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Troubled S&L Fremont Investment & Loan said Tuesday that it had completed the sale of its remaining mortgage servicing rights to Litton Loan Servicing LP, an affiliate of Goldman, Sachs & Co (GS: 170.58, -1.02%). The sale of the $12.2 billion servicing portfolio was first announced on May 9.

Litton has manged to largely stay out of the industry limelight after it was snapped up from the rubble of former scratch-and-dent giant Credit-Based Asset Servicing & Securitization, or C-BASS. The acquisition adds to the servicing platform’s already significant size.

Fremont, with $8.8 billion in assets, is largely expected to head for bankruptcy once its proposed sale to CapitalSource, Inc. (CSE: 15.50, +2.45%) in mid-April, covering most of the bank’s assets and deposit liabilities, is completed.

The company was the 22nd largest mortgage originator in the nation during 2006, according to statistics compiled by Inside Mortgage Finance, before running aground in 2007.

For more information, visit http://www.fremontgeneral.com.

Nationwide Title Clearing, Inc. said Tuesday that it had launched ExpressRetrieval.com, an online service that allows mortgage industry professionals to place orders for vital research and retrieval of recorded real estate documents nationwide.

“What makes the ExpressRetrieval.com online service unique is the ability for users to order hard-to-find documents for any recording jurisdiction nationwide, one at a time or in bulk, and for a reasonable and predictable rate,” the company said in a press statement.

Nationwide Title Clearing previously released its Express Retrieval service in the spring of 2006; the launch of ExpressRetrieval.com makes the service available online to the general public nationwide.

Nationwide said its Express Retrieval online service covers all US recording jurisdictions nationwide, and allows users to order both certified copies and regular copies of documents, without minimum volume requirements — most online services limit orders to those recording jurisdictions that offer public records online and do not offer an easy online ordering system for clerk-certified copies, the company said.

Nationwide Title Clearing senior vice president, Jeremy Pomerantz, said the product was developed to “open the door for new market segments that previously had no clear avenue to easily order documents.”

ExpressRetrieval.com’s search services include combinations of public and private subscription-based databases and image repository resources, phone calls to the county as well as sending a person to physically go to the recording office, if needed, the company said.

All of this is offered at a predictable cost that is provided up-front in the ordering process, said Pomerantz.

To learn more visit http://www.nwtc.com and http://www.expressretrieval.com.

The headline is straight from Yahoo! News because I don’t think there’s a better way to say it.  Massachusetts is suing H&R Block for Option One Mortgage’s lending practices.  Option One is owned by H&R Block.  It will be interesting to see how this plays out and whether it sets the precedent for future legal action against lenders and brokers.

From the article:

Massachusetts authorities sued H&R Block Inc on Tuesday, charging that its mortgage unit discriminated against black and Latino borrowers and escalated a crisis over property foreclosures in the state.

The lawsuit is the first by a U.S. state to accuse a subprime-mortgage lender of civil rights violations following a wave of foreclosures of homes in poor, often black, neighborhoods nationwide.

The complaint, filed in Suffolk Superior Court, accuses H&R’s subprime-lending subsidiary, Option One Mortgage Corp, of engaging “in unfair and deceptive conduct on a broad scale.”

The complaint said the H&R Block unit charged black and Latino borrowers higher points and fees to close their loans than similarly situated white borrowers and targeted black and Latino consumers with marketing “that pushed the sale of predatory loan products.”

“Marketing loan products that were designed to fail not only harms individuals and families who are struggling to afford their homes, but also has a negative impact on neighboring homeowners and the community at large,” Coakley said in a statement.

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As the foreclosure mess has continued to push forward, those law firms that specialize in protecting creditor’s rights have seen business booming like never before. Missouri and Kansas-based Martin, Leigh, Laws & Fritzlen, P.C. — one the Midwest’s larger such law firms — said earlier this week that it has brought five new attorneys on board to help the firm manage its growing workload.

