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MortgageChronicle.com Archives
June, 2011
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Completed OR Foreclosure Overturned
A county judge in Oregon has blocked U.S. Bank from evicting a borrower whose home it purchased in foreclosure.
The judge concluded the the lenders had not properly recorded mortgage documents.
The ruling, if it stands, raises questions about the validity of other recent foreclosures in the state and could create serious problems for lenders and title companies, as well as for buyers of such properties.
M.I. Volume Rises
Mortgage insurers issued nearly $4 billion in policies during May, according to data from the Mortgage Insurance Companies of America.
Business picked up 5 percent from April.
In fact, May was the second-best month this year.
Kingpin Sentenced in Mortgage Crime of the Century
Lee Bentley Farkas was sentenced to 30 years of hard time by a federal judge.
He was found guilty in April of defrauding Colonial and government regulators.
Farkas was the founder and chairman of failed Taylor, Bean and Whitaker Mortgage Corp.
PennyMac Launching Warehouse Business
Private National Mortgage Acceptance Company LLC is launching a warehouse lending division.
A former Countywide executive has been hired to oversee the development of the new division.
The new executive will also help manage the correspondent customer relationships.
Chances of Refi Rally Evaporate
Freddie Mac reported in its most-recent Primary Mortgage Market Survey that the average 30-year fixed-rate mortgage was up 1 basis point from last week.
A recent Treasury rally had mortgage rates heading towards new record lows.
But with 10-year Treasury data pointing towards even higher rates next week, chances of a refinance wave have virtually disappeared.
Fannie's Secondary Activity Off by Over Half from Year Earlier
May's new business acquisitions fell 58 percent from a year earlier at Fannie Mae.
It was the worst month since January 2009.
Home-loan delinquency, however, improved by 101 basis points from May 2010.
Foreclosure Rescue Schemes Frequently Fraught with Fraud
The owners of Axxium Mortgage Inc. were convicted of using mortgage fraud to strip equity from customers of their foreclosure rescue scheme.
An 81-month sentence was handed down to the operator of Nexxus and Global Legal Associates for running a foreclosure-rescue schem and submitting a fraudulent loan to SunTrust Mortgage.
Following her indictment by a federal grand jury over equity stripping and mortgage fraud, the owner of New Begginings Group was arrested.
HUD Issues SAFE Rules
All 50 states and the District of Columbia have passed and enacted legislation to support the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, the acting Federal Housing Administration commissioner said in a statement.
The Department of Housing and Urban Development issued a final rule outlining required minimum SAFE standards.
The rule clarifies minimum standards about how each state's laws and regulations will be evaluated.
Fate of ResCap Still Uncertain
Ally Financial Inc. said in a public filing that Residential Capital LLC could have an adverse effect on its capital and liquidity position.
The mortgage unit is still heavily reliant on support from Ally to meet its own capital requirements.
"In light of ResCap's liquidity and capital needs combined with volatile conditions in the marketplace, there is substantial doubt about ResCap's ability to continue as a going concern."
BofA Announces $14 Billion Charge
Bank of America Corp. announced plans to put $14 billion dollars aside to help pay investors for bad mortgages.
The bank hopes to move a step closer to putting its disastrous acquisition of Countrywide Financial Corp. behind it.
Included in the provision is an $8.5 billion settlement reported this week.
Landmark Foreclosure Case Likely Headed to State Supreme Court
The Maine Supreme Judicial Court is expected to hear an appeal of a lower court ruling involving GMAC Mortgage and its foreclosure practices.
In September 2010, a Maine District Court judge found that a GMAC official had signed a sworn statement supporting the foreclosure on a property owned by a delinquent borrower in the state who had stopped making mortgage payments.
The official, however, hadn't actually reviewed the borrower's foreclosure documents before signing.
Huge MBS Settlement by BoA
Bank of America Corp. tentatively agreed to a settlement of claims by large investors stung by losses on mortgage-related securities that were issued by Countrywide Financial Corp.
The amount of the settlement is tentatively set at $8.5 billion.
The 22 investors held $56 billion in bonds backed by loans from Countrywide.
Mixed Results for Angry Investors
Great Atlantic Group Inc.'s founder and president was arrested in April on charges of securities fraud, wire fraud, and money laundering.
A 2010 state court decision dismissing an investor class action against Countrywide Financial corp. was overturned last month by a California's second appellate division.
Freddie Mac announced in April that a federal putative class action lawsuit filed by shareholders August 2008 has been dismissed.
Issuance Softens at Ginnie
The issuance of mortgage-backed secuties at Ginnie Mae was down around a billion dollars in May.
Compared to year earlier issuance was off approximately $8 billion.
The month-over-month decline applied to single-family, home-equity conversion mortgage and multifamily securitizations.
Countrywide Had Huge Advantage over Smaller Rivals
Fannie Mae and Freddie Mac had a long history of giving their largest customers lower guarantee fees, while charging community lenders much higher fees, according to Congressional testimony.
