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Mortgage Headlines
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Last Updated Monday, January 26, 2004 08:29 AM CST
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Mortgage Market Weakens
In this week's Primary Mortgage Market Survey, Freddie Mac averaged the 30-year fixed-rate mortgage at 5.68%, up 4 basis points from last week. The mortgage industry experts surveyed at Bankrate.com this week predicted rates run the risk of rising over the next month and a half and advised prospective borrowers to lock in rates. The latest survey from the Mortgage Bankers Association of America showed that total applications fell 5.2% from the previous week.
First Horizon 4th Quarter Production Off by More Than Half
First Horizon originated $6.4 billion in loans during the fourth quarter -- a sharp decrease from the prior quarter's $14.6 billion, according to a parent company spokeswoman. The mortgage servicing portfolio stood at $68.9 billion at the end of 2003. First Tennessee also reported that its board of directors is seeking shareholders' approval to change its name to First Horizon National Corp.
Jobs Cut at Fairbanks, WaMu
204 layoffs are projected within Fairbanks Capital Corp., a Salt Lake City, Utah-headquartered company that says it specializes in servicing nonprime residential mortgage loans and employs over 1,500 associates. The layoffs will occur as a result of the company's decision to shut down its Austin, Texas, site by April. Washington Mutual Inc. announced it will eliminate 2,900 full-time equivalent positions by the end of the first quarter, and according to spokesman Alan Gulick, 2,000 of these will be in its home lending business.
Drop In Refis Won't Curb Consumer Spending, Fed Says
Even though home mortgage refinancings will slow this year consumer spending won't suffer, according to a new study by the Federal Reserve Bank of New York. "Concerns are rising that the recent surge in home equity withdrawal has left consumers in a weakened financial position that will, over time, prompt a retrenchment in spending," the Fed economists said in the report. "However, a look at household assets and liabilities suggests that consumers have used the withdrawn funds to restructure their balance sheets and reduce their debt service burden. As a result, households may be in a better position to spend in the years ahead," they said.
Purchase Apps at All-Time High as Rates Fall
In its Weekly Mortgage Application Survey, the Mortgage Bankers Association of America (MBA) reported that the Purchase Index reached a record high -- increasing 12.5% from the prior week to 501.6. MBA said the Market Composite Index -- which includes purchases and refinances -- jumped 30.4% from the previous week to end at 916.1. Freddie Mac said all rates stand at the lowest levels since July, beginning with the 30-year fixed-rate mortgage -- which came in at 5.64% in this week's Primary Mortgage Market Survey. The average last week was 5.66%, while a year ago it was 5.91%. An MBA forecast said 2004 will end with rates in the 6.3% to 6.5% range.
Fundings Fall at WaMu
Washington Mutual Inc. announced that its fourth quarter mortgage volume, or total loans secured by real estate, totaled $68.8 billion, sinking 47% from the previous quarter and 36% below the fourth quarter in 2002. The servicing portfolio for the Seattle-based institution was reported at $770.6 billion, with $182.6 billion of its own loans included. WaMu's subprime lending arm -- Long Beach Mortgage -- had volume of $6.0 billion in the quarter, while WaMu home equity fundings were reported at $7.9 billion. Fourth quarter multifamily volume totaled $1.6 billion.
Radian Takes Big Conseco Hit
Radian Group Inc. will take a $96 million charge in the fourth quarter to pay for $111 million in anticipated claims from a single manufactured housing transaction originated and serviced by Conseco, the company said in a statement. Radian also said it has "direct exposure" of $140 million in two other transactions with a different manufactured housing lender. "While we believe this is an isolated incident, we are no longer directly participate in this asset class," Radian's CEO said in the statement. "Nevertheless, we have learned a difficult lesson limiting our single market exposure and will apply this lesson going forward."
Originations Ascend at ABN AMRO
ABN AMRO Mortgage Group said it funded $5.5 billion in loans during the month of December. The total nudged up from $5.1 billion in the prior month, but was 57% below volume the prior year. The company originated $51 million in multifamily loans during December.
December Volume Down at Fannie
According to Fannie Mae's latest monthly summary, business volume totaled $73.4 billion in December, decreasing from the previous month's $75.2 billion. With $1.3 trillion in outstanding MBS and nearly $0.9 trillion in the gross mortgage portfolio at the year's end, the book of business balanced out to $2.2 trillion. November's conventional single-family delinquency rate -- which is reported on a one month lag -- increased two basis points from the prior month to 0.59%.
Wells Production Plummets
Wells Fargo & Company announced that its fourth quarter residential mortgage originations totaled $71 billion, shrinking from $161 billion the previous quarter. 2003 mortgage volume totaled an industry record $470 billion, eclipsing the previous year's record total of $333 billion. With its subsidiaries included, the banking behemoth reported its servicing portfolio at $731 billion.
