Select the preferred region/country and language from the list below:

Check this box to go to your preferred country/region and language homepage every time you visit www.standardandpoors.com.

S&P |

Servicer Evaluation: EverHome Mortgage Co.

Publication date: 19-Oct-2009 14:40:22 EST

Opinion

The ranking of STRONG is affirmed for EverHome Mortgage Co. (EverHome) as a residential mortgage loan servicer. The outlook is stable.

The ranking reflects EverHome's continued solid infrastructure, experienced management team, and comprehensive employee training and development programs, along with the company's efficient and effective use of technology in its well-automated mortgage loan servicing environment.

EverHome's management remains focused on maintaining sufficient staff to support its servicing operation, as well as employee education and development, internal auditing, and quality control programs. The company's well-documented policies and procedures form a sound foundation for future portfolio growth, and its prudent risk management methodologies provide further support. In addition, the company's servicing operation continues to maintain effective oversight and managerial control over its third-party vendors. Over the past 18 months, EverHome's servicing portfolio has increased modestly in terms of the number of loans and the unpaid principal balance. However, HUD and VA mortgage volumes have increased substantially, by 100% and 267%, respectively. In addition, to support various homeownership campaigns, EverHome increased staffing in its default management areas, especially loss mitigation, which enables the company to conduct, provide, and administer loan workout arrangements with borrowers.

EverHome's key servicing data compares favorably with data for other similarly ranked mortgage servicers, according to metrics the company provided through Standard & Poor's Ratings Services' Servicer Evaluation Analytical Methodology (SEAM) questionnaire. EverHome's loss mitigation techniques are proficient, and the company administers appropriately assertive collection strategies that are supported by additional controls and monitoring applications and its experienced default managers.

EverHome is extremely active in the U.S. Treasury's Home Affordable Modification Program (HAMP). As of June 2009, EverHome had reached out to more than 17,000 mortgagors that have been pre-approved for loan modification under HAMP.

Outlook

The outlook is stable. EverHome's loan portfolio has increased slightly since our last review. The company's strategy is to purchase or sell mortgage servicing rights as market conditions dictate, rehabilitate nonperforming loans, and subservice performing and nonperforming loans. The company continues to challenge itself to strengthen its infrastructure through reengineering workflows and enhancing internal controls. Based on the company's seasoned management team, continued focus on technology to gain increased efficiencies, solid risk management controls, and sound default management controls, we believe EverHome should continue to serve as a highly competent servicer of residential mortgage assets for a wide variety of investors.

Chart 1

Table 1

Delinquency Statistics 1H09
Prime
Jun-09
30 days (%) 4.62
60 days (%) 1.81
90+ days (%) 3.84
Total (% units) 10.27
Foreclosure (%) 2.29
Bankruptcy (%) 1.50
REO (No.) 617

Chart 2

Profile

Founded in 1962 as Charter Mortgage Co. and subsequently renamed, EverHome is a privately held mortgage-banking company headquartered in Jacksonville, Fla. The company is a full-service mortgage company engaged in originating and servicing first-lien mortgages. It currently services and subservices more than 307,000 loans with an unpaid principal balance (UPB) approaching $36 billion; nearly 284,000 loans (over $32 billion) of these loans are serviced for government-sponsored enterprises (GSEs) and private investors.

EverHome is a wholly owned operating company of EverBank FSB. EverBank Financial Corp., the holding company of EverBank FSB, is a $7.5 billion unitary thrift holding company headquartered in Jacksonville, Fla., that employs over 1,500 employees nationwide. EverBank provides banking, mortgage, and other lending products to consumers nationwide through various business partners. EverBank has received awards in the last few years that include Forbes and Online Banking Report's "Best of the Web" and Kiplinger's Personal Finance Magazine's "Best Checking Account."

Management And Organization

The ranking of STRONG is affirmed for management and organization.

Management and staff recruitment, development, and education

EverHome has a well-seasoned management team, and many of its senior and middle management employees have extensive mortgage experience.

  • Average senior managers industry experience is approaching 25 years, including 14 years tenure with EverHome;
  • Middle managers average over 19 years of industry experience, including 10 years tenure with EverHome; and
  • Management and loan servicing clerical staff turnover rates are acceptable at less than 3% and 25%, respectively.

