Magazine article Mortgage Banking

New Customers, Happy Campers

Magazine article Mortgage Banking

New Customers, Happy Campers

Article excerpt

WORDS MATTER--ESPECIALLY IF the attorneys are listening. When Omer Simeon, executive vice president in the Simi Valley, California office of Calabasas, California-based Countrywide Financial Corporation Inc., spoke at the 8th Annual Mortgage Technology Conference in Miami, sponsored by New York-based Thomson Media Inc. (now Source Media), he boasted about the company's No. 1 status in loan originations and servicing, but noted it had not always been that way.

"In 1991, Countrywide reached No. 1 in the total number of transactions," said Simeon. "Recently we became No. 1 again.... So, we've gone that transition--from being No. 1, [then] falling off to [No.] 2, 3 or 4; and Angelo's [Mozilo, Countrywide's chairman and chief executive officer] commitment now, and ours along with it, is that we will not be [No.] 2, 3, 4 or 5. We no longer talk about being No. 1; we talk about dominating the mortgage industry."

Countrywide, in the meantime, has encountered a few bumps along the road to being a market leader. The company reported a 40 percent drop in earnings for the fourth quarter of 2004.

If you're at a tech conference, you're going to hear some kind of debate about best-of-breed versus end-to-end (enterprise) system. The dispute over which is better continues. "I don't think there's any one company that can possibly do it all, and certainly not do it well," said Steve Bachelder, president, SwiftView Inc., Portland, Oregon, arguing against the enterprise option.

"There's so darned much complexity in this industry, between all the compliance issues, the huge number of lenders, all the different [loan origination systems], all the doc-prep issues." A panelist at the Mortgage Technology Conference in Miami, Bachelder said industry complexity "brings the conclusion that best-of-breed will rule, [but] then the challenge for a given lender is which vendors can put [individual components] together for their particular needs? So it's almost a case-by-case situation."

As mortgage originations continue receding from record levels--taking servicing activity with them--and new borrowers become harder to find, loan buyers like Freddie Mac are gearing up efforts to cultivate more volume while curtailing the "feared trio" of nonpayment issues: delinquency, default and foreclosure. Freddie Mac Director Dionisia Coffman told attendees at the Mortgage Bankers Association's (MBA's) National Mortgage Servicing Conference & Expo in Orlando, Florida, in February that Freddie Mac is making more efforts to attract nontraditional homebuyers--particularly women and low-income people.

It has formed the Women's Mortgage Industry Network (WMIN) to draw more women into the mortgage profession, and the group has set a mission of bringing more "single women-head of house-holds with children" into the homeownership fold. Coffman said the homeownership rate for single mothers is 20 percentage points lower than for "single men with children."

Concomitantly, only 47 percent of low-income homeowners are able to stay in their homes for as many as four years, compared with 77 percent of the high-income group, Coffman reported. That spurred Freddie to introduce the Home Possible[SM] Mortgage program, aimed at keeping women and low-income home-owners from losing their properties. Among the features of the program are early intervention in the delinquency process (at 45 days) and follow-up tracking by counseling agencies. …

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