FHA 100% Slated
Borrowers may soon be able to take advantage of the Zero Down Payment mortgage -- in which downpayment and closing costs can be rolled over onto the life of the loan, said FHAs Commissioner. If approved by Congress, the program can possibly be in effect by Oct. 1, 2004. Applicants participating in the Zero Down Payment program must attend pre-purchase homeownership counseling and be able to meet FHA qualifications, according to FHAs top man, and they must also be prepared to pay a premium and interest rate higher than standard FHA loans.
FHA Scorecard Deadline May 1
Effective May 1, 2004, all electronically underwritten single-family mortgage loans seeking to be insured by the Federal Housing Administration must be risk scored by the TOTAL Mortgage Scorecard, according to a mortgagee letter by the HUD. Lenders' automated underwriting systems must be able to link to the TOTAL system by the effective date for the loan to be insurable by FHA.
SunTrust Fundings Sink
Fourth quarter mortgage volume at SunTrust Banks Inc. totaled $6.3 billion -- shrinking from $13.8 billion in the previous quarter, according to a company spokesman. Mortgage production amounted to $43.7 billion in all of 2003, up from $30.8 billion the previous year, according to SunTrust.
Rates Tumble to Lowest Point Since Last Summer
Sinking 21 basis points from the previous week to the lowest level since July 11, 2003, the 30-year fixed-rate mortgage came in at 5.66%, said Freddie Mac in this week's Primary Mortgage Market Survey. Bankrate.com's weekly survey of mortgage industry experts' predictions showed that 50% of them expect a downturn in rates within the next month and a half, 30% say they will remain unchanged and 20% expect an upturn. For the week ending Jan. 9, mortgage loan application activity grew 17.1% from the prior week, bringing the Market Composite Index to 702.6, according to the Mortgage Bankers Association of America.
4th Quarter Production Plunges at BoA
Bank of America originated $18.4 billion in mortgages, according to its fourth quarter earnings announcement, plunging 53% from the third quarter's total of $39.5 billion. In the fourth quarter of 2002, the total was at $31.9 billion. Loans serviced amounted to $246.5 billion at the year's end, down slightly from $264.5 billion a year earlier, according to the report.
Discrimination Against Whites Leads to Flagstar Settlement
Flagstar Bank will pay $1.2 million in a class-action settlement to resolve a judge's ruling that it charged white borrowers up to 4% in revenue per loan fees, while setting the maximum at 3% for minority borrowers. The unequal fee caps were set forth in the bank's internal loan officer revenue per loan policy, which was effective from May 2001 through January 2002, according to plaintiff lawyer Amy Ficklin DeBrota. In an e-mailed statement, the Flagstar said that the circumstances leading to the lawsuit "were unintentional on Flagstar's part" and that it took "immediate, corrective steps to rectify the situation" once it became aware of the possible misinterpretation of its actions.
CTX Branch Among 15 Lenders to Lose FHA Approval
HUD terminated origination approval agreements for fifteen lenders, including a branch of CTX Mortgage Company's located in Illinois. Termination was based on a default and claim rate exceeding 225% of the field office rate. Lenders have the option to reapply for FHA origination approval after a 6-month period if they continue to meet FHA lending requirements, and if the Secretary determines the underlying factors leading to termination have been remedied.
Successful Broker Facing 25 Years for Murder of Wife
Ron Glick, the operator of what a prosecutor described as a successful mortgage brokerage, has agreed to a conviction that will send him prison for at least 25 years for strangling his wife. Glick had sent his wife threatening E-mails the week before she died. About a year ago she had sought a restraining order after he allegedly held a gun to her head, threatened to kill her and then became violent, throwing her to the ground, pulling her hair and kicking her. The day of the murder, the Glicks were to sign their divorce papers, the prosecutor said.
Cougar Attack Won't Keep Originator From Biking
For 13 years, Mike Munzing, a mortgage originator, has enjoyed biking through mountainous landscapes. Although he has ridden in one park almost one hundred times and says one can always count on seeing five or six deer frolicking up in the hills, he has never seen a mountain lion. However, on Thursday, the Orange County Sheriff's Department received a call informing them a woman had been mauled by a mountain lion in the area, said a spokesman in a phone interview. The call was followed by the discovery of another man who had likely been killed by the cat, and the killing of the animal. Munzing said he's sure he'll be "a little skittish" because of the incident, but it won't stop him from mountain riding.
Bad Management Led to Instafi.com Meltdown
The failure of Instafi.com has been big news in southern California, where the company was viewed as a success. At its peak in June the company was completing 2,900 loans a month, employing 380 people and pulling in profits of $1.7 million, according to an account in the Orange County Register. But the company abruptly shut its doors on Dec. 16, leaving debts of $38.2 million against assets of just $1.3 million, the paper reported. Instafi founder and CEO Sean Roberts told the paper the collapse of his company was caused by mortgage-rate swings and poor management.. "I got lazy when the company did well ... I went through the motions," he reportedly said. "I think I should have watched the expenses."
Flagstar Fundings Up
Flagstar Bancorp Inc. reported that in December it closed $2.6 billion in residential mortgage loans, up from $2.3 billion in November. In all of 2003, residential volume totaled a record $56.4 billion, compared to $43.2 billion in the prior year, the company said.
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