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» commission for lender-placed flood insurance. We understand insurance issues can be complex, and we work with customers to try to resolve them." The spokesperson further stated, "Federal law dictates that if a property is in a Special Flood Hazard Area, lenders are required to enforce the purchase of flood insurance for as long as the property remains in one of those flood zones. We abide by federal guidelines in allowing designated customers time to purchase their own flood insurance before we are required to purchase it on their behalf." Berger & Montague, Nichols Kaster, LLP, and Taus Cebulash & Landau, LLP are pursuing class action lawsuits against other banks over force-placed hazard insurance and force-placed flood insurance practices, as well. Other defendants include Bank of America, Wells Fargo, JPMorgan Chase, Citizens Bank, and GMAC. CMBS Delinquency Rate Down to TwoYear Low: Fitch A "surge" in new issuances brought down the delinquency rate for commercial mortgage-backed securities (CMBS) in November 2012, according to a report from Fitch Ratings. The New York-based agency says November's delinquency reading marked a two-year low for commercial mortgages held in securities. The CMBS delinquency rate stood at 8.17 percent in November, representing a decrease of 12 basis points (bps) from 8.29 percent in October, Fitch reported. The decrease marks the sixth consecutive month the rate has fallen and is the lowest level since November 2010, when the rate was 7.96 percent. "CMBS delinquencies appear poised to drop below 8 percent, though large loans moving into and out of delinquency make the index susceptible to volatility," commented Mary MacNeill, managing director at Fitch. In November, the agency saw the closing of $6.6 billion in Fitch-rated deals, which offset $4.6 billion in portfolio runoff. November 2012 was the highest month for Fitch-rated issuance in five years, the agency noted in its report. Fitch also explained that resolutions in November outpaced additions to the index, with $1.5 billion in resolutions compared to $1.3 billion in additions. Among the major property types, the multifamily delinquency rate fell the furthest in November, dropping 53 bps to 9.92 percent. The office sector also saw its delinquency rate fall, decreasing 9 bps to 8.63 percent during the same time period. The retail sector experienced a decrease as well and dropped 7 bps to 7.28 percent. The hotel delinquency rate increased to 9.83 percent from 9.58 percent in October, while the industrial sector's rate moved higher to 8.88 percent, up from 8.76 percent the month before. NCUA Sues JPMorgan for $3.6 Billion The National Credit Union Administration (NCUA) has filed another lawsuit against JPMorgan Securities and Bear Stearns over allegations of falsely representing the quality of mortgage-backed securities (MBS) sold to corporate credit unions. At $3.6 billion, the legal action is the largest suit ever filed by the NCUA. According to the agency, Bear Stearns, which was purchased in 2008 by JPMorgan, misrepresented the underwriting standards of loans in securities sold to U.S. Central, Western Corporate, Southwest Corporate, and Members United Corporate credit unions. The four institutions became insolvent and were placed into NCUA conservatorship and liquidated. NCUA's 280-page complaint alleges that although Bear Stearns' offering documents for the securities described the firm's adherence to underwriting guidelines, the originators had in fact "systematically abandoned the stated underwriting guidelines in the offering documents." "Because the mortgages in the pools collateralizing the RMBS [residential mortgagebacked securities] were largely underwritten without adherence to the underwriting standards in the offering documents, the RMBS were significantly riskier than represented," NCUA's complaint reads. It goes on to say, "[P]roperties were routinely overvalued at the time of origination, rendering the average LTV [loan to value] ratios inaccurate. Indeed, a material percentage of the loans collateralizing the RMBS were all but certain to become delinquent or default shortly after origination. As a result, the RMBS were destined from inception to perform poorly." "Firms like Bear Stearns acted unfairly by ignoring the rules for underwriting. They packaged these securities and then told buyers the paper was sound," commented Debbie Matz, NCUA board chairman. "When the VISIT US ONLINE @ DSNEWS.COM securities plunged in value, we learned the truth. NCUA is now working to hold these underwriters accountable and secure recoveries on behalf of federally insured credit unions." NCUA has eight similar actions pending against other companies, including Barclays, Credit Suisse, Goldman Sachs, and Wachovia. "NCUA and credit unions have successfully worked together to restore stability to the credit union system," Matz said. "Now we are holding responsible parties like Bear Stearns accountable for their actions. It's the right thing to do." A spokesperson for JPMorgan did not reply to a request for comment. North Carolina rank: 29 90+ Day Delinquency Rate Foreclosure Rate november 2012 2.97% Unemployment Rate 2.40% 9.1% year ago 3.16% 3.13% 10.4% percent point change -5.9% -23.4% -12.5% Top County HerTford CouNTy 90+ Day Delinquency Rate november 2012 6.30% Foreclosure Rate 4.48% year ago 5.57% 5.24% percent point change 13.2% -14.6% Top Core-Based Statistical Area LumBerToN, NC 90+ Day Delinquency Rate Foreclosure Rate november 2012 5.60% 3.84% year ago 5.77% 4.75% percent point change -2.8% -19.1% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the November 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary November 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. North Carolina James Williamson & Associates REO Sales & Marketing, 20+Years REO Brokerage, Property Preservation 336.682.4007 or 336.655.5990 fax: 800.795.7065 james@jamesewilliamson.com MEMBER 119

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