By 2007, the advantage helped propel Countrywide Home Loans to a 25 percent market share of total government-sponsored enterprise business.
In addition, sellers like Countrywide benefited from looser underwriting standards established to meet affordable housing goals.
Nearly $10 Billion in Q1 Mortgage Fraud Reports
An analysis of Financial Crimes Enforcement Network's data by MortgageDaily.com indicates that loans associated with first-quarter suspicious activity report filings for mortgage fraud amounted to $10 billion.
The volume of filings leapt from $6 billion during the same period last year.
During all of 2010, loans tied to SARs filings amounted to just $21 billion -- suggesting full-year 2011 results will deteriorate significantly from last year.
Bank Failures Might Slow
The number of consent orders, which the Federal Deposit Insurance Corp. previously referred to as cease-and-desist orders, fell to just 10 last month from 21 in April.
Cease-and-desist orders issued a year earlier numbered 30.
The decline points to fewer bank failures ahead.
Employees at Citigroup Unit Indicted
A news release from the prosecutor in Cuyahoga Country, Ohio, indicated that more than a dozen people were indicted over 100 allegedly fraudulent mortgages.
Nine of the defendants worked for Argent.
Argent was a subprime wholesale lender that was acquired by Citigroup Inc.
Modification Lawsuit Address Host of Issues
A settlement announced last month between Carrington Mortgage Services, the Ohio Attorney General and the Ohio Department of Commerce resolves a lawsuit filed over the handling of loan modifications.
A class action was announced against CitiMortgage Inc., which allegedly "systematically slows or thwarts homeowners' requests to modify mortgages."
PNC Bank employed an arbitrary and blanket prohibition against subordinating second mortgages to new or modified senior mortgages secured by non-PNC liens, according to a class action.
Fairway: Yesterday, Today and Tomorrow
When Steve Jacobs started Fairway Independent Mortgage in 1996, a life event prompted him to open the company in Wisconsin instead of Texas.
The company has now grown to more than 1,000 employees.
Fairway plans to continue its growth by maintaining a focus on purchase-money business.
3 Credit Unions, 1 Bank Collapse
The Georgia Department of Banking and Finance closed down Mountain Heritage Bank.
The National Credit Union Administration placed O.U.R. Federal Credit Union and Borinquen Federal Credit Union in conservatorship.
In addition, St. James A.M.E. Federal Credit Union was liquidated by the NCUA.
Jumbo Rates Improve
The conforming 30-year mortgage fell a little more than a basis point in the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended June 24.
But an even bigger decline was recorded for the jumbo 30-year mortgage.
The disparate movement slashed the jumbo-conforming spread to 43 basis points from 50 BPS in last week's report.
Freddie's Secondary Biz Deteriorates, Delinquency Declines
May purchases and issuances at the McLean, Va.-based lender fell by around $600 million from April, Freddie Mac reported.
Business has not been this bad since October 2008.
Meanwhile, residential delinquency improved 4 basis points.
GSEs, Lenders Sued by Michigan Counties
Oakland County, Mich., has filed a lawsuit against Fannie Mae and Freddie Mac.
Another lawsuit was filed against the two government-controlled enterprises and several servicers by Ingham County, Mich.
The two counties claim that they and the state's public schools lost tens of millions of dollars because mortgage firms have avoided paying the state's property-transfer tax.
Default Strategies
A study from Experian found that 47 percent of strategic defaulters opened a new mortgage during the six months prior their defaults.
"This behavior further supports the evidence that these mortgage defaulters were doing so strategically," the report said.
In addition, around nine-in-10 strategic defaulters remained current on other obligations as much as a year past the default.
PHH Hit With $0.3 Million Fine Over Foreclosures
An order has been issued against PHH Mortgage Corp. by the state of Illinois.
The state said it found evidence of "negligence or incompetence" in PHH foreclosure procedures.
A fine of $290,000 was levied against the lender.
Florida Foreclosure Gone Wild
A Florida couple executed a mortgage note with Washington Mutual Bank in 2005.
But when the bank began foreclosure proceedings in 2008, the borrowers responded by filing fake documents.
The trial court judge accepted the documents, granted a motion to vacate, vacated a final judgment, discharged the lis pendens and dismissed WaMu's complaint with prejudice.
Rates Move Within Narrow Range
Freddie Mac reported in its latest Primary Mortgage Market Survey that the average 30-year fixed-rate mortgage was unchanged from a week earlier.
The 15-year fixed-rate mortgage, however, was 2 basis points higher.
The five-year, Treasury-indexed, hybrid, adjustable-rate mortgage was down 2 BPS.
Servicers Struggle
The average mortgage servicer had a first-quarter servicing portfolio that was 20 percent smaller than their fourth-quarter 2010 portfolios, according to the Mortgage Bankers Association's First Quarter 2011 Mortgage Bankers Performance Report.
Servicers earned about $34 less in revenues per loan serviced in the first quarter.
Based on total net servicing financial income, per-loan income was down $74 from the prior period.
