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MortgageChronicle.com Archives
May, 2011
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COFI Continues Free Fall
The 11th District Cost of Funds Index was nearly 10 basis points lower in April.
It was the 10th consecutive month that COFI was lower.
The index is at its lowest level since October 2009.
M.I. Firms Turn In Weak Performance
Members of the Mortgage Insurance Companies of America wrote 4 percent fewer policies in April than in March.
The balance of primary insurance in force declined more than $5 billion during the period.
Meanwhile, defaults deteriorated by 3 basis points.
2nd Lien Servicer Rating Raised at Green Tree
Green Tree Servicing LLC's second-lien residential servicer rating improved to SQ2, Moody's Investors Service reported.
Strong collection and loss mitigation abilities were cited for the upgrade.
"The upgrade was driven mainly by solid collections and call center performance metrics," the ratings agency said.
2 Cities Defy Double Dip
The Standard & Poor's/Case-Shiller index of 20 cities was down 0.8 percent between February and March.
The index pushed below its previous bottom, confirming a much-feared "double dip" in home prices.
But Seattle and Washington, D.C., were higher.
Mortgage Laundry List for CFPB
On July 21, the Consumer Financial Protection Bureau takes over enforcement of several key regulations impacting mortgage lenders and banks.
The transfer of authority is required under the Consumer Financial Protection Act of 2010.
By the transfer date, the CFPB needs to consult with the current regulators handling the rules and orders then consider public comments from the impacted filing.
Banks Feel Pain of Housing Market
A classic rule of both shopping and investing is that when most people steer clear of something, there may be bargains for the smart money.
Yet it doesn't always work that way at your local dollar store -- or with beaten-down stocks.
That's the challenge investors face with bank shares, particularly those of the industry's titans.
Wholesaler, Bank Push 2011 Casualties to 65
First Heritage Bank was closed Friday by the Washington Department of Financial Institutions.
Sidus Financial LLC said that it was halting new lock requests from mortgage brokers and correspondent customers.
Including banks and credit unions, the failure or closing of 65 mortgage-related operations have been tracked by MortgageDaily.com during 2011.
Judge Casts Cloud Over Oregon Foreclosures
A U.S. District Court judge in Oregon rebuked the industry's sloppy practices in blocking the seizure of a home.
The judge questioned whether big banks should be allowed to foreclose without court supervision -- as required in 23 states but not Oregon.
He specifically warned of problems in cases involving Mortgage Electronic Registration System.
Inside the Boardroom of Failing Bank
In mid-2009, federal regulators had found Bank of Illinois to be undercapitalized and would soon issue a cease-and-desist order.
In the bank's final month, directors appeared to be focused on one of their larger problem borrowers.
In addition, they were pondering their personal liability.
O/O Foreclosures Frozen in Hawaii
A new law in Hawaii prohibits lenders from holding nonjudicial foreclosure auctions until borrowers have an opportunity to participate in a dispute resolution program.
The dispute resolution program is slated to begin operating by Oct. 1.
So in effect, existing owner-occupied foreclosure cases are on hold for up to five months.
YSPs At Issue in $1 Million Settlement
A settlement in a class-action lawsuit will cost Fairway Independent Mortgage Corp. more than $1 million.
At issue are alleged undisclosed yield spread premiums and claims of mortgage fraud by a Missouri originator.
The lead plaintiffs claim that Fairway, as a mortgage broker, had a fiduciary duty to provide them with the least expensive loan and breached that duty by collecting yield spread premiums.
Jumbo Rates Dive
The conforming 30-year fixed-rate mortgage in the latest U.S. Mortgage Market Index fell to 4.74 percent from 4.77 percent the previous week.
At the same time, the jumbo decline was more pronounced, with the jumbo 30-year mortgage sinking to 5.12 percent from 5.32 percent.
The disparate movement slashed the jumbo-conforming spread to 36 basis points from last week's 55 BPS.
Former Fannie Exec Defends Hiring of Frank's Companion
Retired Fannie Mae executive Gerald McMurray hired Herb Moses, the former companion of U.S. Rep. Barney Frank, two decades ago.
He denies Frank's recommendation played a role in the controversial 1991 hiring.
McMurray acknowledged Frank vouched for Moses but said Moses got the job because of his credentials.
Former FHA Lender Fights SEC, HUD
In March, the Securities and Exchange Commission announced that it filed a civil injunctive action against Radius Capital Corp. and its owner over allegations that the defendants tried to defraud Ginnie Mae and mortgage-backed securities investors by issuing MBS filled with loans that were not FHA-insurable.
But in a telephone interview with MortgageDaily.com, the company's owner said that there are no allegations of fraudulent appraisals, phony tax returns or fake social security numbers.
