Today's News

• American Home Plans Loan Sale as Home Prices Fall
  Bad news hammered the mortgage industry this week, though one bankrupt lender hopes to put some of its mortgages up for sale in February, creating opportunity for debt buyers and collectors. American Home Mortgage Investment Corp. asked a bankruptcy court for permission to sell pools of mortgages where delinquent borrowers owe $164 million in principal on the loans, according to a story yesterday by the Associated Press. American Home in August declared bankruptcy after firing about 90 percent of its staff. American Home filed a request with the U.S. Bankruptcy Court in Wilmington, Del., to sell three pools of 618 non-performing loans where borrowers are more than 60 days past due, the AP reported. JPMorgan Chase has an interest in 327 loans; Bank of America in 208 loans; and a pool of 83 loans are subject to liens by American Homes’ bankruptcy lenders. American Homes asked for a Jan. 25 deadline for indicative bids, and a Feb. 11 deadline for formal, binding bids. The court is scheduled to rule on the request on Jan. 14, the AP reports. News for home owners continued to be lousy. The price of existing single-family homes tumbled 6.7 percent to a record low in October, according to the Standard & Poor’s/Case-Shiller Home Price Indices released yesterday. The index represents a composite price for 10 major metro areas. A similar index for 20 metro areas fell 6.1 percent in October with 11 of the areas reporting record declines for a single month. The market for home loans dried up earlier this month with mortgage application volume dropping 7.6 percent for the week ending Dec. 21, according to the Mortgage Bankers Association weekly application survey. Refinance volume fell 8.5 percent and purchase volume declined 6.6 percent, the association found. The association’s index is now at 603.8, down more than 67 percent from its peak of 1,856.7 during the week of May 30, 2003.
• American Home Plans Loan Sale as Home Prices Fall
  Bad news hammered the mortgage industry this week, though one bankrupt lender hopes to put some of its mortgages up for sale in February, creating opportunity for debt buyers and collectors. American Home Mortgage Investment Corp. asked a bankruptcy court for permission to sell pools of mortgages where delinquent borrowers owe $164 million in principal on the loans, according to a story yesterday by the Associated Press. American Home in August declared bankruptcy after firing about 90 percent of its staff. American Home filed a request with the U.S. Bankruptcy Court in Wilmington, Del., to sell three pools of 618 non-performing loans where borrowers are more than 60 days past due, the AP reported. JPMorgan Chase has an interest in 327 loans; Bank of America in 208 loans; and a pool of 83 loans are subject to liens by American Homes’ bankruptcy lenders. American Homes asked for a Jan. 25 deadline for indicative bids, and a Feb. 11 deadline for formal, binding bids. The court is scheduled to rule on the request on Jan. 14, the AP reports. News for home owners continued to be lousy. The price of existing single-family homes tumbled 6.7 percent to a record low in October, according to the Standard & Poor’s/Case-Shiller Home Price Indices released yesterday. The index represents a composite price for 10 major metro areas. A similar index for 20 metro areas fell 6.1 percent in October with 11 of the areas reporting record declines for a single month. The market for home loans dried up earlier this month with mortgage application volume dropping 7.6 percent for the week ending Dec. 21, according to the Mortgage Bankers Association weekly application survey. Refinance volume fell 8.5 percent and purchase volume declined 6.6 percent, the association found. The association’s index is now at 603.8, down more than 67 percent from its peak of 1,856.7 during the week of May 30, 2003.
• PR - "Delinquency Budget" to Rise, So Banks Plan to Spend More on Collections: Survey
  Online Resources Corporation (Nasdaq:ORCC), a leading provider of web-based financial services, released recently the results of a survey of U.S. households and billers regarding the effect of the current mortgage crisis on bill payment and collection patterns. The survey shows that fallout from the mortgage sector is spilling over into the broader economy, impacting companies across industries and their ability to collect payments.The survey of more than 1,000 nationally representative U.S. households finds that Americans are increasingly being forced to prioritize among their bills by creating a “delinquency budget” to determine which bills get paid. While the mortgage bill tends to be the one that households are most likely to pay, businesses across other industries are facing a decreasing share of that delinquency budget. Specific findings include: One out of four households report being delinquent on at least one bill, by 30 days or more; If forced to chose between which bills to pay, 98 percent of households would likely pay their mortgage first; while Credit card, phone, healthcare, utility and loan payments are among the groups of bills that are least likely to be paid. Online Resources also surveyed a cross-section of clients from its 2000+ strong biller end-point network of banks, credit unions, utilities, healthcare companies, card issuers, receivables management and mortgage companies. A majority of the respondents (across all industries with annual revenues ranging from less than $1 million to more than $20 billion), reported feeling a negative impact from the consumer credit crunch already. Only two percent expect it to be easier to collect payments in 2008, and 84 percent expect to spend more on collections in 2008.A key finding of both surveys is that billers are out of sync with how consumers would prefer to resolve their delinquencies. The majority of consumers prefer the web channel for making delinquent payments, due to its convenient and non-confrontational nature. However, only eight percent of billers offer online collections services that go beyond accepting payments that would allow consumers to resolve their delinquency.Prior Online Resources studies show that the web channel is highly effective in increasing collections and in engaging otherwise unreachable delinquent account holders. Production results from a top three U.S. card issuer’s use of the web channel delivered annual savings of over $3 million for each $50 million of delinquent debt. In addition, a significant number of late stage delinquent account holders that were previously unreachable by phone accessed the collections website and made payments on their accounts.“The web channel is playing an increasingly important role in consumers’ financial lives, and it is natural that they would gravitate to the web when they are late on their bill payments, to conveniently and privately resolve what might be an otherwise embarrassing situation,” said Edward Woods, Sr. Analyst for Celent Group, LLC. “As consumers’ payment woes spread further outside the subprime sector, it will be increasingly important for billers to look at consumers’ proven behavior patterns around use of the Internet for bill payments and delinquency resolution.”
• PR - "Delinquency Budget" to Rise, So Banks Plan to Spend More on Collections: Survey
  Online Resources Corporation (Nasdaq:ORCC), a leading provider of web-based financial services, released recently the results of a survey of U.S. households and billers regarding the effect of the current mortgage crisis on bill payment and collection patterns. The survey shows that fallout from the mortgage sector is spilling over into the broader economy, impacting companies across industries and their ability to collect payments.The survey of more than 1,000 nationally representative U.S. households finds that Americans are increasingly being forced to prioritize among their bills by creating a “delinquency budget” to determine which bills get paid. While the mortgage bill tends to be the one that households are most likely to pay, businesses across other industries are facing a decreasing share of that delinquency budget. Specific findings include: One out of fo