Sep 2007
KEEPING YOU CURRENT WITH THE MORTGAGE OUTSOURCING INDUSTRY
ABOUT OCWEN EVENTS LOOKING INTO THE FUTURE INDUSTRY UPDATE
INDUSTRY UPDATE President Bush Discusses Homeownership Financing
In our pursuit to bring you the latest updates, company news and best practices in the mortgage industry, we have compiled this issue of Live Wire. Please send us your feedback for incorporation in future issues. Industry News CAMB Proposes Solutions to Mortgage Crisis: The California Association of Mortgage Brokers (“CAMB”) has come up with several proposals that it says represent solutions to the current mortgage market crisis for consumers. Speaking at a news conference at the group's annual convention in Long Beach, Calif., Ed Smith, its vice president of government affairs, said the CAMB urges Servicers to offer flexible repayment strategies for borrowers facing default and foreclosure, calling it an "extremely important issue for homeowners in California." The CAMB repeated its past call for Congress to declare California to be a "high-cost" state for homeownership. (presently, the only two states with that designation are Alaska and Hawaii.) The group also called for Wall Street to develop lending programs and products attractive to investors and accessible to borrowers. "As has been the case throughout history, markets fluctuate but they always recover," CAMB president Pete Ogilvie said. "CAMB stands ready to work collaboratively with regulators and other stakeholders to stimulate a strong rebound."
THE PRESIDENT: First, we're going to work to modernize and improve the Federal Housing Administration -- that's known as the FHA. The FHA is a government agency that provides mortgage insurance to borrowers through a network of private sector lenders. Sixteen months ago I sent Congress an FHA modernization bill that would help more homeowners qualify for this insurance by lowering downpayment requirements, by increasing loan limits and providing more flexibility in pricing. These reforms would allow the FHA to reach families that need help, those with low incomes and lessthan-perfect credit records or little savings. Last year the House passed this bill with more than 400 votes. Click here to read more LOOKING INTO THE FUTURE “The next wave of transformation for financial transaction processing industries” – Part 8 How will companies stretch their resources to cover the necessary investments? The build vs. outsource decision will change as more industry specific outsourcing capabilities become available and as the historical bias toward doing processes internally shifts toward outsourcing. The basis of decision-making will be based on the following factors: 1. The ability to produce and
Mortgagebot Releases '07 Benchmark Study Offering useful insights into the realm of consumerdirect, Web-based mortgage lending, Mortgagebot LLC, Mequon, Wis., has announced the release of its Benchmarks 2007 study of online lending practices. The study showed that a quarter of the lenders studied "now originate more than half of
their loan volume via the online channel." Research participants include 25 of the top 100 banks and thrifts and 40 of the top 100 credit unions. Confirming trends and "debunking" some myths, the study offers detailed data analysis of loan product and decision-making statistics, online borrower behavior and website usage, lender website configuration and marketing, and more. The study showed that online loan seekers tend to be young, affluent, and creditworthy, with an average income above $85,000 and an average credit score above 700. The study is based on a comprehensive survey and analysis of the online lending practices and procedures at more than 3,600 mortgage lending websites maintained for Mortgagebot's more than 700 clients nationwide. HUD to Implement FHA RBP System: To augment its recently announced FHASecure program, the Department of Housing and Urban Development (“HUD”) plans to take administrative action to implement a risk-based pricing system by Jan. 1 so the Federal Housing Administration can price its mortgage insurance premiums based on a borrower's risk profile, according to a senior HUD official. With risk-based pricing, the FHA would be able to help an additional 20,000 subprime borrowers refinance into new FHA-insured mortgages in fiscal year 2008 and help finance 120,000 new homebuyers who have fewer options due to the contraction in subprime lending, the official told reporters. The Bush administration still wants Congress to pass an FHA reform bill that would give the agency even more flexibility in setting premiums and down payment requirements. HUD estimates that the FHA will refinance 101,000 subprime borrowers into FHA loans by the end of this fiscal year (Sept. 30) and the agency would probably refinance another 160,000 subprime borrowers in fiscal 2008 without any changes to its program. With the FHASecure program (which allows the FHA to refinance delinquent borrowers and risk-based pricing), HUD expects that the FHA can help another 80,000 troubled borrowers avoid foreclosures. However, it could do even more if Congress passes FHA reform. HUD officials revealed that they plan to issue a Real Estate Settlement Procedures Act proposal in January aimed at improving disclosures of mortgage broker fees and settlement costs.
automate processes is increasing along with the emerging ability to swiftly take work outside of corporate boundaries 2. The ability to increase globalization and sophistication of technology solutions increases the investment that can be made to reduce the costs and error rates of financial processes, thus raising barriers to entry and ROI’s in these businesses. This emerging decision-making paradigm supports the view that financial transaction processes will increasingly be performed by an emerging class of companies that will specialize in providing financial services in a factory environment. The need exists, the means to satisfy the need exists, and the companies that will satisfy those needs will emerge. We now turn to an example from one such company.
