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Residential Briefs

Feb. 12, 2015--MBA Staff
West Virginia Supreme Court Rules in Favor of Recordings
MERSCORP Holdings Inc., Reston, Va., said the Supreme Court of Appeals of West Virginia held recording statutes in West Virginia do not require that assignment of a trust deed be recorded in the office of the clerk of the county commission.

In State of WV v. Warren McGraw, the Court disagreed with Wyoming County’s claims that the recording of trust deed assignments in county record books is required by state law, “in order to clear title to properties in the Counties.” While the Counties did not name MERSCORP Holdings Inc. or Mortgage Electronic Registrations Systems Inc. as a defendant in the case, the allegations in the complaint were focused on challenging the operations of MERS and the MERS System.  

In his opinion, West Virginia Supreme Court of Appeals Justice Menis Ketchum II said that “recording statutes in West Virginia do not require that the assignment of a trust deed be recorded in the office of the clerk of the county commission.”

At loan origination, MERS is designated by the lender and the borrower in the trust deed as the beneficiary as the nominee for the lender and the lender’s successors and assigns. The trust deed is recorded in the applicable land records and a recording fee is paid. As long as sale of the promissory note involves MERS System Members, MERS remains the beneficiary of the trust deed and the transfer of the note is tracked on the MERS System.

DocuTech Launches TRiDcast Answering Questions on Integrated Disclosures
DocuTech Corp., Idaho Falls, Idaho, launched its bi-monthly TRiDcast, on Feb. 10. The Tuesday TRID-casts will be accessible through the company’s Integrated Disclosure Resource Center and will aim to invite lender questions on preparing for integrated disclosures that will be leveraged in the company’s 2015 compliance webinars series. 

The TRiDcasts are a new feature of DocuTech’s Integrated Disclosure Resource Center, which provides resources to help lessen the impact of industry changes that go into effect on Aug. 1.

“TILA-RESPA reform is incredibly complex, and lenders are seeking information on how they can ensure their technology, processes and staff are ready for August 1,” said Scott Stucky, chief strategy officer of DocuTech. “The TRiDcasts provide lenders answers to the questions they are asking us every day about integrated disclosures, and with content generated by some of the top experts in the industry, the entire online resource center is one more tool lenders can use to ensure compliance.”

Fitch: Loss Data Offers Clues for Expected GSE Risk-Sharing Deals
Fitch Ratings, New York, said loss severities on liquidated residential mortgages are comparable between Freddie Mac and non-agency loans when controlling for attributes.

Fitch said Freddie Mac enhanced its single family residential loan-level historical dataset in November by adding loan-level loss data. In doing so, Freddie Mac increased transparency to the market in anticipation of an actual loss credit offering in 2015. To date, all risk-sharing transactions have passed losses on defaulted loans to investors using a pre-determined loan loss severity schedule.

Fitch contrasted Freddie Mac's historical loss data with non-agency RMBS loss data. While differences in loss severity exist between the two in aggregate, the differences can be attributed to specific loan attributes like property values and mortgage insurance, rather than differences in operational risk or procedure. 

“Loss severities are very similar when comparing loans with similar attributes,” said Fitch Director Sean Nelson. “This suggests that the underlying drivers of loss severity are the same across both agency and non-agency loans.”

Fitch also compared historical Freddie Mac loss severities to date to the fixed loss severity schedules in recent STACR risk-sharing transactions. Fitch found that observed severities to date are generally comparable to fixed levels for 60-80 percent LTV loans and lower than the fixed levels for 81-95 percent LTV loans. However, depending on the attributes of the loans, loss severities in an actual loss transaction may differ from the aggregate historical data. “Credit enhancement requirements for actual loss transactions will be driven by the particular credit, leverage and mortgage insurance profile of the pool, and may be higher or lower than the CE in existing fixed-severity transactions,” Nelson said.

Fannie Mae: Consumers’ Positive Financial Attitudes a Good Sign for Housing
Consumer optimism toward the housing market gained some momentum last month following a dip in December, likely getting a boost from their increasingly positive financial outlook, said Fannie Mae in its January National Housing Survey.

Fannie Mae said the share of respondents who said their household income is significantly higher than it was 12 months ago rose 4 percentage points to 29 percent, while the share expecting their personal financial situation to improve over the next year increased to 48 percent--both record survey highs. After dropping in December, the share who said it is a good time to buy a home increased 3 percentage points to 67 percent, while the share saying they would buy rather than rent if they were to move jumped 5 percentage points to 66 percent, marking the first increase since September.

“Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes,” said MBA Chief Economist Doug Duncan. “Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up, reversing a three-month trend toward renting.”

Lenders One, Optimal Blue Partner
Lenders One Mortgage Cooperative, St. Louis, selected Optimal Blue, Plano, Texas, as a new preferred vendor.

Optimal Blue, a cloud-based provider of enterprise lending services to the mortgage industry, provides mortgage banks, community banks and credit unions the ability to navigate the mortgage process from capital markets to consumers and back. Lenders One is a national alliance of independent mortgage bankers, correspondent lenders and suppliers of mortgage products and services.

Mortgage Machine Services Offers Source Code to LOS
Mortgage Machine Services, Addison, Texas, announced it will begin offering the source code to Mortgage Machine, its flagship loan origination system.

Previously hosted as a SaaS service for a select group of mortgage banks, Mortgage Machine is a customizable origination platform that supports retail, wholesale and correspondent lending.
Mortgage Returns Offers Training on FHA Mortgage Insurance Changes
Mortgage Returns, St. Louis, launched a mass-training campaign to allow lenders to educate their clients about the new Federal Housing Administration mortgage insurance premium reductions.

Working with changes and updates to new FHA mortgage insurance premiums, Mortgage Returns developed a multi-media campaign including direct mail, email and video messaging to help lenders educate their customers of possible savings opportunities.

DocMagic Implements MISMO Version 3.3
DocMagic Inc., Torrance, Calif., announced its entire product line now adheres to version 3.3 of the Mortgage Industry Standards Maintenance Organization Reference Model. 

Version 3.3 of MISMO establishes a common dataset that is essentially a prerequisite for lenders to use the Consumer Financial Protection Bureau’s new integrated disclosures and share the information about the disclosures with their industry partners. DocMagic’s early implementation of MISMO version 3.3 has allowed the company to begin working on standardizing closing document forms for its clients and partners.

QuestSoft Provides IDS with Automated Income Verification Support for 4506-T
QuestSoft, Laguna Hills, Calif., integrated its electronic 4506-T capabilities into Salt Lake City-based International Document Services' document preparation system idsDoc to help lenders order and deliver income verification forms.

The integration automates the process of requesting and delivering 4506-T documents, as well as building audit reports and certificates of completion for all electronically signed documents. IDS mortgage document preparation software integrates with all major loan origination systems, as well as with proprietary loan software.