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MortgageChronicle.com Archives
February, 2012
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400 Servicing Jobs Open in Texas
Mortgage servicing employees are being recruited for 400 positions in North Texas. Some of the job opportunities are also for area production employees.
Job applicants are being recruited in Dallas as well as the North Texas markets of Plano, Richardson and Fort Worth.
Two openings that are most in demand are the servicing positions of in-line quality assurance analysts and business control specialists. Candidates for these jobs should have at least three years' mortgage experience in either auditing, underwriting or short sales. The business control position requires processing experience.
No Increase in Fannie Delinquency for Nearly 2 Years
New business acquisitions tumbled last month at Federal National Mortgage Association. But late payments on residential loans improved again and have been lower each of the past 23 months. Past-due payments on apartment loans also fell.
Secondary volume was down 20 percent between December 2011 and January 2012 at Fannie Mae. Activity fell 13 percent compared to January 2011.
Fannie Mae's book of business continued to diminish, finishing last month down $40 billion from the same month last year.
Freddie Raises G-Fee to Cover Payroll Taxes
The cost of recently passed legislation that extends a payroll tax cut will be paid by borrowers on agency loans, and Freddie Mac is now notifying its approved sellers of increased guarantee fees.
On Dec. 23, 2011, the Temporary Payroll Tax Cut Continuation Act of 2011 was signed into law by President Obama.
The law temporarily continues the reduction of the Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through today.
Distorted M.I. Data Indicate Decline in New Business
Business was slower for the third consecutive month at the nation's mortgage insurers, while delinquency was lower. But the numbers were distorted by the exit of another mortgage insurer from the sector's primary trade group.
The number of mortgage insurance policies written by members of the Mortgage Insurance Companies of America fell 3 percent between December and January.
However, last month's total excluded Republic Mortgage Insurance Co., which was included in the December data. The elimination of Republic's numbers follows last year's exits from the trade group by United Guaranty Corp. and PMI Mortgage Insurance Co.
R.E. Fraud Complaints Diminish as ID Theft is Top Category
More complaints were filed by consumers for identity theft than any other type of fraud last year as the number of complaints in the category grew 5 percent. One good sign is that the share of complaints about real estate fraud is diminishing.
U.S. consumers filed 38,140 complaints against mortgage foreclosure relief and debt management firms in 2011.
While complaints about foreclosure-rescue services accounted for 2 percent of all complaints, the category wasn't even among the 10-worst.
L.O. Ranks Grow
The ranks of mortgage loan originators grew during the final three months of last year. The growth came despite that one state suspended nearly a hundred originator licenses. Another state revoked the licenses of 15 companies.
As of Dec. 31, 2011, there were 3 percent more registered originators across the country than on Sept. 30, 2011. In fact, the total increased each quarter of last year.
Pennsylvania suspended 92 mortgage loan originator licenses during the fourth quarter, more than any other state.
FHFA Director Resists Democrats' Demands for Writedowns
The acting director of the Federal Housing Finance Agency has been asked to resign, was pressured by senators during a hearing and has been sent more than a hundred letters from House representatives. But the regulator stood his ground on principal reduction by Fannie Mae and Freddie Mac.
Edward DeMarco appeared before the Senate Banking Committee on Tuesday.
Amid calls for his resignation, DeMarco, who heads the agency that controls Fannie and Freddie, has been criticized by Democrats who claim he has personally obstructed a housing recovery.
Fannie Sellers Could Have to Return Premiums
Sellers approved by the Federal National Mortgage Association that have excessive prepayment activity could be required to reimburse the secondary lender for the premiums they earned. Another policy update includes an increase in the fee to review condominium projects.
Reimbursement may be requested for any premium that was paid on a loan that pays in full within 120 days of a whole-loan purchase or the date a mortgage-backed security was issued.
The remediation is being established for when unusual prepayment behavior is identified for a seller.
Mortgage Fraud Cases Fall, Reports Rise
Last year saw fewer federal cases of mortgage fraud than the government's prior fiscal year as lender losses dropped off. But the number of suspected mortgage fraud reports filed by banks and credit unions grew.
The number of pending cases of suspected mortgage fraud was down 14 percent between the government's fiscal-years 2010 and 2011.
But the number of Suspicious Activity Reports filed by financial institutions that suspected mortgage fraud jumped 33 percent during the same period.
Banking Performance Strong
The banking sector has improved earnings, while residential delinquency was down from a year ago. But compared to the prior quarter, delinquency has deteriorated. Although the total number of banks has declined, the number of institutions with a concentration in home loans grew.
Residential loans owned by federally insured banks climbed to $1.8780 trillion in the fourth quarter from $1.8520 trillion in the previous period. Home-loan holdings also grew from the fourth-quarter 2010, when banks owned $1.8997 trillion in residential mortgages.
The data was included in the Quarterly Banking Profile from the Federal Deposit Insurance Corp.
N.J. Servicers Avert Potential Disaster
New Jersey's highest appellate court decided that foreclosure filings can't be thrown out because the mortgage owner's name is missing. A different decision could have impacted thousands of foreclosures that have already been filed.
A 5-0 ruling Monday by the New Jersey Supreme Court said that while the mortgage owners must be identified in foreclosure documents, in cases where the owner's name is not stated, courts can remedy the problem in a variety of ways.
One attorney speculated that "probably thousands and thousands" of foreclosure cases would have needed to be re-filed if the court had ruled differently.
Jumbo RMBS Issuer Closes on First 2012 Deal
Jumbo issuer Redwood Trust has already closed on its first securitization this year and hopes to complete a half dozen before the year is out.
The Mill Valley, Calif.-based company issued $416 million in new residential mortgage-backed securities during January. Redwood hopes to acquire around $2 billion in loans during 2012 and complete as many as six new securitizations including last month's issuance.
One analyst says that Redwood is making progress and increasing volume with its jumbo loan conduit.
BofA Laying Off Default Servicing Employees
Mortgage servicing employees in the state of Maine are being laid off by Bank of America Corp. The job cuts are the result of an office closing at a facility that handles distressed loans.
The staff reduction will be effective later this year. Approximately 200 people are impacted by the office closing, though some might find jobs within different parts of the bank.
One congressional Democrat strongly disagreed with the bank's decision to close the location.
FHFA Asked to Suspend CA Foreclosures
A letter to the Federal Housing Finance Agency from California's attorney general requests the suspension of foreclosures on conventional agency loans while the regulator analyzes the benefit to taxpayers and borrowers of writing down principal.
California Attorney General Kamala D. Harris is asking for a "thorough, transparent analysis of whether principal reduction is in the best interests of struggling homeowners as well as taxpayers."
Harris already has a lawsuit pending against Fannie Mae and Freddie Mac over state subpoenas they ignored.
FHA Raising Premiums to Bolster Capital
In a move to shore up its ailing capital position, the Federal Housing Administration is raising mortgage insurance premiums.
An increase of 0.10 percent on annual mortgage insurance premiums is required through the Temporary Payroll Tax Cut Continuation Act of 2011. In addition, FHA is raising the up-front premium.
The increased premiums are expected to help protect FHA's capital reserve and strengthen the FHA Mutual Mortgage Insurance Fund.
MetLife CRE Originations Up More Than 1/3
Commercial mortgage production shot up more than a third last year at MetLife Inc. But the life insurer lagged the overall industry in new volume.
