Tag Archives: Loan Repurchases

Freddie Mac has entered into a proposed settlement with the now defunct Taylor, Bean & Whitaker (TBW). Under the terms of the agreement, Freddie Mac will be granted an unsecured claim in the TBW bankruptcy estate for just over $1 billion. The GSE estimates it will only see between $40 million and $45 million from that claim. While the settlement entitles Freddie to additional funds related to its mortgage loans, it also requires the GSE to pay TBW and its trade creditors to settle their potential claims against the GSE.

CoreLogic recently released Vector Securities, a platform to enable transparent and dynamic loan-level analysis of non-agency residential mortgage backed securities (RMBS). The company says the transparency at both the deal- and loan-level provided by the new technology is key to enabling a new era of confident securitizations and reestablishing the RMBS market as private liquidity returns.

Wells Fargo reported record earnings of $3.8 billion for the first quarter of 2010. That's up 48 percent from the same period last year, and up 10 percent from the fourth quarter of 2010. The lender's first-quarter profit beat analysts' estimates, but the market didn't look too kindly on the underlying numbers that showed revenue was down $1.2 billion from the previous quarter. That decline included a $741 million drop in mortgage banking fee income. While revenue slipped, Wells Fargo says its numbers were boosted by improving loan quality.

CoreLogic Credco, a provider of merged credit reports, recently integrated its FinalCheck suite into the Ellie Mae Encompass360 mortgage management solution. FinalCheck is an automated Fannie Mae loan quality initiative (LQI) compliance suite that assists lenders in verifying credit, application, and fraud data. The company says the technology can help lenders uncover undisclosed debt prior to loan submission and mitigate repurchase risk to avoid loan buy-backs from the GSE.

Bank of America said Friday that it turned a profit of $2.0 billion for the first quarter of 2011. That's down 39 percent from the lender's earnings a year earlier, largely due to continuing losses tied to its legacy mortgage business. Bank of America took a $4.9 billion hit related to foreclosure delays and other out-of-pocket expenses that the company does not expect to recover, as well as higher litigation costs and loss mitigation expenses. The bank has also confirmed plans to lay off 1,500 mortgage employees.

Blueberry Systems, LLC, a provider of mortgage production solutions to the financial services industry, recently enhanced its proprietary Conductor technology, a component of the company's flagship loan production platform, RELAY. The firms says the update gives mortgage lenders greater control over their loan data, which lowers the risk of errors and costly loan repurchases from mortgage investors.

Word on the street is that Goldman Sachs is looking to sell off its mortgage servicing arm, Texas-headquartered Litton Loan Servicing. One publication's blog post says Litton never proved to be the distressed mortgage cash-cow that Goldman had hoped, while another financial news outlet reports that the servicing unit is indeed unprofitable at the moment. Industry data show that Litton's servicing portfolio has contracted by nearly 35 percent over the last two years.

More legal woes have developed for Bank of America, as some of its mortgage investors brought a lawsuit against the lender in an attempt to force the bank to buy back bad loans. The original balance of securitized loans involved in the case was $2.8 billion, and the plaintiffs claim their trustee ""unreasonably failed"" to sue BofA. Another group of investors, which is engaged in talks with the bank in hopes of avoiding a legal battle in court, has nearly doubled the amount of allegedly faulty loans it wants Bank of America to repurchase.

New Jersey-based Visionet Systems, a full-service mortgage consulting and business process outsourcing company, recently launched new outsourcing services to assist banks with loan buybacks. Currently, Visionet is aiding two of the top four U.S. banks in recovering a majority of mortgage repurchase requests from GSEs and private investors, according to a statement from the company.

Bank of America has set up a new operational division to service all defaulted residential loans. It will be led by Terry Laughlin, who will oversee the bank's mortgage modification and foreclosure programs, and is charged with resolving investors' mortgage repurchase claims. The decision to establish a new, separate division to handle the company's problem loans came out of the bank's ""self-assessment of default servicing"" following the robo-signing scandal.