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Mortgage Headlines
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Last Updated Friday, February
6, 2004 10:12 AM CST
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Service Offers Renters Online Credit History
Pay Rent Build Credit recently launched its Data Network -- an Internet-based program that it says tracks electronic data of consumers' rent, mortgage, phone, insurance, and other recurring bill payments. The company suggests the payment histories can be incorporated into automated underwriting systems for credit pricing decisions. The Pay Rent Data Network requires that consumers build an electronic file of their rental and utility payments on its Web site in order for lenders to consider this information when applying for a loan. Consumers can record up to 36 months of past payment data which is verified through Pay Rent-approved sources.
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.
Turnaround in Production for Countrywide
Countrywide Financial Corp. reported an increase in monthly volume after declining since July. The Calabasas, Calif.-based lender announced that it reached loan fundings of $25 billion in December, up 13% from the previous month. However, volume was higher last December -- when it totaled $35 billion. The company reported its servicing portfolio at a new high of $645 billion. December subprime fundings reached $2.3 billion, and home equity fundings were reported at $1.8 billion.
Financial Freedom Reports Production Increases
Financial Freedom Senior Funding Corp. said it originated a record 13,800 loans totaling $957.2 million during the past year. The total is more than double the $417.0 million volume in 2002 -- which the company previously reported was an industry record. The Irvine, Calif.-lender estimated its year-end servicing portfolio at $2.8 billion, up 46% from the prior year.
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.
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