The letter from MBA Chairman Rob Couch, CMB, urges lenders to offer mortgage relief to borrowers who have lost their homes, suffered damage to their properties or have incurred a loss of employment due to damage to their workplaces.

“During these trying times, individual homeowners may feel overwhelmed by the issues they must address, the emotional toll of losing their homes, and the financial hardship the events have imposed,” Couch said. “We, therefore, encourage MBA members to reach out to potentially affected customers to inform them of the relief options available to them and to assist them where possible.”

The wildfires have cut a wide swath across major portions of Southern California in four counties: Los Angeles, San Bernardino, San Diego and Ventura. More than 2,000 homes and businesses have been destroyed by the fires and more than 20 people have lost their lives.

On October 27, President George W. Bush declared the four counties as federal disaster areas due to wildfires caused by dry conditions.

Fannie Mae, Freddie Mac, HUD and VA allow for disaster relief measures that include temporary suspension or reduction of mortgage payments, or, in certain cases, modification of the terms of the existing mortgage. 

“We ask that you consider implementing these options for affected borrowers,” Couch wrote.
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MortgageFlex Systems, Jacksonville, Fla., a provider of integrated mortgage automation software, announced that Alliance Capital Partners, Jacksonville, Fla., will use the company’s LoanQuest Residential Lending System for originating, underwriting, closing and delivering loans.

RLS is a lending platform that manages the loan process from pre-qualification through secondary market commitment. It employs user-defined menus, built-in security and field edits to allow tailoring to specific user groups and security levels.

MortgageFlex also said it has integrated RLS with Freddie Mac’s next-generation Loan Prospector tools, which provides automated underwriting and the ability to order mortgage-related services. Lester Dominick, president of MortgageFlex, said the company is the first LOS provider to earn this verification.

MortgageFlex Systems: http://www.mortgageflex.com/
Alliance Capital Partners: http://www.firstalliancebank.com/
Freddie Mac: www.freddiemac.org

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Netupdate Inc., Bellevue, Wash., a developer of lending technology, announced the launch of Originator Pro Mortgage Advisor Version 4.0, a point-of-sale system that integrates with other Netupdate products to close retail and wholesale loans.

The new version enables loan officers to obtain all federal and state-specific initial disclosures required to complete the initial disclosure package. In conjunction with Netupdate’s newly introduced Originator Wholesale Connect edition and Originator Pro Pricing & Product edition, part of a stand-alone or integrated Originator Pro Mortgage Software Suite.

Netupdate: www.netupdate.com

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LoanProtector Insurance Services, Inc., Solon, Ohio, an independent outsourcer of customized mortgage insurance tracking and verification programs, announced a new service called Electronic Insurance Interchange. The service involves electronically sharing homeowners’ insurance information from more than 85 insurance carriers with lenders.

Ron Wiser, president of Loan Protector, said EII is designed to act as an insurance information clearinghouse, compiling homeowners’ insurance information from major insurance carriers and enabling lenders to access the information electronically. He said the product enables lenders to save time and resources while remaining in control of their insurance function.

Loan Protector: www.loanprotector.com

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Framework Inc., New York City, a provider of enterprise software, announced that it completed integration of its LendWare credit fulfillment system with FHA Connect Business-to-Business, an XML-based specification from HUD. The integration allows used of FHA business functions with existing lenders’ loan processing systems.

FHA developed the FHAC B2B to provide FHA-approved lenders with a streamlined process for obtaining FHA underwriting data. Dorothy Beattie, senior vice president of product strategy at Framework, said the LendWare integration would reduce work and improve accuracy of data submitted through FHAC B2B.

Framework also announced that it had joined the eMortgage Alliance, a consortium of companies that collaborate to deliver complete mortgage systems. The alliance, founded by DocuTech Corp., Idaho Falls, Idaho, includes Wave Systems, VirPack, SwiftView, Rekon Technologies, The Performance Group, Encomia and Ingeo.

Framework: www.framework.com

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eLynx Ltd., Cincinnati, Ohio and Wausau Mortgage Corp., Pleasanton, Calif., announced an agreement that will enable Wausau to implement eLynx’s Web Posting Service through its Enterprise connect system.

WPS is a server-based “middleware” that provides electronic delivery capabilities of residential mortgage documents. Enterprise Connect is used by Wausau to automate the process of posting documents for delivery via the Internet, using eLynx’s Network Server product as a firewall.

eLynx: www.elynx.com
Wausau: www.wausaumortgage.com

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QuestSoft, Laguna Hills, Calif., a provider of Home Mortgage Disclosure Act and Community Reinvestment Act compliance products and in-house geocoding systems, introduced Instant Geocoder XML Server Edition, which allows lenders to use QuestSoft geocoding products on any platform or application.

