Secondary Market

Fannie Mae issued a servicing guide announcement Tuesday amending the company's requirements regarding foreclosure attorney fees for properties located in the state of Maryland. Effective for mortgage loans referred to an attorney on or after February 1, 2011, Fannie Mae is increasing the maximum allowable attorney fee for legal work related to non-judicial foreclosures from $950 to $1,300.

Banks already facing many legal issues have yet another group on their hands that is closely examining servicing practices and demanding greater transparency. The Association of Mortgage Investors has released a white paper featuring remedies to restore and stabilize the U.S. mortgage and housing markets. The group of investors accuse servicers of making the mortgage process confusing. Their paper says they look forward to continued reviews and the involvement of state attorneys general.

The delinquency rate on loans included in conduit and fusion U.S. commercial mortgage-backed securities (CMBS) deals skyrocketed 79 percent over the past 12 months, according to Moody's Investors Service. Delinquencies started 2010 at 4.90 percent. By the end of December, the rate of past-due loans had hit 8.79 percent. The firm's analysts are expecting the delinquency rate to continue rising in 2011, but at a slower pace than it has over the past two years.

Private equity real estate funding totaled $35.8 billion globally in 2010, which is the lowest annual total since 2003, when funds raised just over $14 billion, a study found. The numbers are 28 percent lower than the $49.8 billion raised in 2009. The study, conducted by Preqin, an information company for alternative assets, examined private equity funds around the world. It found that funds with a primary focus on North America raised the most capital last year, about $22.5 billion.

Jones Lang LaSalle has hired Chris Casey as a managing director in Orange County. A 25-year veteran of the commercial real estate industry, Casey will facilitate financings throughout the western region of the country as part of the company's real estate investment banking team responsible for placing debt and equity for all property types.

Income and expense data released by the Federal Reserve this week shows the central bank is earning a pretty penny from its investments in mortgage securities. The Fed began buying mortgage bonds from Fannie Mae, Freddie Mac, and Ginnie Mae in November of 2008 to help prop up the nation's deteriorating mortgage markets. In 2009, Fed officials reported that these efforts, combined with its purchases of Treasury securities, yielded a $46.1 billion profit. In 2010, earnings on those investments jumped to $76.2 billion.

A recent report by ForeclosureRadar shows unexpectedly mixed foreclosure activity in its five-state coverage area for the month of December. The California-based firm found that foreclosure starts were down in Arizona, California, and Washington; flat in Nevada; and higher in Oregon. Completed foreclosure sales numbers were also mixed across the West Coast states. ForeclosureRadar says the disparity in activity could be due in part to the differing laws between states.

Holliday Fenoglio Fowler, L.P. (HFF) recently added Michael Weinberg to its team in Miami as a senior real estate analyst. Weinberg will focus on equity and debt commercial real estate capital markets transactions in the hotel and retail sectors in Florida. Weinberg has more than five years' experience in the commercial real estate industry. Prior to joining HFF, he was director of real estate at Rida Development and an associate with Trammell Crow Company-CB Richard Ellis.

As the backlog of foreclosures continues to drive down housing prices, losses on private-label residential mortgage backed securities (RMBS) will increase in 2011, according to Moody's. The forecast for more red ink seeping from home loans sold to investors comes despite the fact that the agency believes the rate at which loans become delinquent will decline during the year. Moody's expects flaws in foreclosure practices that have recently come to light to delay foreclosures by three to six months, further extending the window of losses for investors.

Reports have surfaced that the FDIC is contemplating stricter requirements that would force banks to disclose what potential ramifications a loan modification on a first lien they service would have on an underlying lien. Industry analysts have speculated that servicers may be reluctant to modify a primary loan because the bank that services the loan also holds the second lien. Such an arrangement could be considered a conflict of interest and prompts some to wonder if investors would be swayed if they knew of the arrangement beforehand.