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MortgageChronicle.com Archives
September, 2011
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Refis Retreat as Rates Rise
Refinance inquiries were down 17 percent in the latest U.S. Mortgage Market Index.
Refinances accounted for 70 percent of total activity.
The driving force behind the weakened overall performance was rising rates, with the conforming 30-year mortgage averaging 7 basis points more than last week.
Calif. AG Backs Out of Foreclosure Settlement Talks
The departure of California from negotiations to settle alleged faulty foreclosure practices by the nation's biggest mortgage servicers throws a monkey wrench into the Obama administration's push to resolve the debacle.
California Attorney General Kamala Harris removed herself from the talks because the servicers were not offering her state's borrowers enough relief.
California now joins other states including New York in their opposition of a settlement that they claim lets servicers off the hook too easily.
Small Special Servicer Sees Upgrade
Residential Credit Solutions Inc.'s servicer's rating for subprime product has been upgraded.
Residential's special servicing was also raised.
Among the reasons cited for the upgrades were effective default capabilities and competitive performance metrics.
Servicer Rating Raised at Central Mortgage
The primary servicer rating for Alt-A mortgages was upgraded at Central Mortgage Co.
The special servicer rating of the company was also improved.
In addition, the primary servicer rating for prime product was affirmed.
M.I. Firms Maintain Winning Streak
The dollar volume of mortgage insurance policies written during August rose 16 percent from the prior month.
The dollar volume of new business has risen each month since April.
It appears that volume will continue rising based on new M.I. applications.
Fannie Turns in Strong Performance
Fannie Mae reported that new business acquisitions during August increased 12 percent from July.
Residential delinquency at the company was down 5 basis points.
Even multifamily delinquency improved 2 BPS from July.
Record-Low Rates Evaporate
Today's weekly mortgage survey indicated that fixed rates averaged less this past week than at any other time on record since the survey launched in 1972.
However, the market has since changed course, with Treasury yields up 27 basis points over the past week.
Fixed rates are likely to be a quarter percent higher in next week's report.
Leap in FHA Delinquency Leads Overall Rate Higher
Delinquency on loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs jumped 130 basis points between the first and second quarter on loans serviced by federally regulated financial institutions.
That helped push overall quarterly delinquency 60 BPS higher.
Also hurting the overall rate were subprime loans, which saw serious delinquency rise 60 BPS.
Multifamily Deterioration Continues as Hotel Performance Roars Back
An increase in delinquency on securitized commercial mortgages in July was erased last month.
The rate on hotel loans has fallen each of the past four months by an aggregate of more than 180 basis points.
But securitized apartment loans have become a growing problem.
$12 Billion in 2010 Fraudulent Originations
Last year, $12 billion in fraudulent mortgage loans were originated, according to a new report. Compared to 2010, the rate of fraud this year is expected to be mostly flat.
But there has been a shift from identity theft to fraud committed on distressed sales.
Government mortgages have been found to carry more risk than their conventional counterparts.
Warehouse Lenders Defrauded on 23 Loans
A plea bargain is expected from the chief financial officer of a Minnesota lender who allegedly defrauded warehouse lenders in an effort to cover company losses.
The alleged crimes occurred in 2007 and 2008.
The CFO allegedly misled lenders about the status of existing mortgages, concealed defaults on existing loans and hid the fact that he obtained double-funding on 23 mortgages. He also is accused of kiting checks.
Prison ahead for former Countrywide employee
A former financial analyst for Countrywide Financial Corp. has been sentenced to hard time in prison.
The sentence followed a guilty plea from the former employee for stealing data on 2.5 million Countrywide customers.
Countrywide spent $1.2 million notifying the customers, $15.8 million on free credit monitoring and $13.4 million in civil litigation. In addition, each customer whose identity is stolen could receive $50,000.
BofA Biggest Target in Wave of Investor Litigation
Few financial firms are being spared in a wave of lawsuits being filed by investors.
But the company that seems to be most frequently named as a defendant is Bank of America Corp.
Several pending cases against an array of firms including BofA involve alleged Ponzi schemes.
CMBS Performance Improves 3 of Last 4 Months
The balance of securitized commercial mortgages that are past due has fallen three out of the past four months.
But the sector is far from being out of the woods.
Hotel loans and mortgages backed by properties in two states have excessively high delinquency rates.
Mortgage Fraud Reports Continue Rising
As lenders that are forced to buy back loans do their own investigations, the quarterly rate of mortgage fraud reports continues to grow.
Between the first and second quarters, mortgage fraud suspicious activity report filings increased 16 percent.
Most of the alleged crimes happened more than three years ago.
Citi Unit Gets Dumped On for Foreclosures
A group of Ohio residents protesting the lack of maintenance on real-estate-owned properties delivered garbage bags to the local office of a Citigroup Inc. subsidiary.
