The National Groups, LLC (TNG)
- Delinquency on the Rise for Vintage Prime Mortgages
Performance on vintage prime residential mortgage-backed securities (RMBS) continues to degrade,revealed in a report.
The ratings agency announced a downgrade on 6 percent of its rated prime RMBS classes, many of which fall into the pre-2005 category. Fitch attributed the downgrade to increased delinquency rates in certain pools.
"The deterioration in performance in pre-2005 RMBS has been driven by adverse selection in the small remaining mortgage pools," Fitch said in a release. "Record-low mortgage rates driven by the Federal Reserve and sustained by economic uncertainty have led most pre-2005 borrowers to refinance. Consequently, the remaining mortgage pools are increasingly concentrated with borrowers unable to refinance due to credit obstacles."
As delinquency rates increase in older prime pools, performance has improved for Alt-A, subprime, and more recent vintage prime pools. The rate of remaining pre-2005 borrowers rolling into delinquency is 1.5 times higher today than three years ago, and total delinquency is roughly 1.3 times higher than 2011 levels.
Fitch placed 15 percent of all rated prime RMBS classes on Rating Watch Negative in September, citing much of the same data. As of the most recent review, approximately 14 percent of all classes remain on negative watch and are at risk for a further 1-2 rating category revision.
By: Tory Barringer
- Mortgage Rates Set More Record Lows
The Freddie Mac survey showed the 30-year FRM averaged 3.36% for the week ending Thursday, falling below the all-time low of 3.4% set last week. Last year at this time, the 30-year FRM averaged 3.94%.
A weakening economy and the Federal Reserve's continued purchase of mortgage securities took the 30-year, fixed-rate mortgage to historic lows for the second straight week
The Freddie Mac survey showed the 30-year FRM averaged 3.36% for the week ending Thursday, falling below the all-time low of 3.4%. Last year at this time, the 30-year FRM averaged 3.94%.
The 15-year FRM, a popular refinancing choice, averaged 2.69%, falling from 2.73% last week and setting a new record low. A year ago, the average rate for a 15-year FRM was 3.26%.
Five-year, Treasury-indexed, hybrid adjustable-rate mortgage averaged 2.72%, up a bit from 2.71% last week and falling from 2.96% a year earlier.
The Federal Reserve's purchase of long-term fixed mortgage securities pushed 15-year FRMs below 5-year ARMs for the first time since the week of October 15, 2009.
One-year, Treasury-indexed ARMs averaged 2.57%, down from last week's 2.60%. A year ago, it averaged 2.95%.
Freddie Chief Economist Frank Nothaft cited a weakening economy as a reason for the historic lows.
The final estimate of growth in gross domestic product was revised down to 1.3% in the second quarter, representing the slowest growth in a year. Personal incomes rose only 0.1% in August, while July's increase was revised downward.
And pending home sales in August fell 2.6%, well below the market consensus forecast of a slight increase.
Home loan analytics firm Bankrate, which surveys large banks, reported that the 30-year FRM fell to 3.52% from 3.55%, while the 15-year FRM dropped to 2.84% from 2.88%. The 5/1 ARM slipped to 2.67% from 2.68% for the week.
Source: Housing Wire, By Justin T. Hilley
- Foreclosures Decline but Remain High, Prepayments Surge: LPS
Foreclosure inventory continues to decline but remains more than eight times what it was in the decade prior to the housing crisis, according to the latest report from.
Noncurrent loans make up 10.9 percent of all loans as of August, demonstrating a year-over-year change of -7.6 percent, according to LPS.
As of August, the delinquency rate stands at 6.9 percent, and the foreclosure rate is 4.0 percent.
There remains a large gap in the foreclosure rate between judicial states and non-judicial states. In fact, in judicial states the rate remains near an all-time high of 6.49 percent, while the foreclosure rate in non-judicial states is 2.28 percent.
The amount of loans 90 or more days delinquent is near half of its January 2010 peak. The majority of these loans are more than nine months delinquent. About 43 percent are at least 12 months delinquent.
