news flash
JULY 2010
NORTH CAROLINA MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
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risk homeowners. Mortgage servicers report that proprietary loan modifications combined with the government Home Affordable Modification Program (HAMP) have assisted a broad range of at-risk homeowners. More than 104,000 (104,265) borrowers received proprietary modifications during the month of April. The year to date total for these types of loan modifications is now 409,783. When added to the HAMP loan modifications tabulated by the United States Treasury, the industry completed more than 172,000 loan modifications in the month of April and almost 642,000 (641,937) permanent loan modifications for at-risk homeowners so far in 2010. The 172,000 loan modifications for the month of April represents a 46 percent increase compared to the same month last year, when the industry completed 117,818 loan modifications. The number of HAMP modifications continues to increase, but for homeowners who are not eligible, sustainable proprietary modifications continue to play an important role in helping homeowners in difficulty across the country. “Our data continues to show that the industry’s comprehensive loan modification efforts are making significant headway,” said Faith Schwartz, senior advisor for HOPE NOW. “The total number of modifications, including HAMP, show that more than three million homeowners have received modifications since 2007.” For more information, visit www.hopenow.com.
Interthinx finds mortgage fraud risk ranking in highest since 2004
Interthinx has released its quarterly Mortgage Fraud Risk Report, covering data collected during the first quarter of 2010. The report includes an analysis of national mortgage fraud risk and indices for the four most common types of mortgage fraud risk. Based on the most current data available, overall fraud risk has increased by four percent from the previous quarter and 11 percent from the same quarter a year ago to 151 (n=100). This is the first time since 2004 that the index has exceeded 150. Major findings include the following: Arizona surpassed California as the state with the highest fraud risk, possibly because of a migration from neighboring Nevada similar to that which occurred in 2004 to 2006. Nevada remains in second place with California, Florida, and Michigan rounding out the top five states.
After a brief dip in the last quarter, property valuation fraud risk resumed the upward trend that began in fourth-quarter 2007, and it remains the primary driver of the index. Identity fraud risk and employment/income fraud risk are both up around 10 percent from the last quarter. The rise in employment/income fraud risk strengthens evidence that it is starting an upward trend after a long period of decline. Occupancy fraud risk is down by 11 percent, a sharp reversal from last quarter’s rise of 16 percent. Still it is likely that fueled by plentiful inventories and the expected release of “shadow” foreclosure inventory, this index will trend upward in the near future. “Our lender customers can now benefit from our investment in fraud detection and risk mitigation analytics as we share a more detailed analysis of the data we’ve been collecting,” said Kevin Coop, president of Interthinx. “The data we’ve analyzed in our most recent report will help lenders anticipate and prepare for trends that will impact their risk mitigation strategies. This will contribute to their continued success.” The Mortgage Fraud Risk Report is an Interthinx information product created by an internal team of fraud experts. The report was prepared with input from Constance Wilson, Ann Fulmer, Shane De Zilwa, Ph.D., and the Interthinx analytics team. This is the fourth time the company has released its quarterly report, which is providing deeper insight into current fraud trends through analysis of the extensive pool of data the company amasses from the industry’s use of the Interthinx FraudGUARD loan-level fraud detection tool. “It behooves all lenders to take a closer look at the first-quarter report and take advantage of the analysis our research team has performed,” said Mike Zwerner, senior vice president for Interthinx. “Our quarterly report is fast becoming the primary source for detailed fraud risk information for the mortgage industry. It provides the only regular report on what is happening in originations today, which allows lenders to take proactive steps to reduce their risk substantially.” For more information, visit www.Interthinx.com.
MBA: Commercial/multifamily debt outstanding drops 0.9 percent in Q1 The level of commercial/multifamily mortgage debt outstanding decreased in the first continued on page 22
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will address these diverse set of needs. One of the great strengths of a reverse mortgage is that it can be used for any purpose. Similarly, if a person has a high FIT number of five, they may not be facing any imminent risks or cash needs. For these older homeowners, the question may be “Why are they taking out a reverse mortgage?” Is it really appropriate for somebody who may not have much need for these types of loans to incur those costs? Perhaps they should wait until there is a more immediate need. On the other hand, they may want to liquidate some of their home equity so that they can prepare for emergencies. The FIT number itself does not give the answer, but it opens up a more fruitful and broad-based discussion about the various issues people are trying to solve by taking out a reverse mortgage. Why are you excited about FIT and BCU for counselors and lenders? Counseling on reverse mortgages offers an important “teachable moment” because it occurs when people are making important decisions that could affect the rest of their lives. It is also an opportunity to reach out to middleincome families, who may not have the luxury of working with a financial plan-
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ner or who may not easily qualify for public benefits. Enhancing this counseling through FIT and BCU helps to strengthen financial planning and the financial education continuum. Are FIT and BCU essentially HECM counseling enhancement tools? Absolutely! That is the way we’ve always looked at it. People need to know about the loan basics, but we believe it is not just the life of the loan, but the life of the borrower that needs to be considered in making these types of decisions. Atare E. Agbamu, CRMS is author of Think Reverse! and more than 130 articles on reverse mortgages. Since 2002, he writes the nationally distributed column, Forward on Reverse. Through his advisory, ThinkReverse LLC, Agbamu advises financial professionals, institutions, and regulators across the country. In a 2007 national report on reverse mortgages, AARP cited Agbamu’s work. He can be reached by phone at (612) 203-9434 and e-mail at atare@thinkreverse.com. Visit author Atare E. Agbamu’s blog at thinkreverse.com for his thoughts and insights on the reverse mortgage marketplace.
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available and with the many databases of property sales information, we can expect more and different review appraisal formats coming down the pike. In fact, we are already seeing this offered by some of the larger technology companies. On a recent visit to the FNC headquarters in Oxford, Miss., I had a chance to see some of its new cutting-edge products firsthand. FNC’s Collateral DNA suite of products, offers a variety of options designed to provide additional market data to reviewers, whether they be underwriters or review appraisers. These include the GAAR Report, Property Scan Report and the Market Report, all designed to provide additional sales data to assist the reviewer along with the QC Vigilance Report, which not only offers an online appraisal form, but it also populates the form with sales data, not necessarily found in the original appraisal. This allows the reviewer fingertip information with which to develop a more thorough review with the least investment in time and money. There are also other technology companies offering advanced high-tech products that are available as we speak. These will
address the demand for the enhanced review appraisals and other reviewand-underwriting needs, dictated by our current economic environment. In conclusion, you may expect a larger number of independent, as well as in-house reviews of appraisals, used by the lending community, going forward. Because there will be and already is more demand for quality control and independent opinions, expect to see more appraisal-review products. Among the most popular of these will be the Web-based systems, offering additional sales data for the reviewer to use in his or her analysis. This is due to new technological developments, including better software and larger pools of comparable data, which favor quicker and cheaper services at a time when more indepth review services are in demand. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, email charlie@elliottco.com or visit his company’s Web site, www.appraisalsanywhere.com.