The origination of commercial real estate loans during 2011 at the New York-based company increased around 38 percent from 2010.
But the industry as a whole saw CRE loan fundings leap 64 percent during the same period.
REO-To-Rental Pilot Transaction Announced
The next step is being taken in a plan to convert repossessed residential real estate into rental properties.
In August of last year, a joint announcement from the Department of Housing and Urban Development, the Department of the Treasury and the Federal Housing Finance Agency outlined a proposal to use repossessed homes as rental properties.
Earlier this month, FHFA said that investors were being pre-qualified to bid on Fannie Mae's real-estate-owned assets. The asset pools included rental properties, vacant properties and non-performing loans.
BofA Disputes HUD Charges of Discrimination
Bank of America Corp. says that charges by the Department of Housing and Urban Development that it discriminated against disabled borrowers are just plain wrong. The company claims that in the cases cited by HUD, it used the more strict standards required on government-insured loans.
HUD issued a statement earlier today indicating that BofA discriminated against homeowners with disabilities. The bank's actions were allegedly in violation of the Fair Housing Act.
But BofA issued a statement indicating that its policy is to comply with all applicable fair lending laws and regulations.
CMBS Delinquency Rises, Could Jump Higher
Securitized commercial real estate loans saw an increase in delinquency last month, and concerns about denials of loan modifications and debt restructurings this year could have the rate of late payments up nearly another 100 basis points.
Loans included in commercial mortgage-backed securities had a 30-day delinquency rate that was 6 basis points higher in January than in December.
That worked out to around $59.12 billion in past due CMBS loans as of last month.
Radian Rolling Out Construction-to-Perm
Radian Guaranty Inc. said it will begin offering a one-year commitment on mortgages used to finance the construction of a residential property.
A new construction-to-permanent 12-month commitment has been introduced by Philadelphia-based company.
The program is available for proposed construction and for properties that are already under construction.
Billionaire Says Now is Time for Residential Investments
The Oracle of Omaha says that now is the time to invest in residential real estate.
Warren Buffett made the comments in a television news interview.
"If I had a way of buying a couple hundred thousand single-family homes, and had a way of managing -- the management is enormous, is really a problem because they're one by one, they're not like apartment houses -- but I would load up on them," the billionaire said.
HUD Charges BofA With Discrimination
The Department of Housing and Urban Development has charged Bank of America with discriminatory lending. BofA allegedly discriminated against homeowners with disabilities.
HUD claims that the lender violated the Fair Housing Act.
The action comes just less than three weeks since a $1 billion settlement was reached between HUD and BofA subsidiary Countrywide Financial Corp. in the "the largest ever False Claims Act settlement relating to mortgage fraud."
CitiMortgage Whistleblower Tells Her Story
When Citigroup Inc. agreed to pay more than $150 million to settle charges that it failed to follow Federal Housing Administration guidelines, former CitiMortgage Inc. employee Sherry Hunt netted more than $30 million.
Hunt had filed a lawsuit under the federal False Claims Act, which gives whistleblowers a cut of the amount collected.
But Hunt, who is still negotiating whether she will continue working for the lender, says she didn't do it for the money.
Bank with Big Mortgage Branch Operation Fails
A $400 million bank was among two federally insured financial institution failures Friday, and no other firm was interested in acquiring the bank -- impacting a hundred mortgage branch managers that are part of a national branch acquisition business operated by the bank.
In Ellaville, Ga., the state's Department of Banking and Finance seized Central Bank of Georgia. The maneuver was done with an order issued by the Superior Court of Schley County as required by the Official Code of Georgia, Section 7-1-150(a).
The code authorizes such seizures "whenever such financial institution is either insolvent or operating in an unsafe or unsound condition to transact its business, is operating in violation of any court order, statute, rule or regulation, or requests the department to take possession of its business and property," according to an announcement.
SunTrust in Second Wave of Servicer Settlements
SunTrust Banks Inc., which wasn't among the five mortgage servicers to settle with multiple state attorneys general earlier this month, has set aside more than $100 million to cover potential settlements in the states it operates.
The Atlanta-based bank is among a second tier of servicers that have started discussions with the states' top attorneys.
A $120 million pre-tax charge related to an expected settlement has been applied retroactively to SunTrust's fourth-quarter earnings statement.
Residential Delinquency Deteriorates at Freddie
There are two stories about Freddie Mac's delinquency. There is the story about how multifamily late payments have fallen each of the past five months. And there is also the story about residential delinquency, which has managed to increase during each of those same months. In contrast, Freddie's government-controlled cousin hasn't reported an increase in residential delinquency during any month in nearly two years.
Secondary mortgage volume at the Federal Home Loan Mortgage Corp. climbed 8 percent between December and January.
But Freddie's total mortgage portfolio continued to diminish, ending last month $8.3 billion less than at the end of December.
Flagstar Settles With HUD
A lawsuit that accuses Flagstar Bank of disregarding Federal Housing Administration guidelines and falsely certifying government-insured mortgages has been settled for more than $100 million.
The complaint was filed by the Department of Justice and the Department of Housing and Urban Development.
Flagstar allegedly used unqualified employees to approve FHA-insured loans. In additions, according to the complaint, the bank approved mortgages that did not meet FHA underwriting requirements and made false certifications on insured loans.
Presidents Put Dent in Mortgage Business
President's Day left fewer prospective borrowers inquiring about a new loan this week, though higher rates didn't help. The decline was most evident with nonconforming inquiries. One positive sign is that upcoming mortgage rates are leaning a little bit lower.
The average number of loan inquiries per loan originator was down 13 percent from last week, according to the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Feb. 24. The index fell to 210 from 242 for the week ended Feb. 17.
Activity was up 3 percent when compared to the same week last year.
FHA Reports Settlements with Several Mortgagees
A government filing Friday outlined actions taken against approved Federal Housing Administration mortgagees that included hundreds of thousands of dollars in penalties, indemnification on FHA-insured loans and even the loss of FHA approval. Many of the recent settlements involved deficiencies in remitting mortgage insurance premiums.
The Department of Housing and Urban Development is required to release the cause and description of administrative mortgagee actions under the National Housing Act.
A $215,000 settlement was reached in June 2011 with Branch Bank and Trust Co. The agreement calls for BB&T and subsidiary Liberty Mortgage Corp. to remit M.I. premiums and late fees owed.
Nationstar Hires Citi, Fannie Execs as Preps for IPO
As it prepares for an initial public offering, Nationstar Mortgage disclosed that it has recruited former executives of Fannie Mae and Citigroup Inc. to fill senior management slots. The company sees opportunity in building and refinancing its servicing portfolio.
Nationstar Mortgage Holdings Inc. expects to sell 16,666,667 shares of common stock at between $17 and $19 a share in its initial public offering, according to a FORM S-1 filed Friday with the Securities and Exchange Commission.
After the IPO is completed, an affiliate of Fortress Investment Group LLC will own as much as 80.8 percent of the common stock, which will be traded on the New York Stock Exchange under the symbol NSM.
USDA Pilot Program Targets Negative-Equity
A little north of where the Mortgage Bankers Association is wrapping up its annual mortgage servicing conference, the secretary of the Department of Agriculture is promoting a streamline refinance program for negative-equity borrowers.