He claims that in its zest to find high-profile culprits for the mortgage crisis, the government isn't hesitating to put innocent people in jail.
2-Year Low for Fannie Business
Fannie Mae's reported that new business acquisitions during April tumbled by nearly a third from March.
Compared to a year earlier, volume was down by more than half.
In fact, Fannie suffered its slowest month since January 2009 -- four months after Fannie and its secondary cousin Freddie Mac were seized by the government.
Bad Values Lead to Big Discounts on 2005-2007 Vintages
Standard & Poor's Ratings Services analyzed distressed sales on non-agency loans originated between 2000 and 2007.
S&P found that 4 to 5 percent for loans originated between 2005 and 2007 were discounted by more than 25 percent.
"Large variances between loan origination and sale amounts generally suggest ... that original home values were overstated on mortgage applications and not corrected during the originators' review of the property value," an S&P managing director said in the report.
Countrywide, Saxon Settle Military Foreclosures
Countrywide Home Loan Servicing agreed to pay $20 million to resolve a lawsuit alleging that it foreclosed on service members between 2006 and 2009 without court orders, a Justice Department announcement said.
Saxon Mortgage Services Inc. agreed to pay more than $2 million to resolve allegations that it foreclosed on military officials between 2006 and 2009 without court orders.
Both companies agreed to pay military personnel for wrongful foreclosures.
Refi Rally Brewing
Freddie Mac reported that the average 30-year fixed-rate mortgage was lower for the sixth consecutive week.
During last year's refinance wave, the 30-year bottomed out around 40 BPS below today's rate.
Odds are, the 30-year will continue lower in next week's reports based on an analysis of 10-year Treasury yield movement.
Rep. Frank Defends Fannie Connection
U.S. Rep. Barney Frank said questions about how he helped his former longtime companion land a job at Fannie Mae in 1991 are "nonsense."
Frank said that it's "a common thing in Washington for members of Congress to have spouses work for the federal government.
There is no rule against it at all."
The Negative Equity Dilemma
FICO Inc. this spring conceived a scoring tool that identifies the type of borrower most likely to strategically default.
In addition, placed against a lender's customer base, the tool can narrow at-risk borrowers to a list of names.
You Walk Away was formed by a former mortgage broker more than three years ago and has seen business jump lately.
Private Label MBS Revival Not Happening Soon
In a new report, Standard & Poor's Ratings Services said that "U.S. private-label residential mortgage-backed securities have faded into the shadows."
The ratings agency noted that it was the housing market that was a primary contributor to the exit of investors in private-label RMBS.
The report indicated that it will be several years before any recovery arrives.
NV Borrowers Join National Class Action Against BoA
A group of about two dozen plaintiffs initially filed suit against Bank of America during April in Clark County District Court in Las Vegas alleging deceptive trade practices.
The suit claimed BofA misled the homeowners by promising to respond to requests for mortgage modifications, and assuring them foreclosures would be put on hold while modifications were considered, but then moving ahead with foreclosure proceedings anyway.
Not the borrowers have joined a national class-action against the bank in Massachusetts.
Updates at Freddie Impact Fees, Appraisals
Borrowers will now be allowed to use credit cards, cash advances and unsecured lines of credit to pay up to the greater of $1,500 or 2 percent in mortgage application processing fees on Freddie Mac loans.
The update was outlined in a seller bulletin.
The secondary lender also said that a provision limiting the maximum charge for appraisal and credit reports has been eliminated.
BoA, GMAC Help Borrowers in Hard Hit States
Bank of America Corp. said it completed agreements with states participating in the federal government's Hardest Hit Fund.
Also signing on was GMAC Mortgage.
The Hardest Hit Fund initiative targets states with unemployment rates at or above the national average and falling property values.
2 States Subpoena LPS
California's attorney general announced that the state has subpoenaed Lender Processing Services Inc.
At issue are alleged faulty affidavits tied to the "robo-signing" scandal as well as "other illegal activities in the mortgage servicing industry" involving foreclosure misconduct.
LPS was additionally subpoenaed by Illinois' attorney general.
GOP Rips CFPB Chief
President Barack Obama's choice to head the Consumer Financial Protection Bureau faced off with House Republicans.
Some of the GOP members were sometimes less than cordial.
Much of the battling dealt with advice that Warren has been giving related to the potential mortgage servicer settlement with state attorneys.
Freddie Business Falls to Post-Crisis Low
April issuances and purchases amounted to $23.8 billion, according to monthly operational data from Freddie Mac.
It was the lowest activity since January 2009.
Four months earlier,-- the government seized Freddie and its government-controlled rival Fannie Mae at the height of the financial crisis.
Quicken Launches Correspondent Channel
Quicken Loans Mortgage Services has opened up a correspondent lending platform, an announcement said.
