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Mortgage Industry News Headlines
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Last Updated Thursday, May 15, 2008 03:22 PM CST
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Net Branches Boost FHA Programs
Centurymark Home Loans announced earlier this month the launch of an affiliated-branch program that includes FHA programs. Centurymark said it focuses on government programs in the Southwest and West. Sage Credit Co. announced in April that it considers reverse mortgages a tremendous opportunity for its net branch operation.
ARMs Drop, Fixed Rates Headed Higher
The 5-year Treasury-indexed adjustable-rate mortgage average fell 10 basis points from the prior week in Freddie Mac's latest survey. The average 1-year Treasury-indexed ARM fell 11 BPS. The 10-year Treasury yield rose 6 BPS from a week earlier -- suggesting fixed mortgage rates are headed higher.
First Horizon Mortgage Unit to Either Be Sold or Closed
Morgan Keegan & Co. Inc. said it hosted a "well-attended" investor meeting with First Horizon National Corp. management in Memphis. Morgan Keegan's analyst noted the company is expected to either announce a sale of the mortgage unit at any time or accelerate a shutdown over the next four to six months. A source inside unit indicated to MortgageDaily.com that Metropolitan Life Insurance Co. has recently performed due diligence at the unit's headquarters.
Subprime 2nds Downgraded, CMBS Volume Collapses
Moody's Investors Service downgraded tranches of 819 subprime second-lien securities for $29.1 billion. The 2005 through 2007 issuances saw the negative actions because of higher loss projections. Moody's projects $35 billion in 2008 commercial mortgage-backed securities issuance. The level of activity this year represents a steep decline from a record $230 billion in securitizations during 2007.
1 Dead, 1 Acquired & Several Hurting
E*TRADE Financial Corp. reported in a Securities and Exchange Commission filing that it closed its retail mortgage origination business during April. Emerson Lending Co. was acquired by Greenpark Mortgage Corp., according to an announcement. The long-term issuer default ratings of IndyMac Bancorp Inc. and IndyMac Bank were downgraded by Fitch Ratings because of challenges in returning to profitability and its decision to defer dividend payments on preferred stock.
Prime Wholesalers Cut Back as Commercial Gets Aggressive
Wells Fargo Home Mortgage's wholesale lending division recently announced a 3.00 price adjuster will be applied to every loan commitment in the pipeline not locked or re-locked prior to the effective date of a retraction. Countrywide issued a bulletin to mortgage brokers indicating the maximum mortgage with full or alternative documentation has been reduced to $2 million on second homes and $1 million on investor properties. Blackburne & Brown reported its permanent hard-money commercial programs are 15-year first mortgages with no prepayment penalties and points ranging from zero to 2.5 percent. Nationwide Commercial Lenders is advertising stated-income multifamily loans to $30 million with 30-year amortizations, 80 percent LTV and minimum FICO scores of 660.
Best, Worst Mortgage Markets
The second quarter Core Mortgage Risk Index from First American CoreLogic jumped 16 percent from a year earlier. The top four risky markets nationwide were located in California. Fort Worth-Arlington, Texas, had the lowest mortgage risk of any market in the country, and Dallas-Plano-Irving had the second-lowest risk.
April Foreclosures Higher
U.S. foreclosure filings were reported on 243,353 properties during April by RealtyTrac. Filings include default notices, auction sale notices and bank repossessions. Activity was up 4 percent from March and 65 percent higher than a year earlier.
Alt-A Fraud Worse than Nonprime
Mortgage fraud Suspicious Activity Reports totaled 46,717 during fiscal 2007, according to the 2007 Mortgage Fraud Report released by the Federal Bureau of Investigation. The FBI cited data that indicated fraud on Alt-A loans was three times higher than on nonprime loans for loans originated between 2002 and 2006. Compared to conforming loans, fraud on Alt-A loans was nearly four times higher.
Fannie Will Buy Negative Equity Loans
Fannie Mae will purchase refinanced loans with negative equity, according to a statement provided to MortgageDaily.com. The secondary must already own loans that are purchased under the program. The refinanced loan cannot exceed, however, 120 percent of the current property value, the secondary lender said.