Lenders Feel Pain of Falling Production
The average mortgage banker closed 793 loans during the first quarter, the Mortgage Bankers Association reported.
Activity tumbled from 1,296 loans three months earlier.
Net production income plummeted to 20 basis points from 54 BPS three months earlier and 32 BPS a year earlier.
$200 Million MBS Settlement by Regions Unit
The Securities and Exchange Commission announced that Morgan Keegan & Co. has agreed to a settlement.
Morgan Keegan is the investment banking arm of Regions Financial Corp.
Regulators allege that Morgan Keegan and two of its executives overvalued subprime RMBS in five funds sold to investors.
CA LOs Unconcerned with Jumbo Limit Reduction
Rules that temporarily increased limits on the size of loans backed by the federal government since 2008 are scheduled to expire on Oct. 1.
But local loan officers and real estate agents have mixed views on the possible impact.
Most agree the vast majority of homes on the market in Northern California counties would still be eligible for federal mortgage guarantees.
Trade, Consumer Groups Call for QRM Changes
The Coalition of Sensible Housing Policy has presented a white paper to financial regulators in an effort to expand the exemptions for a qualified residential mortgage.
The study details how proposed risk-retention regulation and the failure to properly define QRM exemptions "would significantly harm creditworthy borrowers while frustrating the nation's fragile housing recovery," a news release said.
The report indicated that raising downpayments to 20 percent from 5 percent would disqualify many potential borrowers.
More Good News for Mortgage Industry
The rate of delinquency for borrowers who are at least three months behind on their mortgage payments fell by 4 basis points between April and May, Lender Processing Services Inc. reported.
The positive report came on the heels of good news about the S&P/Experian first-mortgage credit-default index -- which improved 7 basis points during the same period.
It also preceded a report from the Federal Housing Finance Agency indicating that U.S. house prices rose in April for the first time since May 2010.
Discrimination Litigation Gets Costly
Citizens Republic Bancorp Inc. agreed to a $3.6 million settlement with the Justice Department over charges of alleged discrimination by a loan production office in a black neighborhood, a statement said.
A total of $1.5 million in checks were mailed to Hispanic borrowers who obtained a mortgage from Golden Empire Mortgage Inc., the FTC recently reported.
A $1.45 million discrimination settlement was announced between Midwest BankCentre and the Department of Justice.
It's Prison for Taylor Bean CEO, Analyst
Paul Allen has been sentenced to 40 months in prison.
Allen was the chief executive officer of failed Taylor, Bean and Whitaker Mortgage.
Also sentenced was former Taylor Bean financial analyst Sean Ragland.
JPMorgan Settles Mortgage Securities Lawsuit
The Securities and Exchange Commission announced that a settlement has been reached with J.P. Morgan Securities LLC.
The SEC sued the investment banker alleging that the company misled investors in a complex collateralized-debt obligation transaction.
"J.P. Morgan structured and marketed a synthetic collateralized debt obligation without informing investors that a hedge fund helped select the assets in the CDO portfolio and had a short position in more than half of those assets," the SEC stated.
$19 Million Modification Settlement
The Federal Trade Commission filed a lawsuit in 2009 against First Universal Lending LLC.
The complaint alleges that the defendants encouraged borrowers to miss their mortgage payments, charged huge up-front fees and did little to help them after collecting the fees.
The FTC now says that it reached a nearly $19 million settlement with the defendants.
Defaults Decline
First-mortgage delinquency of at least 90 days was down 7 basis points percent during May, according to the S&P/Experian Consumer Credit Default Indices.
On second liens, the rate was 9 BPS better.
The S&P/Experian composite index slipped to 7 BPS in May.
Republican Blasts Mortgage Industry
Oregon state Sen. Brian Boquist sent lobbyists for the Oregon Banking Association and other mortgage industry representatives an e-mail rebuking efforts to block foreclosure reforms he co-sponsored.
He copied the e-mail to all 30 of his Senate colleagues.
His e-mail also touched on bank bailouts and closures and implied that the public would not tolerate future rescues.
Rising FHA Business to Fall
Last month, the Federal Housing Administration endorsed over 2,500 more mortgages than in April.
On a dollar-volume basis, production was up around $0.1 billion.
Overall activity appears to be headed lower based on new applications, which were down more than a quarter in May.
Fannie Raises 1st-Half Forecast
Fannie Mae raised its forecast for second-quarter home-loan production by U.S. lenders by $54 billion.
The first-quarter outlook was raised by $4 billion.
The improved outlook was the result of an increase in expected refinance transactions.
Investment Bankers Sued Over Bad MBS
The National Credit Union Administration has filed a lawsuit against JPMorgan Chase & Co.'s investment banking unit.
The regulator is also suing RBS Securities Inc.
The NCUA claims that the defendants violated federal and state securities laws and misrepresented the sale of hundreds of securities to five failed credit unions that the NCUA took over as liquidating agent.
