Gerald Levy, chairman of the board at Guaranty Bank, Milwaukee, has been elected to a three-year term by the Bank’s Wisconsin member financial institutions. He previously was a Bank director from 1979 to 1982, including a term as vice chairman from 1980 to 1982. Levy replaces H. Lee Swanson, State Bank of Cross Plains, whose term expired.

P. David Kuhl, chairman of the board and CEO of Busey Bank, Urbana, Ill., and Kathleen Marinangel, CEO, president and chairman of the Board at McHenry Savings Bank, McHenry, Ill., each have been re-elected to three-year terms by the Bank’s Illinois member financial institutions. Kuhl has been a director since 2000, while Marinangel has been on the board since 2002.

Thomas Herlache, president, CEO and chairman of the board at Baylake Bank, Sturgeon Bay, Wis., has been appointed to serve the remaining year of the three-year term begun by Jack Rusch of First Federal Capital Bank, La Crosse, Wis. Rusch left the Board last fall when First Federal was acquired by Associated Bank.

Scott Heitmann, vice chairman at LaSalle Bank N.A., Chicago, recently announced he will retire from his positions at LaSalle Bank and its parent ABN AMRO, effective April 1, and will leave the Chicago FHLB Board. He has served on the board since August, 2000.

Nationwide REAS, Cleveland, announced the appointment of James Smith as executive vice president and COO of its Nationwide Portfolio Services division. He will be responsible for expanding the portfolio services segment of Nationwide’s business and developing new products and services.

Smith came to Nationwide from Fidelity Hansen Quality, where he was first vice president of capital markets. He has also held senior management positions with JLS Financial Services, Old Kent Mortgage Co. and Southern Pacific Funding Corp.

goodmortgage.com, Charlotte, N.C., added six staff members to its team. Lori Parris joined goodmortgage.com with several years experience in processing and compliance for smaller mortgage brokers as well as in the large financial institution environment. 

Renita Brinkley joined goodmortgage.com with 9 years experience in mortgage activities such as abstracting, pre-closing processing, processing and underwriting for real estate attorneys as well as large financial institutions.

Louisa Boyd joined the Loan Specialist team with experience assisting borrowers through their loan processes for a mortgage broker in the Northeast. Chris Mentas joined the goodmortgage.com Loan Specialist team. He spent seven years with an IT and healthcare industry staffing firm with additional seven years of experience as a residential appraiser.

Ian Olson joined goodmortgage.com with experience helping homebuyers purchase their properties as a loan specialist for a mortgage broker in the Northeast. Steve Turk comes to the company as a loan specialist, with several years of experience in restaurant management.

LandAmerica Financial Group, Richmond, Va., appointed Elizabeth Sharp as vice president of product and services development, responsible for product research aand new product development. She will be based in Alpharetta, Ga., and Richmond.

Sharp has more than 12 years of experience in market research, product marketing, new product development and product management.

Rapid Reporting, Dallas, promoted T.J. Vanderpoel to chief technology officer. Vanderpoel, who was previously senior network administrator for the company, will expand his role in managing the internal and external enterprise network administration, new technology development and all security issues as well as directing the technical staff.

Vanderpoel joined Rapid Reporting more than three years ago and has more than 15 years of experience in network security.
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Despite perceived fears about identity theft linked to the Internet, more than two-thirds of the cases of identity fraud in 2004—68.2 percent—were committed with information obtained offline, according to the BBB’s "2005 Identity Fraud Survey Report," released last week.

The most common source of identity theft occurred from lost or stolen wallets or checkbooks, the report said. Theft by obtaining personal information online accounted for just 11.6 percent of identity-fraud cases. The survey, conducted by the consulting firm Javelin Strategy & Research, defined "identity fraud" to mean the use of stolen personal data for financial gain.

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Rapid Reporting, Fort Worth, Texas, a provider of pre-funding income and identity verification services to the mortgage industry, announced that an increase in DirectChek sales, staff resources and client base, in addition to fourth quarter changes in Social Security Administration (SSA) policy.

Sales of DirectChek, Rapid Reporting’s online identity verification tool, increased by 248 percent in 2004, the company said. DirectChek compares an individual’s Social Security number directly with the SSA database. In 2004, use of DirectChek revealed that 4.51 percent of the applicants checked had misrepresented their identity. 