EverHome's education environment is well-structured and effective. Two dedicated instructors administer the programs in isolated and committed training facilities. The education programs are comprehensive: curricula are designed for new hires and existing staff and course offerings are available on the company's intranet site. A central database tracks course participation. A combination of structured classroom instruction, on-the-job training and mentoring, and external seminars provide an excellent and varied methodology for ensuring that all new and current EverHome staff are well versed in company policies and procedures. EverBank Leadership University provides various managerial-related courses to expand and enhance supervisors' and managers' disciplines. Characteristics of the program include:

  • An employee orientation program that offers a corporate overview, basic technical training, and a mortgage banking overview;
  • Technical education for LPS (Lender Processing Services, formerly Fidelity Information Services), as well as for other ancillary software programs, is based on job-specific requirements;
  • Agency certifications applicable to investor reporting, loss mitigation, and default management from Freddie Mac and Fannie Mae;
  • Mortgage Banker Association classes and certification opportunities;
  • Management courses for development of leadership skills, including coaching and counseling employees, defining goals, and refining interviewing skills;
  • A four-week course for new customer service representatives provides a wealth of knowledge to help employees navigate the servicing system, along with instruction on telephone etiquette and other customer service areas;
  • A three-week course for new loan counselors that has an extensive focus on the Fair Debt Collection Practices Act (FDCPA);
  • Online compliance education and testing that includes: Bank Secrecy Act, Flood Insurance, Gramm-Leach-Bililey Act, and Service Member Civil Relief Act;
  • Subject matter experts (SME) work in concert with the instructors to provide additional assistance; and
  • Access to external vendors and industry organizations for additional education.
Internal controls

EverHome maintains an online library of policies and procedures (P&Ps). The company communicates time-sensitive information electronically as well as through staff meetings. Electronic access to these materials is an excellent way to give employees instant access to current policy information, thereby ensuring that P&P updates are communicated in a consistent manner to all staff. Development, drafting, and dissemination of the policies evidence sound controls. Highlights include:

  • The P&Ps are well-annotated. They include detailed information on the FDCPA, and in certain instances, state-specific servicing statutes, as well as screen prints to assist in processing;
  • Senior management signoff is required before Web input; and
  • All changes are emailed to employees.

EverHome mortgage servicing audits are designed to mitigate risk of loss to investors. The multiple levels of internal audit, quality control with monthly and quarterly evaluations, and risk management reviews are designed to minimize risk of loss to investors and promote prudent loan-servicing practices across its servicing platform. The corporation maintains a regulatory compliance committee and several working subcommittees that work in concert with all areas to provide oversight and guidance to ensure compliance with applicable legislation.

The corporate audit department reviews and monitors EverHome's servicing operations and complements EverHome's existing quality control and risk management programs. The audits are designed to address and satisfy traditional risk assessments and performance methodologies. In addition to internal audits, the company conducts periodic GSE and investor audits. A review of the audits revealed no material findings, and the findings that were noted were immediately addressed. The company's audit program includes:

  • An annual risk assessment identifies risk exposure and develops an audit plan to address this risk, review of the workflows for controls already in place, and assessment of technology efficiency and effectiveness;
  • The audit scope identifies key areas of risk, including default management, cash management, and investor accounting;
  • Audit frequency is determined according to functional risk assessments of high (12 to 18 months), medium (18 to 24 months), and low (24 to 36 months);
  • The audit department tests against reviews of quarterly risk management and reports results to the executive risk council;
  • No exceptions were cited in the 2008 Uniform Single Attestation Program (USAP) statement;
  • Periodic client reviews monitor servicing adherence to respective servicing guidelines;
  • The audit methodology provides for written feedback to servicing management with a response timeline; and
  • All issues are tracked in a database, and monthly status updates for appropriate management are required, as are quarterly reports to the audit committee.

Management has represented that there are legal actions pending that arose from the company's mortgage servicing activities, but believes these actions will have no material adverse effect on the company.