Multifamily, Industrial Mortgage Lates Skyrocket
Moody's Investors Service reported that delinquency on securitized commercial mortgages was 4 basis points lower in May than in April.
But multifamily delinquency surged 41 BPS from April.
On industrial loans, the rate was up 93 BPS.
Residential Securitization Closes
Walter Investment Management Corp. announced a private placement memorandum under Rule 144A.
The $102 million in residential mortgage-backed notes were issued by WIMC 2011-1.
Walter Investment sponsored the securitization.
Lawsuit Blames 3 Executives for WaMu's Demise
The Federal Deposit Insurance Corp. previously filed a lawsuit against three former executives of Washington Mutual Inc.
The FDIC took over Washington Mutual Bank in 2008.
The FDIC's federal suit lays the demise of WaMu squarely at the feet of the trio.
2011 Mortgage Graveyard Reaches 70
Two East Coast banks taken into receivership by the Federal Deposit Insurance Corp.
A week earlier, the National Credit Union Administration threw a credit union, also located on the East Coast, into conservatorship.
In all, 70 mortgage-related operations or companies have been closed or failed this year based on data maintained by Mortgage Daily.
Stream of Bank Executives Head to Jail
The former chief executive officer of Community National Bank was sentenced last month to four months in prison.
A former director at Peoples Bank of Coffee County has been sentenced in U.S. District Court to 58 months in prison.
A former Omni National Bank vice president was sentenced this month to 21 months in prison.
Rates Edge Up, Activity Edges Down
The conforming 30-year fixed-rate mortgage rose nearly 4 basis points this week.
The 15-year mortgage was also higher.
The increase in rates pulled new mortgage inquiries down 4 percent.
Former Homecomings Exec named President of Growing Firm
Dan Bettenburg has been hired by Stonegate Mortgage Corp.
His new title is president.
Bettenburg previously was an executive at Homecomings Financial LLC.
HECM Lenders Grapple With Taxes, Insurance in Wells' Wake
Wells Fargo Home Mortgage said it would cease production of home-equity conversion mortgages.
"Restrictions associated with reverse mortgages that make it difficult to determine seniors' abilities to meet the obligations of homeownership and their reverse mortgage, e.g., payment of property taxes and homeowners' insurance" were cited for its decision.
The National Reverse Mortgage Lenders Association responded with a news release indicating that it has been working with the Department of Housing and Urban Development resolve issues tied to ability to pay taxes and insurance.
The Bubble That Hasn't Popped
Real estate broker Steve Oliver, who handles the Midland-Odessa, Texas, market, says new arrivals are finding it hard to find a place to live.
Don Hallmark, a local real estate appraiser, agreed that housing is hard to find in the area.
"We're trying to grasp at sale prices that are higher than what we can comp out," Hallmark said.
Biggest HECM Lender Abandoning Originations
Wells Fargo Home Mortgage announced that it would stop originating home-equity conversion mortgages.
During the 12 months ended April 30, Wells Fargo Bank, N.A., originated nearly 20,000 HECMs.
That was more than any other reverse mortgage lender.
Mortgage Bankers Cut Forecast
The outlook for second-quarter home-loan production by U.S. lenders was reduced by $5 billion from last month's forecast the Mortgage Bankers Association predicted.
MBA's third-quarter fundings forecast was cut by $9 billion.
Projected full-year 2011 production was scalled back $25 billion.
Rates Might Improve as 15-year Falls to New 2011 Low
The average 30-year fixed-rate mortgage inched up 1 basis point in Freddie Mac's weekly survey.
But the 15-year fixed-rate mortgage was 1 basis point better.
But both the 15-year and 30-year mortgage are likely to improve at least 5 BPS in next week's rate reports.
Foreclosures Decline, But Not in Michigan
The country's mortgage servicers filed foreclosure notices on 2 percent fewer properties during May than during April, RealtyTrac reported.
Real-estate-owned filings fell 4 percent.
But in Michigan, REO filings jumped 19 percent.
Foreclosure Warnings Mistakenly Sent to BoA Borrowers
Bank of America said that it mistakenly sent nearly 5,000 Oregon borrowers letters indicating that they owe property taxes and might be risking foreclosure.
But the borrowers didn't owe the taxes.
"We sincerely apologize to those who received the letter in error," said a bank spokeswoman.
Origination Estimate Increased $100 Billion
Full-year 2011 originations are predicted to come in at $1.2 trillion, Freddie Mac predicted in its latest economic outlook.
The prediction was better than last month's forecast of $1.1 trillion.
The improved outlook was the result of expanded projections for this year's conventional business.
Criminal Subpoena Issued Against LPS
Michigan's attorney general announced that he issued a criminal investigative subpoena against Lender Processing Services Inc.
Also hit with subpoenas were affiliates DocX, Fidelity National Financial Inc. and CT Corporation system.
The state wants to look at documents used in the firms' foreclosure and bankruptcy document-processing operations.
Bank Exec Pleads Guilty to False Delinquency Reporting
A former vice president at Metropolitan Savings Bank pleaded guilty to a federal charge of making a false report to bank regulators.
