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Stern & Eisenberg is pleased to announce the appointment of Patrick O’Brien to Chief Operating Officer. Pat brings over 27 years of industry expertise and leadership in the mortgage default industry through his extensive experience with mortgage servicers and law firms. “I am excited to have Patrick as our Chief Operating Officer. He is the strategic leader I have wanted to enable Stern & Eisenberg to grow our ability to assist our clients with their everyday legal needs while also allowing our attorneys to focus on providing creative legal solutions when needed. Patrick will continue to be an important team member involved in the success of Stern & Eisenberg,” says Steven Eisenberg, Esq., Founding Shareholder at Stern & Eisenberg. Pat embodies commitment to service excellence at every stage in the mortgage servicing life-cycle. Pat has developed a strong reputation and fostered lifelong industry relationships with servicers, investors, banks, and financial industry partners. Pat is focused on enhancing our unified platform, aligning and providing transparency across the S&E multi-state footprint for all team members and valued clients.
Stern & Eisenberg is a full-service law firm Transforming Legal Challenges into Creative Solutions. S&E provides legal representation in a variety of matters throughout the firm’s footprint. S&E focuses on creditors’ rights, including representation of secured creditors in connection with residential and commercial foreclosures, bankruptcy and bankruptcy litigation, REO and post-foreclosure conveyancing, loss mitigation/loan modifications, evictions, as well as other general practice areas including, but not limited to, real estate and business law; commercial and corporate litigation, real estate closings, estate planning and administration throughout the firm’s larger footprint.
S&E’s multistate footprint for GSE matters includes New York, New Jersey, Pennsylvania, Delaware, West Virginia. S&E also has attorneys licensed in additional states, including, Maryland, Virginia, and Washington, DC. Reach out to Pat via email or call 215-572-8111 extension 1056 or [email protected]. We Must Do More: Addressing The Shifting Tides of Homelessness, Rental Housing and Homeownership.6/27/2024
This contribution is from guest bloggers and industry thought leaders Faith Schwartz, Founder & CEO, Housing Finance Strategies and Stuart Quinn, Managing Director, Housing Finance Strategies. Learn more at HousingFinanceStrategies.com. Congratulations to co-founders Marrisa Yaker, and Cade Holleman, for founding the American Institute of Servicing and Legal Executives (AISLE). Your focus in spreading the word on new regulations and developing solutions for the many challenges facing lenders, loan servicers and consumers, will continue to assist in decoding the complexities of housing finance. Our housing and mortgage industry must do more to ensure access to safe and affordable shelter for all. To do this, we need to have a 360-degree view of the lifecycle of housing to charter a path toward accessible credit, for resilient and sustainable housing for all. First time homebuyer: For many of us, the tradition of leaving your childhood home, renting an apartment, and eventually, purchasing a home is a common path to homeownership. I was fortunate enough to buy my first home in my 20’s. At the time, it seemed like an expensive proposition. But I was encouraged to do so by my bosses to help me get established. My first townhome was purchased in 1986, for $140,000 in Fairfax VA. The reasonable debt to income (DTI) had me well within conventional guidelines as I secured my 7/23 ballon-a FNMA product with a rate of 7 3/8 %. And this began my path towards building wealth and my future downpayment of a home when I married.
The global pandemic had an outsized impact on homeownership and rental housing. There were more refinances of existing loans than recorded in history given the record low-rate environment. Under COVID 19 protocols, the world adjusted to remote work where white-collar employment remained steady and productive but the service economy and ancillary services were devastated. Despite the federal government support in many areas, the post pandemic challenges remain significant. The supply chains and building of homes were delayed, inflation remains stubbornly high (particularly for housing) and many existing homeowners have been disincentivized from listing their properties to make step-up purchases. This is due to their mortgage rates being below current market rates further reducing the available supply of for-sale homes.
