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MortgageChronicle.com Archives
January, 2003
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COFI Tumbles to Lowest Level in Decades
According to the Federal Home Loan Bank of San Francisco, the monthly weighted average cost of funds index (COFI) for savings institutions in the 11th District fell to 2.537% in November, down from 2.708% in October. With this latest drop, the COFI stands at its lowest level in decades.
Mortgage Rates Hit New Record Lows
Freddie Mac found the average 30-year fixed-rate mortgage to be 5.93% for the week ending Dec. 27 -- down a bit from last week's 6.03%, and way down from last year's 7.16%. The annual average for the 30-year for 2002 was about 6.5%, the lowest annual average in more than 31 years, said Frank Nothaft, chief economist at Freddie. The Mortgage Bankers Association of America's index of mortgage loan applications came in at 908.3 for the week ending Dec. 20, a 7.8% decrease from the prior week's 985.5.
Apartment Lending Rises at ABN AMRO
ABN AMRO Apartment Lending reported an increase in lending for the month of November. It produced $123 million in loans during November, an almost 3.4% increase from October's $119 million in production. The information required for disclosure includes applications for loans, originations, and purchases, as well as type, purpose, and amount of the loans.
HMDA Exemption Stays at $32 Million Asset Size
The reporting threshold for the Home Mortgage Disclosure Act (HMDA) will remain unchanged for 2003, the Federal Reserve Board announced Tuesday. The asset-size exemption for banks will stay at $32 million, the board said.
ABN AMRO November Production Falls
ABN AMRO Mortgage Group, Inc. announced originating almost $12.7 billion in loans for the month, bringing its YTD to a record $106.7 billion. The November total is an almost 18.6% dip from October's nearly $15.6 billion in lending, but a 25% increase from last year at this time.
NHEMA Sues OTS
The National Home Equity Mortgage Association (NHEMA) sued the U.S. Office of Thrift Supervision (OTS) Friday over new regulations affecting prepayment and late fee rules on mortgage loans. NHEMA's goal is for the court to rule that the OTS acted beyond its authority in adopting the regulations. NHEMA is hoping to have the new rules eliminated all together.
$35.4 Million Production at Cambridge
Cambridge Realty Capital Companies reported originating a total of $75.4 million in senior and healthcare loans from January to October. That's a $35.4 million increase from the $40 million in closings Cambridge reported for the first six months.
HEL Delinquency Falls
The latest Consumer Delinquency Bulletin by the American Bankers Association revealed that late mobile home loans dropped to 5.38% during the third quarter ending Sept. 30, compared with 5.81% during the second quarter. Late payments on home equity lines dropped to 0.58% during the third quarter, compared with 0.64% in the second quarter.
Wells Leads Originations in Fairfax County
A batch of sample maps reveal the top mortgage lenders in specific geographical regions, and are being marketed by CBMI as a new way to keep check on the competition. The sample map for Fairfax County, Va., shows the top lenders for January through September 2002. According to the map, Wells Fargo Mortgage Inc., based in Des Moines, Iowa, is No. 1 lender for the area with $127.9 million. The sample maps do not include government-insured loans, although lenders can obtain reports that do map such loans, he said.
Freddie Economist Says Rates May Fall
Mortgage loan applications picked up to 985.5 for the week ending Dec. 13, a 14.2% increase from the previous week's 862.7, according to the Mortgage Bankers Association of America's index. The average one-year ARM plunged to 4.07% for the week ending Dec. 20, the lowest level recorded by Freddie Mac since the mortgage giant began tracking it in 1984. "Over the last few days financial markets have been experiencing some nervousness about war in the Middle East and this may cause some downward pressure on interest rate, which could possibly lower mortgage rates a little more in the coming weeks," said Frank Nothaft, chief economist at Freddie.
Freddie November Purchases Edge Up
Freddie Mac reported $74.3 billion in purchases, a slight advance from October's $73.6 billion. Its mortgage portfolio holds a $1.279 trillion balance, Freddie reported, and its retained portfolio totals $549.3 billion. Freddie's duration gap was flat during November, compared with negative-one month in October.
