Archive for August 10th, 2012

Five New Firms Selected to Help Oversee Settlement Agreement

Five New Firms Selected to Help Oversee Settlement Agreement

08/09/2012BY: RYAN SCHUETTE

The Office of Mortgage Settlement Oversight recently chose five new firms to serve as its eyes and ears on the ground as the $25 servicer settlement grinds forward.

The new secondary professional firms – including BKD, LLP; Baker Tilly Virchow Krause, LLP; Crowe Horwath, LLP; Grant Thornton, LLP; and McGladrey, LLP – will assist settlement monitor Joseph A. Smith, Jr., over the next three and a half years.

According to a release, each firm will assist BDOConsulting, a division of BDO USA, LLP, and the primary professional firm responsible for evaluating servicers Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

“Each secondary professional firm has a high level of expertise that will bring the detailed, independent attention we need to monitor this settlement,” Smith said in the release.

He said that he worked closely with BDO to select the final list of firms.

“I am confident that these six accounting firms make up the blend we need to fully implement the settlement,” he added.

Appointed by state attorneys general, Smith leads the office as it oversees compliance by the servicers with terms under the historic settlement from earlier this year.

He had said in past interviews with DS News and MReportthat his office would select and appoint the primary and secondary professional firms later this year.

2012
08/10
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Industry Loses Innovative Legal Mind with Passing of Robert Wilson Jr.

Industry Loses Innovative Legal Mind with Passing of Robert Wilson Jr.

08/08/2012BY: SPECIAL REPORT

Robert M. Wilson, Jr., 60, died after a two-year battle with cancer on August 3, 2012.

Wilson, a lawyer and historian, was born April 28, 1952 to Robert M. Wilson, Sr. and Jan Herrick Wilson in Little Rock, Arkansas.

A frontrunner in his line of work, Wilson began his career in law in 1978 and founded Wilson & Associates PLLC. Wilson was recognized for his tireless efforts to improve the mortgage banking servicing industry. His leadership includes authoring numerous pieces of legislation and serving as general counsel to the Arkansas Mortgage Bankers Association. He was also a founding member of theUSFN, to which he devoted countless hours of service.

Wilson graduated from the University of Arkansas and the University of Arkansas School of Law. In his college years, Wilson enlisted in the Arkansas Air National Guard, attended basic training at Lackland Air Force Base in San Antonio, Texas, and was honorably discharged in 1976. During this period, Wilson also worked under Arkansas Senator John McClellan in Washington, D.C. during the Watergate Hearings.

Wilson also had a passion for history and began collecting military memorabilia in his youth. His collection culminated to the creation of the Wilson History & Research Center in 2006. The center now serves as a nonprofit museum dedicated to locating, acquiring, authenticating and disseminating military headgear of the 20th Century.

Aside from his accomplishments as a lawyer and historian, Wilson will be remembered by those who knew him as a generous, passionate visionary who embraced life and lived it to its fullest. He will be deeply missed by all who had a chance to know him.

Jennifer Wilson-Harvey will continue to direct the operation of Wilson & Associates. Over the years, Wilson and Wilson-Harvey built a strong foundation of leadership and management of the firm through its partners and attorneys.

Wilson is survived by his children, Robert Wilson III and Jillian Wilson, his brother, Charles Arthur Wilson, former wife and law partner, Jennifer Wilson-Harvey, and his step-mother, Jane McGehee Wilson.

2012
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LPS: Judicial States See High Share of Aging Past Due Loans

LPS: Judicial States See High Share of Aging Past Due Loans

08/09/2012BY: ESTHER CHO

A report from Lender Processing Services (LPS) revealed that in judicial states, the share of aging past due loans is significantly higher than in non-judicial states.

In judicial states, nearly 60 percent of borrowers with loans in foreclosure have not made a payment in 2 years, whereas in non-judicial states, that percentage is at about 30 percent. Among those with loans 90 days or more past due, 50 percent of borrowers in judicial states have not made a payment in more than one year, compared to slightly more than 40 percent in non-judicial states.

