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ยป IN THE NEWS Father, Son Charged in Real Estate Investment Scheme A father and son were charged for their roles in a fraudulent real estate investment scheme on March 27, the Securities and Exchange Commission (SEC) announced last month. A federal jury in Detroit convicted John J. Bravata on one count of conspiracy and 14 counts of wire fraud, while his son, Antonio M. Bravata was charged with one count of conspiracy to commit wire fraud. The father and son received charges for their roles in defrauding investors through BBC Equities. The securities offering for BBC raised more than $50 million from at least 440 investors, according to a release. The purported "real estate investment fund" was promised to yield annual returns of 8 to 12 percent. Richard J. Trabulsy, John's partner in BBC, previously pleaded guilty in the same action. Ally Agrees to Sell MSRs to Ocwen and Remaining Servicing Rights to Quicken Detroit-based Ally Bank announced an agreement to sell mortgage servicing rights (MSRs) to Georgia-headquartered Ocwen Financial Corporation for $585 million. Ally Bank also reached an agreement with Quicken Loans to sell the last of its remaining mortgage servicing rights (MSRs) portfolio. The transaction with Ocwen includes MSRs with an unpaid principal balance of $85 billion and another $5 billion in agency MSRs created based on commitments made through the end of February, according to a company release. The sale also includes representation and warranty liabilities for the majority of the loans. In addition, the agreement gives Ally the right to sell its remaining MSR portfolio to Ocwen at a later date. Ally's servicing portfolio currently exceeds $30 billion. The transaction is subject to approval by Fannie Mae and Freddie Mac. "Ally continues to make significant progress in exiting its non-strategic mortgage activities," said Barbara Yastine, president and CEO of Ally Bank. "Going forward, the bank's full focus and resources will be centered on its leading direct banking franchise and advancing its customer-centric deposit activities, as well as continuing to grow its key role in Ally's auto finance operation." The agreement with Quicken includes a portfolio that is comprised of mortgage loans "that are largely expected to be refinanced post-closing, based on interest rates that are above current market levels, and have an unpaid principal balance (UPB) of approximately $34 billion as of [January] 31, 2013," according to a release from Ally. The purchase price is estimated to be approximately $280 million. The transaction is expected to close in the second quarter and is subject to approval by Fannie Mae and Freddie Mac. The two agreements close the book on the bulk of Ally's mortgage activities. Following the bankruptcy of Ally's mortgage arm Residential Capital (ResCap) in 2012, the bank announced it was exploring options to exit the mortgage business and has engaged with companies to sell its operations and servicing rights. "This agreement marks a key milestone for Ally and, upon successful completion of the MSR transactions, Ally Bank will have exited all the non-strategic mortgage activities," said Barbara Yastine, president and CEO of Ally Bank. "Going forward, the bank's full focus and resources will be centered on its leading direct banking franchise and advancing its customer-centric deposit activities, as well as continuing to grow its key role in Ally's auto finance operation." Ally has announced in the past it will continue to originate "a modest level of highquality residential jumbo mortgages for its own portfolio through correspondents and wholesale brokers." At the same time, the acquisition will add to Quicken's growing servicing presence. In the last year, the company has built up a $90 billion mortgage servicing portfolio, making it the 17th largest servicer in the United States, according to a release. With the addition of Ally's portfolio, the company expects to break into the ranks of the top 10 servicers by mid-2013. "We have not been bashful in making the market aware of our interest in acquiring servicing rights," said Quicken CEO Bill Emerson. "This transaction with Ally Bank allows us to purchase a well performing pool of loans, and will help grow our servicing footprint. This servicing pool will also create a large opportunity for Quicken Loans to refinance a substantial amount of these clients into significantly lower monthly payments." VISIT US ONLINE @ DSNEWS.COM Minnesota rank: 45 90+ Day Delinquency Rate Foreclosure Rate February 2013 1.4% Unemployment Rate 1.2% 5.5% year ago 1.7% 2.1% 5.7% year-over-year change -14.8% -40.2% -3.5% Top County FaribaulT CounTy 90+ Day Delinquency Rate Foreclosure Rate February 2013 2.8% 2.9% year ago 3.0% 3.6% year-over-year change -8.7% -18.5% Top Core-based Statistical area alberT lea, Mn 90+ Day Delinquency Rate Foreclosure Rate February 2013 2.2% 2.0% year ago 2.7% 3.3% year-over-year change -18.6% -39.2% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the February 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary February 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Applied Analytics. Minnesota www.MinnesotaREO.com Bruce McAlpin Jeff Detloff Long H. Doan Maribel Garcia Garth Johnson Craig Murphy Michael Olsen 612-669-6324 952-829-2938 763-432-7640 612-821-7500 952-844-1511 763-533-9133 651-209-8444 STAT INSIGHT 62,500 Jobs added in Minnesota over the 12 months ended in February 2013. Source: Wells Fargo Securities, based on data from the U.S. Department of Labor 95