IG XML determines a loan’s marketability or compliance value from remote locations and performs tasks such as HMDA/CRA compliance, identification of low-to-moderate income loans, address verification and marketing campaign success, QuestSoft officials said.

QuestSoft: www.questsoft.com

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Associated Software Consultants Inc., Middleburgh Heights, Ohio, a provider of loan automation software, announced that Zions First National Bank, Salt Lake City, Utah, has implemented ASC’s PowerLender, a Java-based loan origination system, to process its residential mortgage loans. The implementation will eventually involve all 146 of Zions’ branches in Utah and Idaho.

PowerLender allows lenders to incorporate open-source technology into origination platforms and is compatible with most database programs such as Oracle, MS SQL Server or MySQL. It can also choose operating systems other than Windows, such as Linux.

ASC: www.asconline.com
Zions Bank: www.zionsbank.com

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The Credit Network, Framingham, Mass., announced that Fidelity Cooperative Bank, Fitchburg, Mass., implemented TCN’s Web-based iTCN credit reporting platform, which integrates with most major loan origination software systems to enable credit reporting.

The iTCN platform resides with The Credit Network, which company officials said eliminated the need for Fidelity to install its own system. Cheryl Kenney, TCN’s executive vice president, said the system is ideal for lenders that need a low-maintenance, cost-effective credit reporting platform.

The Credit Network: www.TCNLink.com
Fidelity Cooperative Bank: www.fidelitybankonline.com

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Loansoft, Berkeley, Calif., a provider of mortgage automation software, announced that HomeBanc Mortgage Corp., Atlanta, Ga., upgraded its entire sales process to Loansoft’s Studio sales automation system.

Studio is an integrated origination system that automates all mortgage origination functions from point-of-sale to closing. It consists of different modules that can operate in a desktop environment or as an online, browser-based operation.

Homebanc, with more than 400 loan officers in Florida, Georgia, North Carolina and South Carolina, has worked with Loansoft for eight years.

Loansoft: www.loansoft.com
Homebanc: www.homebanc.com

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Lenders First Choice, Simi Valley, Calif., a provider of settlement services and title insurance, said that it in anticipation of HUD’s proposed changes to the Real Estate Settlement Procedures Act it would offer guaranteed closing costs on all mortgage packages.

Under its programs, Lenders First Choice said it would not allow fees it quoted to increase from loan origination to closing. Bill Moody, president of Lenders First Choice, said the company would provide estimated closing costs within two hours of receiving a lender’s order and guarantee the estimate, including mortgage taxes and recording fees.

HUD has not yet finalized its proposed rules to reform RESPA, which could include requirement of a guaranteed Good Faith Estimate (GFE) along with a Guaranteed Mortgage Package Agreement (GMP) that would presumably set settlement costs.

Lenders First Choice: www.lendersfirstchoice.com
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"We expect to see this trend continue and note that not only has the amount of terrorism insurance coverage significantly increased, but that many blanket policies have improved to include ‘per occurrence’ language, said Tad Philipp, managing director for CMBS at Moody’s and author of the market update report. “This language protects investors from coverage being depleted by an event elsewhere in a borrower's portfolio.”

Moody’s took the most aggressive stance of the three ratings agencies in the spring of 2002 when it threatened to downgrade CMBS loans that did not have proper terrorism insurance coverage. After the Mortgage Bankers Association lobbied with other trade associations, including the Commercial Mortgage Securities Association, TRIA passed in November 2002 providing a federal backstop on terrorism insurance.

“The cost of terrorism insurance has fallen for mainstream commercial risks,” said Bernie Brown, president of Insurance Advisors, LLC., Greenwich, Conn. “Terrorism insurance for a high profile, trophy property is still costly, but certainly not nearly as costly as a year ago.”

Meanwhile, the Moody’s report said that, compared with other fixed-income sectors, the CMBS market remains “relatively unscathed” as it works its way through a cyclical downturn.

"Based on our MOST [Moody's Surveillance Trend] surveillance scoring system, the vast majority of CMBS ratings are stable, with 75 percent or more expected to remain unchanged during the coming year," Philipp said.