The protest involved around 30 Toledo residents.
The group cleaned up debris and yard waste at two REOs, loaded the trash in 15 "industrial-sized" garbage bags and dumped them off at the local office of One Main Financial.
Jumbo RMBS Issuance Ahead
A pool of prime residential jumbo loans is being readied for issuance.
Word of the non-agency securitization came Tuesday from Fitch Ratings.
According to the New York-based firm, the private-label residential mortgage-backed securities include prime jumbo home loans.
Fortress Unit Completes Public Offering
Earlier this month, Newcastle Investment Corp. said it planned a public offering.
Newcastle says it is managed by an affiliate of Fortress Investment Group LLC.
On Tuesday, Newcastle said it completed the sale of nearly 26 million shares of its common stock.
Settlement Costs Could Reach $40 Million
Morgan Stanley has agreed to a settlement with Nevada Attorney General Catherine Cortez Masto.
The agreement calls for the company to provide relief valued at between $21 million to $40 million.
The agreement followed an investigation into whether borrowers were deceived about interest rates, payments and potential payment shock.
Fannie Updates Investor Property Guidelines
Loan delivery data must include gross monthly rent on Fannie Mae loans that are secured by investment properties. The requirement also applies on multifamily properties up to four-units. Fannie said it eliminated redundant text from the Desktop Underwriter rental income topic.
Picture Brightens for Shadow Inventory
The supply of properties lurking in the inventories of mortgage servicers took a turn for the better.
The shadow inventory includes mortgages that are at least 90 days delinquent as well as loans in the foreclosure process and real-estate-owned properties.
That inventory fell to a five-month supply as July, down from six months a year earlier.
AGs Take Lead in Actions Against Foreclosure Rescue Firms
A lawsuit was filed last month by California's attorney general against multiple defendants that allegedly operated a scheme where they filed mass joinder lawsuits in order to stop foreclosures.
A complaint was filed by Illinois' attorney general against Avatar Realty Group Inc. and its president for allegedly lying to borrowers about the ability to negotiate with their lenders while instructing them to stop paying their monthly mortgage payments.
Ohio's attorney general filed a lawsuit against a Florida-based firm that is accused of charging as much as $3,495 per customer in return for promised modifications -- though it never provided any help or gave refunds.
Execs Held Liable in LO OT Case
Former loan officers of an out-of-business lender have been awarded $9 million in an unpaid overtime case, and two former executives are being held liable.
A federal judge awarded damages of $4.5 million in addition to unpaid wages and overtime of the same amount to former loan officers of Topdot Mortgage.
In addition, the company's former chief executive officer and chief of operations were found liable.
FL High Court Reconsidering Mandatory Mediation
The Florida Supreme Court is stepping back to consider whether or not its forced mediation program for foreclosures is worth maintaining.
In late 2009, the court made it mandatory for mortgage servicers to participate in the program.
But less than 4 percent of all cases referred to mediation during the year ended March 31 have resulted in an agreement.
Projection for Purchase Production Plummets
Freddie Mac scaled back its outlook for second-half 2011 production by all U.S. lenders.
The problem was lower expectations for purchase financing.
Freddie slashed its projection for second-half purchase production by 28 percent.
Lenders Improve Performance With Minorities
Home Mortgage Disclosure Act data indicates that loan originations were 12 percent lower in 2010 than in 2009.
The report said that minorities were denied a mortgage at a rate of 20 percent.
But non-Hispanic whites had a denial rate of just 14 percent.
American Home Affiliate Teaming Up for Acquisition
Private equity funds affiliated with WL Ross & Co. LLC and Ranieri Real Estate Partners LP have agreed to acquire Deutsche Bank Berkshire Mortgage.
No terms were disclosed about the sale.
The deal is expected to close by Dec. 31.
FHA Approval Requirements Updated
The Department of Housing and Urban Development has modified sections of two handbooks that outline Federal Housing Administration mortgagee approval requirements.
The new requirements are immediately effective.
HUD said that all corporate officers need to be listed by the mortgagee.
Billion Dollar Bank Goes Bust
Virginia's State Corporation Commission closed Bank of the Commonwealth.
The state is authorized to seize a bank if it is found to be insolvent or if deemed necessary for the protection of the public interest.
Bank of the Commonwealth had $985 million in assets as of June 30.
Senior Executives Change Lenders
At Berkadia Commercial Mortgage LLC, Randy Jenson was recently recruited to be president and chief financial officer.
Monarch Bank said in August that William T. Morrison was appointed chief executive officer of Monarch Mortgage.
Pacific Union Financial LLC said that it recruited Robert Telles as its chief financial officer.
Bankruptcy Trustee Sues Irwin Executives
In addition to a lawsuit filed against Irwin Financial Corp. executives, the company's bankruptcy trustee also sued the Federal Deposit Insurance Corp.
