Wednesday, June 30, 2010

LA, CA Markets Showing Signs of Property Appreciation

Some of the nation's hardest hit areas in terms of property value declines may be on the comback, according to Veros Real Estate Solutions, Santa Ana, Calif., an industry leader in enterprise risk management and collateral valuation services. The company recently released an update to its U.S. real estate market forecast, VeroFORECAST.

“More coastal California markets are showing signs of improvement,” said Eric Fox, Veros’ vice president of statistical and economic modeling. “California’s Inland Empire area, including Riverside, San Bernardino and Ontario, is showing signs of modest appreciation, joining the state’s strongest metro region, San Diego. Colorado is beginning to look good again to buyers, with three cities among the top ten.”

Fox said that Louisiana’s Shreveport and Bossier City area represented a new entry among the top five positive trending areas and that the Houston metro area is also demonstrating modest improvement. He added that the company could only speculate on the effects, if any, that will result in the residential real estate market from the catastrophic BP oil spill in the Gulf. None of the firm's zip code level models which are on the coast of the impacted coastal areas are yet showing significant forecast differences from those zip code models that are further inland and less impacted.

According to Veros, the projected five strongest markets are Shreveport / Bossier City, LA +4.2%, San Diego / Carlsbad / San Marcos, CA +3.4%, Riverside / San Bernardino / Ontario, CA +3.2%, Amarillo, TX +3.2%, and Houston / Sugar Land / Baytown, TX +3.1%.

The five projected weakest markets are Chico, CA -8.9%, Deltona / Daytona Beach / Ormond Beach, FL -8.3%, Reno / Sparks, NV -7.8%, Vero Beach, FL -7.8%, and Palm Bay / Melbourne / Titusville, FL -7.7%.

Wednesday, June 23, 2010

New Title Firm Entering Aggressively

Things are brewing over on the title side of the business. Part of that may be that the government is trying to get lenders and title companies to work together more effectively for the benefit of borrowers. Not sure that's happening (or likely to happen), but the new RESPA rules certainly have created some movement in this part of the business.

Two of the firms likely to be making news in this sector are Williston Financial Group and its wholly owned subsidiary, WFG National Title Insurance Company. The two just opened their national headquarters in Lake Oswego, Oregon. WFG is currently licensed and operating in 33 states nationwide. The company is a full service provider of title insurance and real estate settlement services for lender, commercial and residential transactions.

The company is headed up by CEO Patrick Stone, who is no stranger to the settlement services and mortgage lending industry. He completed a lengthy and distinguished career with underwriting giant Fidelity National Financial by serving eight years as its president, COO and director, and was also the CEO of Fidelity National Information Systems. He has also been the Vice Chairman of Metrocities Mortgage and served as a director for First American Corporation prior to founding WFG. He is also a frequent key note speaker at a wide variety of industry conferences.

Stone says that his new company is dedicated to taking time and cost out of real estate transactions, which he says will come mostly from focusing on the client and its processes. By enabling client processes, WFG will increase closing rates, he said.

By minimizing corporate infrastructure, WFG hopes to avoid operating a costly hierarchical organization. Finally, Stone notes that WFG will take a collaborative approach to expediting the real estate transaction, empowering agents and industry professionals with information and technology.

He may be on to something. In less than six months, WFG has already hired almost 200 employees nationally. Stone notes that the company plans to continue its aggressive growth nationally.

“We will be growing rapidly, as it is the most opportune time in the market’s history to make cost effective acquisitions. Moreover, the real estate settlement services industry has become internally focused, creating a disconnect with clients forced to adjust to a challenging market dynamic.”

The company hopes to have offices or agents in over forty states before the end of the year.

Photo: Patrick Stone

Friday, June 18, 2010

Home Lending Source Goes Live with Mortgage Builder Software

Home Lending Source, Middleburg Heights, Ohio, has selected Southfield, Mich.-based Mortgage Builder’s loan origination software (LOS) system after an exhaustive due diligence process, the company said in a release.

The Cleveland area-based lender was formed from an existing mortgage company and an investment group that included several people with extensive experience in building companies. Among them was operations and business process engineering specialist Zubin Nagpal, a principal owner, who immediately saw that the company needed reengineering to compete effectively with the big-box players in the mortgage business. Since the origination effort centers on the LOS, a new lending software system was among the first decisions to make.

Nagpal had largely decided he wanted an end-to-end system rather than buying one integrated from various components, preferring the single platform concept and the data integrity it brings to a business. According to the company, he did demos of 15 competing LOS systems in his first 40 days on the job, and spoke to dozens of third party providers for their impressions of the leading LOS firms.