U.S. Agriculture Secretary Tom Vilsack is in Orlando, Fla., to promote the Single Family Housing Guaranteed Rural Refinance Pilot Program.
In addition to Florida, the pilot program is available in 18 other states including California, Illinois and Ohio.
BofA Stops Sending Fannie New Business
Fed up with erratic repurchase demand activity, Bank of America Corp. has decided not to sell new business to the Federal National Mortgage Association.
As of Dec. 31, 2011, BofA had $14.3 billion in unresolved repurchase claims, the Charlotte, N.C.-based company reported in a filing with the Securities and Exchange Commission. BofA has recorded repurchase liability of $15.9 billion.
BofA and Countrywide sold Fannie Mae and Freddie Mac a combined $1.1 trillion in mortgages originated between 2004 and 2008. Another $0.963 trillion in originations were sold to other investors.
ARMs Improve as 30 Year Bounces Off Low
Adjustable-rate mortgages improved over the past week. But the 30-year fixed-rate mortgage bounced off of its record low, though it might be lower in the next report. Top housing economists are mixed over where they expect mortgage rates will move.
The 30-year mortgage had been at the lowest level ever recorded for three consecutive weeks: 3.87 percent.
But the long-term mortgage lost its grip on the record low and rose 8 basis points from last week.
FHA Limitations on Seller Concessions Revised
A proposed policy that cuts the maximum seller concessions in half on residential transactions financed with government mortgages has been revised in response to strong public feedback.
Current regulations allow up to 6 percent to be paid by the seller when the home loan is insured by the Federal Housing Administration.
But a proposal in July 2010 by the Department of Housing and Urban Development would have the maximum limit on seller concessions reduced to 3 percent on FHA transactions.
Ginnie MBS Issuance Grows Despite Multifamily Decline
The New Year started off strong at the Government National Mortgage Association, with the issuance of mortgage-backed securities that are guaranteed by the Washington, D.C.-based company climbing from the previous month. Multifamily business, however, slumped.
January's total securitizations at the government-owned corporation increased 9 percent from December.
Ginnie guarantees MBS that are used to finance residential and commercial mortgages insured by the Federal Housing Administration and home loans that are guaranteed by the Department of Veterans Affairs. Ginnie also guarantees MBS with loans originated under other government programs.
Default Service Providers Promote Products
Default service providers are busy this week touting their wares as mortgage servicers converge in Florida. Products being promoted include those that identify property association liability and platforms for the entire default loan process.
Stewart Lender Services is exhibiting at the Mortgage Bankers Association's National Mortgage Servicing Conference & EXPO 2012 this week at the Orlando World Center Marriott. The Houston-based service provider said last week that its Rental Management Solutions now provides national property management services.
Another exhibitor, CoreLogic, reported Tuesday that it released DefaultView, a new default servicing platform to help servicers manage loans throughout the entire default cycle.
Expected 1st Half Originations Upped
Thanks to a stronger refinance outlook, more mortgage business is expected during the first six months of 2012 than was forecast last month.
The outlook for residential production during the first quarter was raised 13 percent from what was forecasted just last month.
Even the second-quarter projection was raised 3 percent from the prior prediction.
Mortgage Market Needs Changes
A leading analyst sees many changes needed in the mortgage market. One of those changes is higher interest rates.
Meredith Whitney, founder and chief executive officer of Meredith Whitney Advisory Group noted that the Federal Reserve is evenly divided between raising rates and not raising rates.
But low rates haven't done much for the mortgage market because borrowers can't qualify or don't have enough equity.
GSE Execs Rack Up Tens of Millions in Legal Expenses
An inspector general report examined legal fees being paid on behalf of former senior executives of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. One way that the two government-controlled enterprises can cut back on legal expenses is to stay all litigation until they are out of conservatorship since neither will ever be in a position to pay such fees.
The report highlighted the case of three former executives of Fannie Mae -- including its former chief executives officer, chief financial officer and controller -- who are accused of engaging in practices to artificially inflate the company's stock price.
The three settled with the Federal Housing Finance Agency's predecessor, the Office of Federal Housing Enterprise Oversight, in August 2008 for a combined $31 million.
HUD Clarifies HAMP Credits Toward Settlement
While some principal reduction on mortgages with government loan modifications can be credited towards the recent mortgage servicer settlement, the vast majority of loans modified under the federal program won't be eligible.
The Department of Housing and Urban Development says that incentives paid to servicers under the Home Affordable Modification Program cannot be used as credit towards the massive mortgage servicer settlement announced on Feb. 9.
HUD was responding to a news article that an article in the Financial Times that, it says, argues HAMP subsidies are being used for credit under the settlement.
Mortgage Bankers Raise Origination Outlook
Home lenders cut their outlook for the volume of home purchases expected to be financed this year. But an increase in projected refinance production was enough to push the overall outlook higher.
The latest mortgage production forecast has first-quarter residential originations 6 percent higher than was predicted last month.
Even expected second-quarter financing was increased 2 percent.
Apartment Loan Performance Leads CMBS Improvement
Led by improving multifamily performance, past-due payments on securitized commercial mortgages retreated -- though so did the overall amount outstanding.
Delinquency of at least 60 days on loans that are part of conduit-fusion commercial mortgage-backed securities was 2 basis points better during January than in December.
But late payments on securitized commercial mortgages have worsened 29 BPS from January 2011.
What's Next for Fannie and Freddie?
The next phase in conservatorship for Fannie Mae and Freddie Mac has been laid out for legislators.
The Federal Housing Finance Agency was established through The Housing and Economic Recovery Act of 2008, which was signed into law by President George W. Bush in July 2008.
By the time that the financial crisis reached a fever pitch in September 2008 and capital markets froze up, the government determined that it was time to place Fannie and Freddie under the conservatorship of FHFA, where both companies remain today after costing U.S. taxpayers more than $180 billion.
Serious Delinquency Retreats
Serious home-loan delinquency relented after ascending each of the prior four months. The rate in Dallas declined, while defaults in Miami climbed.
Residential delinquency of at least 90 days dropped 11 basis points between December and January on first mortgages.
Late payments already had been up each month since August.
Distressed Loan Servicer Reports Phenomenal Growth
A mortgage servicer that specializes in distressed loans has seen its staff nearly triple over the past six months.
Wingspan Portfolio Advisors was launched in 2008 by Chief Executive Officer Steve Horne. By October 2009, Horne employed 39 employees.
As of last September, headcount at Wingspan Portfolio Advisors had grown to 500, Horne said in an interview with Mortgage Daily at the time.
Quarterly Production Outlook Lifted
A key outlook for home-loan originations during the first three months of 2012 was raised, though business is expected to fall for the rest of the year. There is no end in sight for continued contraction in the country's collective outstanding mortgages.
The forecast for residential production during the three months ended March 31 was raised 3 percent from last month's outlook.
The full-year 2012 forecast was lifted by 4 percent from the previous projection. But next year's business is predicted to slow.
Home Loan Performance Improves in January
The first month of 2012 was a good month for homeowners, with fewer borrowers falling behind on their payments. A reduction in the rate of newly delinquent borrowers more than offset a bump in the foreclosure rate.
Residential delinquency was down for the second consecutive month in January.
The 30-day rate, including foreclosures, was 14 basis points lower than during December, a month when delinquency slipped 5 BPS from November.
