Tuesday, July 27, 2021
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HUD To Roll Out 5 Region Inspections Contract

The US Department of Housing and Urban Development (HUD) is preparing to open up a multi-region construction draw contract. Contractors will perform inspections of HUD Multifamily (MF) projects under repair, construction or substantial rehabilitation. MF projects serviced by the Contractor under this contract will involve either HUD-insured or HUD’s Capital Advance programs. The contractor must assist all parties (owner, sponsor, architect, builder, mortgage company, consultant) in construction contract administration procedures, issues, and the preparation and submission of HUD forms. HUD anticipates awarding up to two contracts for each of the five regions but reserves the right to combine regions into one contract award if one contractor receives an award for more than one region or expand or reduce the size of a geographic region under an awarded contract. The following are the FHA Regions up for grabs,

Northeast Region (by FHA zone): Washington D.C (000) and 13 States: Connecticut (017), Delaware (032), Maine (FHA 022), Massachusetts (023), Maryland (052), New Hampshire (024), New Jersey (North 031 and South 035), New York (Buffalo 014 and New York City 012), Pennsylvania (East 034 and West 033), Rhode Island (016), Vermont (026), Virginia (051), and West Virginia (045).

Southeast Region (by FHA zone): Puerto Rico (056) and 8 States: Alabama (062), Florida (North 063, Central 067, and South 066), Georgia (061), Kentucky (083), Mississippi (065), North Carolina (053), South Carolina (054), and Tennessee (Knoxville 087, Memphis 081, Nashville 086).

Midwest Region (by FHA zone): 6 States: Illinois (Chicago 071 and Springfield 072), Indiana (073), Michigan (Detroit 044, Grand Rapids 047, and Flint 048), Minnesota (092), Ohio (Cleveland 042, Columbus 043 and Cincinnati 046), and Wisconsin (075).

Southwest Region (by FHA zone): 9 States: Arkansas (082), Iowa (074), Kansas(102), Louisiana (064), Missouri (East 085 and West 084), Nebraska (103), New Mexico (116), Oklahoma (East 118 and West 117), and Texas (Fort Worth 113, Houston 114, and San Antonio 115).

West Region (by FHA zone): 14 States: Alaska (176), Arizona (123), California (Los Angeles 122, Riverside 143, San Diego 129, San Francisco 121, and Norther 136), Colorado (101), Hawaii (14), Idaho (124), Montana (093), Nevada (125), North Dakota (094), Oregon (126), South Dakota (091), Utah (105), Washington (171 and Seattle 127), and Wyoming (109).

Below are anticipated volumes based on CLIN bidding,

HUD is anticipating that the RFP will roll out next month. If interested in bidding, reach out to Foreclosurepedia to schedule a Consultation to see if you are eligible. A DUNS and SAM Account are both required. If you do not have one, Foreclosurepedia is able to obtain them for you.

Wells Fargo Removes Personal Lines Of Credit

In a sign of the times, Wells Fargo has announced that they are ending all personal lines of credit. The bank is shutting down all existing personal lines of credit in coming weeks and no longer offers the product, according to customer letters reviewed by CNBC. Adding pain to the delivery is the fact that Wells Fargo’s actions may negatively impact their customer’s credit scores. The cascading impact of this on the economy is anticipated to stymie what little recovery there has been, thus far, during the COVID pandemic. Whether or not other financial institutions are reading the same tea leaves is yet to be seen. What we do know is that this action is almost an identical picture of how the 2008 Financial Crisis began to unfold.

Foreclosures To Increase But Not How You Expect

According to CNBC, roughly 7.25 million homeowners have entered into forbearance programs at one point or another during the COVID crisis — roughly 14% of all homeowners in the US. Today, 28% of those homeowners — 2 million or so — remain in active forbearance. And out of the 146,000 plans reviewed this week, 44,000 homeowners left forbearance, while the plans of 102,000 were extended.

The nation’s mortgage servicers are gearing up for the biggest wave of delinquent loans since the subprime mortgage crisis, but this time they say they are ready.

The U.S. Commerce Department said sales of new houses have dropped 5.9% on an annualized basis. Home prices are at record high. The National Association of Realtors said sales of existing houses have declined four months in a row. Consumer confidence has declined. Inflation is rising. Commodity prices climbed as demand surged, driving the cost of new houses higher. Sales of existing houses declined in all regions except the Midwest in May, the National Association of Realtors, a Washington-based trade group, reported. The median price for existing housing of all types in May was $350,300, up 23.6% from the same period a year ago. Total housing inventory was 1.23 million units in May, up 7% from April’s total, but down 20.6% from one year ago. The National Mortgage Bankers Association, a Washington-based trade group, said loan applications decreased 6.9% for the week ended June 25 from the previous week to the lowest level in about 18 months. The average interest rate for a 30-year fixed-rate mortgage backed by the Federal Housing Administration dipped to 3.19% from 3.21%.

The math on all of this is that the first round of homeowners whom took the forbearance are now entering into their last quarter of postponing the inevitable. And multiple waves of these homeowners will begin to hit their maximum of 18 months of no payments.