Technology

EverHome operates in a highly automation environment, and has a host of solid systems and support. Systems architecture and business recovery features include:

  • LPS is the primary system of record;
  • Automation work flow software is applied in many servicing areas, which is an integrated rules-based workflow product that enhances productivity and efficiency;
  • ELI (electronic loan interface) is the loan boarding application that provides boarding integration swiftness to the application system and leverages built-in and customized edit routines to assist in identifying boarding exceptions;
  • Fundtech PAYplus Web-based application;
  • Customized "smart buttons" and process activity scripts expedite internal workflow notifications;
  • A scorecard is used for vendor management and feedback;
  • Various information and reporting application interfaces that include: ALLREGS, Rightfax, a GSE interface application, MERS (mortgage electronic registration system), and E-Oscar (a Web-based automated system that communicates with credit bureaus to create and respond to borrower credit disputes);
  • Risk-based scoring models and risk indicators assist collectors in targeting accounts that pose a higher probability of default;
  • Imaging technology allows staff to view documents at their desktops, thus facilitating resolution of customer inquiries;
  • Electronic communication with legal counsel assists in timeline management;
  • Many GUI control and operational reports, including key performance indicators (KPIs), allow EverHome to effectively manage its servicing operation and vendors;
  • A voice response unit (VRU) provides automated customer information retrieval;
  • The company uses an autodialer to build, load, and track calling campaigns on delinquent loans;
  • A collection/workout software package allows for earlier identification of loss mitigation candidates; and
  • Nightly backup tapes are encrypted and stored off site, and a daily mirror backup of production is recorded at an off-site location.

The disaster recovery and business resumption plans are comprehensive and tested at least annually. The plans acknowledge that critical functions must be operational within 48 hours. EverHome's data center building is designed to withstand a category 5 hurricane. The building features nearly 10-inch concrete walls, storm shutters for doors and windows, and appropriate generators to support critical servicing activities. The company's disaster recovery methodology and design identifies and supports each operating unit's disaster recovery and business continuity (DR/BC) plan. The company also maintains a contract with an outside vendor to provide mobile recovery services and host site availability if needed. Also, the company tests connectivity between LPS and vendor sites at least annually.

Loan Administration

The ranking for loan administration is affirmed at STRONG.

Overview

Michael Koster, president and chief operations officer, is responsible for EverHome's mortgage servicing operations. Mr. Koster has more than 25 years of mortgage industry experience. As of June 30, 2009, the company serviced a portfolio of more than 307,000 loans with a total UPB approaching $36 billion.

Chart 3

Standard & Poor's reviewed all aspects of loan servicing, including loan boarding, payment processing, investor reporting, customer service, escrow administration, collections, foreclosure, and asset recovery functions.

New loan boarding and rate administration

EverHome uses LPS' "Passport" and "ELI" applications to enhance and expedite its loan-boarding processes and reduce errors associated with manual input. The company performs a series of edit and logic checks on the portfolio before boarding loans. A 100% document-to-system validation is executed on manually boarded loans and sampling validation on electronically boarded loans. Any exceptions to the boarding process are recorded and aggressively pursued, which helps mitigate customer issues and related expenses. Other features of EverHome's loan boarding and acquisition management include:

  • A separate and distinct department, portfolio development, effectively manages conversions to ensure accurate, responsive, and timely (ART) loan transfer/boarding coordination;
  • A proprietary "acquisition management system" maintains managerial control over key accounting and economic data, document tracking, and task milestone tracking;
  • Automated balancing of financial fields;
  • At a minimum, weekly acquisition/servicing meetings are conducted to discuss current activities, project plans, and when applicable, post-mortem reviews of recently transferred portfolios;
  • Monthly master field edits, consisting of 227 data rules; and
  • Welcome letters are sent to new borrowers that include alternative payment options.

As previously mentioned, EverHome's portfolio business model is to purchase or sell mortgage servicing rights predicated on market conditions and/or subservice mortgage loans. As such, converting and de-converting loans with minimum disruption and issues is necessary. EverHome adheres to an established detailed project plan that includes many managers and supervisors from the servicing areas for all conversions. EverHome conducts a post-mortem review after each conversion. Maintaining an adjustable working plan that includes a post-conversion summarization is an excellent methodology for enhancing and strengthening conversions. In June 2008, the company enhanced its automated loan setup process by installing ELI, which not only expedited the boarding process but also contributed to a further reduction in setup error identification.

Special loans, including adjustable-rate mortgages (ARMs), are managed through the LPS ARM workstation. Solid controls surrounding rate changes--including separate indices input, projected changes, verification, and managerial review and signoff--are effectively administered.

