Lend America, a direct-to-consumer Federal Housing Administration lender, says its servicing assets surpassed the $500 million milestone at the end of the first quarter of this year.
The company, which launched its servicing initiative after receiving approval to issue Ginnie Mae mortgage-backed securities in the second quarter of 2008, has already more than doubled its servicing portfolio in the first quarter 2009 to over $500 million compared to $223 million as of Dec. 31, 2008.
Lend America is now projecting its servicing assets will surpass $1 billion by the end of the second quarter of this year and grow to over $2 billion by year-end. The company says its FHA retail originations, which topped $450 million in the first quarter, are the reason for the increase in servicing assets.
"The surge in borrowers looking to refinance to take advantage of lower rates, as well as the increase in activity related to our structured refinance model – a B2B relationship model with Wall Street investors and banks to refinance their loan portfolios – has allowed Lend America to significantly increase its servicing assets," says the company's chief business strategist, Michael Ashley.
The servicing portfolio is composed entirely of fixed-rate government-insured mortgages and does not have legacy issues relating to adjustable-rate or subprime mortgages. "We believe this structure enhances the quality of our portfolio and reduces both prepayment and default risks," Ashley adds.
Lend America has also expanded its servicing capability by launching a Fannie Mae servicing initiative. In order to qualify, Lend America had to undergo a screening process to establish and clarify it could meet the updated standards of Fannie Mae.
SOURCE: Lend America