|Modifications on securitized loans are projected to increase next year, and one servicer is reporting success with its modified loans. Meanwhile, BankUnited has denied any involvement in a modification deal announced by a Florida firm.
Mortgage Modification Legal Network announced Monday a partnership with Nationwide Mortgage Company and BankUnited. Miami Lakes, Fla.-based Mortgage Modification said the deal involved modifying more than 7,000 loans.
"BankUnited is committed to helping borrowers stay in their homes," BankUnited Senior Vice President Eric Darmanin was quoted as saying in the announcement. "The changing economic conditions have impacted many of our borrowers and we are taking necessary steps to alleviate their situation. Our partner is the most proactive course toward alleviating the problem fast."
But BankUnited denied such a deal existed.
"There is no agreement and no deal," a BankUnited spokeswoman said in a statement to MortgageDaily.com. "BankUnited is not working with the company that issued the invalid press release."
Fitch Ratings reported yesterday that loan modifications on 2005, 2006 and 2007 vintage securitizations will increase 15 percent during the next 12 months. The findings were based on modifications on bank-owned loans and increased inquiries about proposed changes to transaction documents.
"To date, there have been few bank-announced foreclosure moratoriums and modification programs that will apply to securitized mortgages; the bank announcements so far apply only to mortgages owned by the bank and sitting on its balance sheet," the ratings agency stated. "However, Fitch is aware of several servicers of securitized loans who are modifying loans within the scope of existing transaction documents."
Fitch said 187,000 modifications were completed by the 14 largest banks and thrifts in the first half of this year. Pressure to ensure that borrowers on loans in securitized pools are treated the same as bank-owned loan borrowers will push modifications higher. In addition, modifications may maximize returns to residential mortgage-backed securities investors.
Fannie Mae and Freddie Mac modified 13,450 loans during the third quarter, down from 15,372 in the second quarter, the Federal Housing Finance Agency said in a statement yesterday. The year-to-date loss mitigation performance ratios at the secondary lenders increased to 55 percent from 44 percent last year.
The two government sponsored enterprises owned or guaranteed 30.7 million loans as of Sept. 30, FHFA said.
Subprime servicer Ocwen Financial Corp. reported last week that 60-day delinquency on its modified loans was 25 percent after six months. The West Palm Beach, Fla.-based firm said data from the Office of the Comptroller of the Currency indicate 53 percent of overall borrowers who have had a loan modified become at least 60 days delinquent within six months of being modified.
Ocwen said it has prevented foreclosures on 60,000 mortgages this year.
Mortgage servicers can avoid costly staff additions and outsource the modification process to National Loan Resolution Services Inc., a press release Tuesday said. The company said legal fees and related costs may be capitalized into the modified principal balance.