Scores Vary Substantially Among Repositories
The "Credit Score Accuracy and Implications for Consumers" study analyzed more than 500,000 individual credit files, and found that scores reported by the three repositories varied substantially. The joint effort between the National Credit Reporting Association and the Consumer Federation of America is an attempt to point out inequities in the mortgage credit approval system and to weigh the impact of those inequities. The study found that among 1,704 of merged credit files studied manually, almost one in 10 was missing a credit score from at least one repository. Only 21% or one out of five of the total files had a range of fewer than 20 points between the lowest and highest scores; 31% had a range of 50 points or greater between scores; and 5% had a range of 100 points or greater between scores.
Conseco Bankruptcy Among Largest in U.S. History
After four years of heavy losses and deep debt, Conseco, Inc. filed chapter 11 bankruptcy Tuesday night, and its finance unit has entered an agreement to sell its assets, according to federal court documents.In terms of assets, the filing would be among the largest in U.S. corporate history, behind WorldCom Inc.'s $107 billion and Enron Corp.'s $63.4 billion, according to the Wall Street Journal online. In addition to the filing, Conseco's finance unit announced that it has reached an agreement in principle to sell its assets and operations to CFN Investment Holdings LLC.
Reverse Loans Gaining Momentum
Reverse mortgages are on the rise, as is the longevity of the country's elderly. Older homeowners benefit from types of mortgages, in addition to the lenders that offer them. The National Reverse Mortgage Lenders Association (NRMLA) announced in October that lenders closed a record 63% more federally-insured reverse mortgage loans during fiscal year (FY) 2002 ending Sept. 30 than during the record FY 1999. A reverse mortgage loan allows home owners age 62 and over to convert home equity into cash without having to make monthly payments on the loan, according to the U.S. Department of Housing and Urban Development (HUD). The lender gets back the principal plus interest upon the sale of the home or the death of the borrower.
Smaller Towns at Highest CMBS Delinquency Risk
Moody's Investors Service's report on real estate delinquencies in commercial mortgage-backed securities (CMBS) found that the smaller the town, the greater the chance for a commercial building's mortgage to go delinquent. The finding is based on all commercial property types. The "CMBS Delinquency Report Card: From A to Incomplete" also found that, conversely, delinquencies for all property types usually are lowest in larger cities. The study also found the top five states by percentage with the highest CMBS loan delinquency were Tennessee, Iowa, Louisiana, Oregon, Ohio, and New Mexico.
Record Business Volume at Fannie
Fannie Mae reported almost $95.6 billion in business volume, compared with October's $95.1 billion. Fannie's book of business grew to $1.779 trillion from October's $1.769 trillion. The company's gross mortgage portfolio grew to $760.8 billion from October's $751.3 billion
Fake Gift Funds, Income Cited in Massachusetts Fraud Case
Angel L. Serrano Jr., 41, of Potomac Falls, Va., was charged with wire fraud and false statements. The U.S. Department of Justice alleges that between 1996 and 1997, he purchased and sold distressed properties in Massachusetts the same day without informing the lenders. The indictment states that Serrano hid the land-flips from the original sellers and the lending institutions and deceived low-income buyers into submitting fraudulent loan applications to the lender. If convicted, Serrano faces up to five years imprisonment, in addition to a $25,000 fine for each of the three counts of the indictment.
Apps Slide, Rates Improve
Freddie Mac's weekly market survey found a lowered 30-year fixed-mortgage rate average of 6.04% for the week ending Dec. 13. That's a decrease from last week's 6.19%, and from the 7.09% the same time last year.Mortgage loan applications slowed down to 862.7 for the week ending Dec.6, according to the Mortgage Bankers Association of America weekly index, which runs a week behind Freddie's rate survey. Just 10% of those polled by Bankrate.com said mortgage rates will rise over the next five weeks. The other 90% is split evenly between those who said rates will decrease and those who said rates will stay about the same (within 2 basis points).