Cash management and investor accounting

EverHome has an effective and efficient cash management operation that incorporates good internal controls to minimize risk of loss from human error or fraud, and is complemented by its experienced and tenured management. The company uses an external lockbox vendor, electronic media, and in-house systems to process monthly mortgage payments. Ninety-two percent of the monthly payments are received electronically. The company provides flexible payment alternatives to borrowers that also benefit EverHome as a way to manage its collection activity. Prepayment penalty calculations are fully automated through the servicing system, thereby expediting payoff request submissions. EverHome employs solid payment-processing controls, including the following:

  • There are three lockbox sites across the U.S., and each uses image capturing to accelerate payment receipts and postings;
  • The company has a physical secured cash processing area;
  • EverHome uses payment imaging to manage and facilitate any exception or rejection resolution within 24 hours;
  • If a payment check is held overnight, it is secured in a fireproof cabinet;
  • Payment stops are updated daily to mitigate additional delays and expenses associated with accounts in the process of foreclosure;
  • Borrowers have the option to electronically draft their payments on a selected date within investor guidelines;
  • A variety of payment alternatives are offered, including payment through the VRU, PayMap "Just In Time," and Western Union SpeedPay;
  • Manual payment processing is scripted to ensure proper posting hierarchy;
  • The company uses U.S. postal tracking, "Planet Code," for all accounts receiving statements, allowing it to track payments;
  • Over 1,200 custodial, escrow disbursement, remittance clearing, and other operational accounts are reconciled monthly by dedicated staff members who are not associated with reporting and remitting functions;
  • Outstanding items are identified within 30 days and company policy states that open items need to be cleared within 60 days;
  • Online access to bank account statements is available to facilitate the daily and monthly reconciliation process; and
  • Management reviews all bank account reconciliations.

Chart 4

The investor accounting department is responsible for investor remitting, reporting, and account reconciliation processes. The department is organized in three groups by investor/product: GSE investors, private/specialty investors, and specialty products. The department's manager has over 20 years of industry experience. There are solid controls in place to protect investors from risk of loss resulting from fraud or human error. Since our last review, EverHome implemented the "PAYplus USA" Web browser to effectively manage its repetitive payment wire transfers. The following risk management methodologies are in place:

  • Segregation of duties between staff handling remitting and reporting functions;
  • Investor reporting and remitting is 90% electronic and in accordance with investor guidelines;
  • Data-gathering is 100% automated to maximize integrity of investor data;
  • Management reviews investor reports to ensure accuracy;
  • Over 20 MIS (management information systems) quality indicators measure key activities that include: Investor timeline adherence; reconcile and clear items for GSE and private collateralization within 60 days of cutoff; FNMA laser reconciliations per guidelines; FHLMC loan-level edits and cash analysis within guidelines; and Reg Z adherence to ARM adjustments and notifications;
  • The company continues to maintain a Tier 1 Platinum Servicer rating from Freddie Mac for investor reporting and remitting;
  • No exceptions were reported in the company's 2008 USAP; and
  • Management has represented there were no penalties assessed for late reporting or remittance during the six month period ending June 2009.

Chart 5

Customer relations

Over the past year, EverHome has continued to enhance its customer relations operations. Its 24-hour VRU and Web site, which both have a variety of transactional capabilities, allow borrowers freedom to communicate and manage their accounts at their convenience. Skill-based and priority routing of borrower inquiries along with workforce management software assists in advancing calls to the most appropriate representative and helps to ensure staff complements are schedule at peak times. Also, CTI (computer telephony integration) and screen-pops, which were deployed to borrower contact departments, expedites communication dialog.

The customer relations group is aligned into three distinct departments: customer service, specialized customer service, and private-label servicing. Challenges over the past year in fielding an increase of customer inquires related to various mortgage workout options have affected the company's average speed-to-answer (ASA) and abandonment rates. EverHome is not alone in its endeavor to acceptably manage customer inquires. While technology and staff adjustments have made a positive contribution, the current economic environment has presented an unprecedented number of inquiries.

