MortgageChronicle.com -- Free Mortgage Industry News Archives August 6, 2004

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Last Updated Wednesday, September 08, 2004 09:15 AM CST

New Century Volume Dips Again
New Century Financial Corp. announced August mortgage volume totaled $3.2 billion -- down for the second consecutive month. "August's production keeps us on track to meet our third quarter volume target," the company's chairman and CEO said in the announcement.

Mortgage Exec Tops Golf Ranking
Golf Digest's fourth biennial handicap ranking named Curt Culver of MGIC Investment Corp. the best-golfing CEO in the nation -- as he carried a U.S. Golf Association Index of 2.4. To be considered for the ranking, the magazine required CEOs to head a company in the Fortune 500 or the Standard & Poor's 500 and to have a current U.S. Golf Association Index or supply an approximate handicap.

Fraud Used to Obtain Mortgage License
The Arkansas Securities Department recently suspended the license of a Little Rock loan officer for submitting false and misleading criminal history information on his license application, according to an order issued by the department's commissioner. The Department learned that he had pled guilty in 1997 to five federal felony counts of structuring financial transactions to avoid currency transaction reporting requirements.

Effective Newsletters Generate Leads
What is the most effective marketing system for newsletters? The general answer to this question depends upon your objectives in distributing a newsletter. Are you interested in keeping in touch with clients or generating more business? I have always been partial to marketing solutions that employ maximum synergy. In other words, there is maximum effect for the energy expended.

Fastest Growing Mortgage Companies
Climbing nine spots from last year's ranking and topping the mortgage-related list, the third fastest growing company in the nation was New Century Financial. The subprime lender's revenues grew 91% over the past three years, according to Fortune's latest list of the 100 Fastest-Growing Companies. The three factors considered in the rankings were revenue growth, earnings growth and total market return from June 30, 2001, to June 30, 2004.

Mortgage Jobs Fall
The Bureau of Labor Statistics reported that the number of people working in mortgage-related jobs totaled 454,300 in July -- 3,000 less than during June. The Bureau said the unemployment rate in August was 5.4%, or 8.0 million people, slightly less than the previous month.

Credit Repair Scams Among FTCs Most Common Consumer Fraud
The FTC recently released the results of a statistical survey that suggested nearly 25 million American adults have been victims of fraud. The fourth most common fraudulent activity consumers fell victim to was credit "repair" scams -- two million adults paid for such service. Consumers who have trouble obtaining credit because of negative information in their credit records are sometimes targets of fraud, the FTC said, and while only erroneous or outdated data can be removed, "some fraudsters convince consumers that they can help them remove truthful, negative information from their credit report, or establish a new credit record."

Rates Dip, Apps Poised to Rise
The 30-year fixed-rate mortgage average of 5.77% dropped 5 basis points within the past week, according to Freddie Mac's latest survey, down to its lowest level since April. While this week's lower rates may boost mortgage apps next week, the Mortgage Bankers Association reported mortgage activity barely budged in its most recent survey.

Mortgage Apps Most Confusing Form Americans Use
The Perplexity Poll asked consumers to rate 17 commonly used documents they've read in the last 30 days on how difficult each is to understand. Out of 1,709 respondents, more cited mortgage applications as a somewhat or very difficult-to-understand document than any other form.
COFI Continues Climbing
The cost of funds index, or COFI as it is widely known, averaged 1.816% in July, up from the previous month. The average total funds used in the July calculation of the index was reportedly $440.1 billion.

ABN AMRO Shows Mercy to Soldier
A U.S. Army reservist Sgt. recently returned home from caring for wounded soldiers in Iraq to find her husband gone, her four kids living with relatives and her home being foreclosed on by mortgage giant ABN AMRO. But ABN AMRO has halted the foreclosure and agreed to waive fees if she makes up past payments and stays current on the mortgage, a company spokeswoman confirmed in an interview with MortgageDaily.com.

FTC Goes After Secondary Scam
In a lawsuit filed by the Federal Trade Commission, two companies and their owners are accused of deceiving consumers by making false claims that they could earn $10,000 monthly in their spare time buying and selling mortgages. Of the approximate 7,000 consumers the program had in 2003, survey letters were sent to a randomly picked sample of 1,000 by a government consultant. Based on the responses received, "about 90% did not make any money and pretty much everyone was dissatisfied with the program."
ABN AMRO Fundings Slip Again
ABN AMRO Mortgage Group Inc. reported July production of $4.1 billion -- down for the third consecutive month. July fundings consisted of more than 28,500 loans, according to the announcement.
Burglar Uses Taxi to Steal From Mortgage Company
Around 4 a.m. one morning recently, a cab driver picked up a fare at an auto parts store in Lakeland, Fla. The fare eventually directed the driver to the rear entry of a mortgage company, and told the driver to wait for him and then loaded large plastic bags of items into the cab. After becoming suspicious of the fare, the driver called his dispatcher and requested a traffic stop -- resulting in the arrest of the burglar.

Seattle FHLB Seeks to Be an MBS Player
The Federal Home Loan Bank of Seattle announced it filed an application with its regulator for approval to buy mortgage backed securities from member banks and resell them to its members, those of other Federal Home Loan Banks and investors outside the system. Currently, under its mortgage purchasing program, the government-sponsored enterprise can only purchase mortgage loans, not securities, and hold them in a portfolio.
FDIC Concerned About Home Equity Loan Growth
Banks and thrifts insured by the Federal Deposit Insurance Corp. (FDIC) produced $415.8 billion in home equity loans during the second quarter, according to the FDICs latest Quarterly Banking Profile. Although home equity loan performance remains "very good" at the time, an FDIC economist warned that the "elevated rate of growth, combined with the introduction of new and more liberal loan structures, suggest that some homeowners and some lenders may be assuming higher levels of risk."

Bush: Kerry in Financial Industry's Pocket
In a California town hall meeting, Democratic Presidential candidate John Kerry said he wants to do "something about unfair and deceptive lending practices and put billions of dollars back into the pockets of hardworking families." The campaign for President George W. Bush responded by saying Kerry is in the pocket of the financial industry and his attack on predatory lending smacks of hypocrisy.

ARM Movement Varies By Region
The 1-year Treasury-indexed ARM average climbed 4 BPS to 4.05%, according to Freddie Mac's latest survey. However, ARM averages had notable week-to-week changes regionally; in the Northeast, the ARM average jumped 12 BPS, in the West it rose 10 BPS, while plunging 15 BPS in the Southwest. The 30-year fixed-rate average of 5.82% was 1 BPS above last week. Loan applications fell 6.3%, according to the Mortgage Bankers Association's latest Weekly Mortgage Applications Survey.
Wired Funds Between Mortgage Cos at Issue in $337 Mil Case
The Pennsylvania Supreme Court has tossed out what had been the state's largest damage award ever against a bank. Wachovia Corp. went from owing a mortgage company $337.5 million to having the debt wiped clean by an historic court ruling in Pennsylvania. A company ultimately acquired by Wachovia was accused of raiding the accounts of affiliate companies and illegally grabbing $1.7 million that was improperly wired into a frozen account at the bank.

Business Purchases Fall at Freddie
According to its latest monthly volume summary, Freddie's new business purchases of $44.8 billion fell from June -- defying a four-month trend. Freddie's total mortgage portfolio of $1.4 trillion edged up from June, the report said.

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