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Mortgage Headlines
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Last Updated Tuesday, February 04, 2003 11:33 AM CST
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Future of Commercial Mortgage Lending
San Diego, Calif. -- A few guys sat around drinking Monday, trying to figure out the problems of the world -- the commercial finance world, at least. From training, technology, and the next big challenge, these guys -- panelists at the Commercial Real Estate Finance/Multifamily Housing Convention & Expo (CREF) -- shared table microphones and sipped water while offering their expert opinions. The discussion headed toward customer expectations. CREF is the Mortgage Bankers Association of America's annual convention for the commercial sector and runs through Wednesday at the San Diego Convention Center.
Commercial Mortgage Bankers Meet in San Diego
In light of recent bad business practices, it is dangerous for regulatory bodies to react with vigilant, restrictive legislation that ultimately would be "harmful to local economies, harmful for the continuing creation of prosperous neighborhoods," said John A. Courson, chairman of the Mortgage Bankers Association of America, at the Commercial Real Estate Finance/Multifamily Housing Convention & Expo (CREF) on Monday. "We are keeping an eye on such backlash." At the CREF opening general session, Courson warned those in the commercial housing sector that negative public perception could be as damaging as a sticky-finger scandal like those in 2002.
COFI Heads Lower Again
The Federal Home Loan Bank of San Francisco reported the monthly weighted average cost of funds index (COFI) for 11th District Savings Institutions fell to 2.375%. The prior month, COFI was reported at 2.5737%, and the prior year it was 3.074%.
2002 Impac Production Doubles
Impac Mortgage Holdings, Inc. announced 2002 loan production reached almost $3.9 billion, a 162% increase from 2001's total of almost $1.5 billion. The non-conforming lender's master servicing portfolio ended the year at almost $8.7 billion.
Rising Rates Expected to Reduce
The 30-year fixed-rate mortgage also remained almost unchanged at an average 5.90% for the week ending Jan. 31, according to Freddie Mac's weekly rate survey. "Mortgage rates are currently in a kind of limbo with no impetus to drive the figures either up or down," said Frank Nothaft. While more than one-third of the mortgage experts polled in Bankrate.com's weekly survey said rates will go down over the next five weeks, a majority 67% said they will remain unchanged, within 2 bps.
Principal Mortgage to Layoff 500
Principal Financial Group announced Wednesday that it will phase out its traditional residential mortgage loan operation by Feb. 28, laying off about 500 employees in 78 branch offices. Instead of doing business through branch offices, Principal Residential Mortgage will begin solely making loans through its Mortgage Direct operation, which allows borrowers to apply for loans on the telephone or online. CEO Paul Bognanno said the company tried to time the move so that affected employees could take advantage of the robust mortgage market.
Production Up 1/3 From 2001 at First Horizon
First Horizon reported it produced $32.9 billion in loans last year, a one-third increase from 2001. Loans securitized and sold into the secondary market reached $30.8 billion last year, a 42% increase from 2001.
Share of Cashouts Fall
Freddie Mac-owned loans saw a decrease in cash-outs during the fourth quarter, with 41% of its loans obtaining cash-out -- down from 44% during the third quarter. For all of 2002, 47% of borrowers who refinanced cashed out at 5% or higher. More than half of all borrowers in the Northeast cashed out, more than in any other region in America during the year.
Record Production at Indymac
IndyMac Bank reported it originated a record $6.4 billion in loans during the fourth quarter, minus subdivision construction commitments. This is up 23% from third quarter and up almost half from fourth quarter 2001. IndyMac produced $20.9 billion in loans for the year, up almost one-quarter from 2001.
Record Purchases for Freddie as Earnings Restated
Mortgage phenomenon Freddie Mac reported record mortgage purchases for 2002. The business purchase volume of the government-sponsored housing enterprise totaled $642 billion during 2002. Business purchase volume during the fourth quarter reached $239 billion during the fourth quarter. Freddie said it expects to restate financial results for 2002, 2001 and possibly 2000, materially increasing earnings. PricewaterhouseCoopers replaced Arthur Anderson in March 2002, and Freddie said in some instances, the application of SFAS 133 and SFAS 115 were not consistent with generally accepted accounting principles.
World Savings Sees Record ARM Originations
Golden West Financial Corporation reported record loan originations, producing an all-time high of $26.7 billion last year, up 29% from 2001. Fourth quarter also saw an all-time high of new loans totaling $7.6 billion, up more than one-third from fourth quarter 2001. The company's loan balances grew by 17% in 2002, compared with a 5% increase in 2001.
