19th March 2013

One Appraiser’s Solution to Getting Paid

Editor’s Pick: One Appraiser’s Solution to Getting Paid
by Isaac Peck, Associate Editor

Here is one answer to “show me the money.”

The practice of appraisal management companies (AMCs) slow paying appraisers or not paying at all continues to be a problem for the industry- to the tune of millions of dollars in unpaid invoices as a result of recent bankruptcies of three prominent AMCs. As a result, appraisers are looking for ways to protect themselves and their businesses.

One appraiser has a solution that has worked for 20 years: she combines commonsense screening techniques, before taking on a client, along with the imposition of liens against deadbeat payers.

Property Liens
…continue reading the rest of this post: One Appraiser’s Solution to Getting Paid

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14th March 2013

BofA Said to Cut 5% of Property Appraisers Amid Slowdown

By Hugh Son – Mar 13, 2013 8:50 AM PT

Bank of America Corp., the second- largest U.S. lender, cut an appraisal unit’s staff by about 5 percent last month as the firm rid itself of overdue mortgages, said two people with knowledge of the move.

The dismissals from LandSafe’s workforce of more than 1,000 employees began Feb. 22, said the people, who requested anonymity because the matter is private. Those affected include appraisers, who estimate the market value of properties, and regional managers, according to a Feb. 25 staff memo from Tracy Sanderson, a LandSafe senior vice president.

“While we have known we were overstaffed since the fall, we did everything we could to delay impacts as long as possible,” Sanderson wrote. “We were hopeful that our volume would return and potentially reduce the number impacted.”

The bank has scaled back in mortgages after being saddled with more than $40 billion in costs tied to defective home loans. Most of those came to Bank of America through its 2008 takeover of Countrywide Financial Corp., whose operations included LandSafe.

Bank of America, once the biggest U.S. home lender, fell to No. 5 in the fourth quarter and has been eclipsed by competitors including Quicken Loans Inc., according to newsletter Inside Mortgage Finance. The field is now dominated by San Francisco- based Wells Fargo & Co. (WFC), which accounted for almost 1 in 3 U.S. mortgages last year.

Distressed Borrowers

About 70 percent of work done by LandSafe appraisers was related to transactions for soured loans, including the auction of bank-owned properties and short sales in which a borrower’s home is sold for less than the amount owed, said one of the people. The bank’s expected increase in originations this year isn’t enough to offset the drop in work resulting from having fewer overdue loans to service, the person said.

Bank of America had about 773,000 mortgage customers who were at least two months behind on payments at the end of 2012. That figure will drop to 400,000 by the end of this year, fueled by the sale of mortgage-servicing rights on $306 billion in loans announced in January, the firm said.

Terry Francisco, a spokesman for Charlotte, North Carolina- based Bank of America, confirmed the company was cutting LandSafe personnel and placing some elsewhere in the firm. The current staff will be able to handle an expected surge in new mortgages in 2013, he said.
Origination Outlook

“If they do more loans this year than last, I’d be surprised,” said Paul Muolo, managing editor of Bethesda, Maryland-based Inside Mortgage Finance, who predicts Bank of America’s refinancing revenue will drop. “They’re not competing aggressively on rates, they take a long time to close loans, and they’re living off refis that will decline when rates rise.”

Bank of America’s home lending dropped by half last year to $78.7 billion after Moynihan shuttered its correspondent business, which bought mortgages marketed by third-party lenders. Wells Fargo, JPMorgan Chase & Co. (JPM), Quicken Loans, and U.S. Bancorp originated more than Bank of America’s $22.5 billion in fourth-quarter loans, according to Inside Mortgage Finance.

Eliminating workers who served delinquent borrowers is part of Chief Executive Officer Brian T. Moynihan’s plan to pare expenses. Bank of America dismissed 3,000 such employees and 6,000 contractors in the fourth quarter, he said. About $3 billion of quarterly costs tied to legacy asset servicing eventually will fall to $500 million, Moynihan has said.

“There’s nothing more important in our company than to get this done as quickly as possible,” Moynihan, 53, told analysts during a Jan. 17 conference call.
Lenders Retreat

Some of his biggest competitors have said they will pull back in home lending. JPMorgan, the largest U.S. bank by assets, will cut as many as 15,000 mortgage-related jobs through 2014 as fewer employees are needed to service soured loans, the New York-based company said last month.

Rising interest rates may discourage refinancings, which accounted for 71 percent of originations last year, and new loans for home purchases probably won’t cover the shortfall, according to a Mortgage Bankers Association forecast. Total lending will slide 20 percent to $1.4 trillion in 2013, and 24 percent to $1.06 trillion in 2014, the group said.

Remaining LandSafe appraisers may see a “slight increase” in workload because of the adjustment, Sanderson told employees in the February e-mail.

Staffing is “at the right level for our expected volume,” she wrote. “Our hope is that we will get through this challenging environment and then start to grow again.”

To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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5th March 2013

Solutionstar Settlement Services Aquires Equifax Settlement Services

I got this email today:

Equifax Settlement Services is pleased to announce it has been acquired by Solutionstar and is no longer affiliated with Equifax Inc. Solutionstar has great plans to continue to build this business to be the best in the industry. Shortly, we will be rebranding ourselves as Solutionstar Settlement Services. We are committed to this business and look forward to working with you.

Please do not reply to this email. More information will soon follow from your dedicated Vendor Management team.

Hopefully this will mean they do not outsource their reviewers and customer service to INDIA anymore…

Bryan Knowlton

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1st March 2013

UAD Update January 2013 [PDF] – New

January 29, 2013
Uniform Appraisal Dataset Update and Uniform
Collateral Data Portal Release Notification
As communicated in the September UAD Update, Fannie Mae
and Freddie Mac (the GSEs) will convert several of the
current Uniform Appraisal Dataset (UAD) compliance warning ed
its to fatal UAD edits in the Uniform Collateral Data
Portal
®
(UCDP
®
) during 2013. We are targeting implementation of the
first phase in June 2013, with warning edits for the
following data fields converting to fatal UAD edits:
?
Appraisal effective date

Subject contract price and comparable sale price

Above grade Gross Living Area (GLA) (subject and comparables)

Sale type (subject and comparables)
Warning edits for the following data fields will convert to
fatal UAD edits in phases that will be scheduled during the
second half of the year:

Subject and comparable address (including unit number for condominiums)

Subject contract date/ Comparable date of sale/time

Condition rating (subject and comparables)

Quality of construction rating (subject and comparables)

Location rating (subject and comparables)

View rating (subject and comparables)
Each of the data fields in the lists above has associated UAD
edits that will be returned by the UCDP if the data provided
is incomplete or in an invalid format as defined in th
e Fannie Mae and Freddie Mac UAD Specifications. After these
warning edits are converted to fatal UAD edits, if one or mo
re of these edits is issued, it will result in Hard Stop 401
(UAD Compliance Check Failure) and a “Not Successful” status
will be issued in the UCDP. If the lender or appraisal
vendor receives a “Not Successful” status in the UCDP, the lende
r or vendor must resubmit a corrected appraisal with the
required data in the correct format
to ensure a “Successful” status.

For all the details, please visit:

http://www.freddiemac.com/sell/secmktg/docs/uad_newsletter_jan.pdf

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