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SAN FRANCISCO, CA - Sept. 14, 2005 – LoanPerformance, a subsidiary of First American Real Estate Solutions (RES®) and a leader in residential mortgage data and analytics, today announced the introduction of TrueSeconds, a new service that, for the first time, uncovers the existence of second mortgages added after origination.
Identifying second-mortgage liens has been a challenge for mortgage industry stakeholders, especially issuers and investors of mortgage securities. TrueSeconds enables originators, investors and issuers to identify, evaluate and monitor home equity lines of credit (HELOC) and second-mortgage loans on active first mortgage pools and portfolios. TrueSeconds offers one-time, monthly or quarterly monitoring of additional liens. In addition, a daily update of new liens with alerts to servicing and portfolio managers is available with the monthly or quarterly monitoring service.
TrueSeconds combines the resources of LoanPerformance’s industry-leading HELOC and second lien loan database with First American RES’ property data, which covers 97 percent of all real estate transactions in the United States. Earlier this year, First American launched a companion product, LienWatch™, which provides holders of junior liens with an automated method for monitoring a first lien’s delinquency status.
“The growing popularity of second liens, and the inability, until now, to identify their presence, has added a significant element of risk for mortgage lenders and investors,” said Dan Feshbach, chief executive officer of LoanPerformance. “Our analysis of outstanding mortgage pools shows that between 23 and 53 percent of first mortgage borrowers add a second mortgage within three years of origination, masking the true risk of the assets being held or under consideration for investment.”
Feshbach added that these encumbrances place Wall Street traders bidding on pools of loans at a disadvantage since the true combined loan-to-value (CLTV) ratio may be significantly higher than what is disclosed, due to the addition of hidden mortgages concurrent or subsequent to the first lien’s recordation.
TrueSeconds can identify a wide range of second liens, such as “silent” seconds, where the seller finances the second; “piggyback” seconds, in which the originator provides a second simultaneous to closing; “up-sell or cross-sell” seconds, where the originator markets a second after closing; or ”borrower-initiated” seconds, where the borrower acquires a second after closing through another lender.
When clients provide first mortgage loan information, including borrower and co-borrower name and address, TrueSeconds automatically returns appended files that describe all additional liens recorded on the properties, including new lien dates and amounts, and an updated loan-to-value (LTV) ratio based on automated valuations or repeat sales indices with summary reports detailing changing risk profiles of mortgage securities pools.
For more information about TrueSeconds, please call LoanPerformance at (415) 536-3526.
LoanPerformance is a subsidiary of First American Real Estate Solutions and a member of The First American Corporation (NYSE: FAF) family of companies. LoanPerformance’s databases track the delinquency and prepayment performance of 46 million active individual mortgage payments per month and provide loan-level information on more than $1 trillion in non-agency mortgage and asset-backed securities. The company’s data and suite of predictive prepayment and risk modeling solutions enable mortgage originators, servicers, securities issuers and investors to make informed business decisions about credit risk, loss mitigation, customer retention, securitization and investment. For additional information, visit www.loanperformance.com and www.firstamres.com.
The First American Corporation (NYSE: FAF), a Fortune 500 company that traces its history to 1889, is the nation’s largest data provider. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within six primary business segments, including: Title Insurance and Services, Specialty Insurance, Mortgage Information, Property Information, Credit Information and Screening Information. With revenues of $6.72 billion in 2004, First American has approximately 2,000 offices throughout the United States and abroad. More information about the company and an archive of its press releases can be found at www.firstam.com.
*Originally introduced as SecondLook.
Media contacts:
John Lewis
202-261-6548
john@campbelllewis.com
Carrie Gaska
714-701-3265
cgaska@firstam.com
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