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28 Servicing Rights for GSE Portfolio Worth $4.2 Billion for Sale e new year brought with it a new mortgage servicing rights (MSR) opportunity for interested buyers: a substantial GSE portfolio valued at $4.2 billion in aggregate unpaid principal balance. According to MountainView Servicing Group, which is acting as facilitator for the sale, the portfolio is entirely made up of fixed-rate and first-lien products and features low delinquencies. e latest offering is the fourth billion-dollar-plus portfolio to be offered through MountainView in as many months. "We continue to see strong demand for the MSR asset," said Matt Maurer, managing director at MountainView. "And given the quality of this collateral from a well-capitalized seller, we expect this offering to sell at a strong level as well." Among other quality features, the portfolio has a weighted aver- age original FICO score of 752, a weighted average original loan- to-value ratio of 75 percent, and a weighted average interest rate of 4.19 percent. e average loan size is $243,937. e majority of loans included in the sale are in California at about 51.3 percent, according to MountainView. Other top states include Arizona (8.0 percent), Texas (5.9 percent), and Colorado (5.2 percent). FORECLOSURES FALLING, BUT DELINQUENCY RATE CLIMBING e nation's foreclosure inventory fell to its lowest level in almost seven years in November, but the percentage of delinquent mortgage loans is on the rise, according to Black Knight Financial Services' November 2014 "First Look" at Mortgage data. Delinquent mortgages, which are those more than 30 days overdue but not in foreclosure, jumped by 12 percent from October to November, according to Black Knight. While there is somewhat of a seasonal aspect to the increase (the delinquency rate has gone up month-over-month in six of the last seven Novembers), the 12 percent spike is the largest month-over-month increase since 2008, Black Knight reported. e actual number of delinquent loans jumped by 329,000 from October to November, up to 3.08 million, according to Black Knight. e number of delinquent loans declined year-over-year in Novem- ber, however, dropped by 5.7 percent (a total of 153,000 loans), Black Knight reported. e foreclosure inventory rate, which is the percent- age of mortgage loans in any state of foreclosure, stood at 1.53 percent in November, its lowest level for any month since January 2008, Black Knight reported. e number of properties in the United States in pre-sale foreclosure inventory fell by 29,000 from October to November down to 829,000 (a decline of 3.5 percent) and dropped by 427,000 from November 2013 (a decline of 34.7 percent), according to Black Knight. Foreclosure starts nationwide have also fallen to levels not seen since before the housing crisis. Foreclo- sure starts fell by 9.2 percent month-over-month and 29.5 percent year-over-year down to 73,900, the lowest level since May 2006, according to Black Knight. e number of properties 30 days or more delinquent or in foreclosure skyrocketed month-over-month by 300,000 (up to 3.91 million) but year-over-year took a big tumble (down by 580,000 since last November). e number of mortgage loans that were 90 days or more past due but not in foreclosure increased from October to November by 62,000 (up to 1.16 million) but declined year-over-year by 120,000 properties, according to Black Knight. In 2014, about 72 percent of all HAMP (Home Affordable Mortgage Program) modifications were on FHA or VA loans, compared to just 16 percent in 2013, according to Black Knight Financial Services. KNOW THIS FREDDIE MAC: HOUSING MARKET WEAK BUT STABILIZING Freddie Mac's latest Multi-Indicator Market Index (MiMi) report finds the U.S. housing market weak but stabilizing at year's end. e index, released recently, shows that 70 markets are inching upwards, including San Jose and Pittsburgh, which have finally joined the forward momentum. e national MiMi value stands at 74.5, which is up 0.12 percent from September to October and up 0.42 percent over the past three months. Year-over-year, the national housing market has improved 4.48 percent. While still well short of the all-time MiMi high of 122.5, reached in June 2006, the national index is markedly better than it was in September 2011, when the housing market was at 60.3. "When we look at the stability of the housing mar- ket, we've seen a modest 0.5 percent improvement since the beginning of the year in the national index," said Frank Nothaft, Freddie Mac's chief economist. "Hous- ing markets continue to heal across the country, with those hardest hit showing the biggest improvement." e most improved metro areas month-over- month were Kansas City, Memphis, and Atlanta, each up more than 3 percent. Charlotte and Denver— which also improved more than 12 percent year- over-year—were close behind. Year-over-year, Las Vegas improved by nearly 24 percent, while Chicago, Miami, and Riverside, California, each improved more than 12 percent. Statewise, Colorado, Kentucky, Idaho, Maryland, and North Carolina led month-to-month improvement, each growing by a least 1 percent. Year- over-year, Nevada grew 18.95 percent, while Illinois, Florida, Rhode Island, and Colorado each grew by around 10 percent. According to the index, 13 states, plus the District of Columbia, have MiMi values in a stable range (above 80). North Dakota (95.9), the District of Columbia (94.1), Montana (91.2), Wyoming (91.0), and Hawaii (89.2) made up the top five. Eight of the 50 metro areas Freddie Mac tracks, all west of the Mississipi, have MiMi values in a stable range; San Antonio (89.9), Austin (87.0), Houston (85.3), Los Angeles (84.4), and Salt Lake City (83.1) made up the top five. According to Nothaft, the news is encouraging, but hardly a cause for champagne just yet. "Low mortgage rates have helped, but we also need better household income growth," he said. "e employment picture needs to improve more to strengthen wage growth. e good news is we're slowly starting to see this happen in areas like Denver, San Jose, Nashville, and Pittsburgh." Freddie Mac also is seeing better purchase application activity on a monthly basis in these areas, he said.

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