And while many are lauding the Consumer Financial Protection Bureau’s (CFPB) Final Rule on Regulation X which postpones foreclosures through 31 December 2021, the reality is that it is only prolonging the collapse. When coupled with the final CDC Moritorium extension through July and that imposed by Fannie Mae through September, it is fair to say that the days are numbered on the artificially high valuations created as a byproduct of the government smokescreen created at the behest of their corporate masters. More on point, though, with federal courts ruling against governors whom are attempting to suspend federal unemployment, it is looking like the perfect storm is brewing for October.

This week and next, a total of more than 350,000 borrowers will be reviewed for extension or removal from forbearance, according to Black Knight. Of the 146,000 plans reviewed this week, 44,000 homeowners left forbearance, while the plans of 102,000 were extended. With roughly two-thirds of borrowers remaining in forbearance, Black Knight estimates that 575,000 plans will expire in September and the beginning of October, meaning mortgage servicers will be facing the daunting task of dealing with about 15,000 troubled loans per day.

The key number to look at is 15,000 troubled loans per day. Even in the best of times, there is no way to marshal such a labor force to be able to service at those levels for prolonged amounts of time. Part of it is attrition and the other part is that the technology isn’t there — at least not on the National Association of Mortgage Field Services (NAMFS) member side. Don’t get me wrong, handling 15K per day isn’t that much of a feat. The issue that presents is that you are at 90K in the first week. And those continue to spiral upward until you hit, at minimum, 1.5 Million. As each one requires the inspector first, the Field Service Technician next, and the routine services ongoing, you are easily at 270K per week by the first month. There simply isn’t enough manpower whom are willing to perform $3 inspections and wait on their pay for 60 days — provided that the NAMFS member doesn’t seize it under a charge back. I suppose it bodes well for Labor — if Labor believes that volume will make up for pricing. That has been the historical madness and I see no reason why it would change.

Contractor Leads

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Reverse Mortgage Solutions Resold Again … To Ocwen This Time

In September, 2019, Ditech Holdings — Ditech, the nonbank formerly known as Walter Investment Management — went through bankruptcy which, in part, forced the sale of Reverse Mortgage Solutions (RMS). And less than 24 hours latter after selling RMS to Mortgage Assets Management, Ditech Financial sold their forward mortgage business to New Residential Investment for $1.2 Billion. Several days ago, Ocwen announced its purchase of RMS in yet another lipstick on the pig deal. Others are asking, as we release the latest on the National Field Network (NFN) bankruptcy, whether or not the sale is even legal due to the asset purchases by NFN from RMS in Michigan.

Ocwen Financial Corporation (NYSE: OCN) (“Ocwen” or the “Company”), a leading non-bank mortgage servicer and originator, today announced that its wholly-owned subsidiary, PHH Mortgage Corporation (“PHH”), has entered into an agreement with Reverse Mortgage Solutions, Inc. (“RMS”) and its parent, Mortgage Assets Management, LLC (“MAM”), to acquire substantially all of the operations, assets and employees of the RMS reverse mortgage servicing platform. MAM is a subsidiary of investment funds managed by Waterfall Asset Management, LLC (“Waterfall”). The Company will also acquire all of the outstanding equity interests in the RMS Real Estate Owned business, REO Management Solutions, LLC (“REO”).

All told, it is a roughly $12.4 Million deal. Now, granted Foreclosurepedia has predicted most of the consolidations and bankruptcies which have occurred in the post-COVID environment, this one is of great interest. Four years ago, or so, SoftBank — we have plenty of articles about them — acquired Fortress Investment Group (FIG) for roughly $3.3 Billion. FIG manages New Residential as a publicly traded real estate investment trust (REIT). About the same time, New Residential went on a huge buying spree, pre-COVID, which included Shellpoint, Avenue 365, and eStreet. They went on to purchase almost all of CitiGroup’s Mortgage Servicing Rights (MSR) and gobbled up tens of thousands of others from banks like HomeStreet Bank. Additionally, they bought COVIUS and most importantly they snatched up Guardian Asset Management to create a one-stop-shop. Through other deals on the periphery, New Residential picked up pieces of both Chronos and Altisource. In fact, in 2017, Altisource announced a Cooperative Brokerage Agreement relating to approximately $116 Billion UPB of MSRs and Letter of Intent for Other Services.

The story of Altisource is the story of a company embroiled in dozens of scandals involving not paying Labor within the Mortgage Field Services Industry. In fact, in 2018 Altisource Residential decided to rebrand themselves — following along the lines of the Ameritrust – ResiPro rebranding — as Front Yard.

Debt was king and greed was good. This wasn’t the only rebranding that was underway by Altisource, though. Altisource Portfolio Solutions announced that Altisource  Origination Services rebranded as Trelix after snapping up CastleLine. It is easier to simply view the below list obtained from here.

As the Foreclosurepedia Nation remembers, we exclusively broke the story on Ocwen kicking Altisource to the curb when New Residential advised Ocwen that they did not want Altisource servicing their assets vis-à-vis the New Residential MSRs which Ocwen held. All told, it was going to be a $58 Million loss for Altisource. It was also the first time that we learned about equating the default rates into dollar amounts for the Industry. Turning the tables, Altisource leveraged Ocwen into a new deal as seen in Altisource’s 8-K filing with the Securities and Exchange Commission (SEC) below.

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The million dollar question is whether or not the Altisource work, which shifted to Guardian, be repatriated? Even more important, though, is whether or not people even realize whom they work for, today