However, the Moody’s rating agency continues to closely monitor the recovery in the “still-fragile” hotel sector as well as rising vacancies in office properties, the report said.

“The office sector, where the national vacancy rate has risen to approximately 17 percent, has begun to have an impact on CMBS performance," Philipp said.

Statistics from a report by Grubb & Ellis, Northbrook, Ill., and PNC Real Estate Finance, Pittsburgh, Pa., show that asking rents continue to slide for space on the market. The gap between a landlord’s previous and current earnings are beginning to widen, and technology office markets are suffering the most, said Nicholas Buss, group manager, market research at PNC Real Estate Finance.

“All of these companies that were flushed with venture capital and then IPO money rushed out with these grandiose growth plans and leased up a ton of space and really got ahead of themselves in the leasing game,” Buss said.

Meanwhile, rents for office space continue to fall while most commercial brokers believe that rents might start to rise in the second half of 2004 or in 2005.

“Landlords should hope that they don’t have any expirations coming up in the near future because they are probably going to have to release that space for less rent than they are getting now,” said Robert Bach, national director of market analysis for Grubb & Ellis.

Bach said that medical services, healthcare, biotech, and financial service offices have been holding up, but he predicted that technology and telecom office properties would probably be the last sectors to recover.

The Moody’s report shows that in the third quarter of 2003, the ratings agency took rating actions on 228 CMBS tranches (including affirmations and confirmations), up from rating actions on 184 tranches in the second quarter. However, the upgrade to downgrade ratio “varied significantly” based on the type of transaction, Philipp said, with credit-tenant leases showing two upgrades to 12 downgrades and large loans and single asset/single borrower transactions at 15 upgrades to 23 downgrades.

The upgrade/downgrade ratio had significant variations from initial tranche ratings. For investment grade tranches, upgrades topped downgrades by 33 to 30 but for below investment grade tranches, there were five upgrades to 24 downgrades, the report said.

However, conduits made up the best performing sector with 17 upgrades to 14 downgrades, and floaters had a ratio of four upgrades to five downgrades, Philipp said.

The ratio of 1.42 downgrades per upgrade was virtually unchanged from the 1.44 downgrade to upgrade ratio of the second quarter. Excluding credit tenant leases the downgrade to upgrade ratio was 1.19 to 1, the Moody’s report said.
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To refinance the Tower Village Apartments, Gershman arranged $4,076,100. The project is a 98-unit apartment complex that provides affordable housing, section 8, and rental assistance in St. Louis.

And, Gershman arranged $1,693,600 for refinancing Cape Gardens Apartments, a 60-unit apartment complex in Cape Girardeau, Mo. 

All four of the projects were financed with FHA insured 223 (a)(7) financing. 
 
In West Virginia, Gershman used FHA insured 223(a)(7)  to arrange financing on the refinances of three apartment complexes.

For Elkins Manor, a 102-unit complex in Elkins, W.V., Gershman arranged a $2,624,900 loan. Gershman secured $2,404,700 for Beverly Manor, an 80-unit complex in Beverly, W.V. and, for Lewisburg Manor, a 103-unit complex in Lewisburg, W.V., Gershman arranged $2,698,100. 

All three apartment complexes provide affordable housing, section 8, and rental assistance.
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If you have any questions, please contact Venita Murray, senior membership specialist, at 202/557-2845 (vmurray@mortgagebankers.org ) or Phyllis Roberts, membership specialist, at 202/557-2755 (proberts@mortgagebankers.org).

Don’t be left out -- the deadline date for submission has been pushed back to November 14.
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For more information, go to the State/Local Web site at http://www.mbaa.org/state_update/.
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This two and a half day intensive, hands-on sales strategy and coaching course is the only training in the mortgage industry that utilizes D.E.I. Management Group’s patented Performance/Process/Management coaching model.

Learn how to implement DEI’s patented, proven system for managing the prospect base and increasing sales efficiency. Furthermore, DEI’s coaching model will help you master both the “human equation” and the “strategic equation,” so you can set the right goals for the team, retain your most valuable players, and improve income-generating performance.

To register, call 800/348-8653 or click here. For more information, click here or call 202/557-2763.
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Senate to Consider Fair Credit Reporting Act
Last week, Senate Majority Leader Bill Frist, R-Tenn., worked out a time and amendment limit agreement on S.1753, the "National Consumer Credit Reporting System Improvement Act of 2003." This agreement is significant because the bill can now go to the Senate floor for consideration and a vote. We expect the Senate will take up FCRA reauthorization early next week.

