Richard Nacht's The Daily Mortgage

Outsourcing to rise

According to a survey by Ocwen Financial Corporation 42% of the respondents said they are likely to outsource at least some services within the next two years.  The study, “Business Process Outsourcing: What Mortgage Industry Leaders Really Think,” asked mortgage industry leaders whether they were likely to outsource over the next two years, what they think are the motivating factors for outsourcing and what they think the key benefits to outsourcing were.  Participants included mortgage brokers, servicers, correspondent and retail lenders.

The greatest motivators for outsourcing were reported as the growing cost of human resources, management accountability and increase in customer expectations.  Also noted were access to state of the art technology and reducing or avoiding capital expenses.

”It has been our experience that companies that have been successful in the outsourcing arena generally have developed their approach by following four basic rules,” said W. Michael Linn, Ocwen’s Executive Vice President. “First, they began by establishing a clear strategic vision for how Business Process Outsourcing could best be utilized within the organization. Then, to ensure improvements were being made and documented and to reduce the risk of the investment, these companies leveraged a quality improvement methodology such as Six Sigma. Third, they applied the most advanced, proven technology infrastructures, and finally, these companies focused on attracting and retaining the most highly qualified and motivated staff.”

It should be noted that Ocwen has a Business Process Outsourcing division.

Local mortgage office reverses closing decision

In these times of lay-offs and closings here’s a great story.

”Employees at Optimum Mortgage Group’s Jacksonville office successfully lobbied company executives to keep the local branch open after being told that it would be closed.”

More

Freddie Mac gets clean bill of health

According to the Office of Federal Housing Enterprise Oversight, Freddie Mac now has sufficient capital to protect its business.  Freddie Mac ended the third quarter with $34.2 billion in core capital, 40 percent more than its minimum capital requirement.

Freddie Mac is required to have reserves of at least 30% above its minimum after than agreement last year with OFHEO.

MBA and state licensing

MBA sent letters to nine state legislatures and/or regulators (LA, MA, MD, NJ, NV, NY, OR, PA, WA) that are slated to consider creating or amending licensing laws governing mortgage originations in 2005. The letter encourages the legislatures to contact mortgage bankers in their states to obtain their input as they consider creating or amending such laws.

MBA says it will monitor the progress of licensing laws in the states as the 2005 legislative sessions begin, and is forming a State Licensing Task Force to review the issue and develop strategies to address the burden that the proliferation of state licensing laws is causing its membership.

NJ DOB update re: Home Ownership Security Act of 2002

New bulletin from the New Jersey Department of Banking and Insurance regarding the NJ Home Ownership Security Act of 2002, the predatory lending statute that was amended this year and took effect in July. PDF here.

Trump gets help

From the Inman blog -

We got a ton of condos to sell
A fire broke out in the Chicago Sun-Times building yesterday in downtown Chicago. The building is being demolished so Donald Trump can build a 90-story condominium and hotel tower. That should speed up the demolition.

Isn’t Bill Rancic based in Chicago?

Eddie Murphy’s home on sale for $30 million

Eddie Murphy is selling his home in Englewood, NJ for $30 million according to an online property listing on the Burgdorff ERA web site.  According to the listing Murphy’s home has seven bedrooms, nine full bathrooms and four half baths.  “The house is beautifully built.  Music studio, pool, bowling alley and much, much more,” according to the property description.

Should you be interested here are some numbers - 20 percent down is $6 million and monthly principal and interest on the remainder would be $168,634.

The gated estate is known as “Bubble Hill” and Murphy has owned it for 18 years.  The home is 22 years old.  Speaking donkey is not included.

HUD issues anti-flipping exceptions

Thursday, December 30, 2004

HUD has issued an interim rule that details exceptions to its anti-flipping rule.  These exceptions are where the seller has inherited the property or the seller is a federal agency.  The interim rule “clarifies that the time restrictions on sales do not apply to properties that are acquired by inheritance,” said HUD.  In order to battle flipping FHA does not insure loans unless the seller has owned a home (1-4 family only) for at least three months.  The interim rule is effective January 24, 2005.

Fannie sells $5 billion

Turns out that Fannie Mae has agreed to sell $5 billion in preferred stock to institutional buyers, not the $4 billion reported yesterday.

”This placement of preferred stock is a key component of Fannie Mae’s capital restoration plan,” Donald Marron, former chairman of brokerage giant Paine Webber and a Fannie Mae board member who is spearheading the company’s compliance efforts with regulators, said in a statement.

The company said $2.5 billion of the new securities would be outright preferred shares, while the remainder would be comprised of convertible shares. Lehman Brothers Holdings Inc. acted as placement agent for the sale, Fannie Mae said.

Fannie begins process of shoring up balance sheet

Fannie Mae (FNM) disclosed this morning that it is considering raising as much as $4 billion via two private placements with institutional investors. The placements could price and close as early as this week.

FNM said it is considering issuing preferred stock that would be convertible into shares of FNM common stock at a premium to the closing price of the stock. The other private placement would issue “non-convertible floating rate preferred stock.”

The placements appear to be the first step that FNM is taking to shore up its balance sheet in order to come into compliance with its agreement with the Office of Federal Housing Enterprise Oversight (”OFHEO”) to increase its capital surplus to 30% from the 18% level that the firm was at earlier this year. FNM has until mid-year 2005 to meet this requirement.

Analysts estimate that Fannie will need to raise anywhere from $3.5 billion to $12 million to meet its goal.