In the action against the executives, Irwin's former chairman, chief financial officer and an executive vice president were named as defendants.
The lawsuit against the FDIC seeks nearly $200 million.
Foreclosure Lawsuits Push Mortgage Litigation Index Higher
The Second Quarter 2011 Mortgage Litigation Index came in 26 percent higher than the prior quarter.
Foreclosure litigation was up two-thirds from the first quarter.
Overall activity was well more than double the level in the second quarter 2010.
Refinances Spike, Purchases Rise
New inquiries this past week were 36 percent higher than last week, based on the U.S. Mortgage Market Index.
Driving this week's strong activity were refinance transactions, which jumped 43 percent.
Even purchase inquiries climbed 22 percent for the week.
MISMO Management Moves from MERS to MBA
Management of the Mortgage Industry Standards Maintenance Organization Inc. is being transferred.
The entity is currently managed by Mortgage Electronic Registration Systems Inc.
But later this year management will transfer to the Mortgage Bankers Association.
Secondary Volume Climbs to 6-Month High at Freddie
Freddie Mac reported that August purchases and issuances were up more than a third from July.
That was the highest volume since February of this year.
But business fell from August 2010.
G-Fees Jump
Fannie Mae and Freddie Mac guarantee the payment of principal and interest on their mortgage-backed securities.
Both companies charge guarantee fees, or 'g-fees.'
During 2010, the average fee was 18 percent higher than in 2009.
Mortgage Rates Poised to Plummet
The 30-year mortgage was unchanged this week.
But rates are set to tumble in next week's reports.
The 10-year Treasury yield, a benchmark for mortgages rates, has fallen more than 30 basis points during the past seven days.
Drive-By Appraisals At Issue in Lawsuit
Some big names in closing services are involved in a lawsuit filed by a bank over allegedly fraudulent appraisals. At issue are drive-by reports.
The lawsuit was filed this week in a Minneapolis federal court by TCF National Bank.
The accused in the case include Fidelity National Information Services Inc., Lender Processing Services Inc. and LSI Appraisal.
Agency, Insurer Holdings Push CRE Outstandings Higher
The country's collective commercial mortgage portfolio increased 0.1 percent between the first and second quarters.
It was the first growth recorded since the third-quarter 2009.
Behind second-quarter strength were agency holdings, which were up 1.3 percent, and life insurance portfolios, which rose 1.5 percent.
Employers, Employees Battle in Court
A mortgage loan processor filed a putative class action against GSB Mortgage Inc. and its parent claiming violations of the Fair Labor Standards Act.
A New Jersey appeals court reversed a decision in favor of the parent company of defunct Accredited Home Lenders Inc.
A federal judge has conditionally certified a class action against Prospect Mortgage LLC.
Layoffs at Radian
Radian Group Inc. reported that it has reduced its staff by 7 percent.
It also terminated its chief operating officer.
Radian had a loss of almost $2 billion last year.
Fed Statement Sends Rates Plummeting
A Federal Open Market Committee statement said that economic growth is still slow, unemployment remains high and the labor market will continue to be weak.
So the committee voted to enact a plan to extend average Treasury maturities.
The move had the yield on the 10-year Treasury, a benchmark for mortgage rates, falling 7 basis points.
High Probability of Settlements in 17 FHFA Lawsuits
The 17 lawsuits filed this month by the Federal Housing Finance Agency are likely to be settled before going to trial.
While banks are likely to use the defense that Fannie Mae and Freddie Mac were sophisticated investors with the ability to determine the level of risk tied to their investments in private-label mortgage-backed securities, the FHFA contends that issuers are subject to securities laws regardless of the size of the investor.
Problem is that the two government-controlled enterprises are themselves accused by the Securities and Exchange Commission of misleading investors.
Potential Legislation Could Make Fla. Foreclosures Non-Judicial
Florida's governor and leaders of its legislature want to remove foreclosures from the judicial process in an effort to cut down on the time it takes to complete a foreclosure. There is, however, opposition across the isle to the Republican trio's stance.
While foreclosures in Arizona, another state with a high foreclosure rate, take less than 400 days -- in Florida the process exceeds 600 days.
So Florida's governor, house speaker and senate president -- all Republicans -- are considering legislation that would eliminate the need to run foreclosures through the court system.
Wireless Mortgage Applications Advance
ISGN launched its browser-based loan origination technology that can be accessed on smartphones and tablets.
Users of a la mode's Apple offerings have reportedly installed the applications more than 100,000 times.
Institutional clients of RBS Securities Inc. can use an enhanced, free application on their iPads for U.S. market information and commentary on multiple fixed income asset classes.
Delinquency Down in August
Residential delinquency of at least 30 days in August was down 21 basis points from July.
Compared to the same month last year, delinquency improved by 78 BPS.