The overall delinquency rate declined 2.3 percent in August.
States ranking highest for non-current loans include Florida, Mississippi, New Jersey, Nevada, and New York.
States with the lowest percentages of non-current loans include Montana, Alaska, South Dakota, Wyoming, and North Dakota.
LPS noted prepayment activity was up "significantly" in August, nearing levels last reported in 2005.
The annualized prepayment rate at the end of August was almost 25 percent, according to LPS' findings.
Prepayment was highest among loans with higher combined loan-to-value ratios (CLTVs). For example, among loans with more than 120 percent CLTV, prepayment increased more than 65 percent year to date.
According to LPS, this trend is significant because prepayments are an indicator of refinance activity.
In August, 2011 vintage loans experienced a 23 percent increase in prepayments over the month.
Loans with vintages from 2007 and earlier experienced a prepayment increase of just 9 percent, which LPS interprets as signs of a "refi burn out."
"[I]t is also becoming evident that loans originated in 2007 and earlier have diminished prospects for conventional refinancing opportunities," stated Herb Blecher, SVP of applied analytics at LPS.
"Fewer than 30 percent of these vintages remain both active and current, and on average, they are marked by larger negative equity positions and lower credit scores," Blecher explained.
Source: DS News By: Krista Franks Brock
- KBW: Single-Family Rental Market Could Emerge As Asset Class
Over the last year, one part of the distressed housing market that has been gaining positive momentum is the rental class. According to a report from Keefe, Bruyette & Woods, analysts believe the rental strategy may be the short-term spurt to an economic recovery for the housing industry.
KBW said that real estate investors interested in acquiring bank-owned properties that are currently flooding the market throughout the country have raised anywhere from $6 to $8 billion. With this money, KBW said investors can obtain anywhere from 40,000 to 80,000 REO homes.
"The single-family rental market has historically been a fragmented market funded with capital from retail or smaller institutional investors," KBW analysts said in the report. "Investor interest has increased meaningfully as the large foreclosure inventory combined with a secular shift toward renting has created the possibility of larger-scale investments in the space."
KBW expects theto experience robust growth over the next 18 to 24 months, potentially emerging as an institutional asset class.
Chris Clothier, co-owner of Memphis Invest, a real estate investment firm that provides ongoing tenant management for properties on behalf of private investors, also believes the single-family rental market will have short-term success.
"Unfortunately, many of these properties will be flushed through a cycle that will devastate some neighborhoods," Clothier told this publication in an email. "Some of these properties will have perpetual problems and may return as REOs down the line after the funds sell properties to unsuspecting investors at higher prices.
"Unlike the estimated 28 million individual real estate investors, some of whom absolutely want to purchase these properties, the funds are not buying to stabilize their cities or for long-term appreciation and return," Clothier added. "They are buying for very short-term returns and many are looking to package and sell for enormous profit as soon as possible."
Still, though without financial leverage, KBW said that the money so far raised by investors to acquire these properties amounts to less than 15% of unsold REO inventory. Through July, there are over 1.3 million homes in the national foreclosure inventory, CoreLogic reported.
However, over time, KBW expects leverage to become more available.
"Seller financing provided by the GSEs, syndicated lending, high-yield debt, and securitization could later emerge as longer-term funding tools," KBW said. "We estimate current cash returns are in the 5% to 7% range, taxable income would initially be around 4% to 6% after depreciation expense, and total potential returns could reach 15% to 20% (or higher depending on leverage and home price appreciation)."
Meanwhile, KBW found that two mortgage REITs have invested heavily in the single-family rental sector: Colony Financial and Two Harbors.
To date, these companies have invested approximately 15% and 5% of their respective equity in this strategy. This equates to about $300 million of capital, but over $700 million including investments made by company affiliates.
The New York-based investment bank said it "expects more public companies to enter the space over time."
Source: Origination News By, Evan Nemeroff
- TNG Welcomes Robert Moore as Valuations Operations and Compliance Manager
Wayne Arute, President of The National Groups is pleased to announce and welcome Robert Moore as Valuations Operations and Compliance Manager. Bob brings over 25 years in the real estate appraisal and valuations industry and will be responsible for the day to day operations of National Valuation Services, LLC, a subsidiary of The National Groups.
