7,500 Jobs Slashed From Mortgage Industry
The Bureau of Labor Statistics reported that the non-seasonally adjusted number of people employed in mortgage-related jobs totaled 409,600 in November, down from October's revised figure of 417,100. The total consists of 112,700 loan brokers, both mortgage and nonmortgage, and 296,900 people working in Real Estate Credit, said the Bureau.
OCC Launches 'Preemptive' Strike
The Office of the Comptroller of the Currency has picked a fight with the New York Attorney General, consumer groups, and others with new regulations governing nationally chartered banks. The agency said the regulations are designed to crack down on abusive predatory lending practices. Basically, the rules stipulate that states cannot regulate nationally chartered banks with consumer protection laws passed by state legislatures. But reaction was swift and harsh from several quarters -- the chief gripe being that the banks are getting preferential treatment over consumers. Among the most vocal was New York's Attorney General Eliot Spitzer, a tough prosecutor who has taken on Wall Street and the mutual fund industry in high-profile investigations.
Improving Mortgage Market Still Way Off Last Year's Level
The Market Composite Index increased 4.5% from the previous week to 599.9, said the Mortgage Bankers Association of America in its latest Weekly Mortgage Application Survey. In this week's Primary Mortgage Market Survey, Freddie Mac averaged the 30-year fixed-rate mortgage at 5.87%, almost unchanged from last week's 5.85%. A majority, or 64% of the mortgage industry panelists surveyed by Bankrate.com, predict rates will remain unchanged within the next month and a half. The 10-year Treasury-note yield closed Thursday at 4.25%.
December Originations Up at New Century
New Century Financial Corp. reported it originated $3.0 billion in loans during December, up from $2.3 billion the prior month. Fiscal year 2003 loan originations totaled $27.4 billion, skyrocketing from the previous year's record, which was nearly half this amount at $14.2 billion, said the subprime lender.
Record 2003 Production at Bridger
Bridger Commercial Funding announced it originated over $400 million in commercial mortgage-backed securities (CMBS) loans in the past year -- the largest annual volume on record since its inception in 1998. December originations accounted for 23%, or $92 million, of 2003's total.
Tennessee Study Says Minority Share of Subprime Loans Not Disproportionate
The Tennessee Consumer Finance Association (TCFA) recently released a report which showed subprime lending provided the state an estimated $1.3 billion in spending power during 2001. Besides reporting a direct correlation between the higher interest rates and loan fees that come with subprime loans and the rate of loan defaults and payment delinquency, TCFA said the study revealed that, in Tennessee, subprime mortgage lending is not concentrated in zip codes with high concentrations of African Americans or other minorities.
$10 Million Broker is MortgageDaily.com Icon of 2003
Leif Thomsen, the owner of Massachusetts-based Mortgage Master Inc., is MortgageDaily.com's Mortgage Icon of the Year, not only for his hefty earnings -- but also because of his success in the business. A high school dropout and native of Denmark, Thomsen started his firm in 1988. He does no advertising, relying instead on "word of mouth." Thomsen said the firm is the largest independently owned mortgage company in the country, and operates satellite offices in Connecticut, Illinois and Florida. He made headlines for his $10 million in earnings in 2002, and said he made "not much more than that" last year. Thomsen estimates his company did about $3.4 billion of business last year.
ABN AMRO Volume Sinks in November
ABN AMRO Mortgage Group Inc. reported November fundings of over 30,600 loans, accounting for $5.1 billion in total production. The figure slipped from October's loan volume of $6.8 billion and plunged 60% from $12.7 billion the prior year. The group reported its commercial lending arm, ABN AMRO/InterFirst Apartment Lending, funded $70 million in loans during November, sinking 49% from $136 million the prior month.
Best Mortgage Companies to Work For in 2003
Fortune's latest 100 Best Companies to Work For list included 12 mortgage-related entities. Financial services provider Edward Jones, which owns Edward Jones Mortgage, took the No. 4 spot, making it the highest-ranking mortgage-related company on the list for 2004. Next, at No. 5 and moving up 12 spaces from the previous year, was Republic Bancorp, followed by Quicken Loans. Several banking thrifts, which offer mortgage products, filled spots in the 20 to 40 range.
FHA Limit Upped
HUD announced last week that FHA single-family loan limits were raised by 3.4%, increasing the maximum loan amount the FHA will insure to $290,319 in high-cost areas. In low-cost areas, the amount rose to $160,176. In Alaska, Guam, Hawaii, and the Virgin Islands, FHA can insure single-family loans of up to $435,478.