The LPS report also found a surge in HARP refinance activity for those with higher loan-to-value ratios (LTVs) from January to June this year.

“Since the beginning of this year, high loan-to-value refinances have increased significantly. As an example, 2006 vintage GSE loans with six percent interest rates and LTV ratios between 100 and 125 percent increased from a 10 percent annualized prepayment rate at the end of 2011 to more than 40 percent in June 2012,” said Herb Blecher, SVP at LPS Applied Analytics.

Blecher added that LPS data also shows this rise extends beyond that subsection and holds true for other vintages with the similar characteristics

Other data from LPS showed that the delinquency rate for June now stands at 7.14 percent, down 30 percent from the January 2010 peak when the rate was 10.57 percent. Month-over-month, the delinquency rate in June rose 3.4 percent, but was down 7.3 percent.

The rate of properties in foreclosure inventory maintained historically high levels at 4.09 percent for June; in December 2005, the rate was 0.44 percent.

Foreclosure starts totaled 173,556 in June, which down 20.7 percent from May and 20.5 percent year-over-year. Despite the decrease, foreclosure starts still outnumber foreclosure sales at a 2:1 ratio, according to LPS. Foreclosure sales numbered 74,000 in June.

For June, the states with highest percentage of non-current loans, which includes loans 30 days or more past due plus foreclosures, were Florida (21.2 percent), Mississippi (17 percent), Nevada (16 percent), New Jersey (16 percent), and Illinois (13.7 percent).

The states with the lowest percentage of non-current loans were Montana (5.5 percent), Alaska (5.1 percent), Wyoming (4.8 percent), South Dakota (4.8 percent), and North Dakota (3.6 percent).

2012
08/10
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Survey: Delinquency Rates Up, Foreclosure Starts Flat in Q2

Survey: Delinquency Rates Up, Foreclosure Starts Flat in Q2

08/09/2012BY: TORY BARRINGER

The latest National Delinquency Survey from theMortgage Bankers Association (MBA) showed that delinquencies increased in the second quarter of 2012, a shift anticipated by the association.

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 7.58 percent as of the end of Q2, an increase from 7.40 in Q1. It is typical for delinquency rates to increase between the first and second quarters of the year.

The second quarter’s increased rate was still down from 8.44 percent at the same time in 2011.

On a seasonally adjusted basis, the overall delinquency rate increased for all loan types except FHA loans. Subprime loans saw the biggest increase in delinquency, with the seasonally adjusted rate jumping to 19.85 percent for subprime fixed loans and 22.60 percent for subprime adjustable-rate loans.

Delinquency on FHA loans declined, with the delinquency rate falling to 11.89 percent from an even 12.00 percent in Q1.

MBA chief economist Jay Brinkmann said the scale of the increase in delinquency is not as notable as the fact that delinquency rates are no longer falling. It is unknown if the increase in delinquency rates is a temporary situation or a sign of things to come.

“Mortgage delinquencies were up only slightly over the last quarter. Perhaps more important than the small size of the increase, however, is the fact that it reversed the trend of fairly steady drops in delinquencies we have seen over the last year,” Brinkmann said. “This is consistent with the slowdown in the economy during the first half of the year and our stubbornly high unemployment rate. Whether this is just a temporary blip or a sign of a true change in direction for mortgage performance will fundamentally depend on the direction of employment over the remainder of the year.”

Foreclosure starts stayed flat, and the percentage of loans in foreclosure at the end of Q2 fell to 4.27 percent. The serious delinquency rate (for loans that are 90 or more days past due or are in the process of foreclosure) was 7.31 percent, a decrease from last quarter and last year.

FHA reported a relatively large increase in foreclosure starts, with the seasonally adjusted rate hitting 1.72 percent. The jump in starts is not reflective of the performance of the performance of FHA loans, however;MBA attributed the increase to the resumption of foreclosure proceedings after the national mortgage settlement, as most of these loans had been seriously delinquent for some time.

