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Mortgage Headlines
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Last Updated Sunday, February 15, 2004 01:55 PM CST
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Rates Are Still Low, So Where Are the Loans?
The Market Composite Index -- a measure of total mortgage applications -- declined 6.8% from the previous week to 797.8, according to the latest Weekly Mortgage Applications Survey by the Mortgage Bankers Association of America (MBA). The 30-year fixed-rate mortgage averaged 5.66% -- a decrease of 6 basis points from last week -- Freddie Mac's Primary Mortgage Market Survey showed. Freddie's chief economist Frank Nothaft said mortgage rates will remain tame for some months to come due to Alan Greenspan's semiannual testimony about the state of the economy to House members Wednesday.
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.
Mortgage Lender Takes $500k Hit Over Language Issues
An Oregon jury voted 11-1 to award a Spanish-speaking couple $545,000 in damages after finding they were defrauded by signing loan documents they could not read. The couple was approached by a Spanish-speaking sales associate from Beneficial Mortgage Corp. who reportedly offered a second mortgage at 7.8 percent. The payments were to include property taxes and insurance. But when they unexpectedly received a delinquent tax bill they discovered the interest rate on their loan was nearly 13 percent. So they went to court and won.
95% LTV on Manufactured Housing
Fannie Mae announced Tuesday that it will buy 95% LTV purchase money mortgages secured by manufactured homes -- an upgrade from the previous 90% LTV limit. Nine lenders were approved to sell Fannie the higher loan-to-value 30-year mortgages for the purchase of a manufactured home. Fannie said its research showed that lenders with the best performance in manufactured housing loans were those who employed processes and procedures that included close monitoring of the origination, appraisal, and closing functions.
Fundings Fall at Countrywide
Countrywide Financial Corp. reported loan fundings of $21 billion for last month, declining from December's $25 billion. Direct fundings were $6.2 billion, according to the announcement, while wholesale fundings were $3.8 billion and correspondent fundings were $8.2 billion. The servicing portfolio reached $658 billion, marking a 2% increase from the previous month.
9.5 Million Loans Underwritten by Loan Prospector in 2003
Freddie Mac recently announced that Loan Prospector -- its automated underwriting system -- assessed a milestone 9.5 million individual mortgage loans in 2003, up from 8.2 million the prior year. With Loan Prospector, lenders input a borrower's credit, loan and property information and the system provides risk assessment based on the past performance of loans with similar characteristics, said the McLean, Va.-based company. Since its launch in 1995 -- when it reviewed 38,248 loans and three years later 2.07 million -- the system has reportedly handled over 35 million individual mortgage loans.
WaMu Suing IndyMac
Washington Mutual Mortgage Securities Corp. of Seattle has filed a lawsuit in Los Angeles Superior Court against IndyMac Bancorp in an attempt to recover $50 million. WaMu claims it lost the $50 million in residential mortgage loans that IndyMac sold to PNC Mortgage Securities -- a company WaMu subsequently acquired. "Over the course of the relationship with IndyMac, PNC and/or WaMu identified numerous loans which had been purchased from IndyMac that failed to meet the requirements of the contract" between IndyMac and PNC, WaMu said in the lawsuit. Despite the lawsuit, IndyMac said it will continue to try and settle the matter out of court.
Sister Pressured to Take Fall for Brother in Fraud Case
A father and son meet with a female family member in an underground hotel parking garage. The men want the woman -- the daughter and sister to the pair -- to take the fall for a crime the son has committed. They plead, beg, try to convince and even threaten the woman to lie to federal authorities about her role it what has already been exposed as a $33 million bank fraud and mortgage scheme. "If the family sticks together," the brother tells the sister, "you can't beat the f*****g family." Only the family here is not a New Jersey Mafia clan, but a once successful group of Kentucky homebuilders and developers who were trying to lie their way out of a long prison sentence for one of their own.
December Production Off at New Century
New Century Financial Corp. announced that in January it originated $2.5 billion in loans, declining from the previous month's $3.0 billion. In the announcement, company executive, Robert K. Cole, indicated that the lower volume reflected the "seasonal nature of loan production following the holidays."
