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44 WELLS FARGO RECEIVES HIGH SERVICER RATING Wells Fargo Home Mortgage (WFHM) recently received a RPS1- rating for Prime, Alt-A, and subprime products from Fitch Ratings, welcome news to the servicer after the completion of several organizational changes within the mortgage servicing division. In receiving a RPS1-, Fitch Ratings says that WFHM has demonstrated the highest standards in overall servicing ability. is is based on what Fitch Ratings calls "key rating drivers" including organizational restructuring, expanded automation functionalities, alignment of platform with portfolio size, experienced leadership team, consent order update, financial support of parent, and continued performance versus increasing costs. "e servicer continues to invest in training and strengthened its internal control processes to provide increased oversight of its business line operations," says Fitch. "WFHM continues its testing processes in accordance to the national servicing standards and maintains servicing procedures and controls in accordance to the respective state, private investors, and agency requirements." Fitch says that one of the key rating drivers, organizational restructuring, was reflective of the servicer's effort to improve its delinquency portfolio and reduce mortgagor outreach programs. "e servicer indicated that it is now concentrating its efforts on working with smaller community groups and to focus efforts to address home preservation issues," says the report. e report also states that during the period of the review, WFHM finalized the organizational changes including naming a new head of servicing and managers. "In addition, the servicer created the position of change management," says Fitch. "Change management will manage servicing strategy, process engineering, business architecture, and change life cycle management, focusing on the portfolio, service delivery, resources, and demands. Operational risk will continue to focus on, but not limited to, vendor management, customer impact process, and remediation efforts." ese changes were reflective of consolidation efforts in WFHM's process of post-crisis normalization, according to the report, and the servicer has no plans to decrease its hours of operation. Likewise, Fitch says the WFHM will "maintain its outreach program at a level commensurate with its home preservation needs and customer care servicing responsibilities." HOUSING CHARTBOOK DEPICTS IMPROVEMENTS IN POST-CRISIS MARKET e Urban Institute released their monthly chartbook, and along with it data on the latest mortgage delinquency and foreclosure trends. It came as no surprise that these rates continued to decline after the unprecedented levels seen following the housing crisis. But Urban Institute reports that these rates are still relatively high compared to those of pre-crisis in the early 2000's. "Loans 90 days delinquent or in foreclosure totaled 3.0 percent in the third quarter of 2016," said the report, "down from 3.6 percent for the same quarter a year earlier." Seriously delinquent rates for GSE loans also declined. As of September 2016, 1.24 percent of the Fannie Mae portfolio and 1.02 percent of the Freddie Mac portfolio were seriously delinquent. is was a decrease from 1.59 percent for Fannie Mae and 1.41 percent for Freddie Mac from the year prior, according to the report. FHA and VA delinquencies also declined. "GSE delinquencies remain higher relative to 2005-2007, while FHA and VA delinquencies (which are higher than their GSE counterparts) are now at levels lower than 2005-2007," said Urban Institute. With the decline in delinquencies decline in permanent loan modifications, which is another sign of market recovery. Broken down even further, the data from the chartbook reports that the number of active permanent modifications declined by 1,928, making this quarter the third consecutive quarter. "Fewer new permanent modifications were made, some modifications failed because the borrowers did not make their payments, and a small number of borrowers either paid off their mortgage or withdrew their application," said the report. "As a result, active permanent mods declined to 0.98 million."

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