MortgageChronicle.com -- Free Mortgage Industry News Archives September 10, 2004

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Last Updated Friday, September 10, 2004 09:47 AM CST

Cincinnati Fraud Ring Broken Up
Federal prosecutors have now charged nine real estate investors and title agents in what appears to be a real estate flipping ring operating in Cincinnati and southwest Ohio, court documents show. Five people, including a retired teacher, have pleaded guilty to charges that include bank fraud, conspiracy, submitting phony mortgage papers and income tax evasion, according to documents. Prosecutors say the ring relied on inflated appraisals, bogus documents and phony mortgage applications to illegally receive millions of dollars in fraudulent loans.

Mortgage Merger Mania
Among several transactions recently announced was LendingTree Inc.'s agreement to acquire online direct mortgage lender HomeLoanCenter.com. The deal is expected to close within three to four months. Other transactions include Placer Sierra Bancshares' planned acquisition of First Financial Bancorp, and Southern Community Bank and Trust's purchase of two residential mortgage offices of Davidson Mortgage.
30-Year to Average 5.90% Through End of Year
The 30-year fixed-rate mortgage average rose 6 basis points within the past week to 5.83%, according to Freddie Mac's latest survey. The mortgage giant's latest economic outlook has the 30-year averaging 5.9% during the next two quarters. Mortgage applications jumped 7.7%, according to the Mortgage Bankers Association.

Purchase Originations Should Stay Strong Despite Cement Shortage
International demand, rebuilding in the wake of two Florida hurricanes and a vibrant domestic home construction market is raising some concerns about a potential shortage in lumber. Some economists have said that even as the price of building materials rise, mortgage originations should remain strong.

Delinquency Rise Due to Worsening 30-Day Accounts
The second-quarter National Delinquency Survey released by the Mortgage Bankers Association showed the seasonally adjusted delinquency rate for one-to-four-unit residential mortgage loans was 4.43% -- up from the first quarter. Although loans categorized as 90 days or more past due and loans in the foreclosure process continued to improve, the increase in the overall delinquency rate was "almost entirely due to a rise in the number of loans that are 30 to 59 days past due," the group's chief economist said in a prepared statement.
Countrywide May Add 2,500 AZ Jobs
Countrywide Financial Corp. announced it has filed plans to build two new buildings in Chandler, Ariz. If approved, the two planned buildings will give Countrywide an additional 350,000 square feet of space that will allow the addition of over 2,500 central office jobs.

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.

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