She admitted that she lied about the level of residential delinquency at the financial institution.
The bank failed four years ago.
Southeast Originator Up For Sale
Gateway Bank Mortgage Inc. is up for sale, according to a public filing.
In addition, sister businesses are also on the block.
The parent company wants "to focus on the company's community banking business in its core markets," the filing stated.
MetLife Expanding in Dallas Area
Citigroup Inc. is negotiating to sell its huge corporate campus in a Dallas-area development.
MetLife Home Loans is in talks to buy the development, real estate brokers and economic development officials who are familiar with the deal said.
MetLife has been expanding its mortgage operations and needs more office space in the Dallas area, brokers say.
CFPB Official On the Record
Richard Cordray is the director of enforcement at the Consumer Financial Protection Bureau.
Regardless who eventually takes the controversial job of CFPB director, Cordray will be in his job in July when the bureau officially opens for business.
"If we are enforcing the law against the dishonest businesses, the ones that are competing unfairly and illegally with the honest businesses, then that's better for all concerned," Cordray said.
Foreclosure Cases Get Crazy
Mortgage servicer One West Bank filed a lawsuit against the trustee in a mortgage securitization to stop the foreclosure on borrower.
A petition for review of an appeals court decision was denied by the California Supreme Court.
The decision gives the Mortgage Electronic Registration Systems to the right to foreclose.
Ohio Worst State for Mortgage Investors
A review of state actions covered by MortgageDaily.com reveals that the worst state for mortgage investors is Ohio.
The assessment is based on a combination of legislative and other government actions taken in attempts to hinder recovery through the foreclosure process.
It also factors in foreclosure cases lost by lenders and settlements between states and mortgage-related firms.
Mortgage Chief Exiting at Chase
An internal announcement indicated that David Lowman has decided to leave JPMorgan Chase & Co.'s home-lending business.
The communication indicated that the executive is taking "much needed time off."
Lowman joined the company in 2006.
FHA Servicing Portfolio on Market
MountainView Servicing Group announced that it is marketing a mortgage servicing portfolio.
The offering consists of loans issued by Ginnie Mae.
Mortgages insured by the Federal Housing Administration account for 98 percent of the portfolio.
Portfolio Lender Thrives
This year's production at Astoria Federal Savings is expected to rise 11 percent from 2010.
The growth comes as home-loan originations at all lenders are expected to decline a third during the same period.
The president of the company explained that as a portfolio lender, they aren't affected by some of the difficulties that have hurt the market for mortgages that are originated to be sold and packaged as securities.
NC County Rejects Foreclosure Documents
In Guilford County, N.C., the register of deeds said his office will no longer accept suspicious "robo-signed" documents.
The documents at issue have allegedly been linked to foreclosure fraud.
He said his office will hold robo-signed documents until the lenders or law firms involved sign an additional notarized affidavit validating the signatures.
Servicers Have More Time to Comply with Consent Orders
On April 13, the Federal Deposit Insurance Corp. said the nation's 14 largest mortgage servicers faced enforcement actions over their servicing practices.
Eight national bank-servicers each signed consent orders with the Office of the Comptroller of the Currency.
Now the OCC has extended the amount of time the servicers have to comply with the orders.
Radian Eases Non-Agency Jumbo Requirements
Mortgage insurance coverage will be available on non-agency loans up to $650,000, Radian Guaranty announced.
The maximum loan-to-value ratio can be as high as 90 percent.
"With the reduction in the government-sponsored enterprise's and the Federal Housing Administration's loan limits scheduled for later this year, having Radian's jumbo coverage ... will be especially helpful to lenders," the bulletin stated.
Fannie Dismissing All Non-Judicial Foreclosures in Hawaii
Hawaii's governor signed SB 651 into law last month.
The law requires that servicers go through a dispute resolution program on non-judicial foreclosures in the state.
So Fannie Mae is now requiring that all non-judicial foreclosures in Hawaii be suspended and refiled through the courts.
Provident Production Plummets
Volume plummeted by 62 percent between the fourth-quarter 2010 and the first-quarter 2011 at Provident Funding Associates LP.
In comparison, an analysis by MortgageDaily.com of first-quarter production indicated that fundings at all U.S. lenders were down just 34 percent.
Deterioration at Provident was twice as bad as the industry as a whole.
New Activity Leaps as ARMs Explode
At 243, the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended June 10 improved 15 percent from last week.
Helping drive the improvement in new business was adjustable-rate mortgage activity.
ARM inquiries shot up 30 percent from last Friday's report.
Taylor Bean President, Treasurer Headed to Prison
The Department of Justice announced that Desiree Brown was to 72 months in prison.
Brown was the former Treasurer of Taylor Bean and Whitaker Mortgage Corp.
Also sentenced was the company's former president.
10-Year Yield Points to Even Lower Mortgage Rates
During late morning trading Friday, the yield on the 10-year Treasury was down about 5 basis points from Thursday's close.