By: Mickey Linn, Member of the Board of Directors, Ocwen Financial Corporation To be continued… Top
INDUSTRY EVENTS
USFN Fall Regional Default Servicing Seminar Sep 19 – 21, Huntington Beach, CA More info IMN Subprime ABS September 19 -20, Four Season’s Hotel, Las Vegas, NV More info MBA 94th Annual Convention & Expo October 14 – 17, Hynes Convention Center, Boston, MA More info Top
ABOUT OCWEN
Company News Carteret Uses Tech to Enhance Loan Quality: Carteret Mortgage Corporation will deploy credit analysis technology to all its 300 branches to raise the bar on doing quality originations. Specifically, Carteret will use Market Kinetix's patent-pending credit analysis software solution Deal Maker Score. The application provides stepby-step directions to raise a borrower's credit score. A mortgage originator downloads the borrower's credit findings to the product, and the program produces a customized set of recommendations, which show a borrower how to raise their credit score by the target number of points designated by the loan officer. Ginnie Mae introduces HECM: Ginnie Mae is introducing the Home Equity Conversion Mortgage (“HECM”), Mortgage-Backed Securities (HMBS) program, effective September 1, 2007, and thereafter. Ginnie Mae’s HMBS are standardized mortgage-backed securities (MBS), which are collateralized by FHA insured HECM loans. The HMBS is a new class of Ginnie Mae security backed by HECM loan participations under the umbrella of the Ginnie Mae II Custom Program. On September 1, 2007, additional information on HMBS program and related updates to Ginnie Mae’s Mortgage-Backed Securities Guide 5500.3, Rev. 1 ("MBS Guide") will be made available under the "What’s New" section of Ginnie Mae’s website. Tavernier Capital Partners and WESTCAP CORP
We Make Your Loans Worth More™
Ocwen Financial Corporation is a leading business process outsourcing provider to the financial services industry, specializing in Loan servicing; Mortgage fulfillment; and Receivables management services.
Ocwen is headquartered in West Palm Beach, Florida with offices in Arizona, California, Florida, Georgia, Illinois and New York and global operations in Canada, Germany and India. Utilizing our global infrastructure, state of the art technology, world-class training and six sigma processes, we provide solutions that make our clients’ loans worth more. Additional information is available at www.ocwen.com.
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PUBLICATIONS IN THE MORTGAGE INDUSTRY
Choose REALSynergy: Tavernier Capital Partners LLC, Tampa, and WESTCAP CORP, Irvine, Calif., chose West Palm Beach, Fla., based Ocwen Financial Corp.’s REALSynergy as their commercial loan servicing technology platform. REALSynergy is a Windows-based full service commercial and multifamily loan servicing system. Best Practices How to Work with Buyers who have had a Bankruptcy or Other Credit Issues: If a person is in the position of considering filing for bankruptcy, that person's credit is probably already ruined. The person can't pay his or her debts, is behind on many payments, and/or doesn't have enough assets to cover the debts. Therefore, it's not the bankruptcy that "ruins" a person's creditworthiness; it's the situation that warrants the bankruptcy that's the problem. Information about a bankruptcy usually stays on a person's credit report for ten years. And a person must wait at least six years from the date of discharge before filing another bankruptcy. Click here to read more
Scotsman Guide Scotsman Publishing Inc. is a privately held company that has served the mortgage lending industry since 1985. In December 1994, the company created Scotsman Guide to serve the mortgage industry in the Pacific Northwest. Gradually, they expanded distribution of the publication throughout the United States. In April 2001, Scotsman Publishing Inc. purchased Commercial Lender Magazine and merged it with Scotsman Guide. This purchase greatly expanded the commercial lending portion of Scotsman Guide. In December 2001, they began publishing separate commercial and residential editions
For more information about Scotsman Guide please log onto www.scotsmanguide.com
If you have specific questions or suggestions, please write to us at livewire@ocwen.com
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