The channel is targeted at community banks and credit unions.
New clients will be able to close and fund mortgages in their own names.
Foreclosure Litigation Battles Rage On
A foreclosure judgment on behalf of HSBC Mortgage Services Inc. was reversed by the District Court of Appeal of Florida, Second District.
In California, GMAC Mortgage Corp. was denied its application for service upon a borrower by publication in the Santa Clara weekly.
A foreclosure filed by Bank of America was dismissed by a judge in the Superior Court of New Jersey Chancery Division.
Refis Drag Down FHA Volume
The Federal Housing Administration endorsed more than 93,000 mortgages during April, the Department of Housing and Urban Development reported.
FHA volume was lower than the previous month's 99,112 endorsements.
A 22 percent decline in refinance volume was responsible for the decline.
Wholesaler Growing Fast
In February, Kinecta Federal Credit Union announced a new wholesale lending operation.
The unit did business in 17 states at the time.
This week, the credit union said the number of states it does business in has risen to 25.
Over 10,000 Banks Gone Since Mid-80s
The Federal Deposit Insurance Corp. reported that the number of insured banks in its first-quarter banking profile was in excess of 7,500.
A decade ago, there were more than 9,800 banks reporting.
Based on the oldest available FDIC data back to 1984, bank count peaked at more than 18,000.
Vulture Banks Flourish in Georgia
CertusBank has acquired two failed Georgia banks from the Federal Deposit Insurance Corp.
Another startup institution, State Bank & Trust, has also carved a niche by buying failed institutions with assistance from the FDIC.
Community & Southern Bank is yet another startup to compete for failed banks.
Top-10 FHA Lender Announces Acquisition
An announcement from Shore Financial Services Inc. indicated that Hall Financial Corp. will be integrated into Shore.
In addition, Hall Financial's founder was hired as president of Shore's retail mortgage division.
Shore claims to be "one of the top 10 FHA lenders in the entire nation."
Ginnie Lifts Issuance Volume
Issuers of Ginnie Mae MBS securitized 9 percent more mortgage-backed securities in April than in March.
But the small increase last month wasn't enough to outpace April 2010's volume.
Multifamily issuances were up $300 million in April.
Pockets of Strength for Some Originators
Residential origination volume fell to $1.6 billion at Regions Financial, the company reported in its first-quarter earnings data.
Fairway Independent Mortgage Corp.'s chief executive officer said that "Fairway is off to another really good start in 2011."
Last year's production at Cendera Funding was more than $500 million, a news release indicated.
New CA Unit to Tackle Lending Crimes
California Attorney General Kamala Harris announced the creation of the Mortgage Fraud Strike Force.
The 25-person unit includes a team of 17 lawyers and eight special agents from the state Department of Justice.
The strike force will target fraud by issuers of mortgage-backed securities, mortgage advertisers and foreclosure consultants.
PHH Breaks Into Top 5
Wells Fargo & Co. maintained its grip on the biggest-lender title during the first quarter.
Originations by all U.S. residential lenders were down more than a third from the fourth-quarter 2010, according to an analysis of first-quarter data by Mortgage Daily.
PHH Mortgage managed to make its way onto the list of the top-five originators for the first quarter.
Wholesaler Joins 3 Banks on Casualty List
The Georgia Department of Banking and Finance said it obtained superior court orders authorizing it to take possession of two banks in the state.
The Washington Department of Financial Institutions closed down a bank in that state.
In addition, Merit Mortgage Services has advised its loan correspondents of its decision to exit the mortgage business.
Jumbo Pricing Shows Improving Trend
Jumbo mortgages were priced around 55 basis points higher than conforming loans in the most recent U.S. Mortgage Market Index report from Mortech Inc. and MortgageDaily.com.
The jumbo-conforming spread was better than 80 BPS during the same week last year.
And the jumbo-conforming spread has improved considerably from the 113-basis-point level that existed when the Mortgage Market Index was launched in December 2009.
U.S. Bank Settles on FHA Loans
A settlement with U.S. Bank was announced by the Department of Housing and Urban Development.
The bank allegedly did not meet underwriting standards on more than two dozen Federal Housing Administration mortgages.
The agreement calls for a payment of more than $1 million.
Supreme Court Considers Unearned Fee Case
A lawsuit won by Quicken Loans Inc. on summary judgment at the trial court level and upheld on appeal is being considered for review by the U.S. Supreme Court.
The Solicitor General has been asked to weigh in on whether it should review the lower court's decision.
In order for an invitation like this to be made, agreement must be reached between at least four justices -- the same number who must agree in order for the case to be reviewed.
Purchase Outlook Darkens
Fannie's Mae's forecast for second-half 2011 fundings by all residential lenders was cut by $39 billion from its outlook a month earlier.
