“It was time for us to focus all of our corporate resourceson a singular product,” said John LaRose, Celink founder and CEO. “Given the new mortgage landscape and the ever-increasing population of retiring boomers, we saw the subservicing of reverse mortgages as defining and directing Celink’s future.”

In late 2011, Celink assisted its forward subservicing clients in moving their loan portfolios either in-house or to an alternate subservicer.

Contrary to some of the challenges facing the forward mortgage world, Celink sees a bright future for the subservicing of reverse mortgage loans.

“Reverse mortgages are a feel-good product,” said RyanLa Rose, Celink COO. “They help people age in their homes, maintain their independence and self-determination, and provide viable and sound financial solutions for so many. We all need joy in our work, and our employees feel joy every single da yas they help seniors retain their dignity and freedom.”

Written by Elizabeth Ecker

Spring, Texas-based RMS launched its correspondent business arm in March, 2011, and has seen production grow ever since. Between its correspondent and wholesale channels, the company is pursuing even more growth in the coming year, the article reports.

“Our aggregation business has pretty much exploded,” Mike Kent, RMS senior vice president, told Origination News. “In October we did $150 million, (November) we did $175 million. We’ll do $140 million (for December) and we’ve already got on the books about $160 million for January.”

Kent said the recent decision by MetLife to discontinue the purchase of broker-sourced correspondent loans has led to growth in the company’s own correspondent channel as well.

Ultimately, however, RMS says all origination efforts lead to the same end goal: Ginnie Mae issuance.

“Our forte is our HMBS issuance process,” Kent said. “We’re highly efficient and how ever we can flow business into that, whether it be through our aggregation, correspondent flow or wholesale channels, that is where we are really looking to grow our business.”

Read the Origination News article.

Written by Elizabeth Ecker

The deal which is subject to purchase price adjustments and is expected to close on December 22, 2011, according to a Securities Exchange Commission filing. The transfer of the loans is expected to occur in stages beginning in the second quarter of 2012 and continue through the rest of the year.

The decision to sell the servicing rights comes after Bank of America announced it was exiting the business in February, it was the second largest reverse mortgage lender in the country.

Sources close to the transaction tell RMD that Celink, a subservicer based in Lansing, Mich., will handle the servicing for Nationstar. When RMD asked Celink to confirm, the company declined to comment.

Nationstar is a one of the nation’s largest mortgage servicers and is backed by Fortress Investment Group (NYSE:FIG).

Both Helm and Yeary were founders of the reverse mortgage company in April 2007, which has evolved from its origins as a provider of loan servicing and sub-servicing technology into an originator, servicer, and provider of technology, REO asset management and Ginnie Mae securitization. Earlier this year, RMS launched a reverse mortgage call center at its Spring, Texas headquarters. Yeary has served as RMS CEO through the transition and launch of the new business channels, rounding out more than four decades in the mortgage business.

“Marc and I have had one of the truly great partnerships in this business over the last four years and one that beautifully caps the 44 years I have enjoyed in the mortgage finance sector,” Yeary said. “I will continue to be available to assist my business partners Marc Helm and Kevin Gherardi, as needed, and I will continue to represent RMS on the boards of both NRMLA and CIS. I will now also have some time to work on The Nancy Yeary Ovarian Cancer Foundation.”

Yeary served as president and CEO of Unifirst Financial Corp. prior to founding RMS and has also held positions with Orion National Equity, Bomac Capital and as a partner at Mason-McDuffie Co.

Written by Elizabeth Ecker

While a positive outcome for the homeowner, some in the servicing industry were left scratching their heads about how HUD can make tax payments for a borrower who is in default—especially in light of a strong industry effort toward loss mitigation and resolving tax and insurance default—when servicers and lenders cannot.

RMD today learned the details of the situation from HUD.

The loan, made to Texana Hollis of Detroit, was assigned to HUD in 2006, Brian Sullivan, a HUD spokesman told RMD. The borrower was current on her tax and insurance payments, for which her son, under a Power of Attorney, took responsibility.

The loan later went into default, and the borrower’s family members ignored all loss mitigation efforts prompted by HUD. The property went into foreclosure and fell under HUD ownership. In order to maintain ownership, HUD continued to keep up with the taxes and insurance on the property.

“We were absolutely thunderstruck when we understood that a 101-year-old woman was put out of her home,” Sullivan told the press earlier this week. ”We just want to make sure that Mrs. Hollis knows that her home of many years is hers to live in for as long as she wants,” he said.

The initial headlines read “One dollar house gets foreclosed; 101-year-old granny gets evicted.” But the negative press aside, the new headlines including “HUD: 101-year-old can go home,” and “Feds pay taxes, let evicted 101-year-old keep home,” have left some within the industry with questions. Will this be the case for all HUD-owned reverse mortgage properties in default?