EverHome gathers a number of call center volume statistics and uses its forecasting model to help manage the call center staffing complement, identify problems, and measure overall efficiency. The effectiveness of these tools and staff adjustments has helped EverHome realign its ASA and abandonment rates. Other characteristics of customer relations include:

  • Borrower Web site registration is approaching 71%, and Web site utilization and VRU capture rates are at 58% and 39%, respectively;
  • Call center hours are satisfactory: hours are 8:30 a.m. to 5:30 p.m., Monday through Friday, with additional 24-hour support from the company's VRU and Web site;
  • Skill-based and priority routing routes callers to the best available agent;
  • Borrowers who are no more than two payments delinquent can self serve through the VRU and Web site. However, if the total delinquency is not met using the VRU, the borrower will be transferred to a collection agent for further review. If the Web is used, borrowers are able to make one payment, but the reason for default must be entered using the menu selection;
  • The customer care Web network and VRU enhancements allow multidelinquent borrowers to pay by Web or VRU. Management has reported that over 30% of multidelinquent payments are made through the Web site;
  • Efficient monitoring of call center staff ensures consistency and helps identify training issues;
  • A complement of bilingual representatives, which has increased since our last review is in place, with access to a language line with over 180 languages;
  • Since our last review, the company has added a Spanish language module to the VRU;
  • Quarterly customer surveys are conducted that provide feedback from borrowers that has generated and continues to generate application upgrades and service enhancements to further elevate positive borrower experiences;
  • Written correspondence is tracked and monitored by dedicated research and correspondence staff to ensure Real Estate Settlement Procedures Act (RESPA) compliance; and
  • Dedicated training employees fulfill training needs.

The specialized customer service group is responsible for actions that are deemed outside of the norm or require special attention. Some of the activities performed by the group include:

  • Administration of interest on loans with escrow accounts;
  • Escrow reimbursement for loans that have been fully paid;
  • End-of-year statement processing;
  • Research and respond to state and regulatory agency requests; and
  • Administrate subpoena requests.

Since our last review, EverHome has moved to Doc-X for its lien-release application, which has improved the company's mortgage reconveyance processes and timelines. Over 98% of loans that pay off monthly are processed within state guidelines. The exceptions are related to documentation or title issues. There was one penalty assessed for failure to timely reconvey for the first half of 2009.

Escrow administration

EverHome maintains a well-managed escrow administration area. The company benefits from effective oversight of its third-party vendor relationships for real estate taxes and hazard insurance. EverHome has changed its tax and flood insurance vendor since our last review. Nearly 85% of serviced loans are escrowed for taxes and for hazard and flood insurance. The percentage of loans serviced requiring lender-placed hazard and flood insurance align well with similar servicing portfolios.

Table 2

Lender Insurance
Placed Cancelled Renewed
Hazard (%) 2.45 5.52 20.00
Flood (%) 1.00 6.50 51.00

To strengthen its escrow administration EverHome hired an experienced tax manager with over 20 of industry experience. In addition, the company installed a Web-based application that automates escrow exception identification that enhances controls and allows for expedited resolution. The "Magnifide MSP Escrow" application is within the LPS suite of products. Other attributes of EverHome's escrow administration include the following:

  • Placement of all serviced loans under contract with a third-party tax service;
  • Frequent communication with vendor, including monthly rotating site visits with appropriate management;
  • Periodic training is provided by the tax service vendor;
  • Monthly state audits of tax database to ensure RESPA due date compliance;
  • Continue to increase the number of companies using electronic data interface (EDI) to pay premiums to insurance companies;
  • Internet interfaces with HUD and PMI companies are in place; and
  • Nonreimbursable tax penalties align with similar mortgage servicer portfolios.
Default management

Since January 2008, EverHome has nearly doubled its default management staff, tripled its loss mitigation area, and expanded its collection area by 50%. This expansion is likely to continue through the remainder of 2009 as borrowers fall into negative payment behaviors. EverHome's default management department follows a bifurcated methodology to administer its default operation processes. The department splits responsibilities between internal employees and nationwide third-party providers that have expertise in foreclosure, claims, and bankruptcy. Contractual arrangements between EverHome and its vendor partners are in place. EverHome uses the LPS default management applications to effectively manage workloads and maintain compatibility between servicing networks. The company has also developed a default platform to provide customizable solutions for unique and/or highly delinquent loan portfolios. Freddie Mac and HUD have assigned Tier 1 rankings to EverHome's default management processes. As a purchaser of mortgage servicing rights for Fannie Mae's Expanded Approval product and Ginnie Mae conforming HUD and VA loans, a purchaser of delinquent and Alt-A products, and a as subservicer, EverHome experiences elevated delinquencies in its servicing portfolio when compared with other prime mortgage loan servicers.

