We maximize the value of our due diligence services by understanding and recognizing what our client's objectives are, why the data is being captured and/or verified and for what the "scrubbed" data and their corresponding reports are being used.
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Mortgage Market Needs Changes
A leading analyst sees many changes needed in the mortgage market. One of those changes is higher interest rates.

Meredith Whitney, founder and chief executive officer of Meredith Whitney Advisory Group noted that the Federal Reserve is evenly divided between raising rates and not raising rates.

But low rates haven't done much for the mortgage market because borrowers can't qualify or don't have enough equity.



GSE Execs Rack Up Tens of Millions in Legal Expenses
An inspector general report examined legal fees being paid on behalf of former senior executives of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. One way that the two government-controlled enterprises can cut back on legal expenses is to stay all litigation until they are out of conservatorship since neither will ever be in a position to pay such fees.

The report highlighted the case of three former executives of Fannie Mae -- including its former chief executives officer, chief financial officer and controller -- who are accused of engaging in practices to artificially inflate the company's stock price.

The three settled with the Federal Housing Finance Agency's predecessor, the Office of Federal Housing Enterprise Oversight, in August 2008 for a combined $31 million.



HUD Clarifies HAMP Credits Toward Settlement
While some principal reduction on mortgages with government loan modifications can be credited towards the recent mortgage servicer settlement, the vast majority of loans modified under the federal program won't be eligible.

The Department of Housing and Urban Development says that incentives paid to servicers under the Home Affordable Modification Program cannot be used as credit towards the massive mortgage servicer settlement announced on Feb. 9.

HUD was responding to a news article that an article in the Financial Times that, it says, argues HAMP subsidies are being used for credit under the settlement.



Mortgage Bankers Raise Origination Outlook
Home lenders cut their outlook for the volume of home purchases expected to be financed this year. But an increase in projected refinance production was enough to push the overall outlook higher.

The latest mortgage production forecast has first-quarter residential originations 6 percent higher than was predicted last month.

Even expected second-quarter financing was increased 2 percent.



Apartment Loan Performance Leads CMBS Improvement
Led by improving multifamily performance, past-due payments on securitized commercial mortgages retreated -- though so did the overall amount outstanding.

Delinquency of at least 60 days on loans that are part of conduit-fusion commercial mortgage-backed securities was 2 basis points better during January than in December.

But late payments on securitized commercial mortgages have worsened 29 BPS from January 2011.



Outsource Solutions has provided pre and post funding due diligence and compliance review services for its residential mortgage clients since its founding in 2000. Our clients include national banks, regional and national mortgage bankers, wholesale lenders, Hedge Funds and Investment Banks. We have a rather unique skill set in the industry in that we perform and have performed what we refer to as "Transfer Support" services on both sides of the residential mortgage secondary market transaction. Consequently, we understand the procedures and perspectives of the trading partners on each side of the transaction.
Typically, our loan purchase support projects encompass some or all of the functions listed below, depending on client need and preference:

  • Receive loan level registration data from client's loan purchase management or secondary market support system or lock registration engine and load the data onto our due diligence/correspondent purchase loan review and analysis system.

  • Receive closed loan files (or optical images, if applicable) directly from client's sellers as they submit them for purchase.

  • Optically image the loan file and make indexed images available to you via secure access to our website. The document indexes are formatted to your preference.

  • Perform compliance testing on each loan to verify that APR and Amounts Financed were disclosed properly and that the loan does not violate federal, state and local high cost lending statutes. When applicable, Right of Rescission's are reviewed for disclosure and rescission window compliance and all data required for HMDA reporting is captured. Outsource Solutions maintains a working business partnership with Compliance Testing providers to update mortgage lending related statutes that affect High Cost lending calculations, APR's and other RESPA closing issues.

  • Perform pre funding borrower identification and employment (if applicable) verifications as well as generate AVM's on selected loans to screen for borrower, employment and/or property flipping/inflated appraisal related fraud issues. Additionally, social security number to name matching is performed as requested.

  • Perform a general credit, compliance, closing document and associated data capture due diligence review to verify that the loan is documented completely and properly consistent with generally accepted secondary marketing salability standards and that applicable client program guidelines and all applicable stips and waivers are adhered to.

  • Loan level data is captured and/or verified and a confirmation is made that registration data, particularly critical data elements that may result in re-pricing issues if registered incorrectly by the seller, matches data captured from the loan file.

  • Generate exception or loan suspense reports detailing exceptions causing the loan's purchase to be suspended or causing potential re-pricing issues.

  • Capture and verify all loan level data necessary to board the loan for interim and/or final servicing.

  • Capture and/or verify data required for annual HMDA reporting.

  • Perform MERS MIN generation, registration and transfer service. Outsource Solutions is a MERS Patron member and is able to access the MERS system through our log in on our clients behalf to perform registrations and transfers. Outsource Solutions as a fraud detection tool (along with online access to county public records) to detect evidence of property flipping or straw borrowers.

  • Track and retrieve trailing documents (Recorded Mortgages, Final Title Policies) on each loan and deliver to Investors and/or servicers.

  • Store hard copy files until purchased and deliver them to end investors or servicers.

  • Deliver reviewed data files to client, its master and/or subservicing providers and other applicable business partners on a regular basis. These data deliveries will preferably be accommodated by interfaces between vendors and client's operating systems.

  • Track, process, retrieve, image and review trailing documents on all loans purchased. Once approved these final documents are delivered to appropriate trading partners or vendors.



Outsource Solutions offers its due diligence and post closing services described above on both a straight third party and private label basis, depending on the client's preference.