Bob joins The National Groups team from Pro-Teck Valuation Services where, as a certified real estate appraiser, he was responsible for in-depth valuation product reviews, appraisal reporting and analyzing market values. Prior to his position at Pro-Teck, Bob held several roles during his successful tenure at Mortgage Lenders Network USA, Inc., his last position with their organization was as the Manager of Asset Valuation and Preservation.
Mr. Moore holds of Bachelor of Arts degree from the University of Connecticut. He is also a Certified Real Estate Appraiser.
- Press Release: Rick Smith Joins The National Groups as Executive Vice President of Special Servicing & Business Development
Meriden, CT (PRWEB)
The National Groups, a leading special servicing outsource provider is pleased to announce the appointment of Rick Smith as Executive Vice President, Special Servicing and Business Development in our Meriden, CT office. Mr. Smith brings over 30 years of experience in the mortgage industry and will be responsible for several of The National Groups business channels, as well as the leadership of the business development group.
Mr. Smith joins The National Groups team from Clayton Holdings where he was responsible for managing the executive sales strategy and client relationships for the Quantum servicing platform. Prior to joining Clayton Holdings, Rick held numerous executive management positions at Marix Servicing, LLC as well as Chase, KeyBank and Mortgage Lenders Network US, Inc. During his successful tenure Mr. Smith has demonstrated leadership in the areas of special servicing, client relationships, and customer support.
The National Groups, a top rated Special Servicer, Component Servicer, and GSE supplier, through its suite of independently managed subsidiaries, (National Default Servicing, LLC, National Collection & Loss Mitigation, LLC, National Valuation Services, LLC, National Closing, Escrow & Title Services, Inc. and Integrated Servicing Information Systems) provides outsourcing of REO Management & Disposition, Short Sale Fulfillment, Closing & Title and Valuation services, with a focus on offering the most efficient and flexible service possible that is individually tailored to each client's needs, goals and objectives. At the National Groups our philosophy is "Service Without Boundaries". For more information, please visit:. Media Contact: Desmond Primus 860-368-3543 email:
- List of Improving Markets Rises to 99 in September: NAHB
The number of improving housing markets in September climbed to 99 from 80 in August, according to the National Association of Home Builders (NAHB)/First American Improving Markets Index (IMI).
The improving markets are spread throughout 33 states as well as the District of Columbia.
The list includes markets that have improved from their respective troughs for six straight months in three categories: housing permits, employment, and house prices.
The index gathers employment data from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau.
“The number of improving housing markets grew by 19 in September as 68 metros retained their spots, 31 new metros were added and just 12 dropped off the list,” said Barry Rutenberg, chairman of the NAHB and a home builder from Gainesville, Florida. “This solid growth is an encouraging sign that housing continues on a slow but steady recovery path that is gradually advancing from one local market to the next.”
Newcomers to the improving markets list included Tucson, Arizona; Jacksonville, Florida; and Springfield, Illinois.
“More metros across the country are experiencing a sustained uptick in house prices, employment and new building activity as rising consumer confidence in local market conditions pushes more people to consider a new-home purchase,” said NAHB Chief Economist David Crowe. “That said, overly tight lending conditions for builders and buyers continue to slow this process considerably.
By: Esther Cho 09/17/2012. Source: DS News
- RealtyTrac: Foreclosure Filings Point to More Backlog
By Evan Nemeroff Source: Mortgage Servicing News, Managing REO
Foreclosure filings rose modestly in August compared to the prior month, as lenders are still struggling to work through the backlog of delinquent mortgages, according to RealtyTrac.
In August, foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 193,508 properties throughout the nation, up 1% from July.
However, year-over-year foreclosure activity dropped 15%.
The Irvine, Calif.-based analytic providers foreclosure market report revealed that one in every 681 housing units received a filing last month.