January's late payments sank 94 BPS from the same month during 2011.Appraisal Compliance Key to New Offerings
A spectrum of new appraisal services has recently hit the market, and the one common theme among the offerings is compliance. As the number of appraisal management companies seems to continually be increasing, many are enhancing their services with technology. Meanwhile, affordable alternatives to full appraisals that promise more than broker price opinions are springing up.
A recent news release from StreetLinks Lender Solutions indicated that it has launched StreetLinks Liquidation Value Report, a USPAP-compliant liquidation valuation report for mortgage servicers and asset management firms.
More than a million appraisal reports have been delivered through DataCourier since the Uniform Appraisal Dataset went into effect on Sept. 1, 2011, a la mode reported. The free service automatically checks for UAD compliance errors when an appraiser is ready to deliver a final report.
Activity in MBS Lawsuits Continues
Several investors in collateralized-debt obligations have been busy litigating their losses in court. Many of the actions involving mortgage bonds are tied to loan originated by Countrywide Home Loans. Plaintiffs in several of the cases are insurance firms. Criminal charges were recently filed in one case.
Three former Credit Suisse executives were charged with fraudulently inflating the prices of asset-backed bonds known as ABN1. Credit Suisse in March 2008 had to write down $2.65 billion, including $0.54 billion from the ABN1 book, which was secured by subprime residential mortgage-backed securities and commercial MBS.
Deutsch Bank AG subsidiary Phoenix Light SF Ltd. filed a lawsuit on Feb. 14 in the Supreme Court of the State of New York, County of New York, against Ace Securities Corp. for allegedly misrepresenting the quality of $512 million in RMBS.
Mortgage Fraud Defendant Claims Lender Lost Nothing on Securitized Loan
One of two defendants who have already pleaded guilty to defrauding Countrywide Home Loans on a $760,000 mortgage claims that because the loan was securitized, Countrywide didn't face any losses. The strategy is intended to avoid a prison sentence.
If the federal judge in the case agrees, the process of prosecuting mortgage fraud defendants -- which already takes years -- could become even more difficult and complicated.
A decision is expected this week in the case.
Nearly 50 Mortgage Conferences in March
The premier event for the mortgage servicing industry starts on Tuesday and includes presentations by the commissioner of the Federal Housing Administration and the president of the Government National Mortgage Association. The former chairmen of both major political parties were speakers at a recent commercial mortgage event. A look at the Mortgage Daily conference calendar indicates that nearly 50 mortgage-related events are being held next month alone -- though more than 70 conferences and meetings have been identified so far for the second quarter.
On Tuesday, the Mortgage Bankers Association kicks off its National Servicing Conference & Expo 2012 at the Orlando World Center Marriott in Orlando, Fla. The convention, which runs through Friday, costs $1,205 for MBA members and $2,170 for non-members.
Provident Funding is the exclusive sponsor of the National Association of Mortgage Brokers' 2012 Legislative & Regulatory Conference.
Police Notified Private Data Might Have Been Stolen
A Texas-based mortgage banker disclosed that one of its computer servers was broken into, with the alleged criminals gaining access to customers' social security numbers and other private data.
On Friday, Feb. 10, DHI Mortgage Company Ltd. discovered the breach. The lender said that police have been notified.
Borrowers who were impacted by the breach had completed a loan application on the company's website and closed on a loan with the company.
Home Purchase Financing Picks Up
More people inquired about a mortgage to finance a home purchase this week, as was the case for government mortgages. Strength in the two categories was enough to drive overall activity higher. But inquiries for refinances, adjustable-rate mortgages and jumbo mortgages all declined.
Loan pricing inquiries inched up 1 percent over the past seven days, leaving the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily at 242 for the week ended Feb. 17.
The index was 240 a week earlier and 201 a year earlier.
Deal Approved for WaMu to Exit Bankruptcy
In 2006, Washington Mutual Bank was the third-biggest residential lender in the country. Within two years it would become the biggest bank failure in U.S. history. Now a deal has been approved for the former parent of the bank to exit bankruptcy.
Not long after WaMu failed in September 2008, parent Washington Mutual Inc. filed for bankruptcy.
The Seattle-based company tried to emerge from bankruptcy twice, but the judge rejected the reorganization plans both times.
American Home Expands into Correspondent Lending
American Home Mortgage Servicing Inc., a big player in the mortgage servicing arena, has recently expanded into correspondent production, warehouse lending and home valuation services and is changing its name.
The Coppell, Texas-based firm said Friday that it launched correspondent and warehouse lending operations in October.
The addition of the new business lines followed an expansion over the past 12 months into loan closing services, REO management and home valuation.
HAMP Fees Raised on Non-Agency Loans
The amount of incentive paid on non-agency mortgages with principal reduction under the government's loan modification program has been raised. Second-lien investors are also being paid more to reduce or eliminate principal.
On loans that have not been more than six months past due during the prior 12 months with loan-to-value ratios of at least 105 percent but less than 115 percent based on a mark-to-market value, the payout will be 63 cents for each dollar in principal forgiven.
The higher payout applies to modifications that include principal reduction under the Principal Reduction Alternative.
30-Year at Record Low for 3 Consecutive Weeks
There was no movement with fixed rates this week. Yet 30-year mortgages sit at their lowest level ever recorded. But fixed-rates are likely to be higher in next week's report. Borrowers who have a one-year adjustable-rate mortgage can expect their payments to start moving higher based on an increase in the one-year index.
For three weeks now the 30-year fixed-rate mortgage has averaged less than at any other time on record.
But the 30-year mortgage could be around 4 basis points higher in next week's column based on an analysis of Treasury market data.
Mortgage Market Report Card
Mortgage bankers reported that delinquency and foreclosures were lower during the final three months of last year. Even subprime performance improved. But the picture gets much darker when zeroing in on government-insured mortgages. The latest data reflected a two-month delinquency rate that conflicts with statistics reported earlier this week.
Residential loan delinquency of at least 30 days, including foreclosures, tumbled 46 basis points between the third and fourth quarters.
Compared to a year earlier, the rate of past-due payments sank 93 BPS.
Mortgage Market Report Card
Signs of life are emerging in the mortgage securities market and home building as late payments and credit standards are beginning to ease, according to the Federal Reserve. Even the commercial mortgage market, which remains in the doldrums, has exhibited some signs of improvement.
Mortgage rates and current-coupon agency residential mortgage-backed securities have fallen to near historic lows. Yet, refinance activity remains subdued as a result of "extremely tight" mortgage underwriting standards and low levels of home equity.
However, some reports indicate credit standards have started to loosen.
CA Foreclosures Fall Despite National Increase
U.S. foreclosure filings increased last month, though year-over-year performance has been on the mend each month for more than a year now. New filings fell, however, in California -- the state with the most activity. Meanwhile, U.S. mortgage servicers completed fewer foreclosures than in December.
There were 3 percent more U.S. properties owned by delinquent borrowers that were hit with a foreclosure during January than in December. Filings included notices of default, scheduled auctions and repossessions.
But filings tumbled 19 percent from January 2011.
Mortgage Firms Wade through Bankruptcies
A settlement is being sought with former executives by a former financial giant that is in corporate bankruptcy. Investors in a hard-money lender in Maine are spooked by the cost of legal representation, while one 'big bucks' filing is being fought tooth-and-nail by the company's creditors.
