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Mortgage Headlines
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Last Updated Friday, January 30, 2004 10:41 AM CST
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Venture West Production Off
Venture West Funding Inc. loan volume totaled about $271.5 million during the fourth quarter, down from $290.4 million in the prior quarter, according to company announcements. In 2003, total loan volume reached a record $1.03 billion.
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.
Regulator Says E-Mortgage Still Years Off
According to a recent report released by OFHEO, an entirely electronic mortgage --a mortgage where the critical loan documentation is created, executed, transferred, and ultimately stored electronically -- is possible, but is still years away. The high costs involved in switching from existing lending systems to new systems is one of many reasons for the reluctance. While the cost of implementation is holding back the shift to electronic lending, the cost of expenses can be reduced, according to OFHEO.
Anatomy of a Failure
In mid-2003 Partners Mortgage Corp., a private commercial mortgage lender located on posh Mercer Island in Seattle, appeared to be in a strong financial position. The firm had assets of nearly $100 million and was making 14% or more on its outstanding portfolio of mortgage loans. But now the company is in bankruptcy and wants to liquidate. The company financed high interest loans to borrowers who couldn't obtain bank or other financing with money raised by investors. In court testimony the CEO said the company misplayed the market, grew too quickly, relied on unreliable appraisals, and was not diligent on servicing its loan portfolio.
Farmer Mac Fundings Flounder
Fourth quarter purchases, guarantees and commitments totaled $288.2 million at the Federal Agricultural Mortgage Corp., stepping down from the previous quarter's $349.1 million, reported the lender known as Farmer Mac. At the end of 2003, volume amounted to $1.2 billion.
Notary Fraud Leads to Foreclosures
A Pennsylvania man has been accused by state prosecutors of illegally notarizing mortgage documents in a scheme to dupe low-income homeowners into securing inflated home loans. The Pennsylvania Attorney said the man allegedly notarized documents for a Pittsburgh-based home improvement contractor that used the documents to lure consumers into obtaining loans for home improvement projects that were never performed. The Attorney General said the defendants lured "mostly low-income consumers with poor credit histories into home improvement and financing contracts that they failed to start, complete or adequately perform."
Volume Off at Chase
JP Morgan Chase & Co. reported that it's mortgage lending arm originated $51 billion in loans during the fourth quarter, plunging from $93 billion the prior quarter. Loans serviced totaled $470 billion at the year's end, compared to $426 billion a year earlier, the company reported.
Freddie's New Business Purchases Worst Since Summer '02
New business purchases of $44.2 billion last month slipped below November's $44.5 billion, reported Freddie Mac in its latest monthly volume summary. The figure is the lowest since July 2002. The total mortgage portfolio balance was reported at $1.4 trillion. The single family delinquency rate, reported on a one-month lag, rose slightly to 0.76% in November.
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 fixedhttp://www.mortgagedaily.com 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 subprhttp://www.mortgagedaily.comh 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.
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