"Bucking the national trend, deferred foreclosure activity boiled over in several states in August,” said Daren Blomquist, vice president of RealtyTrac.
There was an annual increase in foreclosure activity in 20 states, led in particular by the judicial states like New Jersey (up 65%), New York (56%), Maryland (54%), Illinois (42%) and Pennsylvania (40%).
Meanwhile, foreclosure activity in most nonjudicial states stayed on a downward trajectory through August, Blomquist noted. In the 24 nonjudicial states and Washington, D.C., foreclosure filings decreased 31% annually.
But, there was an increase in monthly filings in 15 nonjudicial states, including Arkansas rising 61%, Utah was up 41%, Colorado had 41% more foreclosures and Washington had a 23% rise.
“The rebounding activity in Washington state is likely the result of lenders catching up with foreclosures delayed by a state law that took effect in July 2011 and allowed homeowners facing foreclosure to request mediation,” Blomquist added. “This rebounding pattern will likely be repeated in the coming months in other states that have passed legislation delaying the foreclosure process.”
After three straight months of year-over-year increases, foreclosure starts (99,405 U.S. properties) in August decreased 13% from July 2011, when foreclosure starts hit a 17-month high. There were 18 states that started more foreclosures this August compared to a year ago. Washington, Pennsylvania, Alabama and New Jersey all experienced year-over-year increases of at least 100%.
During the same time period, recent legislation in Oregon, Nevada, Massachusetts, California and Georgia resulted in these states seeing a sizable slowdown in foreclosure starts, down 89%, 64%, 47%, 42% and 31%, respectively.
Lenders repossessed 52,380 homes last month, 2% less than July and a 19% drop from a year ago, which is the 22nd consecutive month REO activity fell on an annual basis. REO activity decreased from a year ago in 35 states and the District of Columbia. Some of the biggest state REO decreases were Nevada (down 76%), Oregon (57%), Virginia (56%) Washington (46%), Utah (46%), Massachusetts (43%), Pennsylvania (43%) and Colorado (43%).
For the first time since December 2010, Arizona, California, Georgia and Nevada did not post the top two foreclosure rates nationwide.
Due to a 29% jump in overall foreclosure activity compared to July, Illinois earned the country’s highest foreclosure ratefor the first time since RealtyTrac began issuing its report in January 2005. One in every 298 housing units had a foreclosure filing. Overall, 17,781 Illinois properties filed for foreclosure.
Florida was second on the list in foreclosure rates, where one in every 328 homes had a filing. The Sunshine State saw a 26% annual increase in foreclosure starts, while scheduled auctions were up 4% and bank repossessions rose 12%
- Timelines Drive Foreclosure Liquidation Decisions
By Amilda Dymi Source: Mortgage Servicing News
Distressed asset liquidation timelines will continue to coerce the decision making process for both lender-servicers and homeowners.
A key advantage for all parties considering distressed asset disposition is that it boils down to choosing between a short sale and a deed-in-lieu. Yet, exceptionally long foreclosure timelines are holding hostage lenders, servicers and borrowers of distressed mortgage loans.
“Specific to timelines” are one of the main drives in selecting a deed-in-lieu versus a short sale, says Leo Esposito, a loss mitigation and asset disposition expert with ServiceLink. It all depends on a borrower’s individual case as much as on “how much time servicers can save in getting the asset from pre-foreclosure, through the foreclosure process and into the REO status before they can liquidate it.”
In cases when borrowers hand in the keys to a property that is still standing, the servicer or investor has the option to take over the house, process a deed-in-lieu and move on to final disposition faster.
Again, the question is: How much time can be saved? Does it make sense to get the title reversed? Most servicers pursue traditional deed-in-lieu processing. “However, a few things have changed,” he says.
The first major change is that servicers are more aggressively seeking a deed-in-lieu “offering it much earlier in the workout process” compared to only a few years ago when it was seen as the last tool in the workout or liquidation process. “The reason is because servicers see it as a very viable option.” The incentives servicers offer today also are much more aggressive, the compensation is higher than it has been in years past.
