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local edition SERVICING According to a recent survey from Fannie and Freddie, a growing number of homeowners are tapping into help from HARP. California // Mortgage fraud cases declined by 15 percent over the third quarter of 2012, while the dollar amount involved in mortgage fraud cases declined by just 6 percent, according to the Third Quarter 2012 Mortgage Fraud Index, released This is down from $1.8 billion in the previous quarter but up from $1.3 billion tracked in the third quarter of 2011. "Industry feedback indicates mortgage fraud prevention products are uncovering new fraud attempts, but this report and others show the lingering impact of fraud not detected three to five years ago," said Stephen Schrump, president of index sponsor PitchPoint Solutions, Inc. California ranked No. 1 for mortgage fraud during the third quarter with an index value of 193 and dollar amounts totaling about $318 million. New York, having claimed the No. 1 spot last quarter, dropped to the No. 2 spot with an index of 67 and dollar amounts totaling $250 million for the quarter. California has been ranked in the top five states in the index since the second quarter of 2009, and New York has placed in the top five since the second quarter of 2011. se c on da r y m a r k e t Vericrest Buying Nearly $3B in MSRs The financial services company concluded 2012 with a significant acquisition, purchasing billions in servicing rights from undisclosed participants. Oklahoma // Vericrest and 20-year loans as opposed to 30-year loans is also on the rise. In 2011, 15- and 20-year loans accounted for just 10 percent of HARP refinances. Year-to-date, about 18 percent have placed homeowners in these shorterterm loans. California Leading the Country in Mortgage Fraud The most recent Mortgage Fraud Index revealed the Golden State ranks first by MortgageDaily.com. This disparity in declines points to an increase in the amount of money involved in each mortgage fraud case during the quarter, according to Mortgage Daily. The index tracked 141 mortgage fraud cases during the third quarter of 2012, down from 165 fraud cases tracked in the second quarter. The year-over-year decline was even greater, having dropped from 175 cases reported in the third quarter of last year. The total dollar amount of loans involved in mortgage fraud cases tracked during the third quarter of 2012 was $1.7 billion. Financial, Inc., announced it will acquire about $2.7 billion in mortgage servicing rights (MSRs). The company stated it signed two definitive agreements for the MSRs without revealing the name of the companies involved. One transaction closed November 16, followed by the second on December 1. "The acquisition of these MSRs will help to enhance Vericrest's position as a premier mortgage servicer with extensive national reach," said Vericrest CEO David Schneider in a statement. "Combined with our innovative service offerings and state-of-theart platforms, the increased scale Continued on Page 56 The M Report a na ly t ic s Fannie Mae and Freddie Mac refinanced more than 90,000 mortgages through the Home Affordable Refinance Program (HARP) in September, bringing the program's total reach to 1.7 million since its inception in 2009, according to the latest refinance report from the Federal Housing Finance Agency. In total, about 431,000 Fannie and Freddie loans were refinanced in September, 90,000 of them through the federal program. The rate of HARP refinances has increased since the program was revised in the fall of 2011 to expand its reach. Year-to-date, 709,000 loans have been refinanced through HARP, already far exceeding 2011's total of about 400,000. In the third quarter of 2012, 24 percent of all loans refinanced were completed through HARP. The HARP revisions have helped extend the program to homeowners with high loan-tovalue (LTV) ratios. Half the loans refinanced through HARP in September had LTVs of more than 105 percent. This is in keeping with the previous month's 51 percent and slightly higher than the year-to-date share of 43 percent. About one-quarter of the loans refinanced through HARP in September had LTVs exceeding 125 percent. Additionally, HARP refinances comprised a significant portion of refinances in the states hardest hit by the housing crisis. In Nevada, Arizona, Florida, and Georgia, HARP refinances made up 45 percent of all refinances completed in September. This compares with HARP's 21 in fraudulent activity, driving New York out of the top spot. s e r v ic i ng District of Columbia // percent nationwide share for the month. FHFA also points out more than 70 percent of HARP refinances that took place in Nevada, Arizona, and Florida in September had LTVs of greater than 105 percent. In California, the rate was 60 percent. The share of HARP refinances that place homeowners in 15- Or ig i nat ion Revisions to HARP Driving Refi Rise | 55