HUD Provides Details on Expanded FHASecure
Borrowers who became delinquent on their conventional adjustable-rate mortgages as a result of a rate reset or other extenuating circumstances can qualify for FHASecure if they have no more than two 30-day late payments or one 60-day late payment on their mortgage during the prior 12 months, according to a mortgagee letter from HUD. In addition, they must have made on-time payments for the six payments prior to the reset. The maximum loan-to-value is 98.75 percent on some properties.
8 Lose FHA Approval
Eight mortgagees have had their origination approval agreements terminated by the U.S. Department of Housing and Urban Development under the Credit Watch Termination Initiative, according the Federal Register. HUD said it terminates the agreements when loans originated by the mortgagees have default and claim rates higher than the national rate, and they exceed the local area's default and claim rate by 200 percent. Among the latest mortgagees to lose their FHA approval was a branch of Assurity Financial Services LLC, according to the notice.
Foreclosures Ease
April foreclosures totaled 74,570, ForeclosureS.com announced. The level of activity was down 5 percent from the previous month. Pre-foreclosure filings were 179,046 last month, the statement said.
Technology Improves Originations
Calyx Software's newly released Point and Point Data Server versions 6.1 includes a new loan status checklist and the integration of initial disclosures, closing documents and hazard insurance categories, according to an announcement. Originators of loans insured by the Federal Housing Administration can identify markets where FHA activity is expected to spike through the FHA Purchase Forecast announced by iEmergent. Mortgage originators at Hollander Financial will utilize SearchMyLoan.com to find wholesale loan programs and pricing, a press release said.
Secondary Gyrations
Oxford Funding Corp. said today it successfully bid to acquire a $1.7 million residential first-mortgage portfolio at a 46 percent discount. Litton Loan Servicing LP has reached an agreement to acquire Fremont Investment & Loan's remaining servicing portfolio, an announcement said. A decision by Fannie Mae to utilize standard conforming pricing for jumbo loans was hailed by the National Association of Home Builders.
1 Fails, 1 Teeters and 1 Acquired
The Office of the Comptroller of the Currency shut down ANB Financial N.A. in Bentonville, Ark., according to the Federal Deposit Insurance Corporation. Fremont General Corp. warned that its primary operating subsidiary, Fremont Investment & Loan, will likely file for bankruptcy. Liberty Financial Group was acquired by Guild Mortgage Co., an announcement said.
Mortgage Sales Jobs Grow at Chase
From October through February, JPMorgan Chase & Co. hired more than 250 new loan officers, a spokesman told MortgageDaily.com. He said most of the new hires were recruited from competitors. "We will continue to look to hire strong originators," he added.
First Step in Commercial Mortgage Origination
Most experienced commercial mortgage brokers would agree that you should always get a signed fee agreement with your commercial borrower. But asking for this up front can scare away a loan prospect. The first step is to ask for tax returns, enabling you to pre-qualify the package while getting a small time investment from the prospective borrower.
Outlook Varies for CMBS and Nonconforming RMBS
Alt-A residential mortgage-backed securities performance has rapidly deteriorated because of the contraction in available capital, home-price declines and risk layering, Fitch Ratings said. Loans with a simultaneous seconds are seeing delinquency as much as 300 percent higher than those without seconds. Standard & Poor's Ratings Services reported commercial MBS have begun a modest uptick. But property market fundamentals, though softening, remain mostly healthy nationally, with selected pockets of weakness.
New FHA Premiums Slated for Summer
The U.S. Department of Housing and Urban Development announced Thursday that the Bush administration has issued final guidance on FHA mortgage insurance premiums. The statement noted risk-based premiums will ensure taxpayers do not assume the cost of the FHA expansion. Implementation of the new pricing is scheduled for July 14.
Freddie Cutting IL Jobs
Freddie Mac will layoff more than 100 people in Schaumburg, Ill., according to a filing with the state of Illinois. The layoffs are scheduled for June, the filing said. The office houses technology operations for the secondary lender.
Executives Shuffled as Mortgage Woes Continue
Lanty Smith has been named chairman by Wachovia Corp. Standard & Poor's Ratings Services Tuesday placed some ratings of Fannie Mae and Freddie Mac on CreditWatch Negative. American International Group Inc. reported a $7.8 billion first-quarter loss. David H. Rupp has been hired by Regions Financial Corp. to head its mortgage business line.