• Brooke Rank, a 1999 graduate of the University of Missouri-Kansas City School of Law, joined the firm this month and concentrates her practice in the areas of civil litigation and creditor’s rights. She is a member of the Missouri Bar and the Kansas Bar, and is also admitted to practice in the United States District Court of Kansas and the Eastern and Western Districts of Missouri.
• Carrie Mermis is a 2000 graduate of the University of Missouri-Columbia, and she received her J.D. from the University of Missouri-Kansas City School of Law in 2003. She is a member of the Missouri Bar and Georgia Bar, and is also admitted to practice in the Northern and Southern Districts of Georgia. Ms. Mermis is a specialist in bankruptcy practice.
• Mary Walsh is a 2006 graduate of the University of Dayton School of Law, where she was an editor and member of the Dayton Law Review. She graduated with a B.A. in 2003 from the University of Missouri-Columbia. Focusing on civil litigation and real estate, Walsh is a member of the American Bar Association, the Missouri Bar Association, the Bar Association of Metropolitan St. Louis, the Lawyers’ Association of St. Louis and the Missouri Organization of Defense Lawyers.
• James Fletcher, Jr. is a 2006 graduate of Washburn University School of Law. Upon graduation, he served as the law clerk for the Honorable Kelly J. Moorhouse at the Sixteenth Judicial Circuit Court of Missouri, and is admitted to practice in Missouri and Kansas, with his practice concentrated in the areas of civil litigation and creditor’s rights.
• Emily Hess is a 2006 graduate of the University of Missouri-Kansas City School of Law, where she served as a Board Member and Literary Editor of the UMKC Law Review. While attending law school, she interned as a law clerk for the Honorable Scott O. Wright at the U.S. District Court for the Western District of Missouri. Hess’ practice is concentrated in the areas of civil litigation and creditor’s rights.

For more information on the firm and its attorneys, visit http://www.mllfpc.com.

Mortgage applications fell sharply last week, according to a long-standing index traditionally used by prepayment researchers on Wall Street.

The Mortgage Maxx Advance Factor Service reported that overall application activity fell 7.8 percent to 137.2 during the week ended May 30. That drop in activity is adjusted for seasonality and the holiday-shortened business week; unadjusted, the index would have been down 26.2 percent to 109.7, the company reported.

To put these numbers in perspective, the index reached its highest point in over two years of tracking during January 2008 — hitting 232.5 for the week ended Jan 25; January’s high-water mark came after the series hit its low point at the end of December 2007.

“With a non-existent refi arbitrage and discouraging qualifying impediments, mortgage applications will remain under severe pressure,” said Paul Descloux, publisher of what industry participants call the “the Max.”

The Max application index was introduced in April 2006 as a complement to Mortgage MAX AFS’s monthly prepayment projections based on title searches, loan application surveys and other data sources. It also corrects for multiple applications, which can skew actual loan demand under current tight credit conditions — critical information for investors and MBS researchers.

While over time, both the better-known application index published by the Mortgage Bankers Association and the Max end up directionally similar, the timing of application movements can differ somewhat drastically from one week to the next between the two. For MBS investors determining how to price securities, the timing of repayment effects is a critical component of valuing mortgage bonds.

Widespread price declines characterized much of the nation’s housing market in the first quarter, with single-family home prices dropping at a steep 6.7 % annualized rate according to a report issued Monday afternoon by economic and financial analysis firm Global Insight, Inc. The first-quarter drop was the third straight quarterly decline in housing prices, according to the company’s research.

Nationwide, 262 housing markets out of 330 in the study — the overwhelming majority of the nation’s housing markets — experienced declines, Global Insight said, accounting for 84 percent of all housing units and 89 percent of real estate value.

Not surprisingly, California, Florida and Michigan accounted for the steepest losses, and contained 45 of the 50 worst performing metropolitan areas for this period. California and Florida have been among the most overvalued states for the past several years, and Michigan is reeling from the impact of a slumping economy. Other housing markets in the bottom 50 during the first quarter included Las Vegas and Reno, Nevada and Bend, Oregon.

“The housing market will take some time to recover as consumers are constrained not only by tighter credit standards, but rising costs in other areas of the economy,” said Jeannine Cataldi, senior economist and manager of Global Insight’s regional real estate service. “There is also excess supply that needs to be absorbed, plus the rate of foreclosures entering the market needs to slow before housing can begin to pull out of its current downward trend.”

Price declines leading to greater affordability
In the first quarter 2008, only eight housing markets — down from a peak of 53 in 2006 — were determined to be overvalued by Global Insight’s analysis, representing only 1 percent of the U.S. single family housing stock and 2 percent of total real estate value, down from 32 percent and 16 percent, respectively, from 2006.

