Senate Democratic and Republican leaders agreed last night on basic elements of a bill to bring to the floor for debate today. The bill includes several key provisions, including FHA modernization, an increase in the ability of state and municipal housing agencies to purchase tax-exempt bonds; tax credits for people purchasing foreclosed homes or vacant new homes; tax breaks for home builders and others hit hard by the current slump; and an increase in funding for housing counseling.

What the bill does not include—prior to possible amendments—is a provision that would have allowed bankruptcy judges to modify the terms or primary mortgages, which faced fierce opposition from the Mortgage Bankers Association and other key industry groups, as well as many Senate Republicans and the White House (which threatened to veto a bill that has such a provision). MBA has led the fight against the provision, saying that such a measure would cripple the ability of lenders to securitize loans, as well as resulting in tighter underwriting standards and higher interest rates by as much as 1.5 percentage points.

In a joint statement, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., called the agreement, forged by Senate Banking Committee Chairman Christopher Dodd, D-Conn., and Richard Shelby, R-Ala., a “solid, bipartisan start to keeping families facing foreclosure in their homes, helping other families avoid foreclosures in the future and helping communities already harmed by foreclosure to recover.”

“This package addresses the core issues of this crisis, including foreclosure mitigation, mortgage counseling, FHA modernization and homeowner tax credits, among other provisions,” the Reid/McConnell statement read. “We hope to quickly come to a consensus to move this bill to the floor, consider amendments to it and pass strong legislation that helps struggling homeowners and our economy as a whole.”

Dodd, speaking to reporters, acknowledged that both sides had to give ground to reach the agreement. "This is not a complete product, obviously. But it is a major step in the right direction," he said.

MBA Chairman Kieran Quinn, CMB, praised Senate leaders for reaching bipartisan agreement on the bill’s basics, saying the bill as written would provide help to homeowners facing difficulty in making mortgage payments.

"I applaud Senators Reid, McConnell, Dodd and Shelby for putting aside partisan differences to craft a housing stimulus package that will keep at-risk borrowers in their homes, which is something we all agree should be the top priority,” Quinn said. "A more modern and effective FHA, mortgage revenue bonds for state housing finance agencies, additional money for counseling—these are all things that will be of great help to struggling homeowners.

MBA supported many provisions in the bill, but had warned that the bankruptcy provision would be a deal-killer for its support. "I hope that senators will keep their eye on that goal, and not attempt to attach to the bill partisan provisions such as bankruptcy cramdown that would increase borrowing costs on all future borrowers and delay progress on this important bill," Quinn said.

The bankruptcy provision could be introduced as an amendment today, but would face stiff opposition from Republicans, not to mention the White House.

Under current provisions in the bill:

• FHA modernization would go forward, per previously passed Senate legislation, but with a permanent increase in the FHA loan limit to $550,000 with a 3.5 percent downpayment requirement;

• Mortgage revenue bond caps would increase by $10 billion to allow state housing finance agencies to refinance subprime loans, provide mortgages for first-time homebuyers and for multifamily rental housing;

• Purchasers of a home upon which foreclosure proceedings had begun would qualify for a $7,000 non-refundable tax credit on spread over two years that would not be available to newly built homes;

• $100 million would become available in additional funding for housing counseling services;

• Language would allow businesses to carry back net operating losses over a longer period—four years instead of two—so they can claim refunds of taxes paid in earlier years.

MBA NewsLink will provide continuing coverage.
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Customer service heavily relies on technology and requires continuity of data regardless of planned or unplanned disruptions in data. “Real estate transactions require immediate access to funds and quick turnarounds,” Barnes said. “Couple that with the real estate buyer who is anxious to place an offer or nervous about closing on time. You have the potential for disasters if all does not run as planned.”

Equitable Bank adopted NeverFail technology to prevent downtime scenarios. “Prior to using NeverFail, and during a disaster recovery drill, we attempted to bring our Exchange server back online,” said Michael Block, IT officer at Equitable Bank, Wauwatosa, Wis. “We spent an entire business week trying to restore Exchange from tape to dissimilar hardware. We succeeded, but the time needed to recover was totally unacceptable."

The bank’s 12 locations require access to its Microsoft Exchange Server and SQL for banking information contained in the database. Losing SQL would impair the bank’s ability to generate loan documents and loss of Exchange could mean inability to access closing calendars. NeverFail replicated Equitable Bank’s data and applications to a secondary system which provides information during instances of primary server downtime. The secondary server is located 20 miles away from the headquarters and failover is provided over a wide area network (WAN).