The rate for foreclosures was just a single basis point better than the prior month.
Runaway Judge Hits Quicken With Huge Punitive Damages
A West Virginia judge awarded a borrower $2 million in damages against Quicken Loans Inc.
The borrower paid off high-rate debt she owed with a consolidation loan from Quicken then only made three payments.
The judge seemed to ignore Quicken's arguments and gave the borrower's allegations, some unsubstantiated, full credibility.
Mixed Bag for Mortgage Defaults
Ninety-day delinquency on first mortgages was off a basis point between July and August.
On second liens, however, the rates was up 2 BPS.
Both both metrics have improved substantially from August 2010.
Foreclosure Complaint Process Unveiled
Among the requirements outlined in consent orders issued earlier this year against the biggest servicers is that the servicers hire independent firms to review their foreclosure actions in 2009 and 2010.
In order to identify more potential borrowers who were harmed by faulty foreclosure practices, a complaint process is being rolled out during the next several weeks.
Consumers who claim to have been harmed by faulty foreclosures will be able to request a review of their cases and, in warranted instances, be compensated by their servicers.
Credit Scores Change With Economy
A sizeable decrease has been observed since 2008 in the number of consumers with credit scores between 300 and 499.
The activity reversed a trend that occurred between 2005 and 2008 when the number of consumers in increased.
The earlier movement likely reflected highly leveraged borrowers who were less able to weather the economic downturn.
Higher Delinquency Despite Improved Outlook
Residential delinquency of at least 30 days on securitized mortgages was 8 basis points higher in August than in July.
Slower originations are contributing to increase in defaults.
Economic growth is expected to accelerate later this year.
FHFA Defends BofA Servicing Sale to Fannie
The acting director of the Federal Housing Finance Agency told news reporters that Fannie Mae's acquisition of a servicing portfolio from Bank of America Corp. made sense.
He was speaking at a mortgage conference in North Carolina.
"We are certainly concerned about ensuring that these higher-risk mortgages are adequately and appropriately serviced, and this was an arrangement that helped to realize that goal," he said.
Increase in GSE Guaranty Fees Ahead
Despite steady increases in guarantee fees since being thrown into conservatorship, current pricing for credit guarantees at Fannie and Freddie is less than they would be in a purely private mortgage market.
So the regulator and conservator for the two secondary lenders plans to continue increasing the guarantee fees.
"A logical next step in conservatorship is to continue down the path already started of gradually increasing guarantee fee pricing to better reflect that which would be anticipated in a private, competitive market," the acting director for the Federal Housing Finance Agency said in a speech.
FDIC Addresses Lawsuits Against Brokers
A letter from the deputy general counsel for the Federal Deposit Insurance Corp. said that the agency is not singling out mortgage brokers when it pursues claims on fraudulent loans owned by failed banks that it takes over.
Representations and warranties made by mortgage brokers to wholesale lenders already hold them liable for fraud.
A lawsuit is filed against a mortgage broker only after the broker has had a chance to comment and after settlement talks have broken down.
FHA Purchase Originations Jump
Purchase transactions endorsed by the Federal Housing Administration exceeded 75,000 loans during August.
Purchase volume increased from less than 69,000 endorsements in July.
New applications for FHA purchase mortgages rose 11 percent, suggesting higher September volume.
Outlook Raised for Refi Originations
In last month's housing forecast from Fannie Mae, second-half refinance production by all U.S. lenders was projected to come in at $301 billion.
But recently plummeting mortgage rates have apparently altered that outlook.
This month's projection from Fannie has second-half volume now at $415 billion.
Reverse Business Launched
New American Funding disclosed that it opened a new reverse mortgage division.
Business is initially being generated through a radio advertising campaign.
Running the new department is Keith Murphy.
2,500 Show up for Quicken Recruiting Event
Five hundred job openings prompted 2,500 people to attend a recruiting event at Quicken Loans Inc.
Earlier this month, the growing firm announced that it would hold a job fair at its Detroit headquarters.
In addition to loan originators, recruits are being sought for all major areas of the company -- including technology.
Refis Ups, Rates Down but Headed Higher
Loan inquiries for refinances rose 9 percent for the week in the U.S. Mortgage Market Index report.
The conforming 30-year fixed-rate mortgage averaged 4.23 percent this week versus 4.24 percent in the prior report.
It looks like the 30-year will be worse in the next Mortgage Market Index report based on movement in the 10-year Treasury yield.
Lightly Regulated Lenders Fueled Market Collapse
Non-bank mortgage originators with little regulation accounted for an increasing market share in virtually all U.S. counties during the buildup of the real estate bubble.
But the group disproportionately contributed to the recent boom-bust housing cycle.
The market share of these lenders as of six years ago is a strong predictor of how high unemployment would eventually rise.