Impacting Treasury prices was a sinking stock market, with the Dow Jones Industrial Average down 140 points.
Today's Treasury market activity suggests that the 30-year mortgage rate has fallen to the lowest level since late last year.
Conference Addresses Emerging Fraud
CoreLogic organized a national conference on mortgage fraud in Atlanta this week.
Among hot topics discussed at the conference was short-sale fraud.
Another emerging issue is settlement agent fraud.
Rates Lower, ARMs Sink
The average 30-year fixed-rate mortgage fell 6 basis points in Freddie Mac's weekly survey.
A more steep decline was recorded for the five-year, Treasury-indexed, adjustable-rate mortgage: 13 BPS.
The one-year Treasury-indexed ARM was down 18 BPS.
BofA Leads HAMP Volume Lower
The monthly volume of Home Affordable Modification Program modifications completed was off by more than a quarter between March and April, data from the Department of the Treasury indicate.
The biggest decline was at Bank of America Corp.'s banking unit, where HAMP volumd plummeted by nearly three-quarters.
Compared to last year, collective volume from all servicers has retreated by more than two-thirds.
Obama Penalizes 3 Servicers that Produced Nearly Half of HAMPs
An announcement from the Department of Housing and Urban Development indicated that Home Affordable Modification incentive payments will be withheld from three mortgages servicers.
HUD said the action was being taken because they need substantial improvement "in identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance."
The actions against the servicers were taken following new servicer assessments that summarize the performance of the top-10 HAMP servicers.
Life Insurers Outperform Third-Party CRE Servicers
The 30-day delinquency rate on loans held in commercial mortgage-backed securities rose to the highest level on record based on data back to 1997.
CMBS loans are serviced by third-party servicers.
But at life insurance companies, the 60-day CRE delinquency rate was down 5 basis points.
Jumbo Dilemma Looms
Unless Congress takes action, loan limits in high-cost areas will revert back to $417,000 in October.
But the loan limit on home-equity conversion mortgages was permanently raised to $625,500.
Given HECMs can be used on purchase transactions, the use of HECM's on transactions in excess of $417,000 could rise.
Volatile Reverse Wholesaler Standings Revised
Wholesalers lenders saw reverse production drop to fewer than 2,500 home-equity conversion mortgages during April.
The top wholesaler was Urban Financial Group.
Urban stole the No. 1 wholesale title from Generation Mortgage Co.
New York's Foreclosures Take Longest
Fannie Mae more than doubled the amount of time Florida attorneys have to complete a foreclosure, according to revised deadlines issued by the secondary lender.
But it was New York that had the longest time.
Fannie said that New York's foreclosure completion time frame is 570 days.
Fed's QE Exit Could Push Rates Higher
The U.S. Treasury next month will go back to relying on the kindness of strangers like never before to purchase the nation's burgeoning debts.
Taxpayers may have to pay higher interest rates to attract enough foreign investors, analysts say.
The Fed is estimated to have bought about 85 percent of Treasury's securities offerings in the past eight months.
Mass. Official Rejects Robo-Signed Docs
The South Essex, Mass., register of deeds has refused to accept two documents purportedly signed by "Linda Green."
The name that appears on nearly 300 other mortgage documents already on file at the South Essex registry and are what have been referred to as "robo-signed."
Green is an employee of Docx.
FDIC Sues Mortgage Broker
The Federal Deposit Insurance Corp. filed a lawsuit against Amerifund Financial Inc.
The defendant is a mortgage broker that submitted loans to failed Downey Savings and Loan Association, F.A.
The FDIC claims that the broker presented fraudulent loan packages.
LendingTree Cutting Mortgage Jobs
An Indiana office of LendingTree.com will close by August.
More than 60 employees will be laid off as a result.
The company also is closing offices in Tennessee and Florida.
Freddie Shakes Up Management
Anthony Renzi was named executive vice president of a new single-family and operations & technology division, Freddie Mac announced.
David Brickman was appointed senior vice president in charge of the multifamily division.
Five other executive appointments were also announced.
iPhone App Targets Mobile Mortgage Shoppers
Zillow announced the release of the Zillow Mortgage Marketplace iPhone App.
Users are promised an "innovative loan shopping experience."
Prospective borrowers can access pricing engines, mortgage calculators and competing lenders through the application.
2nd Mortgage Borrowers See Worse Negative Equity
Borrower equity extraction through second mortgages significantly increased the risk of a negative equity position, CoreLogic reported.
Just 18 percent of borrowers who had no home-equity loans were underwater at the end of the first quarter.
But the negative-equity rate jumped to 38 percent for borrowers with HELs.
MTA Getting Ridiculously Low
In July 2009, the Monthly Treasury Average fell to the lowest level on record based on Federal Reserve data going back to 1953.
Nearly two years later the MTA continues to set new lows.
In May, the index fell to 0.26 percent.
Fannie Releases Revised Servicing Guidelines
In April, the Federal Housing Finance Agency issued a directive requiring that mortgage servicing guidelines at Fannie Mae and Freddie Mac be aligned.
