Two organizations are touting their ability to get better deals in the secondary mortgage market for their members, while three firms are capitalizing on private funds to boost market liquidity. Among several services available for investors looking at portfolio purchases are performance forecasting, portfolio valuation and analysis of ability to refinance.
In Bulletin Number 2009-9, Freddie Mac reminded sellers that under the American Reinvestment and Recovery Act of 2009, the conforming limit in high-cost areas was temporarily raised to $729,750 until Dec. 31. The high-cost limit under the Economic Stimulus Act of 2008 was permanently raised to $625,500.
Sellers can utilize either option for loans on properties in around 250 counties.
Loan-to-values on super-conforming loans have been cut between 5 percent and 15 percent for American Reinvestment cashout loans, loans secured by non-owner occupied and mortgages on second homes.
American Bankers Association members have delivered more than $100 billion in mortgages under a secondary program launched in 2001, a statement Friday said. Dubbed ABA Mortgage Solutions, the trade group negotiates special pricing for participating members. Last year, ABA members reportedly saved $12 million under the program.
Under the ABA’s initiative, secondary programs are available from Fannie Mae, Freddie and Farmer Mac as well as CitiMortgage and Bank of America Home Loans correspondent lending.
Lenders One Mortgage Cooperative said last month that it extended its contract with Fannie. The company, which said delivery to the secondary lender is “at an all-time high,” claims its members get better pricing through the contract than they could individually.
SecondMarket hired public relations firm Weber Shandwick to raise exposure to its marketplace solutions for illiquid assets, a press release Wednesday said. Among assets traded through the platform are mortgage-backed securities, collateralized-debt obligations and bankruptcy claims.
SecondMarket, which claims to be “the largest marketplace for illiquid assets,” said the 3,000 participants that currently utilize the platform include global financial institutions, hedge funds and private equity firms that collectively manage more than $1 trillion in assets.
TransUnion Consumer Risk Indicators has been developed with the help of First American CoreLogic to provide secondary market risk modeling, according to an April 13 announcement. Historical performance factors and loan-level data are analyzed through “sophisticated proprietary matching algorithms” to predict performance on portfolio and securitized loans.
“Direct insight into the actual risk of the underlying borrowers is critical,” Jeff Hellinga, president of TransUnion’s U.S. Information Services, said in the statement. “This is particularly relevant given the recent creation of the Public-Private Investment Program, which is designed to draw private capital into the market to facilitate price discovery of legacy assets.”
Invesco Ltd. has teamed up with an affiliate of American Home Mortgage Servicing Inc. to invest up to $1 billion using the PPIP, an April 27 press release said. WL Ross & Co. Chairman Wilbur Ross noted that American Home is the largest subprime servicer with a portfolio of 525,000 loans for $110 billion. He said the resources of the servicer along with affiliate Assured Guaranty Ltd., a monoline insurer, will benefit the investment team.
Titan Lenders Corp., which in March was targeting community banks and credit unions for its warehouse lending platform, has now set its sights on private equity funds. The move comes as the number of firms providing lines-of-credit has dwindled to fewer than 30 from a peak of 115, according to a new release last month. Utilizing the Denver firm’s technology, the funds can finance originations targeted for Fannie and Freddie.
Titan claims its service enabled GMI Home Loans, which originates $500 million annually, to establish a warehouse line with NVC Premier Fund LLC in early 2007. The platform includes collateral management, line reconciliation and technology infrastructure.
An alliance between FCI Lender Services and LoanMarket.NET integrates asset purchases with loan servicing options, an announcement last week said. The outsourced servicing function is an economical alternative to investor servicing.
LoanInsights SMART was launched last month to value large loan portfolios and MBS portfolios, a news release indicated. The service analyzes individual loans to determine whether they would qualify for refinancing through major mortgage lenders or through programs from Fannie and Freddie. Borrowers with a high likelihood of refinancing are contacted individually.
“The LoanInsights SMART solution analyzes each individual mortgage in a given pool and determines whether or not it can be underwritten in today’s restrictive lending environment,” the statement said. “It also analyzes how loans in the portfolio might be adjusted to meet current underwriting criteria.”
An expanded partnership between mortgage compliance providers Mavent Inc. and QuestSoft aims to help secondary market players address regulatory changes in the secondary lending process, a recent announcement said. Mavent claims as customers Fannie and CitiMortgage.