M&T Adding Hundreds in N.Y.
M&T Bank Corp. is trying to fill 285 positions in New York state.
It has already started heavily recruiting through ads and other promotions.
Open positions include credit and fraud analysts, salespeople and loan originators.
Ginnie Annual Issuance Surpasses $200 Billion
Ginnie Mae guaranteed in excess of $27 billion in mortgage-backed securities during August.
Business was unchanged from July.
Through Aug. 31, year-to-date issuances amounted to nearly $220 billion.
Agency Approval for Multifamily Lenders
New qualifications have recently been implemented for originators of multifamily seniors housing conventional loans.
Lenders started applying in June for a new special national designation needed to originate these loans.
Freddie Mac approved 12 seller-servicers for the new designation.
Record Low Rates Might Rise
A 3-basis-point improvement was reported by Freddie Mac for the 30-year fixed rate.
But the yield on the 10-year Treasury has risen over the past week.
The rise in the Treasury yield in the face of a decline in mortgage rates indicates mortgages could be worse in next week's report.
California Company Launches Massive Recruiting Campaign
CashCall Mortgage was launched in 2008.
The company is based in Anaheim, Calif.
In an announcement, CashCall said it is recruiting 520 employees for production-related positions.
Foreclosures Turn Higher, REOs to Rise
Total foreclosure filings during August rose 7 percent from July.
But completed foreclosures were lower than in July and than in August 2010.
But the lull might only be temporary, with the increase in new defaults signaling an upcoming rise in repossessions.
Sea of Foreclosure Litigation
In New Jersey, five separate but substantively identical orders authorized foreclosures to resume after the judge's prior decision to halt a total six cases.
An Ohio appeals court affirmed a lower court's decision to deny First Horizon Home Loans' request for relief from the dismissal of its foreclosure after a forbearance agreement was enacted and the borrower defaulted.
The District Court of Appeal of Florida, Fourth District overturned a default and final judgment of foreclosure in favor of LaSalle Bank.
Best Fannie Mae Servicers
Fannie Mae measures the performance of a servicer based on foreclosures avoided.
Among the biggest servicers, GMAC Mortgage LLC was one of four companies recognized for producing better results than its peers.
Also on the list was CitiMortgage Inc.
Congress Advised to Expand HARP
The president and chief executive officer of the Mortgage Bankers Association testified before a Senate subcommittee.
The hearing was about mortgage refinances and restructurings.
He told lawmakers that the Home Affordable Refinance Program should have lower secondary fees, higher loan to values and streamlined appraisals.
Nonconforming Portfolio Line Launched in Texas
NexBank SSB sees an opportunity in offering its portfolio jumbo program to borrowers with conforming loan sizes.
The company unveiled a suite of traditional, non-conforming mortgage products with loan amounts starting at $250,000.
The program "features common-sense underwriting and is funded directly from NexBank's balance sheet," the statement said.
Customer Service Leads to MetLife Downgrade
MetLife Home Loan's servicer quality rating was downgraded.
The negative action reflects deterioration in call-center metrics for its customer service department.
The deterioration was attributed to insufficient staffing in MetLife's customer service unit.
3/4 of Negative Equity Loans at High Rates
Out of nearly 11 million U.S. mortgages with a loan-to-value ratio in excess of 100 percent, more than 8 million have a high interest rate.
Negative-equity borrowers with high mortgage payments are among the most likely group to wind up in foreclosures.
A report released Tuesday found that the share of loans with LTVs above 100 percent edged up between the first and second quarters.
Chase Challenged in Court on Foreclosures
A Florida lawsuit filed on behalf of borrowers in several states accuses Chase of using "nationalized fraud" to process foreclosures. Among issues outlined in the case is the proper endorsement of the original note.
Nearly three dozen borrowers in several states have signed on as plaintiffs.
The loans at issue were originated by Washington Mutual Bank, which was subsequently acquired by Chase.
Another Upgrade to Origination Forecast
Home-loan production by U.S. residential lenders is projected to be just over $0.3 trillion in the third quarter.
The forecast was lifted from less than $0.3 trillion last month.
The upward revision was the third since June.
Rule Attacks Notion of 'Too Big to Fail'
An interim final rule was approved by the Federal Deposit Insurance Corp.
Impacted depository institutions include those with assets of at least $50 billion.
The FDIC noted that the institutions are required to submit periodic contingency plans for resolution in the event of their failures.
Wells HECM Originations Up Again
Wells Fargo Bank, N.A., once again was the biggest originator of home-equity conversion mortgages for the month.
It was the second month in a row that the reverse unit originated more HECMs than the previous month.
The positive results came despite its disclosure in June that it would exit the reverse mortgage sector.
Quicken Steps Up Hirings
Quicken Loans Inc. is hosting a job fair at its headquarters next week.