“An inability to access the database could bring a lending operation to a halt, affecting the bank’s reputation as well as the customer’ ability to purchase real estate and obtain funding for other needs via loan closing,” Barnes said. “The greatest impact to any disruption of the lending process is the direct effect on the customer—customers need immediate access to their funds and account information for offers, closings and other transactions. The loan business operates on a tight schedule and profits are directly tied to the number of loans closed. Server downtime means less productivity and revenue.”

In addition to providing backup, virtualization could significantly reduce hardware and related costs by allowing multiple servers to run on the same hardware platform—one of two main reasons organizations cited for deploying virtualization technology, the report said. For example, an email or unified communications server, a security server and a mobile messaging server could all run on the same physical server, reducing hardware requirements.

“While virtualization has been in use for more than 40 years, starting first in mainframe environments, it has found renewed interest because of its many advantages,” Osterman said. “Because of newer offerings that make virtualization easier and more reliable, and because in many organizations there is sufficient excess computing capacity in many platforms that can permit the application of virtual servers for a variety of server functions, many decision makers are seriously considering virtualization for a variety of applications.”
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The company this week launched Zillow Mortgage Marketplace, offering borrowers an anonymous way to solicit mortgage loan bids from loan originators. The site takes the concept popularized by LendingTree several steps further, said Spencer Rascoff, Zillow’s CFO and vice president of marketing.

“We have a great site for homeowners, but we wanted to marry the need for both borrowers and lenders,” Rascoff said. “It’s designed to have far greater consumer appeal because it’s anonymous. It’s available to 150,000 lenders instead of four, so the model distributes more broadly. And it’s free for originators—your officers have to spend time only pursuing borrowers who want your loan.”

A recent Zillow survey found that respondents had concerns about applying for loans online because of the potential to share data—particularly Social Security numbers—with people they didn’t know.

“Consumers don’t want incessant phone calls from online sites that share personal information,” Rascoff said. “Plus, many people said companies that obtained the data performed credit checks, which they know hurts their credit score.”

Through the Zillow Mortgage Marketplace, borrowers click on a “mortgages” tab on Zillow.com. That directs users to a loan request form, including type of loan, amount, length, location and other basic information, excluding personal information, which Rascoff said Zillow does not sell.

Once the borrower submits the request, it becomes part of a database that registered Zillow lenders/brokers (Zillow itself is not a lender) can browse and, if interested, submit non-binding quotes. The system requires originators to disclose all fees upfront; Zillow then estimates taxes and insurance and provides an estimated monthly payment.

“This makes it easier for borrowers to compare loan quotes on an apples-to-apples basis, note differences and better evaluate overall affordability,” Rascoff said. “The borrower decides which lenders they want to contact, if any, maintaining complete control of the process. Only when a borrower contacts a lender will their identity be revealed.”

The feature also allows registered Zillow originators to view competing quotes and to modify their own quotes accordingly. “The borrower is not limited to four quotes,” Rascoff said. “If 25 originators want to submit a quote for a particular borrower, they can, and the borrower can view all 25.”

Only when a borrower chooses to initiate contact with a particular originator does the borrower’s anonymity end. At that point, Rascoff said, the originator can obtain additional information from the borrower, such as Social Security number, and decide if the quote is still viable.

An additional feature is an originator feedback channel for borrowers, who are asked to rate their experience with originators. To participate in Zillow Mortgage Marketplace, originators must pay a $25 fee and submit information that Zillow confirms, including professional/employment status (including licenses); create a public profile and accept borrower feedback; and agree to a Code of Conduct. Rascoff said the code of conduct prevents “bait and switch” tactics; and the company reserves the right to remove any originators it deems have violated the code.

Zillow launched its Zestimate site in 2006, which put the company on the map. The site, which provides non-binding information about potential prices for homes and neighborhoods, along with aerial photos of homes, attracts more than five million unique visitors every month. Initially criticized for confusion over the authenticity of its information, the web site now states clearly that the Zestimates are not binding appraisals.

Zillow data shows that 90 percent of its users are homeowners, of which two-thirds are either buying or selling a home or plan to in the near future. “A lot of mortgage professionals use Zillow, too,” Rascoff said. “We estimate that more than one-third of all mortgage professionals in the U.S. use us in any given month. It’s going to be very exciting development for mortgage banks—a great opportunity for banks to build business in an environment that can be very favorable for them.”

