Companies seeking to sell closed residential loans have recently been given more options. The business of trading loans has been made easier through technological innovation, while a slew of new offerings promise to reduce risk and improve pricing for secondary market players.
A new funding platform added in July by Amerinote Xchange LLC enables the San Francisco-based firm to acquire performing and non-performing residential first liens on a national basis. The minimum acquisition is $10 million, and the average minimum loan size is $100,000.
“Our investment appetite in existing mortgage loans as an investment has evolved over the past three to four years (since the 2008 banking crash), which used to be completely geared towards commercial loan pools only,” Amerinote Director of Loan Acquisitions Abby J. Shemesh said in the news release. “We finally feel comfortable enough now that we are ready to take on the many residential mortgage loan portfolios that are now available by owners who have decided to take their assets to market for liquidation.”
A correspondent builder division was recently launched by NewDay USA LLC. The new division will operate as a conduit-buyer for government loans originated by builder-owned mortgage companies. Ken Harthausen was recruited to run the new business as its president.
Loan originators, pipeline hedgers and risk managers at more than 220 mortgage bankers have joined the Thomson Reuters Eikon community to access data and news coverage of the to-be-announced mortgage-backed securities market and secondary market trading, a Sept. 17 news release said. Clients of the New York-based firm, including Parkside Lending and MountainView Securities, have access to Tradeweb.
Tradeweb Markets LLC said earlier this year that more than $1 trillion of risk has been offset in the to-be-announced MBS market through the use of the Tradeweb “round-robin” functionality. The technology was introduced less than two years ago and “has significantly lowered the number of failed to-be announced mortgage pool trades by enabling institutional investors to electronically pair-off to-be announced mortgage pool transactions with dealers, replacing a manual process and providing an efficient solution for round-robin fails.”
In July, RiskModelDIRECT was introduced by CoreLogic. The Santa Ana, Calif.-based company claims that the new offering is a cost-effective way for big and small banks and investors to access CoreLogic RiskModel advanced prepayment, default, severity and delinquency risk projections for non-agency residential mortgage-backed securities.
“With RiskModelDIRECT, investors can precisely select a set of securities they are interested in on an a la carte basis or subscribe to the entire MBS and ABS market of non-agency securities,” CoreLogic stated. “RiskModelDIRECT produces fast, highly sophisticated RMBS portfolio risk projections using CoreLogic data that covers more than 97 percent of the non-agency RMBS market and incorporates the CoreLogic HPI and HPI Forecasts into its proprietary models.”
CoreLogic said earlier this year that it was approved by Standard & Poor’s as a third-party due diligence provider for RMBS.
An expansion in the secondary market was undertaken this year by Orion Financial Group. Investors and lenders that manage their own portfolios are the target of the Southlake, Texas, firm and Mortgage Daily advertiser.
A quality control service for correspondents lenders with warehouse lines of credit was recently launched by ISGN Corp. The service reportedly evaluates all quality control points in loan origination — from the submission of a loan application to post-closing. ISGN promises that mortgages are ready for delivery into the secondary market and repurchase risk is reduced. One “top” lender client cited by ISGN cut its loan errors by 90 percent using a pre-funding review.
The PriceMyLoan automated underwriting system is now interfaced with the Federal Housing Administration’s TOTAL Scorecard platform and can be utilized to decision and sell loans direct to Ginnie Mae, LendingQB said in August. Ginnie issuers that are already LendingQB clients have automatic access to the new interface, while non-clients can use their existing loan origination systems to access the interface.
Business Solutions saved members of the American Bankers Association $18 million during the first-half 2012, according to an announcement Thursday from the ABA subsidiary. Business Solutions, which negotiates member advantaged pricing and other benefits with its residential mortgage partners, says it helps community banks participate more successfully in the residential mortgage markets.
Last month ABA said that its Community Bank Mortgage LLC subsidiary selected Plaza Home Mortgage Inc. as its newest secondary market investor. Plaza will buy mortgages on a price-advantaged, servicing-released basis from the 62 members of the cooperative.
Community Bank Mortgage recently renewed its agreement with SunTrust Mortgage Inc. as a preferred secondary market investor.
Earlier this year, Community Bank Mortgage reported that it paid out $2.15 million last year to its banker-owners who sold loans to its affiliates. That worked out to an average of $50,026 per owner.
An origination services bundle announced earlier this month by Lenders One Mortgage Cooperative will include appraisal, flood certification, fraud report and Internal Revenue Service 4506T services provided at a bundled discount. The new bundle is specifically designed to facilitate more efficient retail loan originations. Parent Altisource is powering a custom portal, REALTrans, to deliver the bundled package.
One of Lenders One’s own members, Affiliated Mortgage Co., renewed its preferred investor relationship with the St. Louis-based cooperative in August. Affiliated signed on as a preferred investor in 2009 and became a member in March 2011.
Another recent addition to Lenders One was Priceweaver as a preferred provider. The arrangement gives the cooperative’s members discounted access to flexible and customizable product and pricing engines.