Table 3

Prime Loans Statistics
Jun. 2009 Dec. 2008 Dec. 2007 Dec. 2006 Dec. 2005 Dec. 2004
Units (No.) 307,102 305,805 247,227 287,161 300,506 272,549
Volume (mil. $) 35,773 35,299 27,015 30,919 29,353 32,977
Delinquncies
Total delinquency (% of loans) 10.27 10.59 6.90 6.59 5.39 5.36
30 days (%) 4.62 5.24 4.03 4.26 3.47 3.37
60 days (%) 1.81 1.99 1.07 1.10 0.83 0.77
90+ days (%) 3.84 3.36 1.80 1.23 1.09 1.22
Foreclosure (%) 2.29 1.87 1.54 0.98 0.70 0.92
Bankruptcy (%) 1.50 1.45 1.47 1.30 1.21 0.82
REO inventory (No.) 617 842 401 912 902 627
Note: Years 2006 and prior include subprime subservicing assets.

EverHome maintains a proactive collection department staffed with 124 full-time collection counselors who are well versed in FDCPA guidelines. Collection counselors are configured according to experience level and skill set, and the collection employees are educated to address and remediate delinquent borrowers requiring workout and home retention alternatives. New employees receive 120 hours of education and training, which includes classroom instruction, side-by-side monitoring by instructors, mentoring and monitoring by seasoned loan counselors, and FDCPA education. The company has developed a proactive methodology for mortgage collections that allows for stabilized delinquency rates that are comparable with typical asset industry levels. Since 2008, EverHome has increased its default management team, which includes collection counselors, and the team has industry-experienced managers. The company continues to strengthen its default department. The collection work shift schedule is structured to include three overlapping shifts to navigate across time zones and Saturday hours. Over the past 18 months, the collection department's ASA and abandonment rates have remained consistent. We would, however, like the company bring the ASA toward 20 seconds, and we believe EverHome's determination to continue to improve its servicing operation will be reflected within the next 12 months. The collection methodology includes:

  • Average management industry experience is 14 years and staff is eight years;
  • Appropriately assertive collection timelines based on investor requirements and prudent loan servicing practices;
  • The hours of operation are 8:30 a.m. to 11:00 p.m. Monday through Thursday, 8:30 a.m. to 5:30 p.m. on Friday, and alternating Saturday hours span four hours from 8:30 a.m. to 2:30 p.m. on Saturday (all EST);
  • Delinquent incoming calls (less than 30 days) are managed by customer service, such as promise-to-pay, and the appropriate systems are instantaneously updated (i.e., calling campaigns), thereby avoiding unnecessary borrower contact;
  • Planet Code technology tracks borrower payment envelopes, and it communicates this knowledge to the collection department to modify its calling campaigns;
  • Applicable GSEs and proprietary credit scoring models are used to score, guide and develop effective portfolio calling campaigns based on risk of default;
  • Desk reference manuals are updated frequently to include nuances of guidelines and investor requirements;
  • Collection calls are monitored at a minimum of 10 calls per collector, and feedback is provided by management; and
  • The overall right-party contact rate is highly effective at 23.51%.

Table 4

Right Party Contact Rates
30 days 60 days 90+ days
20.51 7.43 2.41

Chart 6

The company continues to add to its loss mitigation department staff. Since January 2008, the department has increased 319% to 86 employees. Loss mitigation counselors are responsible for identifying and soliciting viable workout and home retention opportunities through Web and telephone communication and letter campaigns. Home retention alternatives are administered through client guideline initiatives in an attempt to provide borrowers with the best solution to remedy the default and remain in their homes. EverHome has redesigned its Web page, which now enables distress borrowers to submit workout packages electronically. Successful loan modifications require an escrow account.

P&Ps for loss mitigation efforts are well documented, and include clearly defined approval levels and step-by-step procedures for pre-qualifying borrowers for workout packages. Loss mitigation will begin at any time during the collection process or if a borrower has communicated that default is imminent. An automated "notice of intent" to foreclose is initiated at the 45th day of delinquency if no contact has been made, but no later than the 65th day, or in accordance with investor guidelines.