“It’s too early too tell what the long-term impact may be as a result of this action in Detroit,” one servicing manager told RMD. “However, I believe that by taking this action, HUD has backed themselves into a corner. How could they justify helping this borrower (who happens to be in their assigned portfolio) while not doing the same for a similar borrower, who has a same type of loan, who happens to be serviced by a lender?”

The actions appear to be in conflict with HUD’s guidance for HECM servicers, the servicing source said, which could cause problems when borrowers ask why a borrower in default in a HUD-owned property can remain in the home, but otherwise, cannot.

“HUD does not allow servicers or lenders to pay for the borrower’s defaulted taxes or insurance in order to cure the default,” the servicing manager explained. “As you can imagine, this could make it very difficult for servicers and lenders to work with borrowers in tax and insurance default when HUD is instructing servicers to do one thing—and is doing something completely different on their assigned loans.”

HUD responded, stating that the circumstances warranted an exceptional response.

“No one should consider this exception to be the rule,” Sullivan said. “This was an highly extraordinary situation given Mrs. Hollis’ circumstances.”

Written by Elizabeth Ecker

In the FAQ, HUD clarified the HECM program’s non-recourse policy, namely that reverse mortgage borrowers—and their heirs—will not owe more on the loan than the home is worth upon the death of the borrower. The clarification impacts borrowers, lenders and loan servicers. The FAQ specified that a sale of the mortgaged property is permitted for at least the lesser of the loan balance or 95% of current appraised value if the loan is due and payable.

The clarifications addressed the issues raised in an earlier AARP lawsuit against HUD, which argued for heirs of reverse mortgage borrowers to be entitled to buy the home for the fair market value, rather than the full balance of the loan.

But with regard to notifying borrowers’ heirs that they have the option to do a short sale of the property if they are a family member, it adds time to the process and without much interest from heirs, says Ryan LaRose, chief operating officer of Celink.

In complying with the HUD request to place the loans on hold for 45 days that are in due and payable, foreclosure and pending eviction status as a result of death, Celink sent notifications to borrowers’ heirs telling them of their option to do a short sale.

“At this point, we are in a 45-day ‘holding pattern’ waiting to see what responses we might get from these notices,” LaRose says.

As for the interest from borrowers, it has been less than overwhelming.

“We mailed the notices several weeks ago and it has generated a decent number of incoming calls of heirs with questions about the notice,” he says, “but we have not seen a high number of heirs expressing an interest in pursuing a short sale thus far.”

The AARP class action lawsuit against Wells Fargo and Fannie Mae alleges that some heirs of HECM borrowers have been foreclosed upon without notification of the option to purchase the home for 95% of the appraised value.

View the FAQ.

Written by Elizabeth Ecker

While HUD said it does not have any new HERMIT materials for distribution, it noted progress points in the development of the technology.

“We are assessing results from our recent User Acceptance Testing (UAT) and identifying required changes,” the email said. “We believe this must occur before we can conduct training and subsequently roll out HERMIT.”

Additionally, HUD noted that it is establishing new baselines for HERMIT’s implementation and is working on a plan to include more servicers in its development discussions and parallel testing. It is also revising the HERMIT training plan and is updating the HERMIT user guide, and expects to have new dates and a training curriculum

The system has experienced numerous delays through its development, most recently having notified the industry in June that it would be postponed again after its initially planned November launch.

HERMIT technology is being developed as a second generation to the outdated Insurance Accounting Collection Systems, which was developed in 1989 and has been used by servicers ever since.

The development of the system falls under a $32 million contract which was awarded by HUD in 2009. The project came under leadership of a new project manager in January, and the date of completion remains unknown.

Written by Elizabeth Ecker

RMS, now in its fifth year of operation, launched a call center in Spring, Texas earlier this year to build on its loan servicing, technology, REO asset management and Ginnie Mae securitization offerings.

“As I like to say, we’ve built the company ‘in reverse,’ from the back-end forward to ensure that when we were ready to originate reverse mortgages there would be a strong, reliable framework to ensure their success for RMS and our producer partners,” said Bob Yeary, chairman and CEO of RMS. “Market events of the last four years have proven that strategy to be best for an enduring presence in the business.”

The company has named two regional directors to lead the development of its lending partners. Ralph Rosynek, RMS vice president, will head up the new third-party origination flow. Garrett Kolb, formerly president, Collateral Force Corporation Financial Services Management and Jamie Longe, formerly national wholesale director for Graystone Mortgage, will oversee the Western and Midwestern markets, respectively.

“This new channel will address the needs of third-party-originators who are already active in the reverse space and those looking for an entry point,” Rosynek said, referring to the approach as an “open access environment.” With market players changing, he added, “the timing is right for of this initiative.”

The lending platform will work for originators of all sizes, Rosynek says, and RMS partners will have access to its Web-based origination system, RM Compass.

Written by Elizabeth Ecker