$139 Billion in Cashouts During 2003
Freddie Mac's fourth quarter Refinance Review revealed that 45% of the company-owned refinance loans included cashout -- where the new loan amount was at least 5% over the amortized unpaid principal balance of the original amount. In all of 2003, homeowners took out almost $139 billion from their home equity, but rising home values put that equity right back in and then some, said Freddie.
Mortgage Jobs Continue to Take Pounding
The Bureau of Labor Statistics reported that the non-seasonally adjusted number of people employed in mortgage-related jobs totaled 438,900 in December, while the previous month the revised number stood at 444,700. The unemployment rate continued to descend -- in January it was 5.6%, or 8.3 million people, down from the prior month's 5.7%.
Rates Hinge on Friday's Employment Report, Economist Says
The 30-year fixed-rate mortgage this week averaged 5.72%, rising 4 basis points from last week, said Freddie Mac in its latest survey. "The prime missing ingredient to sustainable growth is jobs, so January's employment report, due out tomorrow, may just be the sign that is needed to help the market decide which way to go," said Freddie's deputy chief economist Amy Cutts, in a statement. Total mortgage applications decreased 1.5% from the prior week, bringing the Market Composite Index to 855.7, according to the Mortgage Bankers Association of America.
Customer Satisfaction Low For Mortgage Brokers
CFI Group recently released a study that indicates mortgage banking trails all other financial services except health insurance as measured in the American Customer Satisfaction Index. The low score was partly due to survey respondents' broad agreement that the process of obtaining a conforming mortgage was "too complex," said CFI. The study also found that borrowers who used a mortgage broker gave "dramatically" lower scores in all areas of the lending process. The three most influential factors on customer satisfaction were the overall time it takes to a process a mortgage; the convenience of processing and closing the loan; and the role of the lender's loan officer or representative, the study said.
Originations at Cendant Sink
Cendant Mortgage closed $14.9 billion in loans during the fourth quarter, sinking from the prior quarter's $27.6 billion, reported parent company Cendant Corp. The average servicing portfolio of $130.8 billion at the fourth quarter's end rose 17% above the size at the end of 2002.
GMAC Top Commercial Servicer
GMAC Commercial Holding Corp. topped the Mortgage Bankers Association of America's (MBAs) fourth quarter Mortgage Servicing Survey for the second year in a row. GMAC's figures dwarfed those of its nearest competitor, Wachovia Securities, which ranked second. In rankings six through 10, respectively, were Prudential Asset Resources, Washington Mutual, ORIX Capital Markets LLC, Bank of America, and Key Commercial Mortgage.
Commercial Lending Sizzling
The Mortgage Bankers Association of America reported fourth quarter commercial and multifamily loan originations totaled $37.9 billion -- the highest ever. The report showed that about 40% of the quarter's mortgage originations were multifamily. In all of 2003, commercial and multifamily loan originations reached a milestone $116.0 billion, the group said. In a loan officer survey conducted by the Federal Reserve, banking institutions reported the demand for commercial real estate loans strengthened for the first time since 2000.
Trade Secrets Lawsuit Prompted By Hiring of Former Employees
Summit Financial Group is denying that two of its subsidiaries did anything wrong by hiring former employees of Corinthian Mortgage Corp. But in a lawsuit filed in the Circuit Court of Fairfax County, Va., Corinthian Mortgage has alleged Summit received trade secrets from former employees now working for Summit. Summit has denied all allegations in the suit and said in the statement it believes "that plaintiff's claims are without foundation and that meritorious defenses exist as to all the claims."
COFI Ends Historic Run
The 11th District Cost of Funds Index -- or COFI -- rose to 1.902% in December, breaking the descending trend experienced since July 2002, according to the Federal Home Loan Bank of San Francisco. The index, which is reported about 30 days following the end of each month, was reported at 1.821% the prior month.
IndyMac Reports Lower Fundings
IndyMac Bancorp Inc. subprime loan production totaled $4.4 billion during the fourth quarter, down 13% from the previous quarter, according to the company's financial supplement. Alt-A loan fundings accounted for $3.9 billion of the subprime volume total, the report said.
Production Off at Impac
Impac Funding Corp.'s mortgage acquisitions and originations totaled $3.1 billion during the fourth quarter, a 15% decrease from the third quarter. In all of 2003, volume totaled $9.5 billion, compared to $5.9 billion in the prior year, the report said.
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