage Bankers Association Wednesday morning found that overall application activity — fueled by both purchase and refinance applications — bounced up 3.6 percent last week, off of a six and one-half year low recorded the previous week. But did it really? A separate index maintained by Mortgage Maxx LLC, a company that provides prepayment data to Wall Street researchers, reached a much different conclusion on Monday: applications fell 5.4 percent and marked new 2008 low. Applications in

California

fell even further, Mortgage Maxx reported, plummeting 7.7 percent. All of which is enough to leave the most staid prepayment researcher somewhat vexed. “The two data sources will usually vary in magnitude but not as often in direction,” said one ABS analyst that spoke to HW. “We’ve been seeing plenty of situations this year where the Max shows a decline while the MBA shows a bump.” Such trending might be explained by the one salient feature that has tended to keep the Max index favored among ABS analysts, despite its more limited geographic sampling: correction for multiple applications on the same address. HW’s Linda Lowell, a 20 year ABS/MBS market veteran, noted in a previous story that analysts found out the hard way during the recent housing boom that the MBA data tended to overstate increases in loan demand, as brokers encouraged borrowers to shop around for the best rate (such shopping yielded multiple applications for a single loan).  Loan application data is used in prepayment calculations by research, a vital statistic in the secondary mortgage market for pricing activity.  That same demand overstatement problem that plagued MBA application data during the boom now appears as if it could be a problem in the downturn, however, as troubled borrowers hurriedly attempt to qualify for any mortgage, and brokers encourage borrowers to apply as many times as possible to ensure that they are approved for a loan. With programs changing every day, it’s also likely that many borrowers are falling out and being forced to reapply in some cases.  Of course, that evidence is entirely anecdotal at this point, but it seems to be the only plausible explanation for why the two indexes can diverge so starkly in the current market. Given that application data is used to predict housing demand, understanding the reasons both indexes split should be of key importance to anyone serious about remaining in the mortgage market. Worth noting: The MBA reported that its data showed refinance applications representing just 36.8 percent of the overall application activity; FHA applications jumped 3.4 percent … Mortgage Maxx CEO Paul Desclous noted that new grant deeds appear to have peaked on the heels the spring selling season, and likely pressure on future home sales activity was likely to follow.

Housing Wire Magazine says: CDO Managers Raising Distressed Mortgage Funds: Report

July 2, 2008 There really isn’t anything quite like Wall Street, where second and third chances often abound for money managers that have seen prior investments fail — and often in spectacularly blinding ways. The latest proof of this hidden rule comes courtesy of various CDO managers, whose former investment vehicles imploded along with the private-party mortgage boom that they helped fuel; many such managers are now behind distressed mortgage funds that will look to clean up the mess they helped create, according to a published report Wednesday. Bloomberg News’ Jody Shenn and Jonathan Keehner found that the two firms topping the list of managers of failed CDOs — TCW Group Inc. and Harding Advisory LLC — have raised more than $4.3 billion to invest in distressed residential mortgages. Half of the 20 largest subprime mortgage-led CDO managers are now building funds in the distressed mortgage space, according to the story. Of course, other large private equity players managed CDOs as well, including BlackRock Inc. (BLK: 169.57, +0.87%), the biggest publicly traded

U.S.

asset manager. It said in March it was backing a new company called Private National Mortgage Acceptance Co. LLC, also known as PennyMac, that will buy mortgages at a discount and look to make money in the so-called scratch-and-dent business. PennyMac has a $2 billion war chest to step in and start buying, and will bankroll its own in-house servicing platform; in May, BlackRock also negotiated a deal to snap up $15 billion in subprime mortgage exposure from Swiss bank UBS AG (UBS: 20.32, +2.47%). Nonetheless, the fact that many of the largest CDO managers will potentially profit both from the run-up in

U.S.

mortgages and the historic crash has left some market participants rolling their collective eyes. “Why is it that in finance, nothing succeeds like failure?,” asked Yves Smith, who authors the well-read Naked Capitalism blog, calling the move by CDO managers towards distressed mortgages “the latest chapter in trying to trade in on a dubious track record.” Bloomberg’s sources, including a senior managing director at the sixth-largest manager of mortgage-tied CDOs, cited the collapse of Drexel Burnham Lambert Inc., the now-infamous Michael Milken-led junk bond flame-out, as an example of Wall Street’s rebirth mantra — many former Drexel bankers and investors helped clean up the mess left in the firm’s wake. Not that everyone buys the logic, however, that today’s failed CDO managers are akin to Drexel cast-offs. “[T]he Drexel guys were always specialists in junk bonds,” said Smith. “The CDO managers were supposed to be buying good assets but it was later revealed that what they had bought was junk … we are supposed to trust someone with demonstrably failed credit judgement [sic] as skilled in recognizing value in distressed assets?” Regardless of personal take on the matter, it’s becoming clearer and clearer that the market for bad mortgages is hot right now on many different fronts — both bonds as well as whole loans.