Zillow CEO and co-founder Rich Barton said the company hopes the Mortgage Marketplace will have the same impact on the lending process as the Zestimate site. “There is an obvious need for a transparent, free marketplace,” he said.
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“This financing closed at a very turbulent time in the capital markets, and it was only through an incredibly cooperative effort on behalf of all parties involved that the financing was closed on time and as represented,” said Mort Holliday, managing director at C&WSG, who helped arrange the deal. Alex Hernandez, Matthew Lembo and Russell Frahm of C&WSG also participated in the transaction.

The portfolio, nearly 95 percent net-leased to Charlotte, N.C.-based Wachovia Bank, consists of office buildings, operations centers and bank branches. Properties in the portfolio range in size from 5,000 square feet to nearly 500,000 square feet and are concentrated in nine states along the east coast, extending from Connecticut to Florida. C&WSG said the portfolio’s broad distribution among asset type and markets makes it resistant to individual market down turns.

The portfolio was financed in connection with Gramercy Capital Corp.’s acquisition of American Financial Realty (AFR). Gramercy said it added nearly 29.2 million square feet of commercial real estate in 38 states and the District of Columbia.

Gramercy assumed nearly $1.3 billion total of American Financial secured debt. The total value of the acquisition was nearly $3.3 billion, adding to Gramercy's $4.2 billion of debt investments, commercial real estate securities investments, net lease properties and other assets.

"In one transaction, we have effectively doubled the company's size and diversified its asset base and income stream, transforming it to become a significant player in the commercial real estate equity sector as well as in structured finance," said Marc Holliday, president and CEO of Gramercy.
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As in the past, the 2008 Residential Compensation Survey Program will profile more than 300 positions across all lines of business and functional areas within the single-family mortgage industry. The program will include three specialized benchmark products focusing on mortgage banking compensation, as well as productivity and incentive plan design.

In addition to this suite of program offerings, the program includes for the first time a Reverse Mortgage Banking Compensation Survey, specifically covering positions unique to reverse mortgage lending.

Another addition in 2008: MBA is pleased to announce a new forum, MBA’s Human Resources Symposium, September 11-12 in Washington, D.C. Open to both residential (single-family) and commercial mortgage lenders and servicers, the symposium will take place at MBA’s new headquarters, which will include state-of-the-art conference facilities. Only participants in the MBA Compensation Survey Programs will be invited to register for this optional symposium. 

Among the topics to be covered: 

• Aligning Human Capital Strategy with Business Strategy
• Pay and Performance: 2007 Trends (Compensation/Staffing Trends)
• Benefit Trends: Health & Welfare, Retirement, Paid Time Off, Personnel Practices
• Recruitment & Assessment
• Training & Development
• Effective HR Communications
• Performance Scorecards for Sales Agents
  
The following links provide more information on the survey as well as a registration form. 

• 2008 Residential Compensation Survey Program Overview 
• 2008 Residential Compensation Survey Participation Form

As in the past, MBA members receive a discount. Registration and program participation are required in order to receive the results. Survey questionnaires will be sent to all registrants by the end of February. Publication of the survey is anticipated for mid-summer.

Note: MBA also sponsors a specialized compensation benchmark survey focused on the Commercial Real Estate Finance market. This survey program will cover more than 200 positions and provides key compensation data for the commercial real estate finance industry.

For more information, contact McLagan Partners at (203) 359-2878 or one of the following MBA contacts: Marina Walsh at mwalsh@mortgagebankers.org (202) 557-2817; or Adrienne Sund at asund@mortgagebankers.org (202) 557-2879.
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Attend the MBA Government Housing and Loan Production Conference 2008 and gain insight into the dramatic changes made to government housing programs. This conference provides insight on how to make the most of the Federal Housing Administration's (FHA) programs such as FHASecure; the Veterans Affairs (VA) Loan Guarantee Service and the Department of Agriculture's (USDA) Rural Housing Service, as well as the chance to discover alternative sales approaches and evaluate new strategies, products and technology.

Government officials and industry experts lead sessions exclusively designed for mortgage professionals with loan production and regulatory compliance responsibilities, including CEOs, heads of production, credit policy professionals, lenders of government loans and loan officers and brokers.

Who Should Attend:
Wholesale and retail originators, brokers and loan correspondents, residential underwriting professionals, credit policy professionals, quality assurance professionals, executives involved in the development of their organizations strategic plan, and anyone interested in learning more about the current government housing programs.

Speaking Opportunities:
Contact Norman Edwards at nedwards@mortgagebankers.org or call (202) 557-2793.