Most of the deterioration was concentrated in purchase activity.
Fannie reduced its second half estimate to $307 billion in purchase originations from last month's prediction of $343 billion.
Fixed Rates Hit 2011 Low, ARMs Up
The average 30-year fixed-rate mortgage was down for the fifth straight week, according to Freddie Mac's latest Primary Mortgage Market Survey.
It was the lowest level of the entire year for the 30-year.
But Freddie said that the one-year Treasury-indexed adjustable-rate mortgage averaged 4 basis points more this week than in the previous survey.
Lenders Face up to 20 New Regulatory Requirements
In a speech, the Comptroller of the Currency highlighted new registration requirements for loan originators that went into effect in October.
In addition, appraisal independence requirements and the loan originator compensation rule went live on April 1.
He added that there are 15 to 20 new mortgage lending requirements in the regulatory pipeline.
Refi Forecast Lifted as Purchase Outlook Dims
The origination forecast from the Mortgage Bankers Association for second-half refinance volume is 42 percent higher than last month's outlook.
At the same time, MBA's forecast for second-half purchase activity was reduced 21 percent from last month's estimate.
On an annual basis, purchase estimates for this year were cut 12 percent from last month's forecast.
Mixed Delinquency Data
As of the end of the first quarter, delinquency including foreclosures was 125 basis points better than the fourth quarter on an unadjusted basis.
That was based on the Mortgage Bankers Association's National Delinquency Survey.
But the trade group said that after adjusting for seasonality, overall delinquency excluding foreclosures was up 7 basis points.
Mortgage Fraud Prevention Secrets
A panel at this week's Global Technology Summit tackled mortgage fraud and talked about practical ways to prevent mortgage fraud at lending institutions.
The panel, which included an FBI agent and a SunTrust executive, was entitled Global Though Leader Panel: Mortgage Fraud Prevention.
Many of the comments from the panelists emphasized the use of mortgage fraud prevention services.
Lender Feedback Sought for Disclosures
Two proposed disclosure forms have been released by the Consumer Financial Protection Agency.
The regulator is asking lender to identify which of the two forms would better inform a prospective borrower about loan terms.
The two forms include identical information for a 30-year adjustable-rate mortgage to be used for a home purchase.
Foreclosures Lower, New Defaults Up
The foreclosure pre-sale inventory rate in April fell 7 basis points from March, Lender Processing Services Inc. reported.
But 30-day delinquency, excluding foreclosures, was up 19 BPS.
The rise in new defaults helped push the overall non-current rate 12 BPS higher.
Mortgage Master Settles Discrimination Allegations
Mortgage Master has settled allegations that it charged black borrowers in Massachusetts more than non-black borrowers.
The settlement cost the company $250,000.
The agreement resolves claims that it charged some 200 black borrowers up to $1,000 more in origination fees than white and Latino borrowers paid.
How Much Should Appraisers Earn?
During a question-and-answer session, an appraiser at a panel session at the Global Technology Summit 2011 estimated that a busy appraiser would earn more than $200,000.
"Eighteen thousand times 12 is more than the president makes," he said.
"What is, no offense, what is competent ... and fair compensation -- $200,000 a year?"
Originations Increasing, 100s Hired at CA Lender
RPM Mortgage saw residential originations rise 13 percent between 2009 and 2010.
First-quarter volume was up 11 percent from a year earlier.
RPM hired hundreds of new employees over the past two years.
Wholesaler Launches Branch Business
Real Estate Mortgage Network Inc. announced the launch of Menlo Park Funding.
REMN operates a wholesale lending business.
Menlo Park is a mortgage branch business.
1st Lien Lates Lower, 2nds Deteriorate
First-mortgage defaults were down 17 basis points between March and April, according to the S&P/Experian Consumer Credit Default Indices.
The rate has fallen each of the past five months.
In April 2010, first-mortgage lates were around 3.71 percent.
Chase CEO Acknowledges Foreclosure Mistakes Amid Protests
Protesters angry over the foreclosure crisis demonstrated outside JPMorgan Chase & Co.'s annual meeting.
As the protests occurred, the company's chief executive officer was speaking to shareholders.
"I know we have made a lot of mistakes," he said of the company's foreclosures.
CMBS Lates Inch Higher
Securitized commercial mortgages had a delinquency rate last month that was 6 basis points worse than March, according to Moody's Investors Service's delinquency tracker.
The rate reflects CMBS conduit-fusion transactions issued since 1998.
Late payments were worse despite a decline in delinquent loans because of a drop in total outstanding mortgages during April.
Nationstar Seeks $400 Million in IPO
Nationstar Mortgage LLC plans an initial public offering.
The details were disclosed in filings with the Securities and Exchange Commission.