Chart 7

Chart 8

Loss mitigation activities continue during the foreclosure process, and allow a dual path that consists of loan workout activities designed to minimize risk of loss, along with adherence to timelines critical to the foreclosure process. A third-party vendor performs much of EverHome's foreclosure and bankruptcy activities. A dedicated team oversees the vendor activities to ensure compliance with contractual obligations. EverHome's foreclosure committee meets weekly to review and approve or disapprove cases recommended for foreclosure. This practice ensures that collection and loss mitigation efforts have been exhausted before the foreclosure begins. The following are some of the controls in place surrounding foreclosure and bankruptcy:

  • Automated file referral through the LPS foreclosure and bankruptcy workstations pursuant to investor and regulatory timelines;
  • Electronic file referral and communication with counsel;
  • The rate of foreclosures completed according to GSE standards is excellent at 94.67%;
  • A solid foreclosure cure rate of 1.75% indicating exceptional borrower outreach;
  • Attorney scorecards are maintained, with immediate follow-up if performance expectations are not met;
  • Electronic interface with property preservation vendor;
  • EverHome performs an escrow analysis during the bankruptcy process to help prevent escrow shortages and potential payment shock post-bankruptcy plan; and
  • EverHome's legal department manages litigation control.

Administration of EverHome's REO process is organized within the asset operations group. The four-person REO unit, along with the asset management and recovery unit and the default accounting unit, manages a myriad of REO-related aspects to ensure the expeditious administration of REO properties. REO administration also includes the management and coordination of a third-party vendor for asset marketing functions. EverHome has a nationwide relationship with the vendor that helps to ensure consistent and sound practices based on EverHome's methodologies. Asset marketing plans are developed and updated to reflect all activity involving the property. Managerial approval is required for plans that pertain to loans with incurred losses. REO inventory and properties are monitored through Fidelity's REO workstation. EverHome continues to maintain sound oversight for maximizing recovery, as evidenced by:

  • Cost benefit analysis is conducted when property repairs are considered;
  • Cash-for-keys is used to avoid protracted eviction proceedings and to expedite REO marketing time. Approximately 38% of foreclosed properties required a cash incentive to vacate;
  • During the first-half of 2009, 13% of the assets required eviction;
  • The average inventory turnaround time is 148 days; and
  • The gross sale-to-market-value ratio and the net sale-to-market-value ratio were reported at 94% and 85%, respectively.

Overall, EverHome continues to strengthen its default-management administration through increased staff complements, education, and technology. The company's solid procedures and strong vendor oversight practices are geared to achieve maximum results for default management, and EverHome is committed to adopt, improve, and maintain "best practices" within its servicing operations.

Financial Position

The financial position for EverHome is deemed to be Sufficient.

Based on the financial strength of EverBank Financial Corp., the ultimate parent of EverHome, Standard & Poor's is of the opinion that there is sufficient financial strength to sustain EverHome's mortgage servicing operations for the next 12 to 18 months.

Contact Information

EverHome's loan administration operation is located in Jacksonville, Fla.

Drew G. Walthall

Vice President

EverHome Mortgage Co.

8100 Nations Way

Jacksonville, FL 32256

(904) 281-2397

www.everhomemortgage.com

Servicer Analyst:Edward Highland, New York (1) 212-438-1287;
edward_highland@standardandpoors.com

Copyright � 2009 by Standard & Poor's Financial Services LLC (S&P). All rights reserved. No part of this information may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of S&P. S&P, its affiliates, and/or their third party providers have exclusive proprietary rights in the information,including ratings, credit related analyses and data, provided herein. This information shall not be used for any unlawful or unauthorized purposes. Neither S&P, nor its affiliates, nor their third party providers guarantee the accuracy, completeness, timeliness or availability of any information. S&P, its affiliates or their third party providers and their directors, officers, shareholders, employees or agents are not responsible for any errors or omissions, regardless of the cause, or for the results obtained from the use of such information. S&P, ITS AFFILIATES AND THEIR THIRD PARTY PROVIDERS DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P, its affiliates or their third party providers and their directors, officers, shareholders, employees or agents be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained herein even if advised of the possibility of such damages.

The ratings and credit related analyses of S&P and its affiliates and the observations contained herein are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or make any investment decisions. S&P assumes no obligation to update any information following publication. Users of the information contained herein should not rely on any of it in making any investment decision. S&P's opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of each of these activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P's Ratings Services business may receive compensation for its ratings and credit related analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge) and www. ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Contact Client Services

1-877-SPCLIENT
1-877-772-5436

Call Tree Options
Contact Us