Media Coverage - Archives 2010

Technology alone won't solve robo-signing problem by Lee Howlett

As with any technology, our industry can construct many checkpoints to assure efficient production is balanced with quality and compliance.

In the case with robo-signers, had there been a foreclosure platform tracking production volumes — with time studied allowances for appropriate compliance — then it would have been readily apparent that the time allotted for document review, notary acknowledgment and legal compliance was insufficient.

Will Foreclosure Mess Help or Hinder Paperless Mortgage Project?

The business case for electronic mortgages either just received a big boost or suffered a terrible setback. A number of mortgage technology firms argue that the foreclosure documentation crisis that has erupted in the last month could be the wake-up call the industry needs to move to a completely paperless system.On the other hand, some industry participants are worried that the recent scrutiny from judges around the country on original promissory notes and proper chain of title may considerably slow technology improvements.

Fiserv and ISGN Expand Partnership to Deliver Additional Efficiencies to Lenders

Fiserv, Inc. (NASDAQ: FISV), the leading global provider of financial services technology solutions, today announced an extended agreement with ISGN, the leading global mortgage technology solutions company. The partnership agreement gives Fiserv clients a seamless user interface between the LoanServ platform from Fiserv and Attorney Case Management powered by ISGN.

ISGN releases quality assurance and review service platform

In response to increasing demand for third-party quality loan assurance, mortgage-technology services firm ISGN released a new quality assurance and review platform. The platform provides users with loan auditing, underwriting review, loan-modification review, portfolio surveillance and foreclosure documentation.

ISGN Launches Escrow Administration System

ISGN has launched EZEscrow, a scalable and full-service escrow administration solution. EZEscrow helps lenders comply with the Regulation Z mandate requires states banks and credit unions to establish escrow accounts for all high-priced loan transactions, ISGN says. The requirement was made mandatory on April 1.

ISGN launches loan QC compliance monitoring product

ISGN, a provider of technology products and services that help lenders, servicers and secondary markets manage the mortgage industry’s transformation, has launched its Loan Quality Audit and Monitoring Service. The service helps lenders prevent errors in mortgage loan files which could lead to costly buy-backs, delayed closings and much more.

Viewpoint: Loan Transparency Is Key to Averting a New Housing Crisis - Niraj Patel in American Banker

Perhaps a dozen books now in print blame much of the banking meltdown on a lack of government oversight right across the financial services spectrum and, of course, Wall Street greed. However, mortgage lending can't be accused of being one of those too lightly regulated industries no matter what its role in the housing crisis.

Since FDR's New Deal and the creation of FHA and Fannie Mae, the federal government has consistently kept its hand in the primary and secondary mortgage markets, for better or worse.

ISGN bets on U.S. residential mortgage business - thehindu.com

Plans to invest $5 m in India for increasing headcount, product development and infrastructure

ISGN Corporation, a provider of end-to-end services and technology to the U.S. mortgage industry, is betting on the U.S. residential mortgage business for its future growth. According to Krishna Srinivasan, Chief Executive Officer and Vice-Chairman of the company, many clients, mainly eight of the top 10 banks and lenders, still continued to have a huge portfolio in the mortgage vertical.

ISGN Designated as "top 50 Service Provider" for Third Consecutive Year - mortgagemag.com

ISGN, a leading provider of end-to-end technology solutions and services to the U.S. mortgage industry, had been designated by Mortgage Technology magazine as one of the “Top 50 Service Providers” for the mortgage industry. This year’s designation marks ISGN’s third consecutive year to be selected for the prestigious list.

Staying a Step Ahead in 2010 and 2011 - mortgagebankers.org

Patel, Chetan(Chetan Patel is executive vice president of ISGN, Bensalem, Pa., a provider of services and technologies for the mortgage industry. He leads the company's efforts to streamline technologies that make both front- and back-end mortgage processes faster, more efficient and more economical.)