The filings were made as part of the 17-year-old company's planned $400 million IPO and its planned exchange of $250 million in notes.
Delinquency Slides
TransUnion Reported Monday that the 60-day delinquency rate on residential loans was 22 basis points better in the first quarter than in the final three months of 2010.
During the past year, the rate has improved 58 BPS.
Late payments were lower for the fifth consecutive quarter.
Jumbo Conforming Ends Soon
Starting on Oct. 1, the federal government is reducing the size of mortgages it guarantees in high-priced markets.
The maximum loan amount that Fannie Mae and Freddie Mac will back in high-priced areas is scheduled to drop to $465,750 from $729,750.
HSH Associates estimates that buyers seeking jumbo mortgages will see about a 1/2 percent difference in a rates.
Dodd Frank Dominating Conferences
Rep. Paul E. Kanjorski is fielding questions about the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 at the Global Technology Summit in Las Vegas this week.
Issues to be discussed by "experts" during American Bankers Association's annual Regulatory Compliance Conference in June include how Dodd Frank impacts mortgage lending.
Patton Boggs LLP Partner Michael Waldron is participating in a session entitled Dodd-Frank and The New Regulatory Regime at the REThink Symposium.
Appraisers Can't Ignore REO Sales
Nationally, distressed sales account for 39 percent of the housing market.
Repossessed properties and those owned by borrowers in financial peril weigh heavily on the real estate market.
Sales of those homes, commercial buildings and lots make up such a large percentage of the market today that the appraiser's old axiom -- that distressed sales not be factored into establishing valuation -- no longer strictly applies.
Q1 Mortgage Fraud Index Up 44%
The Mortgage Fraud Index from MortgageDaily.com was 990 in the first quarter.
The cases covered by the index represented fraud on an estimated $1.2 billion in real estate loans.
The level of loans rose from $0.9 billion in the final period of last year.
Retreating Rates Stimulate Refis
Overall new mortgage inquiries rose 3 percent this week based on the latest U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com.
Lifting this week's activity were refinances.
The Refinance MMI climbed to 116 from 106 seven days prior.
SunTrust Recruiting Production Employees
SunTrust is bucking the layoff trend and adding production jobs.
SunTrust Banks Inc. hopes to fill 76 production positions in the Southeast, a spokeswoman said in a statement.
The job openings are immediate and expected to be filled within three months.
Plummeting Rates Likely to Reverse and Rise
Freddie Mac reported the average 30-year fixed-rate mortgage improved 8 basis points from the prior week.
The 30-year reached the lowest point since the week ended Dec. 9, 2010.
But next week, Freddie's report is likely to be at least 10 BPS worse than today's given movement in the 10-year Treasury yield.
CA Borrowers Eliminating 2nds in Bankruptcy
Bankruptcy lawyers say delinquent borrowers in California are increasingly turning to Chapter 13 bankruptcy to eliminate their second liens while avoiding foreclosure.
Statistics are hard to come by, but attorneys say a provision has been used effectively on hundreds, if not thousands, of cases in the San Francisco Bay Area during the past two years.
"It's a big thing in our valley," said one bankruptcy lawyer.
Drop In Foreclosure Filings Won't Last
The month of April saw 9 percent fewer properties that faced a foreclosure filing than in March, RealtyTrac reported.
Filings reflect defaults, including notices of default and lis pendens; auctions, including notices of trustee sale and notices of foreclosure sale; and repossessions that create real-estate owned assets.
"This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure," RealtyTrac's chief executive officer stated in the report.
BoA CEO Addresses Mortgage Business
Bank of America Corp.'s chief executive officer faced complaints at the company's annual shareholder meeting about the bank's handling of foreclosures.
In his opening remarks, he worked to distinguish the successful parts of the company from the struggling mortgage business.
He clearly laid the blame on the 2008 purchase of tottering mortgage lender Countrywide Financial Corp.
A Decade of Rising Fraud
Last year, a total of 1.3 million Suspicious Activity Reports were filed, the Financial Crimes Enforcement Network reported.
More than 70,000 of the filings were related to mortgage fraud.
"Mortgage loan fraud is the only summary characterization that has experienced an increase every year since 2001," the report said.
Rate Forecast Improves
Freddie Mac predicted that the 30-year fixed-rate will be 4.8 percent in the second quarter.
The 30-year is expected to rise to 4.9 percent next quarter.
Last month's forecast from Freddie projected the 30-year at 5.2 percent in the third quarter.
PMI Cuts Rates on High Credit Score Borrowers
PMI Mortgage Insurance Co. announced that base premiums for borrowers with credit scores of at least 720 are being lowered.
In addition, borrowers with lower credit scores are being given access to programs with loan-to-values up to 95 percent.
The updates go into effect on May 16.