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Data Tree LLC, San Diego, a provider of recorded property document images and a subsidiary of The First American Corp., announced launch of DocEdge.com, a Web-based product offering 24/7 access to the Data Tree imaged document database. 

DocEdge.com uses multiple search capabilities so that users can view current and historical ownership details of residential, commercial and other types of real property. They can receive copies of mortgages, deeds, assignments, transfers, assessor maps and a variety of reports including property detail, sales comparables and legal and vesting information.

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Fidelity National Financial, Inc., Jacksonville, announced implementation of an agreement with RealEC Technologies, Inc., to develop and launch a new tool for its title agencies, FNF.net.

FNF.net deploys three technology components from RealEC: the RealEC Exchange, iSelect and iBundle. These technologies will be customized for the needs of Fidelity’s agency network, allowing title agencies to create bundles of services (such as appraisal, credit, AVM and flood) based on their specific criteria. These bundles can then be offered through agency-branded Web portals for utilization by realtors and lender customers in the marketplace.

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More than 4,400 local homeless programs across America will receive $1.4 billion in grants announced today by HUD, which called the grants the largest single commitment of federal funds designed to provide shelter and care for those without a home of their own.

HUD Secretary Alphonso Jackson said the funding represents the largest level of support for a number of local projects on the front lines of caring for people who might otherwise be living on the streets. Jackson announced the funding at a homeless center in Los Angeles with California Governor Arnold Schwarzenegger(R).

HUD's funding is provided in two ways: Continuum of Care grants provide permanent and transitional housing to homeless persons. In addition, Continuum grants fund important services including job training, health care, mental health counseling, substance abuse treatment and child care. Emergency Shelter Grants convert buildings into homeless shelters, assist in the operation of local shelters and fund related social service and homeless prevention programs.

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Del Mar Database, San Diego, released the findings of a recent DataTrac customer survey indicating that the average DataTrac customer increased production in 2004. Of the mortgage lender customers surveyed, 80 percent increased production in 2004 over 2003 and the average increase was more than 20 percent.

DataTrac is a software product that enables lenders to leverage their existing technology investment to reduce costs, generate greater profits per loan, minimize errors using business intelligence and fund more loans with fewer people.

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Hyland Software, Inc., Cleveland, developer of the OnBase enterprise content management (ECM) software suite, announced that it has joined the eMortgage Alliance, an open consortium of companies promoting standards-based eMortgage technology, solutions and best practices to encourage the utilization and implementation of eMortgages throughout the mortgage banking industry. 

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TransUnion Settlement Solutions, Wilmington, Del., announced enhancements to TransUnion ePolicy, which will give residential mortgage lenders additional automated capabilities when selecting appropriate valuation and title products for any loan application’s set of circumstances. TransUnion ePolicy creates, stores and accesses complex credit policy tables consistent with a lender’s underwriting guidelines. 
 
Currently, TransUnion ePolicy offers lenders an array of property valuations, appraisals and title products. 

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The Treasury Department and the Internal Revenue Service published a revenue procedure providing guidance on a like-kind exchange of a home. The revenue procedure clarifies that a homeowner, who may exclude gain upon a sale or exchange of a home, also may benefit from a deferral of gain for a like-kind exchange with respect to the same property.

Generally, a homeowner may exclude up to $250,000 ($500,000 for certain joint returns) of gain upon the sale or exchange of a home.  The homeowner must have owned and used the property as his or her principal residence, for periods aggregating two years or more, during the five-year period ending on the date of the sale or exchange, and must not have used the exclusion during the two-year period ending on that date. The home-sale exclusion may apply to a home office, or other business portion of a home, but not to depreciation from the business use.

In the case of business property, a property owner generally would not recognize gain upon the exchange of the business property for replacement property of a like kind. The property owner would recognize gain to the extent received in cash or property that is not of a like kind (commonly called boot). Property used solely as a home would not constitute business property.

The revenue procedure indicates that, in certain cases, a homeowner may benefit from both the home-sale exclusion and the like-kind deferral. In such cases, the property would have been used consecutively or concurrently as a home and a business (e.g. rental residence). The revenue procedure sets forth six examples, illustrating the treatment of depreciation and boot.
   