Bankruptcy Trustee Joel I. Sher has asked the court to approve a $6.5 million settlement obtained with the former officers of Thornburg Mortgage Inc.
In court documents filed Feb. 13 in federal bankruptcy court in Baltimore, Md., the trustee asked the court to approve a global settlement that would put to rest the legal claims and plethora of lawsuits swirling around the former executives that stem from the 2009 Chapter 11 bankruptcy filing.
Citi Settles Charges of Fraud on FHA Loans
Citigroup Inc.'s mortgage subsidiary has agreed to settle a government lawsuit for more than $150 million. The unit is accused of falsely certifying federally insured mortgages, not reporting mortgage fraud and pressuring quality control employees to ignore loan defects.
The settlement will cost Citi $158 million in damages and civil penalties.
"CitiMortgage failed to perform basic due diligence, failed to verify information in the loan file that bore directly on the borrower's ability to make payments on the mortgage, and repeatedly endorsed mortgage loans that contained serious defects and departures from HUD's underwriting standards and thus were not eligible for FHA insurance," a government statement said.
Risk of Appraisal and Income Fraud Rises
Fewer people are likely to lie about whether they will occupy a property, while the probability of borrowers using someone else's identity is also falling. But the likelihood of appraisal fraud has recently worsened, and more people are prone to deceive lenders about their income. The overall risk of mortgage fraud in the country hasn't changed much.
The risk of mortgage fraud during the final three months of last year on new loan originations was 1 percent higher than in the third quarter.
The four states with the highest risk of mortgage fraud were also the states with the worst foreclosure rates in the fourth-quarter 2011.
Florida Firm Recruiting 1,000
A mortgage compliance firm based in Florida plans to increase its staffing by a thousand people.
Among the available jobs are experienced underwriters, attorneys and processors as well as compliance experts and appraisers.
Offices in Orlando, Fla., and Jacksonville, Fla., will house some of the new recruits, though the Florida locations are expected to reach their maximum capacity by this spring. In addition, existing facilities in California, Dallas and Denver could be expanded.
More Details Emerge About Massive Servicing Settlement
Following last week's huge settlement between the nation's five biggest mortgage servicers and 49 state attorneys general, more details have been released about the amounts being paid by the servicers and collected by the states. While the settlement erases much of the uncertainty surrounding the industry's liability, the banks are not out of the woods and still face plenty of legal challenges.
BofA expects its settlement costs will ultimately come in around $11.8 billion, including the amounts owed to the Fed and the OCC and a previously announced settlement of as much as $1 billion with HUD over alleged mortgage fraud by Countrywide on loans insured by the Federal Housing Administration.
An investigation into how much most major states claimed they will receive as their share of the settlement turned up more than $35 billion. The following table summarizes the amounts reported by these state.
Mixed January Performance at Radian
The volume of mortgages insured last month by Radian Group Inc. eased from December. But compared to a year prior, volume nearly doubled. Delinquency, however, improved from one month earlier and 12 months earlier.
The mortgage insurance company wrote $2.0 billion in new policies during January, according to operational data released Tuesday.
Business slipped from $2.3 billion the previous month.
Deadline Set for Mandatory SARs Filings by Non-Bank Lenders
A deadline has been established for a new requirement that mortgage brokers and other non-bank residential lenders file reports when mortgage fraud is suspected.
The Financial Crimes Enforcement Network last week said that it finalized new regulations requiring non-bank residential lenders to file suspicious activity reports.
Financial institutions were already required to file SARS when mortgage fraud is suspected.
West Outperforms East as U.S. Delinquency Deteriorates
The level of late payments on mortgages secured by Arizona and California properties has declined at least 200 basis points over the past year -- the best performances of any states. But New Jersey and Vermont put in the worst performance. U.S. delinquency, meanwhile, rose in the final quarter of 2011 and might rise again.
The U.S. delinquency rate increased 13 basis points between the third and fourth quarters of last year.
But the rate of past-due paments was down 40 BPS when compared to the fourth-quarter 2010.
Proposed Servicer Statement Addresses Settlement Issues
The Consumer Financial Protection Bureau has developed a proposed standardized statement for mortgage servicers to use.
The prototype includes a breakdown of how much of the monthly payment went to principal, interest and escrow. It also details the outstanding principal, maturity date and other loan terms.
The American Bankers Association called the standards outlined by the CFPB a good idea, while an executive with a public interest group said simplified mortgage statements would help resolve problems that were at the heart of the mortgage servicer settlement.
Appraisal Firms Litigate and Defend
A trio of lawsuits previously filed on behalf of a failed bank against national appraisal firms have seen mixed decisions by the courts. Two other lawsuits filed by appraisal firms against two big mortgage firms unsuccessfully alleged that being removed from the lenders' approved appraisal lists damaged their businesses.
Capital West Appraisals LLC appealed a decision by the U.S. District Court for the Western District of Washington to dismiss its second amended complaint against Countrywide Financial Corp.
The complaint alleged violations of the Racketeer Influenced and Corrupt Organizations Act. Capital West was the lead plaintiff in the diversity action brought under the Class Action Fairness Act of 2005.
More MetLife Employees Find New Homes
Hundreds of MetLife Home Loans employees have been recruited as another Texas-based lender expands its operations in the eastern half of the country. It's the third mass hiring of employees impacted by MetLife's decision to get out of the business.
Earlier this month, Provident Financial Holdings hired 40 employees from Irving, Texas-based. Less than a week later, HomeStreet Bank reported that it hired 160 employees in the Northwest.
Now, a Dallas-based mortgage subsidiary of Lone Star Funds said it picked up around 300 MetLife employees.
MGIC Cuts M.I. Rates for Higher Credit Scores
Borrowers with higher credit scores will now be eligible for lower mortgage insurance premiums at Mortgage Guaranty Insurance Corp. Meanwhile, guidelines have been relaxed for debt-to-income ratios, loan-to-value ratios and second homes.
Mortgage insurance rates are being reduced for borrowers whose credit scores are at least 760, according to a bulletin from the Milwaukee-based mortgage insurance company.
In non-restricted markets, MGIC will allow DTI ratios up to 45 percent on loans up to $625,500 as long as the payment is fixed for the first five years.
121-Year-Old Bank Among 2 to Fail
Two midwest banks were closed by the national regulator of banking institutions, including one that was more than a century old. Meanwhile, a net branch operation that had previously touted a planned transition from mortgage broker to mortgage banker has since vanished.
The Office of the Comptroller of the Currency closed down two banks on Friday. Both banks saw their assets and losses deteriorate as a result of unsafe and unsound practices, and the OCC said they were "critically undercapitalized" to the point that they could not survive without government assistance.
The Federal Deposit Insurance Corp. was appointed receiver in both of Friday's bank failures.
Investor Loan Losses Prompt BofA Subpoena
Bank of America Corp. is being investigated by the commonwealth of Massachusetts over the possible overvaluation of collateralized-loan obligations. The investigation could spread to more banks.
On Thursday, Massachusetts Secretary of State William Galvin subpoenaed records from BofA to determine if the firm knowingly overvalued around $870 million of loans that it sold in 2007 to institutional investors.
The investors eventually lost approximately $150 million on their investments.