Secondary Marketing Litigation Log
A federal appellate court has reinstated a lawsuit dealing with allegations that CitiFinancial Mortgage Co.'s non-delivery of loan documents led to two investors being unable to foreclose on a $140,000 Illinois mortgage.
A Tampa, Fla., mortgage broker was sentenced to more than 15 years in federal prison for allegedly selling the same mortgage to multiple investors.
A letter earlier this year to the FHFA from U.S. Rep. Maxine Waters (D-Calif.) and several other Democratic members of the House questioned the Federal Housing Finance Agency's repurchase settlements with Bank of America Corp. and Ally Financial.
Protest Planned at BoA Annual Meeting
A coalition of religious leaders called N.C. United Power plan to demonstrate outside Bank of America Corp.'s annual meeting.
At issue are 4,500 faulty mortgage documents found in one North Carolina county by the register of deeds.
"If you have 4,500 documents in Guilford County, we believe there are hundreds of thousands around North Carolina and the country," the leader of the coalition said.
FDIC Sues AMC
The Federal Deposit Insurance Corp. has filed a lawsuit against LSI Appraisal LLC.
The regulator hopes to recover losses on loans from the failed Washington Mutual Bank.
But the mortgage service provider explained that it provided only appraisal reviews on three-quarters of the reports identified by the FDIC.
Massive Wave of MBS Litigation Hits
Talcott Franklin P.C. announced that it has been retained by "large" RMBS investors to force Option One Mortgage Corp. to repurchase "improperly originated or documented" loans that violated representations and warranties.
A complaint was filed by the Federal Home Loan Bank of Boston against securities dealers, underwriters, control persons, issuers/depositors and credit rating agencies on $5.8 billion in private-label MBS.
Among several companies being sued by MBIA Inc. are Bank of America Corp. and affiliated companies, Residential Funding Company LLC and Select Portfolio Servicing Inc.
Quicken Loses Ruling in Timesheet Fraud Case
A federal judge has denied a motion by Quicken Loans Inc. to dismiss a lawsuit by a former company secretary.
The plaintiff claims that Quicken required her to only show 40 hours on her timesheet even though she worked overtime.
Quicken had requested the dismissal on the basis the plaintiff had filed bankruptcy but didn't list the potential overtime claim as an asset.
FDIC Chief Leaving in 2 Months
President George W. Bush appointed Sheila Bair as chairman of the Federal Deposit Insurance Corp. in 2006.
More than 300 federally insured banks have failed during Blair's tenure.
The FDIC has announced that Bair will leave in July.
Warehouse Lender Goes Correspondent
In August 2010, NexBank, SSB, disclosed that it had opened a new warehouse lending division.
More recently, the bank said it launched a correspondent lending group.
The new division promises "viable funding solutions with expedient turn times for banks and mortgage brokers."
Another MTA Record; More to Come
The Monthly Treasury Average fell 2 basis points in April based on Federal Reserve Data.
The index was 13 BPS better than a year earlier.
It was the lowest MTA on record based on an analysis of data back to 1953.
Mortgage Fraud Diminishes in 2010
The number of reported instances of fraud or material misrepresentation was down 41 percent between 2009 and 2010, according to LexisNexis Mortgage Asset Research Institute.
It was the "first time in several years" that there was a decline.
The level of activity was virtually the same as 2006 -- the beginning of the financial crisis.
Biggest Wholesale HECM Title Changes Hands Again
Wholesale originators of home-equity conversion mortgages saw volume slip 1 percent between February and March, Reverse Market Insight reported.
The volatile title of biggest wholesale HECM lender was captured by Generation Mortgage Co.
During the past six months, four companies have held the No. 1 wholesaler spot.
Top Mortgage Exec Leaving Wells Fargo
Mark Oman plans to retire from Wells Fargo & Co. this year.
The company disclosed the upcoming retirement in a public filing.
Oman joined the banking behemoth in 1979.
Servicers Slow HAMP Production
Data reported by the Department of the Treasury indicated that 29,840 permanent loan modifications were completed under the Home Affordable Modification Program in March.
Activity fell from the prior month.
In addition, the number of permanent modifications was well below in March of last year.
Bank Casualties Reach 40
The failure of Coastal Bank last week brought to 40 the number of federally insured banking institutions to fail this year.
The Florida bank was taken over by the Office of Thrift Supervision.
A $13 million hit is expected to the Deposit Insurance Fund because of Coastal's demise.
Wells Lifts Litigation Reserves
Wells Fargo & Co. has disclosed that its reserves for mortgage litigation have been increased by $500 million.
The company cited potential fines and penalties related to its mortgage practices.
Wells Fargo said civil penalties could result from a pending probe.
Bank Sues Former Mortgage Employees Over Stolen Data
Huntington National Bank has filed a lawsuit against six former employees.