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The nation’s homeownership rate record set a record in the fourth quarter, HUD said. The new annual rate of 69.0 percent surpasses the previous record of 68.3 set in 2003. The new quarterly rate of 69.2 percent ties the record set in the second quarter of 2004 and means there are now 74.4 million American families who own their own homes.

Minority homeownership also set records. A new record annual rate of 51.0 percent was set in 2004 and the quarterly news is even better. Minorities set a new quarterly record of 51.4 percent in the fourth quarter, representing 15.5 million minority homeowners.

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ISO, Jersey City, N.J., has acquired AppIntelligence, Weldon Spring, Mo., a provider of Web-based analytic tools designed to identify and detect fraud in the residential mortgage industry. Terms were not disclosed.

ISO is a provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, real estate, health services, government and human resources. AppIntelligence has more than 600 customers. An ISO spokesperson said AppIntelligence customers would not experience any service disruption.
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"U.S. issuance will be boosted by several new issuers and by hotel backed transactions returning to favor helping top off an already robust pipeline,” said Tad Philipp, managing director for CMBS at Moody’s and author of the report. “In addition we expect to see the introduction of new collateral types such as condo conversion loans, as well as further development of synthetics.”

Moody’s also said loans made during the peak origination years of the late 1990s will mature and become eligible for refinancing.

"Given that property prices have appreciated and interest rates have fallen since then many loans from late 1990's vintages will likely refinance with higher proceeds than the last time around," Philipp said.

Fixed rate transactions are shifting toward larger deals, a trend that started in 2004 as several large deals had successful executions.

"Larger deals introduce efficiencies on several levels, helping drive their growing popularity,” Philipp said. “From the investor perspective, the larger class sizes of bigger deals offer greater liquidity. From an issuer perspective transaction costs can be reduced by coming to market somewhat less often but with larger deals.”

Moody's expects an increase in issuance of traditional conduits after several years in which fusion deals made up the vast majority of fixed-rate issuance, (smaller loans with high leverage blended with larger loans with low leverage).

“Some of the larger deals may provide greater diversity and less ratings volatility,” Philipp said. “Loans that would otherwise cause concentration issues appear smaller in the context of the larger deals."

Moody’s expects the performance of floating rate investment grade CMBS to generally remain stable, but with somewhat more potential for upgrades because of “the rapid build up of credit support that can occur in investment grade classes when larger loans with shorter lives begin to pay off,” the ratings agency said.

During the fourth quarter of 2004, Moody's said it took rating actions on 28 CMBS transactions with 191 CMBS classes, including 82 affirmations and confirmations, 69 upgrades and 40 downgrades. Upgrades in investment grade rated classes exceeded downgrades by a margin of 63 to ten while downgrades in below investment grade rated classes, outpaced upgrades 30 to six. The majority of the downgrades (29 of 40 classes) pertain to the below investment grade classes of conduit and floating rate transactions.

Moody’s said the average loan to value (LTV) ratio and the share of loans with LTV's in excess of 100 percent set new highs in the fourth quarter of 2004 with average conduit loan LTV during the fourth quarter at 95 percent, up from 94 percent the prior two quarters.

“Approximately 29 percent of conduit loans exceeded 100 percent Moody's LTV, up from 22 percent during the third quarter," Philipp said.

Also in 2004, commercial real estate collateralized debt obligations (CDO) continued to grow as a means for subordinate CMBS buyers to finance operations and manage balance sheets last year. Moody's reviewed 15 commercial real estate CDO transactions last year with a total issuance amount of more than $7 billion.
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Sierra closed a $34.375 million deal for Oswego Pointe Apartments , a 422-unit apartment complex in Oswego, Ore. The refinance loan terms are a 10-year adjustable-rate mortgage (ARM) loan with a 1-year lockout and a 2-year interest-only period followed by eight years of amortized payments, based on a 30-year amortization. The loan includes an embedded cap below 6.8 percent.