Business Slows in Super Bowl Week
Hurt by weakened refinance activity, fewer mortgage inquiries were made during Super Bowl week. But refinance inquiries were well above the level a year ago. Purchase activity slipped from last week and was off more than a third from a year earlier.
Overall mortgage activity was down 11 percent from last week, according to the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the week ended Feb. 10. The index landed at 240, which was around 18 percent higher than the same week in 2011.
Refinances put in the worst week-over-week performance of any category, with new refinance inquiries down 14 percent. But refinance business was up 85 percent from a year prior.
Average Credit Score Falls Last Year
The average credit score was lower last year. Three out of the five states with the highest credit scores are in the West. But among the 10 states with the worst scores, just one was in the West.
The average U.S. consumer shopping online for a mortgage saw their credit score decrease 5 points between 2010 and 2011.
California had the highest average credit score for the second consecutive year.
Smaller Players Fill Correspondent Void
While several major lenders have cut back on correspondent lending or shuttered correspondent operations altogether during the past year, nearly a dozen smaller players have sprung up to service the sector. On Friday, another firm joined the fray.
The likes of Ally Financial Inc., Bank of America Home Loans, MetLife Home Loans and PHH Mortgage Corp. have exited or scaled back their correspondent lending since last year.
Smaller lenders to exit correspondent include Merit Mortgage Services, Sidus Financial LLC, O2Funding and reverse mortgage lender Genworth Financial Home Equity Access.
Settlement Cop Had Been Obama's Pick for FHFA Director
When President Obama nominated North Carolina's banking commissioner more than a year ago to head the Federal Housing Finance Agency, Republicans in the Senate -- which would need to confirm such an appointment -- dissuaded the official from completing the confirmation process. But now the president has found a spot for the state regulator that isn't subject to partisan posturing.
North Carolina Banking Commissioner Joseph Smith Jr. was nominated 13 months ago by Obama for the role of FHFA director. But the nominee withdrew his name from consideration after facing resistance from Senate Republicans.
However, a newly created slot that would have Smith monitoring the massive mortgage servicer settlement doesn't require Senate confirmation.
Oklahoma is Lone Holdout in Servicer Settlement
Unlike his 49 counterparts, the attorney general of Oklahoma opted out of the national servicer settlement because it went too far.
The nation's five largest mortgage servicers agreed to a settlement with 49 states over allegedly faulty foreclosure practices.
But Oklahoma Attorney General Scott Pruitt said concern that the national settlement overreached the power of state attorneys general was enough to avoid participating in the agreement.
Record Low 30-Year Rate Might Rise
While the 30-year mortgage retained its record-low standing this week, it could be higher in next week's report. Meanwhile, pricing on 15-year loans and jumbo mortgages was less competitive this week relative to the conforming 30-year mortgage.
After falling to the lowest level on record, the 30-year fixed-rate mortgage maintained its record status this week.
But an analysis of Treasury market activity this week points to a 6-basis-point increase in rates by next week's report.
Record Mortgage Fraud Settlement
Allegations that the Federal Housing Administration was defrauded on mortgages it insured have been settled for $1 billion. The settlement, which is the biggest of its kind, also resolves allegations of inflated appraisals and abuse with the government's loan modification program.
The settlement with the Department of Housing and Urban Development is "the largest ever False Claims Act settlement relating to mortgage fraud," the Department of Justice said Thursday in a statement.
According to the announcement, the settlement resolves civil claims by the government that FHA lost hundreds of millions of dollars because of a mortgagee that had allegedly been "recklessly and fraudulently underwriting loans to unqualified borrowers."
BofA Requiring Reservations for Refis
Borrowers who telephone Bank of America Home Loans about a refinance during busy times are being asked to reserve a spot two to three months down the road.
BofA insiders who requested anonymity have confirmed that a new reservation system is being implemented, though some bank customers aren't impacted by the move.
The system will help the lender grapple with strained capacity issues resulting from recent enhancements to the Home Affordable Refinance Program.
California Sees Huge Chunk of Servicer Settlement
A multi-state settlement reached between the nation's biggest mortgage servicers, state attorneys general and federal agencies goes beyond the $25 billion that had been reported. A big share of the settlement is earmarked for California, which had been a stumbling block in final negotiations.
The settlement was announced in a press conference Wednesday that included state and federal officials. Agreeing to the deal were Bank of America Corp, JPMorgan Chase & Co., Wells Fargo & Co., Citibank and Ally Financial.
The five companies were ranked as the biggest mortgage servicers in 2011 by Mortgage Daily.
Government Share of Mortgage Market Falls
Residential loan originations fell in 2011, and some lenders saw more of a decline than others -- though a few firms eked out a gain. The government's role in residential finance was reduced last year as private capital crept back into the market. Half of all the U.S. mortgage market last year was controlled by three lenders.
Fourth-quarter residential originations by all lenders were an estimated $381 billion, based on an analysis of production activity by Mortgage Daily.
Volume was up from an estimated $317 billion closed by U.S. lenders in the third quarter.
Some CRE Lenders See Strength
The origination of commercial real estate loans was higher at several firms last year, and much of the strength came from multifamily production. One firm reported that annual volume more than doubled.
Fannie Mae reported that its lending partners financed 2,763 multifamily loans for $24.4 billion last year.
Last year's CRE loan production at Prudential Mortgage Capital was the third-best year on record.
Some Lenders Lift Business Despite Industry Slowdown
Although residential originations for the industry as a whole were down last year, gains were made by a lender that is exiting the mortgage business and a growing Oklahoma firm. Quarterly activity at the nation's credit unions reached the second-highest level ever.
A Mortgage Daily analysis of multiple economic forecasts indicates that home-loan production for all U.S. lenders were down around 15 percent between 2010 and 2011.
But MetLife Home Loans reported to Mortgage Daily that it originated around 7 percent more last year than it did in 2010.
PHH Paring Correspondent Production
PHH Corp. plans to reduce correspondent mortgage lending at PHH Mortgage. The company's chief talked about the impact to employees.
Last month, PHH warned in a Securities and Exchange Commission filing about a possible reduction in correspondent production.
This week, the company's president and chief executive discussed plans to cut back on correspondent mortgage production.
SAFE Exam Guidelines Released
Examination guidelines for non-bank loan originators have been issued to state mortgage regulators.
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 established minimum standards for the individual states to license and register mortgage originators.
Those standards are outlined in new SAFE Act Examination Guidelines.
Loan Performance Improves in 2011
Last year saw a decline in the rate of seriously delinquent home loans and a reduction in the number of completed foreclosures. In addition, mortgage servicers are managing to speed up the time it takes to resolve distressed assets.
Residential delinquency of at least 90 days finished last year around 50 basis points better than at the end of 2010.
The number of mortgages in foreclosure as of Dec. 31, 2011, declined 8.4 percent from a year earlier.
PennyMac Becomes Billion Dollar Player
Quarterly correspondent fundings and the mortgage investment portfolio at PennyMac Mortgage Investment Trust have each reached nearly a billion dollars.
Fourth-quarter correspondent production more than quadrupled PennyMac's third-quarter activity.
The mortgage investment portfolio was valued at nearly $1 billion as of the end of last year. The total included distressed residential mortgage whole loans, real-estate-owned assets and mortgage-backed securities.
Worst HAMP Month on Record
During the final month of 2011, the number of loan modifications completed under the government's program saw the smallest gain in the history of the program.