Record $5.2 Billion November Production at Flagstar
Flagstar Bancorp, Inc. reported record November mortgage loan production of $5.2 billion, an almost 2% increase from the former record of $5.1 billion set in October. Year-to-date, Flagstar has closed $37.9 billion in loans, beating 2001's YTD of $29.2 with an almost 30% increase.
Countrywide November Production Off
Countrywide Financial Corporation reported it funded a total of $32.2 billion in loans during November, a 7.2% decrease from October's record $34.7 billion. Subprime fundings for November held steady from October's total, both at just more than $1 billion each, but saw a 73% increase over last year's $597 million.
Freddie to Donate $225 mil to its Foundation
Reducing its earnings by $146 million after taxes for the fourth quarter, Freddie Mac announced it will contribute $225 million in cash to philanthropic programs. The Freddie Mac Foundation, which funds children-at-risk organizations, will receive $205 million of the contribution, said Freddie spokeswoman Sharon McHale.
Production Falls at New Century
New Century Financial Corporation produced about $1.30 billion in loans last month, a step down from the $1.43 billion in loans produced during October. Year-to-date (YTD), the company has produced $12.45 billion in loans, compared with $5.48 YTD at the same time last year.
MortgageDaily.com Users Top 10,000
The number of registered MortgageDaily.com users has passed the ten grand mark, according to a user registration system implemented in August. Of the more than 10,000 registered users of the online industry news publication, about 63% of them said they work in loan origination. Users who work in loan production, including loan processors, sales managers, underwriters, and closers, total more than 6% of the registered readership, down a bit from the 7% who claimed this field in October.
Rates Rise From Record Lows
The 30-year fixed-rate mortgage averaged 5.95% during the week ending Jan. 10, up a bit from last week's 5.85%, according to Freddie Mac. One-year Treasury-indexed adjustable-rate mortgages averaged 4.03% this week. The Mortgage Bankers Association of America reported an increase in mortgage applications for the week ending Jan. 3, which came in at 1182.3. That number is a 24.3% increase from the previous week's index of 950.9. This week's panel of mortgage experts on Bankrate.com's weekly survey said they think mortgage rates are headed south again.
Scratch & Dent RMBS Issuance Up
Moody's Investors Services reported that the market for non-standard residential mortgage-backed securities deals backed by scratch-and-dent, reperforming, sub-performing, and non-performing loans is gaining ground. However, some analysts say this characterization is skewed because issuance in general has multiplied. The four major categories of non-compliance that lead to a scratch-and-dent label are misassigned credit grade, poor appraisal quality, consumer law compliance issues, and missing loan documentation.Reperforming loans have suffered a serious 90-day or more delinquency in the past, but are back in shape and have demonstrated payment ability once again. Non-performing loans are seriously delinquent, and the expected outcome for them is liquidation.
New Century Production Soars
New Century Financial Corporation reported almost $4.5 billion in volume during the fourth quarter, an 18.4% increase from the third quarter's $3.8 billion.December hit record volume with a reported $1.7 billion, compared with almost $1.3 billion in November and $750 million in December 2001. New Century's fiscal year 2002 finished up with almost $14.2 billion in loan volume.
Economy to Escalate CMBS Delinquencies
The credit performance of commercial mortgage-backed securities (CMBS) has been exceptionally strong over the past 10 years, according to a report by Standard & Poor's Ratings Services (S&P). However, the report also said the slow economic recovery will produce escalating delinquencies. The report, "Credit Performance of U.S. Commercial Mortgage-Backed Securities," revealed the results of a study that began in September examining cumulative principal losses and the potential future losses of 237 pools of multi-borrower CMBS issued in the United States that were rated by one or more of the three U.S. rating agencies between 1994 and mid-2002, S&P said.
30-day Q3 Delinquency Down 14 bps, 90's rise
Mortgage delinquency slowed during the third quarter and foreclosures remained flat, according to the National Delinquency Survey released Tuesday by the Mortgage Bankers Association of America (MBA). For one-to-four unit residential properties, the delinquency rate was 4.66% during the third quarter, the MBA found. That seasonally adjusted rate is an 11 basis points (bps) decrease from second quarter, and a drop of 17 bps from third quarter 2001.