Nagpal narrowed the field down to five companies that were deemed the best and brought in a team of users to help him make the next cut. The team, consisting of a branch manager, the head of underwriting and a closer, saw demos of the five and reduced the group of contenders to three. Adding additional operations people to the team, they went on-site at several client companies and interviewed actual users of the three LOS systems to eliminate one more.

Next came the acid test: they invited the two finalist companies into their offices to show the systems to loan officers and the department staffs.

“We picked Mortgage Builder,” Nagpal says. “It was the integrated system we were looking for and had a superior reputation among our fellow Lenders One alliance members. Most importantly, Mortgage Builder gave us the technology sophistication we needed to grow and compete with the biggest lenders without making a prohibitively large investment to buy an enterprise-level system.”

Home Lending Source chose Mortgage Builder’s Application Service Provider (ASP) delivery model, but plans to switch to hosting the software on their own servers in the near future.

“This was another part of Mortgage Builder’s appeal,” Nagpal explains. “Their offering allows us to start off with their taking care of the hosting and maintenance and then switch to an in-house model later, when we are ready to take it on. Mortgage Builder lets us go from one option to the other seamlessly, with no impact to the LOS’ features or capabilities.”

Training and implementation timeframes were also an important consideration for Home Lending Source as they chose their LOS. Mortgage Builder’s reputation among its clients gave its platform the edge there, too.

“Our head of operations set an aggressive implementation schedule of 75 days and, with Mortgage Builder’s help, we were successful in achieving it,” he relates. “Their trainers have been fantastic, and we’ve had great response from Customer Support, just as their other clients told us during the due diligence phase.”

FNC to Build Gulf Coast Oil Crisis Web Site

No one is quite sure what will be successful in stopping the oil bubbling up into the Gulf of Mexico or what impact it will have on the people that live and work along the Gulf Coast, but one company wants to find out. Oxford, Miss.-based FNC is creating an online map, that it says will track the sale prices and home values of Gulf Coast homes since the BP oil spill began in May and will continue to offer this info free until the crisis ends.

To facilitate this, FNC has invited Gulf Coast-area real estate professionals to provide information for the new web site.  The Collateral Vision Gulf Coast Crisis Website—available this fall—will map property values from the Gulf Coast at least 50 miles inland.

Mortgage technology company FNC is encouraging industry professionals in the affected areas—community bankers, lenders, appraisers, real estate brokers, bank managers—to use the site to post photos, narrative, blog entries, and comments describing what they discover about the oil spill’s impact on home values and sales.

“We hope the web site will become a repository of detailed news about how lenders, loan servicers, and insurers are responding to homeowners whose incomes and mortgages have been affected by the oil spill,” said Carol Luitjens, FNC’s chief marketing officer.

Also on the site, FNC experts will discuss how appraisers might evaluate the impact of the oil spill fairly and accurately, how the spill may affect homeowners trying to refinance, and how an enormous number of insurance claims may affect the mortgage and lending industries.

Eventually, visitors to the site will be able to enter a zip code and recover a wealth of information about current residential property values and trends within 100 miles of the Gulf Coast.

This could send a clear message to federal regulators regarding the size and scope of the damages, which should aid them in reaching a settlement with BP. If all goes well, the well will be plugged before the FNC site goes live. If not, it could provide a record of the worst environmental catastrophe in American history.

Too bad no one thought of this in the wake of Hurricane Katrina.

Thursday, June 17, 2010

MIAC has a portfolio for sale

We've been hearing that portfolios are coming back to market. Recently, Mortgage Industry Advisory Corporation (MIAC), a leading provider of pricing, risk management, and accounting solutions for the mortgage and financial services industries, announced that it was the exclusive representative of a seller offering a $1 Billion FHLMC bulk mortgage servicing portfolio.

According to MIAC, the portfolio has several attractive characteristics including: $141,699 Average Loan Size; 100% Fixed Rate loans; Weighted average interest rate of 5.09%; Weighted average delinquency rate of 1.28%; Weighted average loan Age of 54 months; National Geographical Distribution.

The Bid Date is Friday, June 25, 2010. A copy of the Offering Memorandum is available online. Loan level portfolio data can be supplied in electronic format upon request. Interested parties should contact their MIAC representatives with any questions about the portfolio sale.

We've worked with MIAC in the past but have no connection to the company at this time.