The Obama administration reported that 762,839 permanent loan modifications were active as of Dec. 31, 2011. The modifications were completed through the Home Affordable Modification Program.
That was a gain of 12,091 over November -- the smallest gain on record.
DocX, Founder Indicted
A grand jury has indicted DocX and founder Lorraine Brown, who could spend up to seven years in prison if she is convicted.
Charges were based on 68 foreclosure documents with signatures in the name of Linda Green but allegedly not actually signed by Green.
The criminal indictment is just one in a series of civil and criminal legal woes plaguing DocX parent Lender Processing Services.
Bank Picks Up MetLife's Northwest Production Ops
A Seattle bank has picked up a majority of the production personnel employed in the Northwest by MetLife Home Loans.
The planned shutdown of the MetLife Inc. subsidiary was disclosed last month. Mortgage staffing at MetLife stood at 5,507 as of Sept. 30, 2011.
A MetLife spokesman recently explained that while a maximum 4,300 layoffs could occur, some of those employees will end up in other MetLife jobs while others will leave to work at other companies.
Regulation Requires SARs Filings by Non-Bank Lenders
Mortgage brokers and non-bank mortgage lenders will soon be required to file reports when mortgage fraud is suspected. The additional compliance burden is likely to lead to an increase in filing statistics even though actual fraud activity could retreat.
Non-bank residential lenders will now be required to file suspicious activity reports under new regulations finalized Tuesday.
SARs reports help identify straw buyers, fraudulent flips and short-sale fraud.
Biggest Reverse Lenders in 2011
While retail originators of federally insured reverse mortgages made production gains last year, wholesale lenders struggled to keep up. As three formerly prominent players exited the reverse lending arena, two firms have established themselves as the new retail and wholesale leaders.
Wells Fargo Bank, N.A., exited the reverse lending arena with a bang.
The company, which last June said it would stop originating home-equity conversion mortgages, saw 15,673 retail and wholesale HECMs endorsed by the Federal Housing Administration during all of 2011 -- more than any other lender.
Servicer Settlement Won't Stop States from Filing Criminal Charges
The state of California is contemplating signing on to the proposed mortgage servicer settlement that would still enable the states to pursue criminal charges against bank officials.
The state's attorney general, Kamala Harris, previously backed away from negotiations because the $25 billion deal didn't go far enough to compensate borrowers in the Golden State.
But now Harris says she is back at the table trying to finalize an agreement.
AGs in Final Stages of Servicer Settlement
The lead attorney general in the states' settlement with the country's biggest mortgage servicers says that negotiations have progressed to the "final stages."
More than 40 states have signed on to a proposed $25 billion settlement, according to Iowa Attorney General Tom Miller.
Miller heads the multi-state settlement negotiations.
New MTA Record Even as 1-Year Yield Drifts Higher
Record lows have become routine for the Monthly Treasury Average, and last month was no exception. But the underlying yield has started creeping higher.
An analysis of Federal Reserve data indicates that the MTA was down 1 basis point between December and January.
But the yield on the one-year Treasury, which is used to determine the MTA, rose a basis point between the end of December and the end of January. It was up another basis point Monday.
Apartment and Hotel Loans Help CMBS Delinquency Rate
The rate of delinquency on securitized commercial real estate loans was lower last month, and a big drop in late payments on loans secured by apartment buildings and hotels was responsible for the improved performance.
CRE loans at least 30 days past due as of Jan. 31 that were included in commercial mortgage-backed securities accounted for 9.52 percent of all CMBS loans.
That worked out to $57.7 billion in delinquent loans.
Biggest CRE Loan Servicers
For three consecutive years now, Wells Fargo & Co. has been ranked as the biggest servicer of commercial real estate loans. Its dominance in the sector was made possible through an acquisition more than three years ago. The ranking was released from an annual commercial mortgage convention.
The San Francisco-based company landed the top spot despite that its CRE servicing portfolio dropped 3 percent from the end of 2010.
Next on the 2011 list was PNC Real Estate / Midland Loan Services.
Growth Projected for CRE Production
A forecast issued Monday by commercial mortgage bankers indicated that commercial real estate loan production jumped 64 percent between 2010 and 2011.
During 2012, CRE originations are expected to increase 17 percent from last year.
In fact, commercial mortgage production is projected to increase again in 2013, 2014 and 2015.
Reverse Lender Has Top-10 Aspirations
Reverse Mortgage Network was opened for business in October 2011. The company staffed up by recruiting reverse mortgage originators from Wells Fargo Home Mortgage, which had previously announced plans to exit reverse mortgage lending.
Now Reverse Mortgage Network has recruited the founder of a company that has previously claimed to be the biggest reverse mortgage lender in Maryland and 39 of its loan originators.
The parent company says that its chief executive officer projects that "Reverse Mortgage Network will, in the near future, become one of the top 10 largest reverse mortgage lenders in the country."
BofA Mortgage Chief Stepping Down
The president of Bank of America Home Loans is leaving the company. Having been handed the reins at the previously biggest mortgage company in the country, the exiting executive was once thought to be a contender for the top job at the parent company.
When BofA announced in January 2008 its intention to acquire Countrywide Financial Corp. -- the biggest U.S. mortgage lender from 2004 until 2007 -- David Sambol, the president and chief operating officer at the time for Countrywide, was named to lead the company. But by the time the acquisition was done, Barbara Desoer, who had been BofA's chief technology and operations officer, was tapped to run the unit.
This week, the bank announced Desoer's intention to retire.
Mortgage Activity Up Again
Falling mortgage rates motivated an increasing number of borrowers this week to inquire about a refinance, though inquiries for purchases were also higher. Rates, however, are poised to deteriorate. Refinance activity more than doubled compared to a year ago. Despite a widening spread over conforming rates, more jumbo borrowers were out shopping for a loan.
The number of prospective borrowers who inquired about a mortgage rose 4 percent from last week, leaving the U.S. Mortgage Market Index from Mortech Inc. and Mortgage Daily for the seven days ended Feb. 3 at 270.
The index was 48 percent higher than the week ended Feb. 2, 2011.
Borrowers Successfully Stave Off Foreclosure
Borrowers in more than a dozen foreclosure actions in 10 states have recently received favorable rulings from the courts. Several of the cases either involve the Federal National Mortgage Association or the Mortgage Electronic Registration Systems Inc. Foreclosure processing services were named as defendants in lawsuits filed by the states of Illinois and Nevada.
A foreclosure judgment in favor of U.S. Bank, N.A., as trustee against Julia Feltus was overturned by the District Court of Appeal of Florida, Second District, last Friday.
U.S. Bank had sought to re-establish a lost promissory note, and the court said that trial court erred because "U.S. Bank failed to show conclusively the absence of a genuine issue of material fact and that it was entitled to foreclosure as a matter of law."
New York Sues MERS, Members
New York's attorney general has filed a lawsuit against the three biggest lenders and the Mortgage Electronic Registration System Inc. alleging that the registry is a sham designed to deceive borrowers and the public and avoid recording fees. The state wants the system declared illegal and all resulting title defects cured.
The complaint was filed Friday in the Supreme Court of the State of New York by New York Attorney General Eric T. Schneiderman.
The state alleges that the defendants have been using MERS "in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process."