Cendant's High Default Rate in KC & St. Louis Spur HUD Audit
After completing an audit of Cendant Mortgage Corp. because of its high default rate in St. Louis, Mo., and Kansas City, Kan., the U.S. Department of Housing and Urban Development (HUD) has asked the lender to indemnify more than 1,000 loans that were improperly endorsed for federal insurance coverage. HUD also recommended that the federal Mortgage Review Board require Cendant and the Office of Housing to begin protecting the insurance fund against future losses.
Quicken Settles Charges it Failed to Provide Adverse Action Notices
Quicken Loans, Inc. has agreed to settle charges from the Federal Trade Commission (FTC) that the mortgage lender violated the Fair Credit Reporting Act, the FTC announced Dec. 30. The federal regulator said Quicken failed to provide "adverse action" notices, which notifies consumers when their credit report is wholly or partly the reason for denial of credit. Quicken told its customers who didn't preapprove for an online loan that they had "unique borrowing needs." Quicken then instructed them to click through to provide contact information. Consumers who received the "unique borrowing needs" advisory but did not submit the contact information online received no further contact from the Lavonia, Mich.-based company, the FTC said.
Max FHA Loan Now $280,749
The U.S. Department of Housing and Urban Development announced last week that the loan limit on Federal Housing Administration (FHA) insured single-family mortgages will increase to a maximum of $280,749 in high cost areas. In low cost areas, the new limit is $154,896. The annual FHA increase follows Freddie Mac and Fannie Mae's conforming loan limit increase, announced in November.
How Low Can They Go?
Freddie Mac reported that the average 30-year fixed rate mortgage was 5.85% -- its lowest point since Freddie began tracking it in 1971. The average 15-year fell eight basis points from last week to a record low 5.24%, Freddie said. The average one-year adjustable rate mortgage rose five BPS from last week record low to 4.06%, according to Freddie's survey. The Mortgage Bankers Association of America said overall applications rose 4.7% from last week, with the application index reaching 950.9.
Bankers, Appraiser Accused in Builder Fraud Case
According to a copy of an FBI affidavit completed in May, A. William Erpenbeck, Jr., who was president of homebuilder The Erpenbeck Company, directed his employees to deposit checks made out to construction lenders to the company's own account at Peoples Bank of Northern Kentucky. The FBI estimates that Erpenbeck diverted approximately $25 million in construction payoff proceeds to the company account. The affidavit accuses two bank executives of falsely listing down payments in order to secure loans on properties they purchased from Erpenbeck. A Kentucky appraiser is also being investigated for her role in determining values on properties that were financed for more than the loan amount.
COFI Tumbles to Lowest Level in Decades
According to the Federal Home Loan Bank of San Francisco, the monthly weighted average cost of funds index (COFI) for savings institutions in the 11th District fell to 2.537% in November, down from 2.708% in October. With this latest drop, the COFI stands at its lowest level in decades.
Mortgage Rates Hit New Record Lows
Freddie Mac found the average 30-year fixed-rate mortgage to be 5.93% for the week ending Dec. 27 -- down a bit from last week's 6.03%, and way down from last year's 7.16%. The annual average for the 30-year for 2002 was about 6.5%, the lowest annual average in more than 31 years, said Frank Nothaft, chief economist at Freddie. The Mortgage Bankers Association of America's index of mortgage loan applications came in at 908.3 for the week ending Dec. 20, a 7.8% decrease from the prior week's 985.5.
Apartment Lending Rises at ABN AMRO
ABN AMRO Apartment Lending reported an increase in lending for the month of November. It produced $123 million in loans during November, an almost 3.4% increase from October's $119 million in production. The information required for disclosure includes applications for loans, originations, and purchases, as well as type, purpose, and amount of the loans.