The current state of housing in the post-pandemic carries residual overhangs left from the pandemic, combined with high interest rates and strong undercurrents of demographic shifts. A key set of highlights and challenges going forward include:
What can we do to improve the current state of play for housing and shelter? Update Government programs to reflect the current state of housing, offering more program and product innovation and use of emerging technology. Private industry, stakeholders and government agency markets should continue to make strides leveraging source data and emerging technology to drive change in housing access. Regulators should pay close attention to innovation and rules that create a “sandbox” for the rules of the road moving forward. And public policy will continue to have a role in driving the percentage shifts in homeownership, rental homes and addressing the chronic challenges for those unsheltered across the country. We know the demand exists for affordable access to credit and housing. By improving our processes and programs, we can scale into solutions to drive improved ownership metrics. Examples of technological innovation on the supply side may include leveraging new technologies like 3D printing and other prefabrication to produce faster time to market. Continued efforts to evaluate and scale effective localized changes more broadly for ADU and manufactured housing policies for development of smaller homes will also continue to drive affordability for the first time homebuyer (FTHB). Much shared effort and partnership were cornerstones to the pandemic response in housing to deliver new options for distressed renters and borrowers alike, a similar renewed focus and partnership should be made towards safe and creative financing solutions on the front-end, such as shared equity down payment assistance and new financing alternatives with consumer safeguards and choice to leverage new programs. Despite a period of surging refinances, overall costs to originate remained stubbornly high, re-evaluation of redundant processes and leveraging source data, utility like consortiums for tech and data, holds the potential to drive and democratize credit. Driving these types of changes should be key aspirations for all housing market participants to forge a broader and better path forward. Today, VA published details on the highly anticipated Veterans Affairs Servicing Purchase (VASP) Program which is now set for launch on May 31. As a reminder, VA previously published an agency information collection activity in November 2023 on this program. In the information collection, VA stated, “VA is initiating an expanded program using existing Refund provisions. This option will assist Veterans with VA-guaranteed loans who have defaulted on their mortgage loan and are facing foreclosure. Under this program, VA will exercise its statutory option to purchase the loan from the servicer and VA will hold the loan in VA's own loan portfolio. The servicer will prepare a modification of the loan to increase affordability for the Veteran. Servicers who participate in the program are required to document their efforts to assist the Veteran through a waterfall of existing loss mitigation options and provide that documentation to VA. Information collection is necessary to ensure that Veterans and servicers comply with VA program requirements under VASP that are not already covered by existing, approved information collections for loan servicing and loan refunding.” In addition to the Press Release and Chapter 9 published today, VA published a VA Servicer Newsflash with the below information and Appendix F on VASP. “Department of Veterans Affairs (VA) Manual 26-4 Servicer Handbook, Chapter 9, has been updated to include new information regarding the VA Servicing Purchase (VASP) program. In addition, Appendix F “Additional VA Contact Information” has been replaced with the new “VA Home Retention Waterfall.” Changes are outlined on the corresponding transmittal documents dated April 10, 2024, and the policy is effective May 31, 2024. The updated M26-4 and transmittals are available here. Accepting VASP submissions – Servicers can send VASP submissions to VA beginning May 31, 2024. VA recognizes that servicers may need time to comply, therefore servicers have until October 1, 2024, to implement. Servicers should report any IT solutions that cause extended timeframes in VASP implementation. Servicers should ensure all home retention options, including VASP, are considered prior to foreclosure. All inquiries related to this announcement are to be submitted in ServiceNow. To read VA Servicer Handbook M26-4 Appendix F: VA Home Retention Waterfall, click here.
Additionally, VA materials state that “Veterans will not apply directly for VASP. Instead, beginning May 31, mortgage servicers will identify qualified borrowers and submit requests on behalf of Veterans based on a review of all home retention options available and qualifying criteria. Veterans facing financial hardship should work with their mortgage servicers to explore available options.”
AISLE Submits Letter to VA with Feedback on VASP Program, Urges Consideration of Key Concerns1/17/2024
AISLE submitted a letter to the U.S. Department of Veterans Affairs (VA) on the VA Servicing Purchase Program (VASP) and offered suggested recommendations for consideration. Per the VA Press Release published in November 2023, VASP will allow VA to purchase defaulted VA loans from mortgage servicers, modify the loans, and then place them in the VA-owned portfolio as direct loans.