The company held a similar event earlier this year.
But this month's fair seeks five times more employees than the earlier event.
BofA Clarifies Planned Layoffs
A week ago, sources were cited in estimates that layoffs at Bank of America Corp. could reach 30,000.
This past weekend, the number swelled to 40,000.
In a statement this week, BofA said it expects to eliminate 30,000 jobs during the next few years.
Record CMBS Delinquency as Defaults Dip for Other CRE Lenders
Investors of commercial mortgage-backed securities fared worst among all investor types during the second quarter.
Delinquency on securitized commercial mortgages deteriorated to the worst level on record.
But other investor groups were able to rein in late payments on commercial real estate loans.
Former IndyMac Chief Calls Multiple Lawsuits "Frivolous"
As the former chief of failed IndyMac Bank FSB, Michael Perry is facing multiple lawsuits -- including one filed by the Securities and Exchange Commission.
But Perry says the civil lawsuits that have been filed against him are "filled with distortions and inaccuracies."
He says plaintiffs are filing the frivolous actions to extract payouts from directors and officers' liability insurance policies.
Minnesota Emerges as Mortgage Fraud Hot Spot
Minnesota has emerged as a problem area for mortgage fraud and helped lift national activity from the first quarter. But a national improvement from a year earlier was attributable to another three states.
The Second-Quarter 2011 Mortgage Fraud Index from MortgageDaily.com came in at 1261, an increase of 27 percent from the first quarter.
The index is based on criminal and civil cases where defendants are accused of trying to deceive real estate lenders into making credit decisions using fraudulent documentation or property appraisals with false values. Case tracking is maintained by the mortgage fraud blog FraudBlogger.com.
Florida Financial Institution Fails Friday
The First National Bank of Florida was seized by the Office of the Comptroller of the Currency.
The closing occurred on Friday.
"The OCC also found that the bank is likely to incur losses that will deplete its capital and that the bank is significantly undercapitalized, and there is no reasonable prospect that the bank will become adequately capitalized without federal assistance," an OCC statement said.
BofA Layoffs Now Expected to Reach 40,000
Company-wide layoffs at Bank of America Corp. are now expected to reach 40,000.
As it grapples with the fallout from its 2008 acquisition of Countrywide Financial Corp., the Charlotte, N.C.-based institution must also prepare for potentially more litigation liability.
The job cuts will be concentrated in the consumer financial products business, which includes mortgage positions.
Purchase Financing Down 19% Past 12 Months
Compared to the same week last year, home-purchase financing has fallen nearly a fifth.
At the same time, refinance transactions have climbed 8 percent.
Purchase business was down 10 percent from a week prior.
FHFA Considering Refi LTVs Above 125%
The Home Affordable Refinance Program was originally launched in March 2009.
Borrowers with loan-to-value ratios between 80 percent and 125 percent are eligible.
But the Federal Housing Finance Agency acting director issued a statement indicating that he is looking at how borrowers with LTVs higher than 125 percent can participate in the program.
Senate Committee Passes Flood Bill
The National Flood Insurance Program is set to expire at the end of this month.
A Senate committee has passed a bill to keep coverage intact.
The bill, however, still needs to be passed by the full Senate and reconciled with the House before it can be signed by the president.
WaMu Execs Accused of Overstating RMBS Quality
Among the 17 lawsuits filed last week by the Federal Housing Finance Agency was one that targeted residential mortgage-backed securities issued by Washington Mutual Inc. and its subprime subsidiary.
Nearly two dozen individuals named as defendants in the cases are accused of overstating the quality of the securities.
FHFA claims that offering documents for the securities understated loan-to-value ratios, though that was due in part to appraisers who bowed to pressure by WaMu to come in with higher values.
The Conference Journal
Mortgage conference season is in full swing.
Nearly 60 events are scheduled for this month alone.
Compliance, litigation and technology as well as reverse mortgages are among the topics to be discussed at the events.
New Record for Rates Could be Broken Again
The average 30-year fixed-rate mortgage was 4.12 percent in Freddie Mac's most recent survey.
It was the lowest level ever tracked by Freddie.
Movement in the 10-year Treasury note yield suggests that a new record could be in the cards for next week's report.
Former MBA Chief Joins DC Consulting Firm
John Courson has joined Treliant Risk Advisors.
Courson is the former president and chief executive officer of the Mortgage Bankers Association.
Treliant says that it "is a multi-disciplinary consulting, compliance and strategic advisory firm for the financial services industry."
$200 Million Repurchase Lawsuit
A $200 million lawsuit has been filed in federal court after repurchase demands on subprime mortgages were not met. Some of the loans at issue were involved in a mortgage fraud scheme.
The lawsuit was filed by U.S. Bank against WMC Corp. and EquiFirst Corp.
