Loss Mitigation

A three-party consortium of opportunists has purchased a stake in an $898 million pool of nonperforming residential loans that the FDIC seized from AmTrust Bank last December. The procurers -- which include mortgage servicer Residential Credit Solutions, hedge fund CarVal Investors, and the Royal Bank of Scotland's RBS Financial Products subsidiary -- picked up the AmTrust portfolio with a winning bid amounting to 37 cents on the dollar. Ninety-six percent of the loans are delinquent.

Coester Appraisal Group recently announced that its CEO Brian Coester has been commissioned by AllRegs to develop instruction manuals, video tutorials, and classroom training programs to educate lenders on how to protect themselves against repurchase requests that are based on erroneous assessments of the loan file's appraisal. According to Coester, discrepancies in appraisals account for roughly 15 percent of all repurchase requests, but often the loan originator is not responsible for the discrepancy.

Nationwide Title Clearing (NTC) has joined forces with the founders of TransContinental Title to form a new national title company, Lenders Title Solutions (LTS). The new Florida-based firm provides title and closing services to lenders in all 50 states, and according to the principals, together, LTS and NTC will offer a life-of-loan services solution, from the moment the loan is closed until it is paid off and released.

Equator said Thursday that 300,000 short sales have been initiated on its platform since the short sale automation solution was launched in November 2009. Just over a month ago, the company hit the 200,000 mark, illustrating just how quickly short sale transactions are gaining momentum. Since January, Equator says its technology platform has processed twice the amount of short sales as REOs. Its users completed an average of 196,822 short sale transactions per day during the first two months of the second quarter of 2010.

Mortgage fraud risk has declined by 25 percent since it peaked in the third quarter of 2007, according to CoreLogic. But further analysis by the company reveals that despite the falloff, one in 200 home loans still contain misrepresentations that could result in default. CoreLogic concludes that overall fraud risk within the industry appears to have leveled off in 2009. However, one area of increasing concern is short sales, which grew in volume by more than 300 percent over the previous two years.

Based on new data released by Fitch Ratings, $512 million of loans held by investors in commercial mortgage-backed securities (CMBS) were added to the past-due bucket last month. The net increase pushed the U.S CMBS delinquency rate to 8.14 percent. While it's the first time Fitch has reported delinquencies beyond the 8 percent mark, June's 17 basis point rise was the smallest increase in 11 months, thanks to loan resolutions on $1.5 billion during the one-month period. However, the ratings agency says this trend isn't likely to continue.

Nielson & Sherry, PSC is expanding its footprint in Kentucky with the opening of a new office in Louisville on August 1, 2010, located on the city's east side in the recently renovated Hurstbourne Place office tower, just minutes from the state and federal courthouses. Nielson & Sherry's focus is on legal issues related to the banking, lending, and real estate industries, including REO, title, and foreclosure-related matters.

In just the first three months of operation, Fannie Mae's mortgage help center in South Florida has been able to provide assistance to more than 700 Miami-Dade metro area mortgage borrowers seeking to avoid foreclosure. The center, which offers free mortgage and financial counseling to homeowners at risk of foreclosure, was opened in late February through a partnership between Fannie Mae and Neighborhood Services of South Florida.

The Federal Housing Finance Agency (FHFA) is putting a host of private-label mortgage-backed securities (MBS) under the microscope in an effort to examine their role in losses suffered by Fannie Mae and Freddie Mac. As conservator of the nation's two largest mortgage investors, FHFA has issued 64 subpoenas seeking documents related to the GSEs' investments in private mortgage bonds. The agency is looking into whether the MBS issuers should be held liable and forced to buy back bad mortgages.

A new study developed by TransUnion finds that consumers with multiple account relationships with the same lender outperform consumers who maintain only one relationship with that lender, with the biggest improvements in delinquencies seen among mortgages. The study found that borrowers whose only credit relationship with their lender was for their mortgage had a 30-day or worse delinquency rate of 4.8 percent. However, this delinquency level dropped to 4 percent if the borrower had two relationships with the lender, and that rate fell even further with each additional relationship.