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Secondary Marketing Update

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Nearly $50 million in residential mortgage-backed securities were traded at a 99 percent discount. Other secondary activity included the sale of nearly $200 million in commercial loans, several agency updates and the promotion of services that help sell or value mortgage assets.

A $190 million commercial loan portfolio was sold by Irwin Financial Corp. at 99.8 percent of par, a July 1 statement said. Around $40 million of the loans were sold to First Financial Bank, National Association.

Last month, Mission Capital Advisors LLC announced it was soliciting bids on a $158 million commercial mortgage portfolio on behalf of an unidentified commercial bank. The portfolio of 12 performing and non-performing loans is secured by properties in California, Florida, Mississippi and New York. reported last month that it has $100 million in mortgage notes up for sale online. The loans are secured by properties in 40 states.

United Western Bancorp Inc. reported this month the sale of $47.3 million in lower tranche RMBS to an un-named buyer at a $47.0 million discount. The securities, issued under the name Option ARM Securities, were the last of its RMBS holdings backed by payment-option adjustable-rate mortgages.

“When the bank originally acquired the Option ARM Securities, each security was rated AA by at least two nationally recognized rating agencies,” United said in explaining the deep discount. “In the period from April 2008 to June 30, 2009, the Option ARM Securities were progressively downgraded until they were graded significantly below investment grade by at least one nationally recognized rating agency.”

In Bulletin Number 2009-17, Freddie Mac outlined new parameters for purchasing Higher-Priced Mortgage Loans under a July 2008 final rule amending the Truth in Lending Act’s Regulation Z. The changes are effective on Oct. 1.

Higher-priced loans must either be fixed-rate; a 7/1, 10/1 or 10/6 ARM; or a seven-year balloon. Freddie won’t buy, however, loans with prepayment penalties (even though Reg Z permits prepayment penalties on some high-priced loans), streamlined refinances or Freddie Mac Relief Refinance Mortgages with the same servicer.

Freddie said in Bulletin Number 2009-15 last month that post-settlement delivery fees will be assessed for Relief Refinance Mortgages. Eligibility and delivery requirements were introduced for its new Relief Refinance Mortgage Open Access.

The secondary lender’s requirements for the use of mortgage proceeds will change on Sept. 1 on its Relief Refinance Mortgage – Same Servicer program. The program also now allows the simultaneous refinance of existing junior liens serviced by the first-mortgage servicer.

A June 17 bulletin, Number 2009-14, reminded sellers that Freddie was activating net price functionality for all sales under the Cash program. The bulletin indicated that Freddie can recapture premiums and buy-up proceeds on repurchases, and it said servicers can now charge late document fees to sellers that don’t deliver transfer-of-servicing documents within six months of sale. Seller-servicers are now required to include their e-mail addresses in the signature block of wire transfer authorizations Form 483 and Form 987E.

Freddie’s secondary rival, Fannie Mae, released Announcement 09-20 on June 25 indicating that some loans considered ineligible by Desktop Underwriter for its Refi Plus program could be manually underwritten.

Fannie said in Lender Letter 05-2009 last month that it would begin sending notifications to borrowers when it purchases or securitizes a mortgage. The notice is required within 30 days of sale, transfer or assignment as part of TILA amendments enacted as part of the Helping Families Save Their Homes Act of 2009. Fannie will identify the servicers as the party having authority to act on Fannie’s behalf.

IMPACT Group issued a July 7 statement that Fannie’s elimination of trailing spouse income was troubling. The career management firm noted prospective job transferees are reconsidering relocating.

Freddie issued a bulletin Friday indicating that it was eliminating the use of trailing spouse income as of Oct. 1.

Forrester Research featured LoanInsights’ Securitized Mortgage Asset Resolution Tool, or ‘SMART,’ platform in the June 2009 Hot Banking Tech Companies To Watch In 2009: Q2 Update, LoanInsights recently announced. The offering — targeted at banks, hedge funds and investors — aggregates lender and government guidelines and “accelerates the mortgage modification and workout process by finding the underlying property addresses and borrowers in an MBS securitization.”

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