“While the rate of foreclosure filings was unchanged, that rate would have fallen were it not for the considerable jump in foreclosure starts on FHA loans,” Brinkmann said. “This quarter’s rate set an all-time record for FHA loans, but it was only slightly higher than the previous high set in 2010. The jump was due to one or more large servicers of FHA loans restarting foreclosure actions on delinquentFHA loans after the completion of the Department of Justice review and the mortgage servicing settlement.”

While foreclosure starts didn’t seem to be affected by judicial or non-judicial state status, MBA’s survey showed a discernible difference in foreclosure percentages between the two types of state. Of the 12 states whose foreclosure percentages exceeded the national average, 11 are judicial states. The only outlier was Nevada.

Maryland saw the greatest number of foreclosure starts by far, with 1.95 percent of loans going into the foreclosure process by the end of the quarter. In terms of total foreclosure percentages, Florida ranked number one with 13.70 percent, nearly double the second-ranked state (New Jersey at 7.65 percent).

“Among the states, the rate of new foreclosure actions in Maryland was the highest in the nation during the second quarter, more than double the national average. The Maryland numbers, however, were largely driven by the resumption of foreclosures following the servicing settlement,” Brinkmann said.

“In terms of the percentage of loans in foreclosure, Florida continues to lead the nation at 13.7 percent, more than three times the national average, followed by New Jersey at 7.7 percent, Illinois at 7.1 percent and New York at 6.5 percent. In contrast, Arizona and California, two of the states hit hardest by the housing downturn, are at 3.2 percent and 3.1 percent respectively, both more than a full percentage point below the national average.”

2012
08/10
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Aloha State Residents Allegedly Lost Millions in Foreclosure Sales

Aloha State Residents Allegedly Lost Millions in Foreclosure Sales

08/09/2012BY: TORY BARRINGER

Hawaii is seeing a number of lawsuits against banks related to allegedly unfair foreclosure sales practices, The Honolulu Star-Advertiser reported Tuesday.

Lawsuits have been brought against Deutsche Bank National Trust Co., Bank of America, U.S. Bank N.A., and Wells Fargo. In addition, a suit has also been filed against Routh Crabtree Olsen, a Washington firm with offices in Hawaii, for its alleged involvement.

The lawsuits allege that state residents received lower prices than they should have for their properties sold through non-judicial foreclosure auctions. The plaintiffs say that these institutions committed multiple violations of state non-judicial foreclosure laws and kept residents from getting the highest possible prices for their properties.

The amount of losses for the residents reaches in the millions of dollars, according to their attorneys.

The suits allege that the banks advertised and conducted non-judicial foreclosure auctions for quitclaim deeds, meaning the properties are sold “as is” and without a guaranteed clear title.

However, the banks then allegedly provided winning bidders with limited warranty deeds, which ensure fee-simple title and are thus more valuable.

One resident’s lawyers estimated that she and her husband would have received at least $50,000 more if the sale had been for a limited warranty deed, the Star-Advertiser reported.

Additionally, the suit against Routh Crabtree Olsen alleges that the firm did not publicly announced postponement of auctions, did not use licensed attorneys to conduct the auctions, and filed false affidavits about the transactions. The firm is also accused of delivering limited warranty deeds in violation of notices that sales would be for properties “as is.”

Honolulu attorney John Perkin told the Star-Advertiser he thinks Routh Crabtree Olsen’s practices are “outrageous.”

“They came here as robotroops for these big mainland lenders and proceeded this wholesale violation of our Hawaii statues,” Perkin said.

The suit seeks class action status for an estimated 700-800 residents who non-judicial foreclosures were assisted by the firm and the other co-defendants. The plaintiffs seek to represent close to 3,000 borrowers whose properties went through the same process.

The plaintiffs seek millions of dollars in damages across all the suits, which would be tripled under Hawaii’s unfair and deceptive practices law should the plaintiffs win.

Spokespeople for U.S. Bank and Wells Fargo denied involvement in the foreclosures. According to the Star-Advertiser, no other banks responded to requests for comment.

2012
08/10
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