home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map

twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Servicing News | Servicer Ranking | Delinquency Statistics
Stories about mortgage servicers, delinquency and f o r e c l o s u r e s. Coverage of servicing lawsuits and loan servicing technology.

Fannie's Going Inside Fairbanks

Letter to Senator says GSE employees to montitor servcing center

June 4, 2003


According to a letter delivered to a senator, one of the nation's secondary lending behemoths intends to start personally monitoring the business practices of one of their mortgage servicers.

Fairbanks Capital Corp. has agreed to allow Fannie Mae employees to monitor its workers during daily business in its mortgage servicing center.

The Utah-based Fairbanks has had trouble staying out of the headlines lately, with last minute finance deals, replaced senior executives, protestors jamming up board meetings, servicer ratings cuts and even a news item on the CBS Evening News detailing customer complaints.

GSE-Fannie detailed their findings and future actions concerning Fairbanks in a letter to Maryland Senator Paul S. Sarbanes Monday. Sarbanes had requested Fannie look into Fairbanks practices in a letter dated March 31. In that letter, Sarbanes voiced concerns about Fairbanks' servicing practices. The senator included in his letter an investigative reporting package from Baltimore television station WBAL.

Fannie responded in a letter to the Senator from general counsel, confirming that an investigation would be pursued. In its Monday response, Fannie noted that they had investigated Fairbanks' sites in Salt Lake City, Utah, Austin, Texas and Jacksonville, Florida.

The investigation by Fannie found three main problems: inadequate internal controls; inadequate dispute resolution; and improper assessment of certain fees and charges, the letter said.

Websites abound online for those who feel they were fraudulently treated by Fairbanks. In fact, two of the company's most vocal critics, founders of the site Borrowerhelp.com, have gone to Utah to serve as unpaid consultants in helping the company develop new consumer policies, according to various media accounts.

Since reaching Salt Lake City and observing changes in the company, the two critics, W. Craig Kenney and Brian Barr, now say that Fairbanks is "a model for needed change throughout the sub-prime industry," according to a Salt Lake City Tribune article dated May 30.

According to the letter from Fannie, Fairbanks will no longer be eligible to service Fannie-held mortgages until Fannie is satisfied that Fairbanks is handling servicing properly. Excluded from this agreement are certain closed loans.

Fannie will also be allowed to review deliquent loans before they are sent into foreclosure, the letter said. Weekly reports detailing business activity will be issued by Fairbanks to Fannie, the letter said.

As part of the agreement, Fairbanks has agreed to reimburse customers for improper fees and other inappropriate charges, according to the letter, initialed by Franklin D. Raines, chairman and chief executive officer of Fannie.

In response to Fannie's actions, Sarbanes issued a statement which read in part, "I...want to commend Fannie Mae for moving so quickly to address this situation and to further prevent consumers from becoming victims of these schemes."

A media spokesperson for Fairbanks reiterated the company's "comprehensive plan" to review loan processes, adding that the company "has been and is making improvements."

Fairbanks has been making headlines lately. Here are a few recent developments concerning the company:

  • May 27: Fairbanks announces a financing arrangement in a press release, which states in part: "The proposed agreement provides the extension of committed financing for servicing advances and working capital through September 30, 2004. Further, the Company's primary shareholders will provide an additional $35 million of financing."

  • May 23: The ContraCosta Times website reports Fairbanks' protesters descended on the board meeting of parent company PMI Group, Inc., a day earlier.

  • May 13: Fitch Ratings downgrades the company's residential subprime primary servicer rating. The press release voiced concerns over management loyalty and financing.

  • May 8: PR Newswire releases company statement naming Brad Shuster Chairman
  • and James Ozanne Chief Executive Officer for Fairbanks, replacing current executives.

  • April 30: Standard & Poor's Ratings Services announces a downgrade on Fairbanks, to "below average" from "strong;" and removed them from CreditWatch negative, calling their outlook "stable." The S&P report noted documentation that "indicated a pattern of apparent Fair Debt Collection Practices Act (FDCPA) violations." Also, the report spelled out concerns about the training levels of primary collections employees, inbound call abandonment issues and foreclosure rates that "do not necessarily reflect reasonable efforts to exhaust loss mitigation opportunities."

  • April 29: Fitch Ratings places Fairbanks on "Rating Watch Negative," citing a pending "determination of the impact of certain of their reporting and remittance practices."

  • March 27: Fairbanks issued a press release stating that the company would "cooperate fully with reviews by the U.S. Department of Housing and Urban Development (HUD) and the Federal Trade Commission (FTC)" concerning servicing practices."

Anne Lineberry is MortgageDaily.com's editor. She previously worked as an online editor/producer for DallasNews.com and on the Metropolitan desk for the print edition of The Dallas Morning News. Email Anne at [email protected]

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders