The Department of Housing and Urban Development has entered into a partnership agreement with the National Community Stabilization Trust to facilitate the implementation of a “first look” program that will give preference to certain purchasers to acquire FHA real estate-owned properties. In a notice published in the Federal Register, HUD announced the issuance of a universal Name and Address Identification Number (NAID) to the NCST to assist eligible buyers in purchasing REO properties under the National Stabilization Program’s “First Look Sales Method.” The NAID requirement for purchasers is...

Fannie Mae, Freddie Mac and their federal regulator do not appear to have made much headway in convincing the mortgage industry to support a switch to a fee-for-service approach to servicing government-sponsored enterprise single-family mortgages. The vast majority of comments filed with the Federal Housing Finance Agency in response to its white paper on servicing compensation were from small and mid-sized lenders. The FHFA outlined two possible approaches, including its plan to pay servicers a flat fee of as little as $10 a month to service performing loans, with additional payments for...

There are new signs of life in the market for mortgage servicing rights, where observers suggest real estate investment trusts could become significant buyers and the government-sponsored enterprises are facilitating more transfer activity. Newcastle Investment Corp. recently announced a $44 million investment in excess mortgage servicing rights, done jointly with Nationstar Mortgage, a mortgage special servicer. Both companies are affiliates of Fortress Investment Group, a global investment management firm. Newcastle, a commercial mortgage real estate investment trust, acquired 65 percent...

For the past 18 years, listeners to the nationally-syndicated Dave Ramsey Show have heard the host recommend Nashville-based Churchill Mortgage. While Ramsey’s debt-free living message might seem at odds with a mortgage banking company issuing loans, Churchill Mortgage has found in Ramsey an excellent partner. “We get phone calls and hits to our website from every state in the country,” said Matt Clarke, Churchill’s CFO and COO. “The population of callers is largely high quality borrowers.” Churchill has been a sponsor of the Dave Ramsey show since it began, and continues to reap benefits. The question...

The one category of distressed loan that the federal government has the most control over – mortgages insured by the FHA and VA – continues to show the worst success rates for loan modifications. After 12 months of post-modification seasoning, over half (51 percent) of government-insured loans were 60 days or more past due, according to a report issued this week by the Office of the Comptroller of the Currency. That compared to an overall 60+ re-default rate of 39 percent. Fannie Mae and Freddie Mac mortgages, along with loans held in the servicer’s portfolio, showed the best...

Some mortgage servicers have done a better job than others in adjusting to a market environment of high default and foreclosure rates, according to a new Barclays Capital report, and the difference can have a significant impact on the value of non-agency mortgage securities they service. Servicing is not as easy as it used to be and has come much more under the spotlight, Barclays noted. Servicers have to work with distressed borrowers to determine whether loan modification, refinance or liquidation is the most appropriate response. Servicer performance can be shaped by the composition of...

The Federal Housing Finance Agency should refrain from implementing a proposal that would overhaul the mortgage servicing compensation system as it has failed to make a “compelling case” as to why it is necessary to change a system that has “worked well for decades,” according to the Mortgage Bankers Association.In a comment letter sent to the Finance Agency earlier this month, MBA President and CEO David Stevens said the FHFA’s proposed changes would dramatically alter residential servicing, origination and secondary market operations, not necessarily for the better.“The current servicer compensation model is still the best approach and making radical changes, like the proposed ‘fee-for-service,’ will have dramatic impacts not just on originators, servicers and investors but also on borrowers in both the costs they pay to get a mortgage and the support they receive from their servicers,” said Stevens.

Weeks after bringing the first criminal charges to be filed in a “robo-signing” related case, the Nevada State Attorney General’s office has filed suit against Lender Processing Services, the nation’s largest provider of default mortgage services, and some of its subsidiaries for engaging in allegedly deceptive practices against consumers in the state. The lawsuit, filed Dec. 15, 2011, in the 8th Judicial District of Nevada, follows the state AG’s investigation into LPS’ default servicing of residential mortgages in Nevada, especially loans in foreclosure. The lawsuit includes allegations of widespread document execution fraud, deceptive statements made by LPS about efforts to correct document fraud, improper control over foreclosure attorneys and the foreclosure process, misrepresentations about LPS’ fees and services, and evidence of an overall press for speed and volume that prevented the necessary and proper focus on accuracy and integrity in the foreclosure process.

California. In XL Specialty Insurance Company v. Perry, No. 11-2078, U.S. District Court for the Central District of California ruled that the Federal Deposit Insurance Corp. cannot intervene in in a litigation dispute between former IndyMac Bancorp executives and their insurers. The court ruled the FDIC did not meet the standard for intervention as a matter of right, or the standard for permissive intervention. Connecticut. In RMS Residential Properties, LLC v. Anna M. Miller et al., the Connecticut Supreme Court recently ruled that RMS Residential Properties, LLC, with an assignment from Mortgage Electronic Registration Systems, Inc., had standing to foreclose after the borrower defaulted, and that MERS was a valid mortgagee at the origination of the loan, as the nominee for the original lender. The court rejected the claim of the defendant, who argued that that MERS, as third party, could not be named as a mortgagee because it was not the original lender or the party secured by the mortgage. The court also rejected the defendant’s request to declare the MERS mortgage to be void because MERS was not the owner of the debt.

There’s been a notable changing of the guard among attorneys in the mortgage banking practices at the law firms of Patton Boggs, Ballard Spahr and Dykema. Partners Richard Andreano, John Socknat and Michael Waldron and associate Reid Herlihy left Patton Boggs recently with upwards of 100 clients and signed on with the newly created Mortgage Banking Group at Ballard Spahr. The new unit is part of Ballard Spahr’s larger effort to build up its Washington, DC, office. Meanwhile, Dykema augmented its regulatory presence by bringing on board former Patton Boggs senior lawyers Heather Hutchings and Haydn Richards to its Financial Services Regulatory and Compliance practice.