The litigation follows an investigation into a sample of the loans that allegedly found material breaches on 75 percent of the mortgages.
MGIC Units On the Block
MGIC Investment Corp. is in talks to sell off two of its subsidiaries.
One of the units provides online mortgage origination products and services for lenders.
The other sells Web site technology to the mortgage and real estate industries.
Correspondent Lender Launches
New Penn Financial LLC plans to announce the launch of a correspondent business unit.
The new channel will provide portfolio products.
New Penn lends in 42 states.
Correspondent Lender's Focus is Renovation Loans
Platinum Home Mortgage Corp. announced the launch of a new correspondent lending program.
The company is targeting correspondent clients for renovation programs.
Platinum plans to buy loans in 48 states.
MBS Lawsuits Get Complicated
A claim by plaintiffs to hold JP Morgan Chase Bank, N.A., liable for mortgage-backed securities issued by Washington Mutual Bank was denied by a federal judge.
But in another case against the Federal Deposit Insurance Corp. filed by Deutsche Bank National Trust Co. over WaMu MBS, the federal judge denied the FDIC's request for a dismissal.
Knights of Columbus expanded a lawsuit against The Bank of New York Mellon to include claims of breach of contract, breach of fiduciary duty, negligence, gross negligence, recklessness and unfair trade practices.
Lenders One Production Higher
Lenders One Mortgage Cooperative reported that first-half loan production was up 16 percent from the first-half 2010.
A Mortgage Daily analysis indicates that industry-wide production was down 8 percent during the same period.
However, the growth is primarily the result of an expanding network, as the average volume per Lenders One member fell.
Young Firm Touts $1 Billion Monthly Milestone
loanDepot was launched in January 2010.
A news release from the company indicated that it took in $1 billion in new residential business during August.
"The company expects these originations, defined as a loan that has been locked and sent to its operations group for closing, to continue to fund though September," the statement said.
Exec Shakeup Impacts BofA Mortgage Chief
Bank of America Corp. has unveiled a management reorganization.
The move leaves the company with three operating units: individuals, companies, and institutional investors.
The president of the bank's mortgage unit no longer reports directly to BofA's chief executive officer.
10-Year Treasury Yield Closes At All-Time Low
The yield on the benchmark 10-year Treasury closed at 1.98 percent today.
It was the first time the yield has fallen below 2 percent based on Federal Reserve data back to 1962.
It was also the lowest level on record for the closely watch security.
Just Another MTA Record
Plunging Treasury yields have the Monthly Treasury Average at a new record-low.
With the one-year Treasury yield threatening to fall below 0.1 percent, the MTA fell to its lowest level on record based on Federal Reserve data.
The index was 0.23% during August.
Press Reports Exaggerate Damages Sought in MBS Suits
The Federal Housing Finance Agency announced Friday that 17 lawsuits were filed against issuers of private-label securities.
But after press reports put the amount of damages sought at $200 billion, FHFA issued a statement offering further clarification.
The regulator said that while Fannie Mae and Freddie Mac invested $200 billion in private-label MBS, only some of the securities are at issue in the litigation.
Chapter 13 Bankruptcies Rise
Chapter 13 bankruptcy filings accounted for 30 percent of all consumer bankruptcies during August.
That worked out to around 34,000 filings.
The number of Chapter 13 filings was worse than roughly 32,900 Chapter 13 bankruptcies during July.
2011 Mortgage-Related Casualties Reach 100
The Georgia Department of Banking and Finance took possession Friday of CreekSide Bank.
Georgia's banking department also closed down Patriot Bank of Georgia.
Including credit unions and non-bank firms, 100 mortgage-related entities have failed or been closed down so far during 2011.
Up to 30,000 Layoffs Possible at BofA
As many as 30,000 employees could be laid off by Bank of America Corp., and mortgage jobs are among the first to be analyzed.
The Charlotte, N.C.-based company has launched Project New BAC, which looks to reduce bureaucracy and improve customer service.
The consumer business will be the first group to be reviewed. This includes mortgage operations.
Mortgage Market Index Down 3 Weeks in a Row
The average loan originator pulled 12 percent fewer pricing inquiries this week than last week, based on the Mortgage Market Index.
It was the third consecutive week that new business was lower.
Behind the disappointing performance were refinance inquiries, which fell 14 percent from last week.
MBS Litigation Tsunami hits Financial Firms
Separate lawsuits were filed against 17 issuers and underwriters of private-label mortgage-backed securities purchased by Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency filed the lawsuits as conservator of Fannie and Freddie.
"The complaints filed today reflect FHFA's conclusion that some portion of the losses that Fannie Mae and Freddie Mac incurred on private-label mortgage-backed securities are attributable to misrepresentations and other improper actions by the firms and individuals named in these filings," FHFA said in a statement.