MIAC isn't the only company that says it is seeing increased activity in loan trading. Our client Franklin Credit Management recently reported a burst of activity in the market. We're watching this development with high hopes, but I'm not yet convinced it means that new investors are ready to move back into the market.

Sunday, June 13, 2010

Mortgage Banking Solutions Hires Paul Peters

Mortgage Banking Solutions, Austin, a management advisory firm to the residential mortgage finance industry, has hired Paul M. Peters, a long-time mortgage banker, as Senior Mortgage Consultant. Peters will concentrate his national practice primarily on bank and credit union-owned mortgage operations.

Peters has extensive experience in all areas of bank and credit union-owned mortgage operations, having over 34 years of hands-on mortgage banking leadership experience. Most notably, Peters served as President of Hibernia Bank’s Mortgage Division (Hibernia was acquired by Capital One Bank in 2006) for over 12 years and continued as President of Capital One Mortgage, N.A. for two years after the merger.

During his career at Hibernia/Capital One, the mortgage operation was nationally recognized as a top producer of retail and correspondent loan production, with 2004 volume exceeding $7.5 billion.

“We are delighted to have Paul bridge the gap between FDIC banks and mortgage lending,” said Dave Lykken, managing partner with MBS.

Lykken pointed out that Peters understands the challenges and opportunities of bank-owned mortgage operations with regard to profit contribution, regulatory compliance issues, mortgage-specific risk mitigation, cross-selling of other profitable bank products and customer service/retention that are specific to a bank or credit union.

“The mortgage division of a bank should be complementary to all the other bank divisions and, through consistently good customer service and well thought-out cross-sell policy, the closing of the mortgage loan for a satisfied customer should serve as an excellent entrĂ©e for cross-sells of several other valuable bank products,” Peters said.

In the past, the mortgage industry's inability to follow through on this promise has contributed to its abysmally low customer service ratings. It will be interesting to see if Peters can bring this vision to fruition for his new company's clients.

Peters holds a Bachelor’s Degree in Finance and earned the Certified Mortgage Banker (CMB) designation in 1991, the highest professional designation awarded by the Mortgage Bankers Association of America.

Wednesday, June 09, 2010

Is wholesale lending coming back?

When the industry (and its regulators) realized that the loans that had been originated during 2003-2007 were largely made to borrowers who probably never should have had a loan (at least the loans that eventually went into foreclosure), the nastiness flowed downhill, all the way to the brokers. Wholesale lending swiftly fell out of favor.

It appears that the pendulum is swinging back and brokers are finding more lenders willing to take the applications they send upstream. That's good news for companies that provide technologies to help brokers determine which loan programs will work for which borrowers, given the stricter underwriting guidelines lenders are using today.

For instance, Costa Mesa, Calif.-based PriceMyLoan recently announced that Mid-Island Mortgage Corp, a retail and wholesale mortgage lender on the east coast, recently deployed its automated underwriting and loan pricing engine.

"The critical factor for us in choosing a pricing engine was integration with FHA TOTAL Mortgage Scorecard," said Terri Cutting, sales manager for wholesale lending at Mid-Island Mortgage Corp. “We were happy to learn that PML completed an interface with the Federal Housing Admistration’s (FHA) TOTAL Mortgage Scorecard loan approval platform in January.”

Other providers of Product and Pricing engines (PPE) have also been experiencing success as lenders rebuild their third-party origination networks.

Earlier this month, Denver-based Mortgage Cadence, Inc., a leading provider of Enterprise Lending Solutions (ELS) for the financial services industry, announced that it has been selected by Carnegie Mortgage LLC, the wholly owned subsidiary of Grand Bank, N.A. of Hamilton, N.J., to replace their mortgage lending and document management technology platform. Carnegie Mortgage originates approximately $200 million in mortgages per month via their retail and wholesale channels, Ovation Home Loans and Icon Residential Lenders. Ovation Home Loans is the company's retail channel and Icon Residential is a wholesale lender. Product and Pricing is part of what the new platform will provide.

Last month, Calyx integrated Mortgage Pricing System's LEAP! PPE into its Point software for mortgage brokers and Sollen Technologies added its PPE to AppNavigator's loan locking tool.

"If your organization is in the mortgage industry, you can use AppNavigator to automate the process of locking your loans," says Paul Griffin, CEO of AppNavigator. "Our processes will move data from Sollen to the investor website then update your internal LOS with the lock confirmation without your staff touching the data."

It brokers are going to make a comeback, these are some of the technologies they'll be using to efficiently originate to lenders' new, tougher guidelines.