Originations Up 71% From 2001 at Wells
Wells Fargo & Company reported it originated $333 billion in mortgage loans during 2002, a 71% jump from the 2001 total, spokesman Jon Ferchen said. Fourth quarter originations totaled $112 billion, up from third quarter's $89 billion. Well Fargo's year-to-date servicing portfolio totals $570 billion, Ferchen said.
Production Falls From 2001 at Chase
JPMorgan Chase & Co. produced $155.4 billion in mortgage loans during 2002, a step down from the $184.2 billion produced in 2001. Fourth quarter originations totaled $60.9 billion, almost double the $35.4 billion produced during the third quarter, according to spokeswoman Charlotte Gilbert-Biro. Loans serviced totaled $426 billion by the end of 2002, compared with $430 billion at the end of 2001, Gilbert-Biro said.
Record 2002 Production at ABN AMRO
ABN AMRO Mortgage Group, Inc. reported that it produced $119 billion in mortgages during 2002, a $36 billion increase from 2001. It produced a total of $40.95 billion in mortgages during the fourth quarter, more than a one-quarter increase from the third quarter. The company's top lending division was InterFirst Wholesale Mortgage Lending. It produced $99.5 billion during 2002. The commercial lending division of ABN AMRO Mortgage Group, Inc. reported $1.8 billion in lending for 2002, more than a one-quarter increase over 2001's production.
Broker Lies on Stand in $67 Mil Mortgage Fraud Case
According to court documents provided by the U.S. Department of Justice, a mortgage fraud case involving $67 million in homes built by a New York builder used fraudulent appraisals, income and asset documentation. Many of the loans were run through Patrick McNamara, a mortgage broker and star witness for the government in the case against the builder. Using state-of-the-art computer technology and scanners, McNamara and the builder allegedly altered income and asset documents, created fake leases, and presented fraudulent loan applications to wholesale lenders. McNamara also used other mortgage brokers to obtain the approvals.
Near Record Fannie Multifamily Investments as S&P Says Sector Souring
Fannie Mae announced that in 2002 it nearly matched its record multifamily investments, even though Standard & Poor's Ratings Services (S&P) also announced that the multifamily housing sector has been declining financially. Fannie's investments in that sector reached more than $22 billion last year, almost meeting its record from 2001despite the 20% to 30% decline in the market. S&P said the rate of new 30-day multifamily delinquencies increased quite a bit during the third quarter, and as a result, the multifamily delinquency rate is expected to rise in the months ahead.
Threat of War Pushes Mortgage Rates Down
The 30-year fixed-rate mortgage averaged 5.91% this week, according to Freddie Mac's weekly rates survey. That's down from last week's 5.97%. "Market concerns over weak economic indicators and an increased risk of war in the Middle East pushed mortgage rates even lower this week," said Frank Nothaft, chief economist at Freddie. The Mortgage Bankers of America's weekly mortgage loan application index found that applications decreased to 1100.3 the week ending Jan. 17 from 1154.3 the previous week. The mortgage experts polled in Bankrate.com's weekly survey are uneven about what rates will do over the next 30 to 45 days, but the majority cast a vote for "down" -- 57% said rates will fall, 7% said they'll go up, and 36% said they'll remain the same, within 2 bps.
MBA Sees 6.5% Rates, Near Record Purchase Activity in 2003
Housing has been a pillar for the snail-like economy, and this will continue as the economy recovers in 2003, the Mortgage Bankers Association of America (MBA) stated in its "State of the Real Estate Finance Industry" report, which recaps all-things housing from 2002 and states expectations for this year. Mortgage interest rates have been at 40-year lows, and helped fuel the final production figure for of residential loans last year -- $2.46 trillion. While the 30-year rate is expected to increase, it should remain low overall and average 6.5% for 2003, the MBA forecasted. Home purchases and refinancing activity are currently at record levels.
GMAC Reports Record 2002 FHA Production
More than $800 million in loans closed at GMAC Commercial Mortgage Corporation were FHA insured. This represents about 14% of all FHA loans, GMAC reported. About 70% of FHA activity at GMAC is targeted toward multifamily housing. Loans processed under the Multifamily Accelerated Processing program at the Department of Housing and Urban Development (HUD) account for one-third of the company's HUD loan production.
Mortgage Payment on Scandalous Execs House Tops $100k
Executives such as the ones accused last year of espousing tainted fiscal virtue don't deal in puny conventional mortgages -- which wouldn't loan enough to cover the cost of the front door. With the help of home values reported by the Wall Street Journal Online, the monthly mortgage payments of these headline-dominators can be calculated -- while reiterating the difference between us and them. Tyco International, formerly the parent of CIT Group Inc., is selling Dennis Kozlowski's Manhattan co-op on Fifth Avenue -- bought with pilfered Tyco funds -- for $16.8 million. Your mortgage payment would be a mere $107,899.89 a month.
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