Viewpoint: Give Shared Equity Deals a Chance American Banker - Lee Howlett in American Banker

New first-quarter figures from the Federal Housing Finance Agency showed 239,000 completed foreclosure preventions for Fannie Mae and Freddie Mac borrowers, up from 137,000 in the previous quarter. Government-sponsored-enterprise loan modifications jumped to 137,000 in the first three months, from 57,500 in the fourth quarter of 2009.

Impressive though these numbers are when looked at as percentage growth from quarter to quarter, they are minuscule when compared with the vast sea of underwater mortgages, those with principal balances higher than the current value of the home. Housing analysts estimate that 4.5 million homeowners are underwater by more than 33%.

Unless we address one of the fundamental problems of the housing crisis - negative equity - a significant majority of these borrowers could default, ballooning credit losses for already harried bankers and other mortgage lenders.

Federal and GSE home retention programs designed to keep underwater borrowers in their homes usually seek to reduce the interest rate of the loan, stretch out the payment terms and provide some forbearance of the principal balance. But what is missing in tackling negative equity is finding an alternative for outright principal forgiveness, which banks, lenders and investors understandably want to avoid.

Essentially a successful loan modification that includes writing down debt is similar to a typical corporate debt restructuring, a fair debt for equity exchange benefitting both the lender and borrower. In a debt-for-equity exchange, banks and lenders would see lower writedowns and avoid the plummeting net present value of home collateral caused by foreclosures and real estate owned inventories.

Realigning mortgage debt with the current value of a home will give underwater borrowers a fresh start and lower their monthly payments to a sustainable level, one they can afford. What makes this work for banks is a shared equity arrangement, which converts the bank's forgiveness of principal into a share of the future appreciation of the home from its current value.

A shared equity arrangement is not a reverse mortgage or a shared appreciation mortgage. It creates two liquid performing assets from an illiquid first mortgage, a newly modified or originated mortgage with a balance below the value of the home and a real estate agreement in the form of a purchase option.

This purchase option brings lenders and investors to the table, enabling them to recoup some of the debt forgiveness required to lessen the losses of the seriously delinquent and underwater mortgages in their portfolios. For banks a shared equity mortgage arrangement can help free up capital on the balance sheet by creating a new saleable performing mortgage and a liquid real estate agreement that can be sold or carried on the books at fair value.

The total value of a shared equity deal most likely will exceed that of other loan modification alternatives such as short sales and deeds in lieu.

And a shared equity arrangement can lead to lower loss provision requirements for banks if it lowers redefault rates associated with many loan modifications.

The real estate agreement in a shared equity deal - the purchase option - can be designed as a proprietary financial contract, which gives the lender or investor the right to share in a specified percentage of the future gain or loss in the home's value. Usually the gain or loss is realized when the home is sold.

Standardizing equity share contracts could help make real estate equity an asset class for institutional investors.

Shared equity arrangements first appeared during the real estate bull market as a debt-free way for homeowners to tap into their home equity and convert it into cash. But today they offer banks the opportunity to turn delinquent mortgages into new liquid performing loans and to be compensated for a portion of the principal that has been forgiven.

With strategic defaults on the rise as more underwater borrowers who can afford to pay walk away from their mortgage obligations, REO inventories necessarily will expand putting more downward pressure on home prices.

Equity share mortgages can help ameliorate some of that pressure and lessen potential loan portfolio losses.

Lee Howlett is president of the servicing practice for ISGN, a provider of technology to the mortgage industry.

ISGN Formally Launching Shared Equity Program for Underwater Borrowers

- www.housingwire.com

FHA Mortgage Workout Lacks Incentives and Creates Problems: Industry Sources - housingwire.com

Lee Howlett, president of mortgage technology and service provider ISGN’s servicing practice, told HousingWire that the principal forgiveness initiative was expected. “We’ve seen sequential progress toward that over the past year and a half,” he said.

Banks Will Recoup Billions from GSEs' Loan Buyouts - Kate Berry/American Banker

"What happens when a property is sitting in REO and they need to have a property preservation company cut the grass or make repairs? It's the servicer who pays for that, so it's another area where the cash is going out the door," said Niraj Patel, a group president at ISGN Corp., a Bensalem, Pa., provider of mortgage technology and services.