In something of a legislative twist, the Senate is expected to take up the House-passed version, H.R. 2622, strike the contents and replace it with the substance of S. 1753. The Senate will then go on to further consider amending H.R. 2622 according to the agreement brokered by Frist. 

The practical effect of this maneuver will be elimination of a conference committee to reconcile differences between the House and Senate. It is most likely that the House and Senate will publicly modify and pass H.R. 2622 for as long as it takes until all the differences between the two chambers are resolved.

MBA's lobbying team has worked hard all year for reauthorization of key pre-emptions in FCRA that protect our national credit reporting system and are due to expire at year's end. These key pre-emptions are made permanent in both versions of FCRA reauthorization, and MBA has recently sent two letters to all Senators requesting that they pass the legislation with no further amendments. MBA's strategy to ensure a successful conclusion to reauthorization will be modified to a small degree now that debates over the competing versions of affiliate sharing and adverse action are going to be conducted publicly.

For more information, please contact Erick Gustafson at 202/557-2913 (egustafson@mortgagebankers.org), or Mary Jo Sullivan at 202/557-2859 (msullivan@mortgagebankers.org).

MBA Chairman to Testify on Predatory Lending
On November 5, MBA Chairman Rob Couch will testify before two House Financial Services Subcommittees at a joint hearing on predatory lending. Couch will urge Congress to create a uniform national standard on predatory lending to end the inconsistent patchwork of state laws that often put heavy compliance burdens on lenders. These burdens can translate into higher costs for consumers.

The hearing will represent one more way in which MBA has actively pursued predatory lending issues this year. During the past year, MBA put its lobbying weight behind urging this hearing on predatory lending. Additionally, in June, MBA held an "Enforcement Summit" where lawmakers, industry representatives and regulators gathered in Washington, D.C., to discuss enforcement of existing consumer protection laws. 

For more information, please contact Rodrigo Alba at 202/557-2930 (ralba@mortgagebankers.org).

Fair Labor Standards Act
MBA continues to press Senate leaders to protect the Labor Department's proposed rule to update "white collar" overtime regulations under the Fair Labor Standards Act (FLSA). Last month the Senate voted to include an amendment introduced by Rep. Tom Harkin, D-Iowa, to its Labor, Health and Human Services appropriations bill. The amendment would block DOL from finalizing its proposal by preventing the department from spending any money to promulgate the rule.

A conference committee is in the midst of forming a compromise between the House and Senate versions of the Labor HHS bills. MBA continues to try to eliminate or modify the Harkin amendment language by pressuring the conferees to protect DOL's proposal. Last Friday, MBA sent a letter to the chairmen of the Labor HHS Subcommittees in the House and Senate encouraging them "to reject any efforts to prohibit DOL from reforming the "white-collar" overtime exemptions under the [FLSA] as [they] complete the FY 2004 [Labor HHS] appropriations bill." 

Additionally, MBA is part of a coalition urging Congress to protect the proposed rule via several ads that are running in various Capitol Hill publications. Attached is a recent ad that was run by the coalition in Roll Call, one of the most popular newspapers on the Hill.

The outcome of the campaign against the Harkin amendment is uncertain at this time. Protecting DOL's proposal remains a top priority of leadership in the House and Senate, as well as of the White House, which has issued a veto threat. However, opposition to the proposal by key Appropriations Committee members Senators Arlen Specter, R-Pa., and Ted Stevens, R-Alaska, presents a tough hurdle for its success. Stevens is the chairman of the Appropriations Committee and Specter is the chairman of the Appropriations Subcommittee on Labor, Health, Human Services and Education.

For more information, please contact Rodrigo Alba at 202/557-2930 (ralba@mortgagebankers.org).

Senate Passes Extension of National Flood Insurance Program
Last week, the Senate passed S.1768, the "National Flood Insurance Program Reauthorization Act of 2004." This legislation was introduced by Sen. Jim Bunning, R-Ky., and extends until December 31, 2004 the National Flood Insurance Program. 

MBA has been calling for a multi-year reauthorization of NFIP. When it became clear that Congress would not approve such a measure, MBA got behind the idea of a "patch" to protect the program in the form of a one-year extension. MBA will now urge the House to pass a similar provision so that Congress reauthorizes the program without letting it expire as it did last year. 

For more information, please contact Renee Rappaport at 202/557-2758 (rrappaport@mortgagebankers.org).