HMDA Exemption Stays at $32 Million Asset Size
The reporting threshold for the Home Mortgage Disclosure Act (HMDA) will remain unchanged for 2003, the Federal Reserve Board announced Tuesday. The asset-size exemption for banks will stay at $32 million, the board said.
ABN AMRO November Production Falls
ABN AMRO Mortgage Group, Inc. announced originating almost $12.7 billion in loans for the month, bringing its YTD to a record $106.7 billion. The November total is an almost 18.6% dip from October's nearly $15.6 billion in lending, but a 25% increase from last year at this time.
NHEMA Sues OTS
The National Home Equity Mortgage Association (NHEMA) sued the U.S. Office of Thrift Supervision (OTS) Friday over new regulations affecting prepayment and late fee rules on mortgage loans. NHEMA's goal is for the court to rule that the OTS acted beyond its authority in adopting the regulations. NHEMA is hoping to have the new rules eliminated all together.
$35.4 Million Production at Cambridge
Cambridge Realty Capital Companies reported originating a total of $75.4 million in senior and healthcare loans from January to October. That's a $35.4 million increase from the $40 million in closings Cambridge reported for the first six months.
HEL Delinquency Falls
The latest Consumer Delinquency Bulletin by the American Bankers Association revealed that late mobile home loans dropped to 5.38% during the third quarter ending Sept. 30, compared with 5.81% during the second quarter. Late payments on home equity lines dropped to 0.58% during the third quarter, compared with 0.64% in the second quarter.
Wells Leads Originations in Fairfax County
A batch of sample maps reveal the top mortgage lenders in specific geographical regions, and are being marketed by CBMI as a new way to keep check on the competition. The sample map for Fairfax County, Va., shows the top lenders for January through September 2002. According to the map, Wells Fargo Mortgage Inc., based in Des Moines, Iowa, is No. 1 lender for the area with $127.9 million. The sample maps do not include government-insured loans, although lenders can obtain reports that do map such loans, he said.
Rates to Hover at Current Levels, Freddie Economist Says
According to the Mortgage Bankers Association of America's weekly index, applications took a 2.4% fall to 1154.3 for the week ending January 10, compared with last week's 1182.3. On the rise, Freddie Mac's weekly survey revealed the average 30-year fixed-rate mortgage to be 5.97% for the week ending Jan. 17. Mortgage rates should hover around their current levels, and 2003 should be another strong housing market year, said Frank Nothaft, chief economist at Freddie. Half of mortgage experts polled on Bankrate.com's weekly panel said they expect rates to head south over the next 30 to 45 days.
BoA 2002 Net $9.25 Billion
Bank of America reported $2.61 billion in net income during the third quarter, compared with $2.24 billion during the third quarter. On a yearly basis, the bank reported $9.25 billion in net income during 2002. A spokeswoman said the company's mortgage banking income reached $206 million during the fourth quarter.
Household Net Drops
Household International, Inc. reported $338 million in net income for the fourth quarter. This is an almost 53% increase from third quarter's $221 million. For the fourth quarter, the Prospect Heights, Ill.-based company announced $45.8 billion in real estate-secured owned receivables, an almost 5.6% decrease from third quarter's $48.5 billion. Securitization revenue on an owned basis totaled $536 million during 2002, a 5% increase from the fourth quarter of 2001.
Record $848.9 Billion Business Volume During 2002 at Fannie
Fannie Mae reported net income of $4.6 billion in 2002, a 21.6% decrease from 2001's year-end total of almost $5.9 billion. That year-to-year decrease is because of $4.5 billion in mark-to-market losses, on a pre-tax basis, in the time value of purchased options -- interest rate "swaptions" and interest rate caps, Fannie said. Fannie's business volume reached a record $848.9 billion by the end of the year. This represents an almost 38.0% increase from 2001's total of $615.3 billion. Fannie's combined book of business, which is the gross balance of mortgages held in portfolio and outstanding MBS held by other investors, ended the year at $1.820 trillion.