Oswego Pointe is located on the border of Beaverton, Ore., and Hillsboro, Ore., known as the Sunset Corridor, considered to be a high technology region for employment, including high-profile corporations such as Intel and others. The property is also located 15 minutes from downtown Portland. Unit amenities include fireplace, deck or patio with some river views and washer and dryer. Common amenities include clubhouses with fireplaces and fitness equipment or meeting room with kitchen, racquetball, basketball, indoor and outdoor pool, spa, sauna, tanning bed and trails.

A loan for $13.625 million was closed for The Lakes Apartments , a 288-unit apartment complex in Beaverton, Ore. The refinance loan terms are for a 10-year ARM loan with a 1-year lockout and a 2-year interest only period followed by 8 years of amortized payments, based on a 30-year amortization. The loan includes an embedded cap at 6.62 percent.

The Lakes was built in four phases from 1987 through 1990 and comprises 49 residential buildings with 270,868 square feet of net rentable area. Most units feature river views and all units have a full-size washer and dryer, fireplace and deck or patio. Common amenities include clubhouse with lounge, billiards, fireplace, fitness room, business center, theatre, indoor pool and saunas, kitchenette and barbecue patio area.

Sierra closed $8 million in financing for Don Miguel Apartments , a 200-unit apartment complex in Alta Loma, Calif. The refinance loan features a fixed-to-float, 10-plus 1-year term, with 10-years yield maintenance and a 30-year amortization structure.

Don Miguel comprises 25 residential buildings, constructed in 1984 on 9.07 acres of land. The property is located near Interstates 210 and 15, accessing Riverside and San Bernardino counties, as well as Los Angeles and Orange counties. Common amenities include pool, clubhouse, spa, laundry facilities and security patrol.

A refinance loan was closed for $21 million for Brookside II Apartments , a 264-unit apartment complex in La Palma, Calif. The loan features a 15 plus 1-year fixed-to-float term with a 30-year amortization structure.

Brookside II is the second phase of a two-phase property built in 1971through 1972. Both phases operate as one property with one leasing office. The property offers three different floor plans for one- and two-bedroom units. Common amenities include pool, spa, billiard room, laundry facilities, barbecue areas, recreation room, sand volleyball court and gazebo.
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“Lesson to be Learned from the Residential Lending Industry,” a session on Monday, February 7, focuses on what the commercial industry is learning from the residential arena. The panel features moderator Stacey Berger, executive vice president at Midland Loan Services Inc./PNC Real Estate Finance; and panelists Mark Aggrey, assistant vice president at GMAC Commercial Holding Corp.; James Cooke, attorney with Ballard Spahr Andrews & Ingersoll LLP; Daniel McLaughlin, executive vice president and product division manager with MERS; and Jack Sponsler, director of product management at Emergis Inc., will describe incremental approaches to integrating eMortgage Technology into the processes for shorter term return on investment.

“Is this the Best of Time or the Worst of Times for Multifamily Finance,” a session on Tuesday, February 8, discusses whether the good time will continue for borrowers or will investors dry up in anticipation of emerging problems such as poor fundamentals and intense competition in strong markets. This panel features moderator Shekar Narasimhan, CMB, managing partner at Beekman Advisors LLC; and panelists Adrian Corbiere, senior vice president of multifamily at Freddie Mac; Richard Lawch, senior vice president of multifamily at Fannie Mae; Kieran Quinn, vice chair of COMBOG and chairman and CEO at Column Financial Inc.; David Twardock, president of Prudential Mortgage Capital Co.; and Chris Wheeler, chairman and CEO of Gables Residential Trust .

For more information on additional session, visit MBA’s 2005 Commercial Real Estate Finance/Multifamily Housing Convention and Expo Web site at: http://events.mortgagebankers.org/cref2005/.
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For reprint information on stories in MBA NewsLink, contact Al Esposito at 1-800-394-5157, extension 28.
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Last week, MBA urged all senators via letter to cosponsor S. 190. MBA lobbyists will continue to work with Senate offices this month to secure additional cosponsors, and will monitor the bill's progress to ensure that MBA-supported provisions remain in place as the bill moves through the legislative process.
 