The defendants allegedly stole more than 2,000 customer records before they quit to go work for the competition.
The bank claims that the defendants spent weeks leading up to their resignations downloading and printing confidential customer records from the bank's secure database.
Refis Surge
A 15 percent jump in refinance inquiries from last week was noted in the Mortgage Market Index.
Refinance share rose to 47 percent from 45 percent.
This week's share reflected a 34 percent rate-term share and a 13 percent cashout share.
Dozens of Cease-and-Desist Orders Terminated
Dozens of Cease-and-Desist Orders Terminated
The Federal Deposit Insurance Corp. reported that it processed 87 matters during March.
That was an increase from 60 matters the previous month.
But 27 of the actions were the termination of cease-and-desist orders.
MetLife Growing Staff
MetLife Bank, N.A., reported to Mortgage Daily that mortgage staffing increased by nearly 200 employees between the fourth-quarter 2010 and the first quarter 2011.
Compared to a year ago, mortgage headcount was up 25 percent.
The growth is happening as rival lenders are slashing their staffs by the thousands.
Mortgage Staffing Slashed
In March, mortgage employment was down 2,800 jobs, according to data released Friday by the Bureau of Labor Statistics.
Headcount in the sector was down 19,100 jobs from a year earlier.
The decline in mortgage employment came as the 30-year fixed-rate mortgage rose more than 70 basis points between November and April.
CRE Originations Off a Quarter
The Mortgage Bankers Association reported that total commercial real estate originations fell 25 percent between the fourth-quarter 2010 and the first quarter of this year.
The quarter-over-quarter decline in commercial mortgage production was led by conduit volume -- which was down 58 percent.
Also hurting performance was agency business; activity at Fannie Mae and Freddie Mac fell 45 percent.
Improving Rates Headed Lower
A 7-basis-point week-over-week improvement was reported by Freddie Mac for the average 30-year fixed-rate mortgage.
A similar decline was recorded for the 15-year fixed-rate mortgage.
It looks like rates might fall further based on 10-year Treasury yield action.
BoA to Triple Number of Mortgage Assistance Centers
Bank of America Corp. announced plans to open 28 new mortgage assistance centers.
The new locations will bring the total to 40 centers in 22 states.
The bank plans to announce additional openings in the second half of the year.
SC Foreclosures Suspended
An administrative order was filed Monday in the Supreme Court of South Carolina.
The order impacts foreclosure actions on owner-occupied properties that are pending as of May 9.
According to the order, a notice of the mortgagor's right to foreclosure intervention must be given to the borrower and filed with the court before a foreclosure can complete.
BoA Cuts NY Staff
Bank of America Corp. has notified New York officials that it will lay off 34 employees in the state.
The move is being made amid declining loan production.
BofA previously announced that it planned to eliminate more than 1,500 home loan positions around the country.
Freddie Earns a Profit
Freddie Mac reported that net income was $676 million for the three months ended March 31.
The company swung from a $113 million loss in the fourth-quarter 2010.
Performance has improved dramatically compared to the $6.7 billion loss in the first-quarter of last year.
Unfair Margin Calls Alleged in Thornburg Lawsuit
Five major banks engaged in "a collusive scheme" for more than a year, according to a complaint filed in a federal bankruptcy court by the trustee of bankrupt Thornburg Mortgage.
The company is now known as TMST Inc.
According to the complaint, the bank fraudulently bled Thornburg Mortgage of almost $2 billion until the firm had no choice but to seek bankruptcy protection in 2009.
PHH Outperforms Rivals
Home-loan production at PHH Corp. was down 25 percent between the fourth-quarter 2010 and the first-quarter 2011.
PHH gave a better performance than the one-third to one-half declines reported by most other major lenders.
However, The PNC Financial Services Group reported a smaller first-quarter decline than PHH.
BoA Servicer Ratings Downgraded
Moody's Investors Service downgraded Bank of America's prime and nonprime servicer ratings.
The downgrades impacted the two entities that conduct servicing for the organization.
"The downgrade was mainly due to the deterioration of the company's collections and loss mitigation metrics," Moody's explained.
MortgageIT Sued Over Faulty FHA Loans
Deutsche Bank AG and subsidiary MortgageIT "repeatedly lied" on Federal Housing Administration originations, according to a civil lawsuit filed by the U.S. Department of Justice.
MortgageIT "recklessly selected mortgages that violated program rules in blatant disregard of whether borrowers could make mortgage payments," the suit alleges.
Deutsche Bank said it is still reviewing the complaint.
Bankruptcies Retreat After Vicious Month
Consumer bankruptcy filings subsided last month.
The agency said in a statement that it closed an $0.4 billion unregistered securitization.
FDIC said it was the first time that it has sold commercial mortgage loans in a securitization since the beginning of the financial crisis.