SunTrust Reports 2002 Earnings
SunTrust Banks, Inc. reported almost $72.7 billion in average loans during the fourth quarter, an almost 1.4% increase from third quarter's $71.7 billion. It reported $68.1 million in mortgage servicing-related losses during the fourth quarter, more than the almost $11 million loss reported during the same time last year. SunTrust also reported $103.3 in mortgage production-related income for the fourth quarter, an almost 77.0% increase from last year's $58.4 million.
Record $5.3 Billion Flagstar December Production
Flagstar Bancorp, Inc. announced that it closed $5.3 billion in residential mortgage loans, beating its previous record of $5.2 billion during November. The company reported closing $15.6 billion in loans during the fourth quarter. Flagstar announced closing a corporate annual record of $43.2 billion in mortgage loans.
Calif Sues Long Beach for Interest Overcharges
The California Department of Corporations filed the suit in the Superior Court of Sacramento County and is seeking $9 million in civil penalties against Long Beach Mortgage Company, Washington Mutual's subprime lending branch, a department announcement said. In 1999, the state department found that Long Beach was overcharging its borrowers by beginning interest charges too early, the announcement said. The state department instructed Long Beach to pay back its borrowers the overcharged interest and stop the overcharging practice. After a review of loans that Long Beach originated between Dec. 14, 1999, and Jan. 31, 2002, the department said it still finds the lender in noncompliance even after Long Beach claimed to have implemented safeguards to correct the problem.
407,000 Employed in Mortgage Lending
About 407,000 people held the title of mortgage broker or banker during the month of December, according to the seasonally adjusted monthly report by the Bureau of Labor Statistics. That represents an almost 1.8% increase from November's figure of about 400,000. The bureau also reported December's general unemployment rate at 6.0%, tied with November and April for the highest rate of 2002.
Countrywide 2002 Production 1/4 Trillion
Countrywide Financial Corporation reported $102.1 billion in total fundings for the fourth quarter, which is the first time Countrywide has produced a $100 billion-quarter. Countrywide reported a monthly record in total fundings with December's $35.2 billion. Year-to-date, the company reported funding $250 billion, an 82% increase from the $138.2 billion produced in 2001.
MortgageDaily.com Users Top 10,000
The number of registered MortgageDaily.com users has passed the ten grand mark, according to a user registration system implemented in August. Of the more than 10,000 registered users of the online industry news publication, about 63% of them said they work in loan origination. Users who work in loan production, including loan processors, sales managers, underwriters, and closers, total more than 6% of the registered readership, down a bit from the 7% who claimed this field in October.
Rates Rise From Record Lows
The 30-year fixed-rate mortgage averaged 5.95% during the week ending Jan. 10, up a bit from last week's 5.85%, according to Freddie Mac. One-year Treasury-indexed adjustable-rate mortgages averaged 4.03% this week. The Mortgage Bankers Association of America reported an increase in mortgage applications for the week ending Jan. 3, which came in at 1182.3. That number is a 24.3% increase from the previous week's index of 950.9. This week's panel of mortgage experts on Bankrate.com's weekly survey said they think mortgage rates are headed south again.
Scratch & Dent RMBS Issuance Up
Moody's Investors Services reported that the market for non-standard residential mortgage-backed securities deals backed by scratch-and-dent, reperforming, sub-performing, and non-performing loans is gaining ground. However, some analysts say this characterization is skewed because issuance in general has multiplied. The four major categories of non-compliance that lead to a scratch-and-dent label are misassigned credit grade, poor appraisal quality, consumer law compliance issues, and missing loan documentation.Reperforming loans have suffered a serious 90-day or more delinquency in the past, but are back in shape and have demonstrated payment ability once again. Non-performing loans are seriously delinquent, and the expected outcome for them is liquidation.
New Century Production Soars
New Century Financial Corporation reported almost $4.5 billion in volume during the fourth quarter, an 18.4% increase from the third quarter's $3.8 billion.December hit record volume with a reported $1.7 billion, compared with almost $1.3 billion in November and $750 million in December 2001. New Century's fiscal year 2002 finished up with almost $14.2 billion in loan volume.