Areas of the Pacific Northwest, including Bend, Oregon and Longview, Washington, continued to be among the most overvalued. However, other areas once extremely overvalued — in particular, the Northeast and coastal California and Florida — are now rated by Global Insight as fairly valued, a sign that some of the hardest-hit housing markets may be nearing a bottom.

Additionally, a number of widely dispersed and mostly smaller markets throughout the country that had seen less price fluctuation during the boom years have shown strong price resilience.

As proof of the power of small towns, the top nine housing markets registering price increases during the first quarter all had populations less than 300,000 — and were as varied as Ithaca, New York; Billings, Montana; Houma, Louisiana; and Odessa, Texas.

The Global Insight study uses a model that was originally developed at National City Corp. (NCC: 5.50, -6.78%), although the bank no longer sponsors the study.

For more information, visit http://www.globalinsight.com.

Disclosure: The author held no positions in NCC when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

Some good news for secondary market participants arrived late Monday, with Freddie Mac (FRE: 24.51, -1.21%) saying it would look to issue a Reference REMIC security in June. The GSE did not provide details regarding the size of the expected issuance, but the fact that markets have recovered sufficiently to support a new issue at all should come as good news for investors who have been dealing with a literal dearth of such new issues in recent months.

Reference REMICs are essentially the GSE equivalent of a mortgage-backed security, and build on the Freddie Mac’s guaranteed maturity class (GMC) product. Freddie Mac GMCs are structured mortgage-backed securities with a shortened stated final maturity, and are backed by either Freddie Mac-issued Gold PCs or Hybrid ARMs.

Since July of last year, Freddie Mac has issued only two such Reference REMICs. The latest, in February, saw its size reduced from $700 million to $400 million.

A funding calendar published by the GSE specifies monthly opportunities for REMIC issuance, but the frozen mortgage market has made it difficult for it to issue new securities, forcing both it and sister GSE Fannie Mae (FNM: 26.89, -0.30%) to rely instead on issuing debt to fund operations instead.

Freddie said further details on the expected issue will be made available the week of June 9.

For more details, visit http://www.freddiemac.com.

Disclosure: The author held no positions in FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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Once considered largely an afterthought from a functional standpoint, LOS providers are moving to quickly to introduce full-featured compliance solutions into their platforms as the housing crunch rolls on. The reason isn’t hard to divine: compliance matters more now than it has in the past, and originators are being pushed to make sure the loans they make can pass both federal and state muster.

The latest example of this trends comes courtesy of QuestSoft, a provider of compliance software and geocoding services for lenders, which said Monday that its automated compliance review system, Compliance EAGLE, has been integrated into Loan Energizer. Loan Energizer is a loan origination system designed by Encino, Calif.-based Management Systems Development, Inc.

Via the integration, Compliance EAGLE combines its compliance monitoring and reporting functions with Loan Energizer’s LOS, to offer a comprehensive rule set that evaluates loan portfolios for possible compliance violations and automates reporting, both companies said in a press statement.

“The integration of Compliance EAGLE with Loan Energizer ensures that our users can be confident in their compliance with the thousands of laws, rules and regulations that otherwise might unravel the quality of their loans and operations,” said Doug Turner, president of Loan Energizer. “With Compliance EAGLE, not only do we reduce the time and costs of complying with these rules, but we can also reduce the expenses related to audits and increase the attractiveness of loans for investors.”

Compliance EAGLE itself is based on the use of Mavent Expert System to perform a full range of compliance services, including reviews of federal, state and local regulations.

Loan Energizer executives said that their users will benefit from Compliance EAGLE being integrated as a full module within the software — this allows users to access the compliance tools directly from within the Loan Energizer user interface.

For more information, visit http://www.gomsd.com and http://www.questsoft.com.

Encomia, an electronic mortgage provider, said Monday that it has updated its eDisclosures platform, introducing new enhancements designed to improve ease-of-use. The platform enables brokers and lenders to create an electronic loan document package in their loan origination system and post it online for consumers to electronically sign.

Enhancements include a drag and drop signature function that enables users to apply eSignatures to any document, Encomia said. Other enhancements include faster system response, and improved reporting for the loan originator on the signing and viewing statuses of their document packages.

“Together as a company, we have focused the last two eDisclosure releases on building an even better user experience for lenders and borrowers, on the foundation of an already rock solid engine,” said Phil Boyer, CIO of Encomia.

For more information, visit http://www.encomia.com.