The directive was issued in conjunction with settlement between federal regulators and the nation's largest mortgage servicers.
In line with the directive, Fannie released new standards for the management of delinquent loans, default prevention and foreclosure time frames.
Regulators Allow More Time for Risk Retention Comments
A risk-retention rule is being implemented as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The rule would require issuers of mortgage-backed securities to retain at least 5 percent of the underlying assets' credit risk.
The comment period for the rule has been extended until Aug. 1.
OTS Seizes SC Institution
Atlantic Bank & Trust was closed down Friday by the Office of Thrift Supervision.
The bank was based in South Carolina.
"Atlantic, which reported net losses in 2008, 2009, 2010 and the first quarter of 2011, was critically undercapitalized," the OTS explained in a statement.
Litton to be Sold
Ocwen Financial Corp. disclosed that it has reached an agreement to acquire Litton Loan Servicing LP.
The seller is The Goldman Sachs Group Inc.
Litton says it currently employs more than a thousand people.
Consumer News Publication Launches Amid Plunging Mortgage Rates
The 30-year fixed rate has fallen each of the past eight weeks, according to the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com.
Last week's 30-year rate was the lowest this year.
The launch of a new consumer mortgage news publication will help current and prospective borrowers take advantage of these low rates while giving them an improved understanding of available options and the mortgage process.
CA Investors Burned by Hard-Money Brokers
A Sacramento Bee review of court and regulatory filings shows that for more than 20 years, a number of hard-money brokers have misused or stolen their investors' money.
Some brokers landed in prison.
A Bee review of statewide data for the biggest 344 brokers operating around the peak of the real estate bubble found one out of every four has been accused of wrongdoing or sanctioned by the state Department of Real Estate in the past decade.
Trade Group Leader Proud of OK Performance
etty Shaw is senior vice president and mortgage operations manager for SpiritBank in Oklahoma City.
Next year, she becomes president of the Oklahoma Mortgage Bankers Association.
She says she is proud of how Oklahoma has fared versus what she hears when traveling outside of the state.
Refis Strengthen During Holiday Week
Inquiries for refinances rose 4 percent this week, according to the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended June 3.
Refinance share, meanwhile, expanded to 53 percent from 49 percent.
The improvement in refinance activity came on the heels of Memorial Day.
HUD Moving to the Cloud
The Department of Housing and Urban Development's chief information officer wrote that several services are being transitioned to the cloud during the next calendar year.
By the end of this year, HUD's e-mail user accounts will be handled through cloud technology.
By moving to the cloud, the CIO says he expects the strategy "to lead to faster provisioning of services, ability to rapidly scale services, and more predictable costs."
Disappointing Employment Data Could Be Boon for Industry
Mortgage jobs were down by more than 5,000 positions in April.
The U.S. unemployment rate increased to 9.1 percent last month from April's 9.0 percent.
But the disappointing data already has the 10-year Treasury yield lower, putting mortgage rates closer to the record-low reached in November 2010.
Bets Against Clients Prompt Goldman Subpoena
The Manhattan district attorney has subpoenaed Goldman Sachs.
The subpoena is tied to allegations that the investment banker bet heavily against its clients in risky mortgage deals.
The subpoena relates, at least in part, to four offshore deals that were the focus of a two-year inquiry by a Senate subcommittee.
Executives Skimmed 1% Off Bank's Originations
A former Coast Bank executive faces sentencing next month.
The president of American Mortgage Link also faces sentencing.
The pair allegedly had taken an extra 1 percent fee in making loans to borrowers purchasing lots and homes.
FHFA Nominee Gets Back to Regulating NC Banks
North Carolina State Banking Commissioner Joseph Smith Jr. was nominated by President Barack Obama in November to head the Federal Housing Finance Agency.
But Smith says the lure of unfinished business in North Carolina pushed him to withdraw his name from consideration.
So far on his watch, the state has bolstered its landmark anti-predatory lending law and the banking commission has tightened license requirements for mortgage brokers.
Bankruptcies Retreat
Bankruptcies filed by U.S. consumers during May tumbled 15 percent from the prior month, the American Bankruptcy Institute reported.
Filings were down 19 percent from the same month last year.
Chapter 13 filings retreated around 11 percent.
MO Lender Adding 300 Jobs
VA Mortgage Center.com does business from its headquarters in Columbia, Mo.
The company specializes in loans that are guaranteed by the Department of Veterans Affairs.
A statement from the governor of Missouri indicated that the lender plans to hire 300 new employees during the next five years.
Lender Settles Discrimination Complaint
Cornerstone Mortgage agreed to settle a federal complaint that it discriminated against home loan applicants on maternity leave, the Department of Housing and Urban Development announced.
The lender agreed to pay one applicant $15,000 and set aside a $750,000 fund for others who may have similar claims.
Cornerstone also agreed to adopt a clearer policy against discrimination and to notify potential claimants about the fund.