CMBS Delinquency Improvement Tied to Reporting Changes
One-month delinquency on loans included in commercial mortgage-backed securities was down 36 basis points in August from the previous month.
The improvement, however, was mainly tied to changes in the reporting of delinquency data.
Special servicers reversed a change made the previous month in the way they reported dual-tracked loans.
Another High-Profile Reverse Mortgage Exit
SunTrust Mortgage Inc. has decided to stop originating reverse mortgages.
The company said its resources can be put to more productive use elsewhere.
It was the fourth high-profile exit from the reverse mortgage sector this year.
Reverse Originations Inch Up
Home-equity conversion mortgage production rose 5 percent between July and August.
But business was lower than in August 2010.
Zeroing in on just retail production, Wells Fargo Bank, N.A., maintained its standing as the biggest originator.
Mortgage Jobs Retreat Despite Broker Growth
The Department of Labor reported that the number of jobs in the mortgage employment sector fell by 1,500 positions between June and July.
The decline came despite an uptick in mortgage broker jobs.
Compared to July 2010, mortgage industry jobs were down by more than 23,000 positions.
Icon Says It's Growing, Not Laying Off
Icon Residential Lenders says a news report that it is laying off 120 employees is not correct.
An Icon executive explained that the company is growing has hasn't laid anyone off.
He said that the layoffs are happening at an East Coast retail business owned by Icon's parent company.
Low Rates Might be Lower Next Week
There was no week-over-week change in the average 30-year fixed-rate mortgage.
But it looks like the 30-year could be at least 5 basis points better in next week's report based on the 10-year Treasury note yield.
The 10-year yield was down 8 BPS from last Thursday.
HAMP Volume Sinks
The monthly volume of modifications completed under the Home Affordable Modification Program tumbled 22 percent between June and July.
Compared to a year earlier, HAMP volum plummetd 44 percent.
Since the program was launched, servicers have completed 675,447 permanent modifications.
Goldman Hit With Fed Order Over Foreclosures
The Federal Reserve Board disclosed that a consent order was issued against The Goldman Sachs Group Inc. and Goldman Sachs Bank USA.
The formal enforcement action seeks to address "a pattern of misconduct and negligence" tied to servicing and foreclosure processing at its former mortgage servicing subsidiary.
The order requires Goldman to retain an independent consultant to review the servicer's foreclosure proceedings.
Wholesaler Looks to Broker Clients to Build Branch Network
Bay Equity Home Loans is a wholesale lender that says it operates in several western states.
But the San Francisco-based firm has also developed a retail bank platform.
Bay Equity has enlisted the help of one its mortgage broker clients in an aggressive push to expand its branching network.
Goldman Agrees to Write Down Principal
An agreement was reached between New York's Department of Financial Services and Banking Department and Goldman Sachs Bank, Litton Loan Servicing LP, and Ocwen Financial Corp.
The agreement is required as a condition of Goldman's planned sale of subsidiary Litton Loan Servicing LP.
Among other things, Goldman agreed to write down principal on 60-day delinquent home loans in New York serviced by Litton and owned by Goldman.
Agency Issuance Leaps
Issuance of fixed-rate mortgage-backed securities at Fannie Mae, Freddie Mac and Ginnie Mae jumped 22 percent between July and August.
Volume swung from a 9 percent decline between June and July.
Through Aug. 31 of this year, total issuance exceeded $0.6 trillion.
Reverse Lender Formally Launches
JGWPT said that it has officially launched a reverse mortgage division.
The company recently acquired J.G. Wentworth.
The reverse business began as a pilot program at J.G. Wentworth a year ago.
COFI Rises, 1-Year Sinks
The Cost of Funds Index increased 1 basis point between June and July.
The only other time during the past year the COFI increased was in May.
Meanwhile, the yield on the one-year Treasury note was down by half between July and August.
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FDIC Addresses Lawsuits Against Brokers
Sept. 19, 2011
The Federal Deposit Insurance Corp. said that it is not singling out mortgage brokers when it pursues claims on fraudulent loans owned by failed banks that it takes over. The regulator said that it follows much of the same procedure followed by wholesale lenders in similar situations.
A letter was sent from Richard J. Osterman Jr., deputy general counsel for the FDIC, to Mike Anderson, the government affairs chairman for the Association of Mortgage Professionals.
The letter was written in response to an Aug. 31 meeting with the trade group.
<MortgageDaily.com subscribers read full story>
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Mortgage Jobs Retreat Despite Broker Growth
Sept. 2, 2011
An increase in the number of mortgage brokers wasn't enough to offset a drop in mortgage banking employees. But bad news for overall U.S. employment could be good news for mortgage employment.
The Department of Labor reported Friday that there were 237,300 people employed in real estate finance during July.
Mortgage industry headcount eased from a revised 238,800 in June.
<MortgageDaily.com subscribers read full story>
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