Economy to Escalate CMBS Delinquencies
The credit performance of commercial mortgage-backed securities (CMBS) has been exceptionally strong over the past 10 years, according to a report by Standard & Poor's Ratings Services (S&P). However, the report also said the slow economic recovery will produce escalating delinquencies. The report, "Credit Performance of U.S. Commercial Mortgage-Backed Securities," revealed the results of a study that began in September examining cumulative principal losses and the potential future losses of 237 pools of multi-borrower CMBS issued in the United States that were rated by one or more of the three U.S. rating agencies between 1994 and mid-2002, S&P said.
30-day Q3 Delinquency Down 14 bps, 90's rise
Mortgage delinquency slowed during the third quarter and foreclosures remained flat, according to the National Delinquency Survey released Tuesday by the Mortgage Bankers Association of America (MBA). For one-to-four unit residential properties, the delinquency rate was 4.66% during the third quarter, the MBA found. That seasonally adjusted rate is an 11 basis points (bps) decrease from second quarter, and a drop of 17 bps from third quarter 2001.
Cendant's High Default Rate in KC & St. Louis Spur HUD Audit
After completing an audit of Cendant Mortgage Corp. because of its high default rate in St. Louis, Mo., and Kansas City, Kan., the U.S. Department of Housing and Urban Development (HUD) has asked the lender to indemnify more than 1,000 loans that were improperly endorsed for federal insurance coverage. HUD also recommended that the federal Mortgage Review Board require Cendant and the Office of Housing to begin protecting the insurance fund against future losses.
Quicken Settles Charges it Failed to Provide Adverse Action Notices
Quicken Loans, Inc. has agreed to settle charges from the Federal Trade Commission (FTC) that the mortgage lender violated the Fair Credit Reporting Act, the FTC announced Dec. 30. The federal regulator said Quicken failed to provide "adverse action" notices, which notifies consumers when their credit report is wholly or partly the reason for denial of credit. Quicken told its customers who didn't preapprove for an online loan that they had "unique borrowing needs." Quicken then instructed them to click through to provide contact information. Consumers who received the "unique borrowing needs" advisory but did not submit the contact information online received no further contact from the Lavonia, Mich.-based company, the FTC said.
Max FHA Loan Now $280,749
The U.S. Department of Housing and Urban Development announced last week that the loan limit on Federal Housing Administration (FHA) insured single-family mortgages will increase to a maximum of $280,749 in high cost areas. In low cost areas, the new limit is $154,896. The annual FHA increase follows Freddie Mac and Fannie Mae's conforming loan limit increase, announced in November.
How Low Can They Go?
Freddie Mac reported that the average 30-year fixed rate mortgage was 5.85% -- its lowest point since Freddie began tracking it in 1971. The average 15-year fell eight basis points from last week to a record low 5.24%, Freddie said. The average one-year adjustable rate mortgage rose five BPS from last week record low to 4.06%, according to Freddie's survey. The Mortgage Bankers Association of America said overall applications rose 4.7% from last week, with the application index reaching 950.9.
Bankers, Appraiser Accused in Builder Fraud Case
According to a copy of an FBI affidavit completed in May, A. William Erpenbeck, Jr., who was president of homebuilder The Erpenbeck Company, directed his employees to deposit checks made out to construction lenders to the company's own account at Peoples Bank of Northern Kentucky. The FBI estimates that Erpenbeck diverted approximately $25 million in construction payoff proceeds to the company account. The affidavit accuses two bank executives of falsely listing down payments in order to secure loans on properties they purchased from Erpenbeck. A Kentucky appraiser is also being investigated for her role in determining values on properties that were financed for more than the loan amount.
COFI Tumbles to Lowest Level in Decades
According to the Federal Home Loan Bank of San Francisco, the monthly weighted average cost of funds index (COFI) for savings institutions in the 11th District fell to 2.537% in November, down from 2.708% in October. With this latest drop, the COFI stands at its lowest level in decades. |
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