Merger Creates Portfolio Lender
Shellpoint Partners LLC announced that it completed the acquisition of New Penn Financial LLC.
New Penn specializes in government originations.
Loans originated by New Penn will either be securitized or held in Shellpoint's portfolio.
More Good News on Rates
The average 30-year loan applicant got a fixed rate that was 5 basis points better the prior week, according to Freddie Mac's most recent rate survey.
The 30-year has improved for seven consecutive weeks.
Compared to a year earlier, the 30-year was down 24 BPS.
Servicers Lose on MERS Bill in Oregon
The Oregon House Judiciary Committee voted down an amendment sought by mortgage servicers, title companies and credit unions.
The lobbying came as judges in the state have blocked non-judicial foreclosures because of documents that were allegedly not properly recorded by the Mortgage Electronic Registration System.
The amendment would have relieved lenders of ensuring a property's ownership history is properly recorded in public records before foreclosing outside a courtroom.
Further Deterioration in Reverse Sector
Reverse mortgage production during May was lower than any month since May 2010, according to data reported by Reverse Market Insight.
Home-equity conversion mortgage volume was 15 percent lower than April.
Compared to a year earlier, HECM originations were down 14 percent.
Risk Of Appraisal Fraud Sinks
The likelihood that property valuations will be manipulated has declined 22 percent during the prior 12 months, according to a quarterly report from Interthinx.
The the Property Valuation Fraud Risk Index came in at 223.
Valuation fraud can occur at origination with inflated appraisals or on short-sale transactions with artificially low estimates.
Branch Platform Expansion Leads to Hirings
An announcement from iServe Residential Lending LLC indicated that several locations throughout three states have been opened.
The additions are part of an "ongoing national branching platform expansion plans."
The company said in a statement to MortgageDaily.com that it added 40 new employees during the first quarter.
CMBS Defaults Down Despite Deterioration in Industrial, Office
The 30-day delinquency rate on securitized commercial mortgages was 5 basis points lower in May, Trepp LLC reported.
The report indicated that securitized industrial mortgages deteriorated more than a hundred BPS.
Office delinquency was up 3 BPS.
OC LOs Wanted
Kinecta Federal Credit Union announced the opening of a new mortgage center in Orange County, Calif.
Members who use four Orange County branches of the credit union will be serviced by the new center.
The new location "will be staffed by upwards of 30 experienced mortgage loan professionals."
Conventional Issuance Down, Ginnie Up
Issuance of Ginnie Mae fixed-rate mortgage-backed securities inched up in May compared to April.
But issuance of Fannie Mae's fixed-rate MBS declined more than $2 billion from April.
May volume at Freddie was also more than $2 billion worse.
Wells Fargo Sues County Registrar
Wells Fargo Bank is suing Johnston County Registrar of Deeds.
The company cliams that the office misspelled a borrower's name when it indexed a deed of trust.
Wells Fargo wants at least $10,000 in damages from Johnston County government.
10-State SAFE Settlement
A news release from New Jersey Department of Banking and Insurance commissioner indicated that the state had joined a 10-state settlement with Mortgage Access Corp.
A joint examination last year found that the lender "had attempted to approach this changed regulatory landscape through a multi-state loan production system making non-compliant use of unlicensed individuals."
The settlement resolves Secure and Fair Enforcement for Mortgage Licensing Act compliance issues raised from the investigation.
Resistance to MERS Relief Bill in Oregon
The Oregon House Judiciary Committee postponed a hearing on a state senate bill which largely deals with publicly subsidized housing in foreclosure.
But an amendment to that bill introduced last week would relieve lenders of ensuring a property's ownership history is properly recorded in public records before foreclosing outside a courtroom.
The co-chair of the committee said he did not find support to pass a the amendment put forth at the financial industry's request.
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Employees at Citigroup Unit Indicted
June 27, 2011
Nine former employees of a Citigroup Inc. subprime wholesale lending subsidiary -- including underwriters, account managers and supervisors -- are accused of colluding with appraisers, borrowers and mortgage brokers to fraudulently fund a hundred Ohio mortgages. The indictments are part of the biggest mortgage fraud case in U.S. history.
OAt the height of the mortgage industry meltdown, Citi acquired Argent Mortgage Co. from ACC Capital Holdings -- the parent of now-defunct Ameriquest Mortgage Co.
The deal included $45 billion in mortgage servicing rights.
<MortgageDaily.com subscribers read full story>
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FDIC Sues Mortgage Broker
June 07, 2011
A California mortgage broker that allegedly submitted $2.4 million in fraudulent loans to Downey Savings and Loan Association, F.A., before it failed has been sued by the Federal Deposit Insurance Corp. While the broker operated as a corporation, the FDIC hopes to break the corporate veil and go directly after the owner.
On Friday, the FDIC filed a complaint in U.S. District Court for the Central District of California against Amerifund Financial Inc.
Several individuals are also named as defendants.
<MortgageDaily.com subscribers read full story>
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