For more information, please contact Josh Denney at (202) 557-2816 (jdenney@mortgagebankers.org)
 
Mortgage Insurance Fairness Act Reintroduced in Senate
Sens. Gordon Smith, R-Ore., and Blanche Lincoln, D-Ark., reintroduced the Mortgage Insurance Fairness Act on January 24. The bill, which MBA supported in the 108th Congress, seeks to make mortgage insurance premiums tax-deductible for the majority of American homeowners. MBA will work in the coming weeks to secure additional cosponsors for the bill and will monitor its progress as debate moves forward. 
 
For more information, please contact Josh Denney at (202) 557-2816 (jdenney@mortgagebankers.org)
 
MBA to Continue Work on REMIC Modernization 
MBA, as the lead association in a broad industry coalition, is working with members of Congress to reintroduce legislation to modernize Real Estate Mortgage Investment Conduits (REMICs) tax law. MBA lobbyists met last week with staff of key supporters of the legislation in the 108th Congress in preparation for reintroduction next month. MBA staff will work with Congress to attach the REMIC modernization bill to one of the several anticipated tax bills in Congress this year.
 
For more information, please contact Josh Denney at (202) 557-2816 (jdenney@mortgagebankers.org)
 
FTC Issues Final Rule on Prescreen Notices
This past week the Federal Trade Commission (FTC) issued a final rule  providing a model notice lenders must include in prescreened offers of credit. Under the Fair and Accurate Credit Transactions Act the FTC was charged with the obligation of coming up with a model notice that is “simple and easy [for consumers] to understand.” The FTC adopted a “layered approach” requiring that each prescreened offer include a short statement informing consumers of their right to opt-out and listing a toll-free number to call and a longer statement providing additional information about prescreening. 
 
The rule is effective August 1.
 
For further information, please contact Mary Jo Sullivan at (202) 557-2859 (mwsullivan@mortgagebankers.org)
 
Call to Action on GSE Oversight and Mortgage Insurance Deductibility Legislation
The Capitol Assets Program (CAP), MBA's grassroots initiative, last week issued calls to action on two recently-introduced pieces of legislation. The first call to action  urges CAP members to contact their legislators in support of S. 190, which would reform the oversight of the GSEs.
 
The second Action Alert urges members to contact their legislators in support of S. 132, which would allow for the tax deductibility of mortgage insurance premiums.
 
For more information on MBA's Capitol Assets Program click here or contact Paul Hilliar at (202) 557-2858 (philliar@mortgagebankers.org)
 
Update: Arizona AG Seeking Abusive Lending Legislation
As reported in December, Arizona Attorney General Terry Goddard has drafted "The Home Loan Protection Act," which would address abusive lending practices. The latest draft of the bill includes one improvement in the language concerning the "reasonable, tangible net benefit" language that had been removed. However, the bill's assignee liability language, although modified, is still troublesome for the industry because it remains similar to the language contained in the recent Massachusetts law that Fitch Ratings and others expressed concerns about. 

The language still states that assignees of high-cost home loans are “subject to all affirmative claims and defenses with respect to the loan that a borrower could assert” against the original creditor of the loan unless the purchaser or assignee can demonstrate that certain "safe harbor" requirements were met.
 
Despite these modifications, most of the bill's language remains the same in the new draft. This includes the definition of a high-cost home loan as one where the APR exceeds the U.S. Treasury rate by 8 percent for a first lien loan and 10 percent for a subordinate lien loan, or where the total principal loan amount is $20,000 or more, with an amount equal to 5 percent of the total principal loan amount, or where the total principal loan amount is less than $20,000, with an amount less than $1,000 or 8 percent of the total principal loan amount. Prepayment penalties and yield-spread premiums are included in the calculation of points and fees. 
 
The proposed bill would also prohibit the use of mandatory arbitration clauses and it contains the right for a creditor to cure and preempts any local laws that would cover loans covered under the proposed act.
 
The last day to introduce a bill in the Arizona House is February 8, and February 1 in the Senate. To date, no legislator has introduced the bill.
 