FDIC Executes Securitization Sale
A portfolio of commercial mortgages has been securitized by the Federal Deposit Insurance Corp.
The agency said in a statement that it closed an $0.4 billion unregistered securitization.
FDIC said it was the first time that it has sold commercial mortgage loans in a securitization since the beginning of the financial crisis.
Ally Originations Off by Half
International first-quarter mortgage production at Ally Financial Inc. exceeded $12 billion, according to fourth-quarter earnings data and figures provided directly to Mortgage Daily.
Domestic activity was less than $12 billion.
Compared to the fourth-quarter 2010, originations were down by 49 percent.
Setback for Reverse Originators
Monthly data released by Reverse Market Insight indicated that home-equity conversion mortgage production during April fell 16 percent from March.
It was the lowest volume since October 2010.
HECMs are insured by the Federal Housing Administration.
Residential Demand Eases, CRE Strengthens
In its Senior Loan Officer Opinion Survey on Bank Lending Practices, the Federal Reserve said that "moderate net fractions of banks" said that demand weakened for prime mortgages.
In fact, demand for closed-end loans has declined for three consecutive quarters.
But demand for commercial mortgages strengthened.
AMC Guarantees Against Repurchases
Coester Appraisal Group announced that it is providing a guarantee that its reports will stand up to repurchase demands.
"The guarantee is applicable for any appraisal-based repurchase request as long as the loan is in good current standing and not in any stage of delinquency," the appraisal management company stated.
Appraisals completed after June 1 are covered.
Study IDs Successful Originator Traits
FirstUSA conducted a survey of more than 3,600 originators.
One of the biggest findings was that the top 15 percent of loan originators generate "seven times the sales volume of average originators."
The difference is how top producers do a better job of staying in touch with potential customers.
Agency Issuance Sinks to 2-Year Low
Data provided by eMBS indicate that fixed-rate issuance by Fannie Mae, Freddie Mac and Ginnie Mae was $68 billion during April.
The last time the sum was this low was January 2009.
Volume fell from April and from a year earlier.
Employment is Litigious Affair
A new trial will be sought by former employees against Quicken Loans Inc., Nichols Kaster PLLP said in March following a jury verdict in favor of Quicken.
California's Second District Court of Appeals affirmed a lower court's decision to award a former employee substantially less than she was seeking from Fidelity Capital Mortgage Brokers.
A U.S. District judge denied a request for a dismissal in a whistleblower lawsuit filed by a former Fannie Mae executive.
Bank Failure Follows CEO's Death
Michigan's Office of Financial and Insurance Regulation took possession of Community Central Bank.
Last year, Community Central said that its chief executive officer had gone missing.
A month later, published reports indicated that his body had washed ashore in Lake St. Clair with a gunshot wound to the head.
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Supreme Court Considers Unearned Fee Case
May 20, 2011
A judgment in favor Quicken Loans Inc. is being considered for review by the U.S. Supreme Court. At issue are alleged unearned fees.
Quicken, which claims it has never charged unearned fees, said it won the case on summary judgment at the trial court level by presenting undisputed evidence that fees it collected were earned.
The ruling, according to the Detroit-based firm, was upheld on appeal by the Fifth Circuit Court of Appeals.
<MortgageDaily.com subscribers read full story>
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Wholesaler Launches Branch Business
May 18, 2011
A national wholesale lender has launched a new branch business that promises to help mortgage brokers navigate the increasingly complex regulatory and compliance landscape.
The news came Tuesday from Real Estate Mortgage Network Inc.
The Edison, N.J.-based company claims to be "one of the largest independent mortgage lending firms in the U.S."
<MortgageDaily.com subscribers read full story>
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Warehouse Lender Goes Correspondent
May 09, 2011
Less than a year after launching a new warehouse lending division, a Texas-based bank announced plans to start a correspondent lending program.
In August 2010, NexBank, SSB, disclosed that it had opened a new warehouse lending division.
The company was targeting small- and medium-sized originators and mortgage brokers looking to transition into mortgage bankers.
<MortgageDaily.com subscribers read full story>
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Mortgage Staffing Slashed
May 06, 2011
Thousands of jobs in real estate finance have been wiped out as a result of rising rates -- with brokers taking the biggest hit. But recently falling rates raise the prospect of elevated refinance demand. And since big employers who have been busy reducing headcount might not be in any rush to staff up again -- mortgage brokers and small mortgage bankers might be in a good position to seize the opportunity.
In March, there were 244,900 people employed in mortgage lending, according to data released Friday by the Bureau of Labor Statistics.
Headcount in the sector fell from 247,700 jobs during February. A year earlier, that total stood at 264,000.
<MortgageDaily.com subscribers read full story>
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