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.

Non-bank servicers have received a reprieve from scrutiny by the Consumer Financial Protection Bureau due to a heated political fight in Congress. Despite a major push last week by the Obama administration, Senate Republicans blocked an attempted vote to confirm former Ohio Attorney General Richard Cordray as director of the CFPB. Last week, the Senate voted 53-45 on a motion to consider Cordray as director of the CFPB. At least 60 votes were needed to end a Republican filibuster. Scott Brown, R-MA, was the only Republican to vote in favor of the motion ...

The Treasury Department increased its threats against non-agency servicers regarding Home Affordable Modification Program performance. In a report released last week, the Treasury was highly critical of JPMorgan Chase and a number of other non-agency servicers remain on notice. Freddie Mac, acting as the Treasury’s compliance agent for the Making Home Affordable program, conducts quarterly assessments of HAMP servicers. In the third quarter of 2011, Chase was deemed to be in need of “substantial improvement” in compliance with MHA guidelines, the third quarter in a row for the servicer ...

The Federal Housing Finance Agency’s proposal to shift the handling of nonperforming loans to special servicers would not benefit most servicers and borrowers, according to the Mortgage Bankers Association. The proposal could also hinder efforts to shift activity to the non-agency market. In September, the FHFA proposed a fee-for-service compensation model for the government-sponsored enterprises and suggested it could also be applied to the non-agency market. According to the FHFA’s discussion paper, Fannie Mae or Freddie Mac would pay a set dollar fee per performing loan – $10 was cited as an example. For non-performing loans ...