Network with Attendees:
Conference sponsorship is the ideal vehicle to grab the attention of this important audience and position your company as a leader in the industry. All sponsorships include a tabletop exhibit opportunity, but space is limited. For more information contact Phil Giorgianni at phil@mortgagebankers.org or call (202) 557-2733.

Web Site:
For more information about MBA’s Government Housing and Loan Production Conference 2008, visit http://events.mortgagebankers.org/ghlp2008/default.html.

Additional Government Housing Resources from MBA:
CampusMBA FHA Central is a collection of valuable educational resources providing the most comprehensive set of solutions for getting you and your business up to speed on FHA and VA loans. FHA Central resources include classroom-based courses, LIVE online workshops and more. For more information on FHA Central, visit http://www.campusmba.org/AllLearningProducts/FHACentral.htm?WT.mc_id=GHFWebFHACent.
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General sessions include a Regulatory and Legislative Roundup on Tuesday, May 6 featuring key players in the mortgage market. James Lockhart III, director of the Office of Federal Housing Enterprise Oversight; and Brian Montgomery, assistant secretary for housing and federal housing commissioner at HUD, discuss latest developments in current public policy debates taking place in the nation's capital on real estate finance issues, such as the foreclosure crisis, restoring liquidity to the mortgage markets, regulatory reform of the Government Sponsored Enterprises, FHA empowerment and FHASecure, as well as congressional proposals to combat predatory lending. MBA Senior Vice President for Government Affairs Steve O'Connor moderates this panel.

The Opening Reception features legendary Boston Red Sox great Jim Rice on the Expo trading floor. Rice will greet participants and sign baseballs on Sunday, May 4 from 5:00-7:00 p.m.

Who Should Attend
MBA’s National Secondary Market Conference & Expo 2008 is designed for industry leaders and decision makers from residential and capital markets, including CEOs and senior level executives, mortgage investors, investment bankers, rating agency professionals, risk managers and mortgage lenders.

Register before April 4 to save on your registration fee. Web site: http://events.mortgagebankers.org/secondary2008/register. Make your hotel reservations at the Sheraton Boston before April 8. Room rates are $238/night and up. Register today: call (800) 793-6222 or visit the conference web site for more information: http://events.mortgagebankers.org/secondary2008/default.html?wt.mc_id=NLSCD.

For more information, download the conference brochure at www.mortgagebankers.org/files/conferences/pdf/M2802048_brochure.pdf.

Exhibit and Sponsorship Opportunities
MBA's National Secondary Market Conference & Expo 2008 provides the ideal opportunity to position your company as an industry leader in front of key decision makers. To sign up for exhibitor space contact Kim Newell at (202) 557-2791 or knewell@mortgagebankers.org or Patty Miller at (202) 557-2792 or pmiller@mortgagebankers.org. For sponsorship opportunities contact Mark Brady at (202) 557-2790 or mbrady@mortgagebankers.org.
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Rounding out the top 10 were Deutsche Bank Commercial Real Estate; Credit Suisse; Holliday Fenoglio Fowler LP; Capmark Financial Group Inc.; CBRE|Melody; Goldman, Sachs & Co.; and KeyBank Real Estate Capital.

Five different companies topped the 11 lists reporting originations by investor groups: Wachovia as the top originator for REITS, mortgage REITs, investments funds, Fannie Mae and conduits; Capmark Financial Group for Freddie Mac, FHA/Ginnie Mae and specialty finance companies; Bank of America for commercial banks/savings institutions; Wells Fargo for life insurance companies and for other investors; TIAA-CREF for pension funds; and GE Real Estate for credit companies.

By dollar volume, the top three intermediaries in 2007 were Wells Fargo, Holliday Fenoglio Fowler and CBRE|Melody. The top three lenders were Wachovia, Bank of America and Wells Fargo.

The MBA Annual Originations Rankings study is the only report of its kind that provides firm-specific dollar volumes and loan counts detailing the mortgage originations of 124 leading commercial/multifamily intermediaries and lenders. Detailed tables present origination volumes in more than 140 categories, including by role (e.g., lender, intermediary); by investor group (e.g., conduit, commercial bank/thrift, life company, Fannie Mae, Freddie Mac, etc.); by property type (e.g., office, multifamily, retail, industrial, etc.); by financing structure type (first lien, mezzanine, other); by the location of the originating office; and by combinations of these categories.

A copy of the results is available through MBA's Online Store by visiting http://store.mortgagebankers.org/ProductDetail.aspx?product_code=EC6-300013-RP-I.
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