Loss Mitigation

DebtX, a loan sale advisor for commercial, consumer, and specialty finance debt, says it is working with a number of financial institutions to provide loan portfolio due diligence services to evaluate merger and acquisition (M&A) transactions. The company's M&A advisory service offers asset evaluation, loss forecasting, and cash flow analysis for buying and selling institutions considering strategic transactions.

The delinquency rate on loans included in commercial mortgage-backed securities (CMBS) fell four basis points in May to 9.18 percent, according to Moody's. The dollar balance of past due loans was approximately $56 billion. While loans totaling $3.4 billion became newly delinquent, previously delinquent loans totaling $4.1 billion became current, worked out, or were disposed. The top 25 metros continue to outperform the broader market with a delinquency rate of 8.48 percent, 70 basis points below the national average.

MERSCORP, Inc., which operates the Mortgage Electronic Registration Systems (MERS) database, announced Tuesday that Bryan Kanefield has joined the company's executive leadership team in the newly created role of SVP and chief risk officer. Kanefield joins MERSCORP from Fannie Mae, where he was most recently a member of the senior leadership team responsible for building and managing key operational units of the Making Home Affordable program.

Wells Fargo will host a home preservation workshop in Irvine, California, this week to assist Wells Fargo and Wachovia customers in Southern California who are facing financial hardships. The two-day event begins Wednesday. Borrowers attending the event will meet with home retention team members to obtain loan modifications or pursue other foreclosure prevention options. Bilingual representatives are also available to assist borrowers.

Unemployment has pushed many homeowners to the brink of foreclosure. Housing analysts have become especially vocal about the effect of extended periods of joblessness on mortgage performance. The average duration of unemployment was 40 weeks in May. On Monday, HUD and NeighborWorks announced the roll-out of the Emergency Homeowners' Loan Program (EHLP) to 27 states and Puerto Rico, extending over $800 million to assist homeowners at risk of foreclosure because of a reduction in income.

Litigation related to mortgage servicing surged during the first quarter, after last fall's robo-signing issues raised questions about servicers' procedures and garnered widespread attention from mainstream media. Mortgage servicing litigation increased 88 percent over the first three months of this year, according to industry data released Monday. Investor-related litigation, however, eased, as did actions related to loan modification disputes.

Kentucky-based PBI Bank expects to enter into a consent order with the FDIC and the Kentucky Department of Financial Institutions, according to the bank's parent company, Porter Bancorp, Inc. The move will create benchmarks for the bank to improve its business, including enhancing asset quality, reducing loan concentrations, and maintaining capital levels.

Delinquencies on U.S. commercial real estate loan collateralized debt obligations (CREL CDOs) decreased last month, reversing the previous month's increase, according to the latest index results from Fitch Ratings. From March to April, the delinquency rate rose from 14.1 percent to 14.8 percent. But by the end of May, Fitch says it had fallen back to 14.1 percent. Last month's late-pays dropped as nine new delinquencies were offset by the resolution of 18 formerly delinquent assets.

The American Bankers Association has sent a letter to key lawmakers in the Senate, urging them to reject foreclosure legislation proposed by Sens. Jeff Merkley and Olympia Snowe. Their bill, tagged the Regulation of Mortgage Servicing Act, has been introduced as an amendment to a larger economic development bill being considered. It mandates an independent, third-party case review prior to foreclosure, among other things, and the bankers group says it would prolong the market correction by slowing down legitimate foreclosures.

Mortgage insurer PMI has announced the launch of a new program to identify mortgage servicers who score high marks for keeping borrowers in their homes. These companies will benefit from certain advantages when doing business with PMI. The company has identified certain servicing best practices that play a central role in maximizing home retention and achieving positive results for borrowers, communities, and mortgage investors, alike, and PMI says servicers who follow these practices should be recognized.