Mortgage Jobs Hold as U.S. Data Point to Economic Recovery
An increase in the number of mortgage brokers was offset by a decline in non-broker mortgage jobs. However, the government revised the prior month's mortgage industry headcount up by more than 28,000 jobs. But the bigger news was an improvement in the U.S. employment situation last month. The latest data are a sign of an improving economy -- though it might also signal the end of record-low interest rates.
The number of people working in the mortgage industry, including mortgage brokers and non-broker, fell less than 1 percent between November and December, according to government data released Friday.
Compared to December 2010, headcount in real estate finance was down 8 percent.
Record Low Rates Likely to Hold
Most mortgage rates fell to the lowest levels ever recorded, and it looks like they could hang near those lows through next week. The one exception is the one-year adjustable-rate mortgage.
The 30-year mortgage, 15-year mortgage and five-year, Treasury-indexed, hybrid adjustable-rate mortgage all fell to record lows.
This week's Treasury Market data suggests rates are likely to be about the same in next week's report.
Survey: Strip Off Jr Liens in Chapter 13 BKs
A majority of people in the legal community believe that a borrower should be able "strip off" a junior-lien mortgage in a bankruptcy payment plan even if the bankruptcy is not discharged.
The findings were based on a poll taken of lawyers, judges and other bankruptcy professionals as well as bankers and lenders.
The majority either agreed or strongly agreed that debtors should be allowed to strip off a wholly unsecured junior mortgage lien in a chapter 13 plan, even if they are not entitled to a discharge.
Servicing Business Becoming Unprofitable
The cost of servicing residential mortgages has gotten so out of hand that it is starting to make sense for some firms to get out of the business.
Costs associated servicing a performing mortgage could increase by more than half compared to pre-crisis levels.
On non-performing loans, the costs are likely to more than double.
Record Production at Fairway
In the final three months of 2011, Fairway Independent Mortgage Corp. originated more loans than in any other quarter in its history. The company increased its staffing and plans to continue recruiting this year.
Residential originations during the fourth quarter were 38 percent higher than the company funded in the third quarter.
It was the biggest quarter ever for Fairway.
California Bank Picks Up MetLife Production Employees
A California bank saw an opportunity to hire several dozen employees, including top producing loan originators, who work for MetLife Home Loans.
Last month, MetLife Inc. said it would shut down its mortgage banking operations nationwide.
So Provident Financial Holdings, which added 40 mortgage employees last year, has stepped in to hire a group that operates from the San Francisco area.
Multifamily Business Strengthens at Freddie
Apartment lending took off last year at the Federal Home Loan Mortgage Corp., with the volume of multifamily activity leaping by nearly a third. Delinquency also improved.
Freddie Mac reported Thursday that multifamily loan purchases and bond guarantees jumped 32 percent between 2010 and last year.
Record activity was reported for the company's conventional activity and Capital Markets Execution program.
Ally Struggles With Mortgage Ops
Losses from mortgage operations took a big bite out of Ally Financial Inc.'s earnings. Still, the lender managed to increase quarterly originations and keep delinquency from rising.
The mortgage operations took a hit of more than $200 million before taxes in the final three months of last year, though that was an improvement from the third quarter.
"The fourth quarter of 2011 was impacted by a $270 million charge for penalties expected to be imposed by certain regulators and other governmental agencies in connection with foreclosure-related matters," Ally said.
Shrinking Pool of Reverse Lenders Lift Originations
The number of companies originating federally insured reverse mortgages may have fallen by more than half compared to a year ago, but the remaining pool managed to increase business last month.
During the first month of this year, the number of home-equity conversion mortgages endorsed by the Federal Housing Administration jumped 12 percent from December.
Volume was down 20 percent, however, compared to January 2010.
Citi Abandons Broker Business
Citigroup Inc. said that its mortgage lending unit is getting out of wholesale lending.
The New York-based company said in a statement Wednesday that its CitiMortgage Inc. subsidiary will transition away from mortgage broker business.
The majority of wholesale lending employees are expected to be placed in similar positions within other parts of the company.
Keeping Mortgage Profits in the Family
A firm that is a little more than a year old is boasting about its growing production of mortgages financed by family members.
National Family Mortgage provides peer-to-peer lending services for loans between relatives.
Programs offered through the broker include 100 percent loan-to-value mortgages, refinances and home-improvement loans.
Mass Refi Plan Unveiled for Non-GSE Borrowers
A massive refinance program for borrowers who don't have conventional agency mortgages was one of several initiatives announced Wednesday by President Obama. But the multi-billion-dollar tab for the program will be picked up by the nation's lenders.
The plan calls for loans to be refinanced through the Federal Housing Administration even if FHA doesn't already insure their existing mortgage.
Eligible borrowers can refinance non-jumbo loans as long as they have made their last six payments on time and had no more than one missed payment during the past year.
COFI Bounces Up from All-Time Low
In November, the Cost of Funds Index fell to the lowest level ever recorded based on data as far back a July 1981.
It was the fourth consecutive month that the 11th District index was lower.
But in December, COFI increased 2 basis points from the prior month.
REO-to-Rental Program Takes Shape
The government announced Wednesday that investors can begin the qualification process of bidding on pools of real-estate-owned properties held by Fannie Mae.
The pools of properties purchased through the program will be subject to a requirement that the properties be rented out for a minimum period of time.
While the initial phase of the program involves REOs owned by Fannie, investors will subsequently be able to bid on pools owned by Freddie Mac and the Federal Housing Administration.
Freddie Issuances Surge
For five consecutive months now, Fannie Mae has managed to increase its secondary activity, contrasting last month's activity at rival Freddie Mac. Annual business, however, was lower at both firms. Fannie's residential delinquency didn't increase a single time last year, while late payments at Freddie have deteriorated each of the last several months.
Fannie reported that its new business acquisitions during December climbed 16 percent from November's level.
The improvement contrasts secondary volume at Freddie, where activity fell 19 percent between November and December. |
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Nearly 50 Mortgage Conferences in March
Feb. 1, 2012
The premier event for the mortgage servicing industry starts on Tuesday and includes presentations by the commissioner of the Federal Housing Administration and the president of the Government National Mortgage Association. The former chairmen of both major political parties were speakers at a recent commercial mortgage event. A look at the Mortgage Daily conference calendar indicates that nearly 50 mortgage-related events are being held next month alone -- though more than 70 conferences and meetings have been identified so far for the second quarter.
One of my favorite radio shows is This American Life. The public radio broadcast has stories each week about a variety of subjects. The speakers are each excellent storytellers.
Episode #74, Conventions, dealt with the psychology of conventions.
<MortgageDaily.com subscribers read full story>
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Mortgage Jobs Hold as U.S. Data Point to Economic Recovery
Feb. 1, 2012
An increase in the number of mortgage brokers was offset by a decline in non-broker mortgage jobs. However, the government revised the prior month's mortgage industry headcount up by more than 28,000 jobs. But the bigger news was an improvement in the U.S. employment situation last month. The latest data are a sign of an improving economy -- though it might also signal the end of record-low interest rates.
The Bureau of Labor Statistics released U.S. employment data early Friday indicating that 265,300 people were employed in the mortgage industry during the month of December.
Headcount for real estate finance slipped from a revised 265,400 in November.
<MortgageDaily.com subscribers read full story>
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