For more information, please contact Beth Percynski at (202) 557-2866 (bpercynski@mortgagebankers.org)
 
Hawaii Proposes Elimination of Non-Judicial Foreclosures
On January 25, HB 783 was introduced in the Hawaii Legislature. The bill would eliminate both the old and new non-judicial foreclosure statute. Currently Hawaii has a non-judicial foreclosure and a judicial foreclosure statute. Nearly 10 years ago the state passed a non-judicial foreclosure statute. With elimination of the non-judicial foreclosure process, lenders' costs would increase due to the additional time it could take for a lender to receive repayment. Consequently, the costs would trickle down to the borrower, who would then be faced with higher interest rates or loan costs.

For more information, please contact Beth Percynski at (202) 557-2866 (bpercynski@mortgagebankers.org)
 
Wyoming Considers Legislation to Regulate Mortgage Lenders and Brokers
A bill was recently introduced in Wyoming that proposes the creation of the Wyoming Residential Mortgage Practices Act. The bill would regulate mortgage lenders and brokers. Of note is the legislative intent of some language that would hold board members and senior executives of mortgage companies accountable for their employees' actions. Additionally, mortgage lenders would have to be licensed in the state to use email, the Internet, or other electronic means to contact Wyoming citizens. 
 
Enforcement of this new law would fall upon the Division of Banking. Corporations or other entities, except individuals, who violate this act would be guilty of a misdemeanor and could potentially be fined no less than $25,000. The bill passed the Senate January 20th and currently awaits House consideration.
 
For more information, please contact Beth Percynski at (202) 557-2866 (bpercynski@mortgagebankers.org).
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The House Financial Services Committee holds its organizational meeting on Wednesday, February 2. No surprises are expected, but the committee will make its subcommittee assignments and approve an oversight plan.

The committee also announced that Federal Reserve Chairman Alan Greenspan will make his semi-annual report on monetary policy on Thursday, February 17.

Greenspan will also appear before the Senate Banking Committee on Wednesday, February 16. But before then, the committee kicks into action a hearings on Tuesday, February 8 to examine the “Role of Credit Rating Agencies in the Capital Markets.” Executives from the three major ratings agencies and other policy groups are expected to testify.

Upcoming Reports/Events:

Jan. 30-Feb. 4: School of Mortgage Banking Course II, Tampa
Feb. 3: CampusMBA: Creating New Customers, Tampa
Feb. 6-9: MBA Commercial Real Estate/Multifamily Finance Convention & Expo, San Diego
Feb. 7: CampusMBA Web-Based Course: FHA Fundamentals
Feb. 12 : Federal Open Market Committee
Feb. 16-17: Risk Management Workshop, Dallas
Feb. 20: MBA Servicing Management Workshop, Orlando
Feb. 20-23: MBA National Mortgage Servicing Conference & Expo, Orlando
March 1-3: CampusMBA Underwriting University, Houston
March 1-4: Regulatory Compliance Institute, Miami
March 6-11: CampusMBA School of Mortgage Banking II, New Orleans
March 15: Advanced Loss Mitigation Seminar, New Orleans
March 16-17, Advanced Claims Workshop, New Orleans
March 29-April 1: MBA National Technology in Mortgage Banking Conference & Expo, Orlando
April 10-15: CampusMBA School of Mortgage Banking III, Oak Brook, Ill.
April 13-14: CampusMBA: Detecting and Avoiding Mortgage Fraud, Birmingham, Ala.
April 19-20: MBA National Policy Conference, Washington, D.C.
May 1-4: MBA National Secondary Market Conference & Expo, San Francisco
May 4-6: Commercial Asset Administration & Technology Conference, Chicago
May 15-18: MBA Legal Issues & Regulatory Compliance Conference, Phoenix
May 15-20: CampusMBA School of Mortgage Banking Course I, Philadelphia
June 5-8: MBA Presidents Conference, Palm Beach, Fla.
June 8-10: MBA Subprime Lending & Alternative Products Conference, Washington, D.C.
June 12-17: CampusMBA School of Mortgage Banking Course II, Denver
June 15-17: CampusMBA eMortgage Workshop, San Francisco
Aug. 14-19: CampusMBA School of Mortgage Banking Course III, Chicago
Sept. 11-13: MBA Document Custody Conference, Miami Beach, Fla.
Oct. 23-26: MBA Annual Convention & Expo, Orlando

Information about MBA Events can be found at the MBA Web site, www.mortgagebankers.org; and at the CampusMBA Web site, www.campusmba.org.
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