PHH Improves From Q4
First-quarter loan production was $10 billion at PHH Mortgage, according to earnings data reported by its parent. Originations improved from the fourth quarter and from a year earlier. Delinquency came in at 2.3 percent, improving from the prior quarter. An $8 million loss during the latest quarter was also an improvement from the fourth quarter.
MGIC Cuts, Restricts Eligible Loans
MGIC will stop issuing policies on expanded-criteria A-minus loans, according to a bulletin issued to lenders Thursday. Reduced-documentation Alt-A loans, investment properties and cashout refinances were also cut from eligible programs. The changes are effective June 1 and supersede existing lender rate plans, underwriting exceptions and program approvals, MGIC said.
Mortgage Legislation Passes House
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, was approved by the House today, according to a congressional announcement. The legislation combines a number of bills designed to provide relief to the ailing U.S. housing market. Among the bills included in the package are the FHA Housing Stabilization and Homeownership Retention Act, FHA Modernization and GSE Reform.
Pair Accused of Secondary Fraud
An indictment has been filed against two former executives of Olympia Mortgage Corp., the U.S. Attorney announced. One of the defendants is accused of stealing more than $44 million in proceeds that should have been paid to Fannie Mae. The other is accused of creating fake payment histories for loans sold to Credit Suisse First Boston.
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Copyright © 2007 MortgageDaily.com
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First Step in Commercial Mortgage Origination
An important part of the commercial mortgage brokering process is the fee agreement.
Most experienced commercial mortgage brokers would agree that you should always get a signed fee agreement with your commercial borrower. But when do you ask him or her to sign it?
If the client is new and you ask for a signed fee agreement right away, you'll probably be turned down.
read full story
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N.Y. Assembly Approves 1-Year Moratorium
One of New York's state legislative bodies has declared a public emergency and passed a bill that would give judges the power to delay subprime foreclosures for up to one year. Another bill that passed requires mortgage brokers to have an agency relationship with loan prospects.
The legislation, Bill No. A09695B, would allow a court to delay the actual order to transfer title on foreclosures of subprime first mortgages, second mortgages and home equity loans for up to a year, the New York State Assembly announced.
The state hopes to enable delinquent borrowers to work out a payment schedule with the servicer or to find relief during the delay.
read full story
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Brokers, Appraisers and Securitizers Blamed for Meltdown
The former owner of a failed wholesale lender has authored a book that discusses his take on the causes of the mortgage meltdown. Among the culprits: mortgage brokers, appraisers, investment bankers and ratings agencies. Wholesalers, he wrote, were caught in the middle -- though they deserve a share of the blame.
Greed, Fraud & Ignorance: A Subprime Insider's Look at the Mortgage Collapse, written by Richard Bitner, offers one take on what was happening behind closed doors as the mortgage industry began to topple.
Some of Kellner's former executives now run Dynamic Findings in Flower Mound, Texas. The firm operated with less than 25 employees, according to Jigsaw.
MortgageDaily.com subscribers read full story
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Broker Licenses Tumble
A sharp decline in the number of licensed mortgage brokers has been fueled by the loss of subprime programs, a decline in broker market share and the collapse of many wholesale lenders. Among states with the biggest declines were Florida, Minnesota and Ohio.
Minnesota saw a 70 percent drop in licensed mortgage broker companies, from a little more than 4,000 to less than 1,200. A new law that took effect last Aug. 1 increased license fees and set net worth requirements for those companies. Individual broker originators are not required to be licensed.
"We estimate that more than half of that [decline] is due to the downturn in the real estate business and the rest is due to the new law," Minnesota Department of Commerce spokesman Bill Walsh told MortgageDaily.com.
MortgageDaily.com subscribers read full story
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Study Suggests Subprime Borrowers Fare Worse With Brokers
Mortgage brokers blasted a study that claimed subprime borrowers wind up paying more than $5,000 in additional costs if they use a broker. But the report also found that borrowers with excellent credit get a better deal by using a broker.
The study was announced Tuesday by the Center for Responsible Lending.
The Washington, D.C.-based consumer group said that during the first four years of a loan, a typical subprime borrower who uses a mortgage broker pays $5,222 more than if he or she obtained the loan directly from a lender.
MortgageDaily.com subscribers read full story
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