Especially in foreclosure states where foreclosure timelines are getting longer and it may take up to 36 months, the amount offered to borrowers has increased drastically from one to two thousand dollars to, in some cases $10,000 and more, he says. “Unfortunately it is about math, what it adds up to.” If in a judicial state, where it could last for years, the foreclosure process has not been commenced, or has been commenced very recently, it becomes an issue for the servicer “whose hands are tied because the borrower is not going to move out of the house unless there is an incentive to do so,” he added.
“Borrowers are holding the home, and the foreclosure, over the servicer’s head, they are holding servicers hostage. The power is in the hands of the borrowers.”
Ultimately it depends on how much the servicer is willing to pay given the specific metrics of the property. The servicer has to compare the amount of management and other holding costs with the amount of the compensation and even at $10,000 it is significantly lower than management costs.
The third major change in the disposition marketplace however is in the model itself. How processing and servicing operations are managed, the software and technology is used to proceed with a deed-in-lieu makes a major difference, he says.
It is a decisive factor not only because it determines the scale of operations but also the overall efficiency of dispositions where all the power is in the hands of the servicer.
“Traditionally the deed-in-lieu process was a much more fragmented process. Servicers had to deal with multiple attorneys in multiple states,” he explained. The new modules available have allowed servicers to centralize their processes.
Many servicers are switching from fragmented operations to centralized systems that no longer handle deed-in-lieu transactions through operational processes that involve a number of different offices, points of contact or vendors, according to Esposito.
The ServiceLink module is one such example that can be used in all states because it provides the property title data chain and are licensed to contact borrowers and communicate with them directly.
- On The Move
The National Groups corporate headquarters is on the move. With the growth of our Connecticut employee base from under 60 employees to almost 300 employees within the past two years we are excited to announce the relocation of our corporate office to an expansive 20,000 square foot facility in Meriden, CT. The executive team has strategically decided that relocating to a facility with three times our current office space will greatly allow for additional capacity to service existing and future clients. One client, a major bank , has significantly increased short sale fulfillment volume which required the hiring of additional staff.
The National Groups, a top rated GSE vendor, through its suite of independently managed subsidiaries, (National Default Servicing, LLC, National Collection & Loss Mitigation, LLC, National Valuation Services, LLC, National Closing, Escrow & Title Services, Inc.) provides outsourcing of REO Management & Disposition, Short Sale Fulfillment, Closing & Title and Valuation services, with a focus on offering the most efficient and flexible service possible that is tailored to each client's needs and objectives.
- Mitchell Oringer Promoted to Executive Vice President Austin, TX
Mitchell Oringer was recently promoted to Executive Vice President of Asset Disposition. Mitchell will direct all aspects of REO & Loss Mitigation disposition across all related business channels at The National Groups. Joining TNG in 2008, Mitchell brings 20 years of experience in default management and has directed loss mitigation and collections operations at IndyMac Federal Bank, GMAC/ResCap and Clayton Holdings.
- Bruce Wentworth Promoted to Executive Vice President
Meriden, CT - Bruce Wentworth was promoted to Executive Vice President of Administration and Strategy. Bruce oversees the administrative functions of the company including contract review and negotiation, quality control, compliance and licensing, technology as well as portfolio and company strategies Having joined TNG in 2009 with over 30 years of experience in residential loan, tax lien servicing and REO management, Bruce held several executive positions prior to joining The National Groups. For the 7 years prior, he was a Senior Vice President at Clayton Holdings serving in loan and tax lien servicing.
- TNG Welcomes Bryce Fendall, Managing Director, Short Sale Asset Disposition
We are pleased to announce that Bryce Fendall has joined The National Groups as Managing Director, Short Sale Asset Disposition effective April 2, 2012. Reporting to Mitchell Oringer, Bryce will be responsible for the day to day business operations relating to Short Sale asset disposition and loss mitigation. Prior to joining TNG Bryce was part of the senior leadership team at IBM Lender Business Process Services, formerly Wilshire Credit Corporation. He brings with him more than 15 years of experience in REO and Loss Mitigation operational management.