Brownfields
The provision of the Brownfields Act covering the brownfields cleanup cost expensing rule expires at the end of 2003. At the present time, the Senate Finance Committee has included a six-month extension of this provision in a group of other extender provisions. No other substantial changes to the law are being considered. While MBA supports a permanent extension of the provision, as well as expansion of the act to cover cleanup costs of petroleum sites, both of which are included in H.R.2815, introduced by Reps. Jerry Weller, R-Ill., and Xavier Becerra, D-Calif., it is unlikely that any action will be taken on this bill, this year. Therefore, MBA will support the straight extension and work for reform of the act, next year.

For more information, please contact Burton Wood at 202/557-2806 (bwood@mortgagebankers.org).

Regulatory Affairs

Veterans Administration (VA) Loan Guarantee Re-engineering
Earlier this year, VA requested assistance from MBA and other groups in re-engineering the VA Loan Guarantee Program's business process. After receiving comments from MBA and others, VA proceeded to evaluate all recommendations, created task forces to propose specific changes, and assembled them into a report for department leadership. MBA suggested that the process would work better if the task forces' proposed changes were reviewed by MBA members prior to dissemination at VA for review and approval.

MBA has now received written confirmation that VA will provide such an opportunity to MBA members.  This will be facilitated through MBA's Residential Loan Production Committee. This is another example of the strong partnership that MBA has with the VA Loan Guarantee Service.

For more information, please contact Tim Doyle at 202/557-2860 (tdoyle@mortgagebankers.org).

HUD to Reimburse the Cost of Pre-Conveyance, Approved Repairs
At the request of the MBA Property & Preservation Workgroup and Loan Administration Steering Committee, HUD staff has agreed in principle to reimburse for the cost of approved repairs done pre-conveyance even if an extension of time to convey is not granted. Currently HUD contractors are requiring servicers to repair foreclosed property as a condition of conveyance, but then deny extensions of time in which to complete the repairs, making such repairs unreimburseable. Failure to complete the repairs results in denials of claim payment and protracted appeals.  This catch-22 practice has been viewed as extremely unfair to servicers and considered a mechanism used by HUD contractors to avoid having to incur the cost of repairs themselves as required by their contracts with HUD. A mortgagee letter is expected.

For more information, please contact Vicki Vidal at 202/557-2861 (vvidal@mortgagebankers.org).

Congressional Hispanic Caucus Sends Letter to Secretary Martinez on RESPA Reform
On October 17, the Congressional Hispanic Caucus (CHC) sent a letter to HUD Secretary Mel Martinez opposing his department's proposed RESPA reform rule, particularly regarding the issue of packaging. The letter outlines CHC's concerns with the proposal's decreased consumer protections, adverse effects on small businesses, and its potential to create obstacles to increasing minority homeownership.

For more information, please contact Rodrigo Alba at 202/557-2930 (ralba@mortgagebankers.org).
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Two subcommittees of the House Financial Services Committee will hold a hearing on Wednesday, November 5 on “Protecting Homeowners: Preventing Abusive Lending While Preserving Access to Credit.”

Mortgage Bankers Association Chairman Rob Couch, CMB, is among those scheduled to testify. Couch will urge members of the House Financial Services subcommittees on housing and community opportunity and financial institutions and consumer credit to adopt a uniform, national standard against predatory lending.

The hearing will take place in room 2128 of the Rayburn House Office Building at 10:00 a.m. The hearing can be viewed live over the Internet at http://financialservices.house.gov/.

The Senate Banking Committee will hold a hearing, also on November 5, on “The State of the Banking Industry.” Among those scheduled to testify are Federal Reserve Chairman Alan Greenspan; Office of Thrift Supervision Director James Gilleran; Federal Deposit Insurance Corp. Chairman Donald Powell; and Comptroller of the Currency John Hawke.

The hearing will take place at 10:00 a.m. in room 216 of the Hart Senate Office Building and can be viewed live over the Internet at www.capitolhearings.org.

Upcoming Reports/Events:
Nov. 3: Value of New Construction in Place, Commerce Department
Nov. 5: MBA Weekly Mortgage Application Survey
Nov. 7: Employment, Bureau of the Census
Nov. 14: Producer Price Index, Bureau of Labor Statistics
Nov. 17-19: MBA Accounting, Tax and Financial Analysis Conference, Las Vegas, Nev.
Nov. 18: Consumer Price Index, Bureau of Labor Statistics
Nov. 18: Housing Marketing Index, National Association of Home Builders
Nov. 19: Housing Starts, Commerce Department
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