VA Loan Limit Bumped
Ginnie Mae announced that effective Jan. 1, VA-insured home loans of up to $333,700 are eligible to be placed in its mortgage-backed securities pools. The new maximum amount increased 3.4% from the previous limit of $322,700 and mirrors the 2004 single-family conforming loan limit increase. The cash down payment and or equity, plus the available VA guaranty, is still required to equal at least 25% of the lesser purchase price or the Certificate of Reasonable Value, said Ginnie.
Meltdown at Metropolitan
Metropolitan Mortgage & Securities, based in Spokane, Wash., has lost control of one of its subsidiaries -- Western United Life Assurance Co. -- to insurance regulators in three states. It has suspended payment on nearly $600 million in debt owed to an estimated 35,000 investors, it's preferred stock has been delisted off of the American Stock Exchange, and the company's investment unit -- Metropolitan Investment Securities -- shut down Dec. 15 after being fined $500,000 in late October by the National Association of Securities Dealers. Metropolitan said in a statement that its auditor does not have enough time to review all records for its annual 10-k filing because "the company is believed to have incurred losses in excess of those disclosed in its June 30" quarterly reports.
Monthly Payment on Candidate's Home Could Top $50k
Massachusetts Democrat John Kerry, trailing in polls and fundraising to party front-runner Howard Dean, has taken a $6.4 million mortgage against his $10 million Boston town home. "Senator Kerry has finalized plans to loan his presidential campaign over $6 million," Kerry's campaign manager said. "The personal loan was secured through a mortgage on his share of the family's home in Boston. Using a rate of 5.04% on a 15-year loan and an online calculator from the Mortgage Banker's Association of America, the monthly payment would be $50,961.
COFI Tumbles 9 BPS
The Cost of Funds Index, popularly known as COFI, fell 9 basis points from the prior month to 1.821%, the Federal Home Loan Bank (FHLB) of San Francisco reported. November's COFI is the lowest ever reported by MortgageDaily.com, according to the numbers announced by the 11th District FHLB.
Mortgage Market Closes Out 2003
The 30-year fixed-rate mortgage came in at 5.85%, up 4 basis points (BPS) from last week, said Freddie Mac in its latest Primary Mortgage Market Survey. In Bankrate.com's latest weekly survey of mortgage industry experts' rate predictions, 57% of the panelists voted rates would remain unchanged (plus or minus 2 BPS) over the next 30 to 45 days. The 10-year Treasury note yield closed the year out at 4.25%, while a week ago, it was reported at 4.15%. For the week ending Dec. 26, the Market Composite Index, which is a measure of mortgage loan applications for purchases and refinancings, decreased 9.0% from the previous week to 574.1, the Mortgage Bankers Association of America said.
Dark Christmas Turns White for Calif Mortgage Company
The Saturday before Christmas, employees of a Sacramento-based mortgage company were devastated when they found out the gifts they had gathered to donate to 42 abused children had been stolen. According to the Sheriff's Department, the suspect was arrested at her residence across the street from the mortgage company and jailed. But, thanks to immediate coverage of the incident by a local news station, dozens of inspired Californians donated gifts including a $5,000 donation, Sacramento Kings shirts and hats and dozens of gift cards with values between $10 to $75.
Freddie's November Business Tumbles
Last month's new business purchases of $44.5 billion shrunk 43% from the previous month, said Freddie Mac in its latest monthly summary of business activity. A retained portfolio of $646.6 billion and net mortgage participation certificates of $750.8 billion accounted for the total mortgage portfolio balance of nearly $1.4 trillion, according to the mortgage giant. The reported single family loan delinquency rate for October was unchanged from the previous month's 0.75%.
Industry Icons
Here, in alphabetical order, are MortgageDaily.com's five icons of the mortgage industry during 2003. Chairman and CEO of Countrywide Angelo Mozilo; chairman and CEO of Fannie Mae Franklin Raines; NAMB mortgage broker of the year JJ Sims; mortgage broker Leif Thomsen with more than $10 million in income; and Doreen Woo Ho, president of Wells Fargo Consumer Credit Group.
Activity Eases as Rates Improve
The Market Composite Index fell 6.8% from the prior week to 631.2, the Mortgage Bankers Association of America reported. At one basis point lower than the previous week, the average 30-year fixed rate mortgage was 5.81%, according to Freddie Mac's latest survey. Thirty-eight percent of those surveyed by Bankrate.com expect rates to drop, while another 38% see no changes. The 10-year Treasury-Note saw this morning's yield fall 9 BPS from yesterday's close to 4.15%.
Vestin CEO Looking to Go Private
Vestin Group Inc.'s chief executive officer and majority shareholder, Michael Shustek, has approached the board with an offer for the outstanding stock of the company that he does not presently own, said a spokesman for the group. The Las Vegas-based company said the board has appointed a special committee of independent directors that will evaluate and respond to Shustek's proposal, as well as, negotiate the terms if any transaction results.
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