AISLE’s recommendations were based on the intent to assist Servicers and Borrowers once the program is published. Specifically, requesting tools for mortgage servicers to successfully implement the program once published. Having additional tools once the program is published will ensure a smooth implementation for both Borrowers and Servicers. Below, you will find some of the recommendations for consideration that were referenced: • Requested the Agency allow mortgage servicers ample time to implement the new program, including recommendations of the following:
• AISLE offered data and general feedback on the note rate, which creates a sustainable monthly payment. Members can click here to request a PDF copy of the full letter. AISLE closed its Founding Member opportunity on Tuesday, January 9, 2024, weeks ahead of its scheduled run due to overwhelming interest from the industry. The Institute soft-launched on November 30, 2023, and offered a Founding Member opportunity through the first 24 members or January 24, 2024, whichever occurred first. "We are exceptionally grateful for the trust placed in AISLE and its mission to shape regulatory policy, first by our Advisory Board members and Cross-Section Leaders. And today, we're thrilled by the response from the industry and those law firms and businesses that have stepped forward as thought leaders intent on shaping the regulatory environment that binds us as collaborators more than competitors," said Co-Founder Cade Holleman, M.A. Board Chair Marissa Yaker, Esq. added, "As we wrap up our very exciting launch, I am eager to turn our attention to the work ahead of us: focusing our combined energies on regulatory policy, meaningful and impactful change at the agency, servicing, and legal levels, and working to improve the broader housing industry for all market participants." AISLE Founding Members are listed below, in order of commitment.
Founding Members will have a role in shaping the AISLE Member Code and have a closed-door Founding Members session annually, as well as other membership perks. Additionally, AISLE's initial offering of annual sponsorships sold-out during the same November 30, 2023 to January 9, 2024 window.
Top-level 2024 sponsors at LV4 are a360inc, McMichael Taylor Gray, and LOGS Legal Network. LV3 annual sponsors include McCabe, Weisberg & Conway, Ghidotti | Berger, Quintairos, Prieto, Wood & Boyer, McCalla Raymer Leibert Pierce, and Codilis & Associates. Additionally, Steele, LLP and the Council for Inclusion in Financial Services are LV4 digital sponsors for 2024. While the Founding Member opportunity has closed, general membership in AISLE is still available to interested law firms and businesses intent on shaping the industry's regulatory environment and operating climate. If you are interested in contributing to the Institute's work on these critical, forward-looking policy improvement goals, you can learn more about how your business can become an important member of the AISLE community by clicking here. The OCC has published its Mortgage Metrics Report for the Third Quarter of 2023. The Report presents performance data for the third quarter of 2023 for loans that the reporting banks own or service for others as a fee-based business. The data in the report reflects a portion of first lien mortgages in the country, excluding junior liens, home equity lines of credit, and home equity conversion mortgages. For perspective, “the reporting banks serviced approximately 11.8 million first-lien residential mortgage loans with $2.7 trillion in unpaid principal balances. This $2.7 trillion was 22 percent of all residential mortgage debt outstanding in the United States.” Daren Blomquist, Vice President, Market Economics, Auction.com, and AISLE Cross-Section Leader for Trends + Technology, also reviewed the data noted the below. "while somewhat skewed toward an inherently less risky segment of the market, this report provides more confirmation that mortgage performance has settled into a more stable, sustainable pattern over the past year as the dust settled from the whirlwind market of 2020 and 2021. Absent of some unforeseen shock to the economy or housing market, I’d expect this pattern to continue in 2024. I will be keeping a close eye on redefault rates, which have now increased for five consecutive quarters and have doubled since the fourth quarter of 2021, when the pandemic foreclosure moratorium ended. If redefault rates continue to rise, it could be an indication that more distressed homeowners who have held off foreclosure in the short term are running out of runway when it comes to avoiding foreclosure for the long term.” Marissa Yaker, Deputy General Counsel of Regulatory Affairs, Padgett Law Group and Chairperson of AISLE, adds her thoughts on the Report's data. "as an industry, we have BEEN SEEING LOW DEFAULT RATES, but the re-default data is interesting to track in light of all the loss mitigation that took place during the past few years. Hopefully, these Borrowers can benefit from the additional programs that some of the agencies will be releasing in 2024." Within the Report, the OCC includes a chart that highlights the Number of Re-Defaults for Loans Modified Six Months Previously Modified Loans 60 or More Days Delinquent Six Months After Modification by State. It is interesting to review, due to all the loss mitigation in light of the pandemic. Some of the key points from the OCC Report:
Summary of Delinquent Loans:
Summary of Modifications:
Link to the OCC Report: Mortage Metrics Report Third Quarter 2023 (occ.gov) |
