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MortgageChronicle.com Archives
October, 2011
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COFI Near Record Low
The Cost of Funds Index fell 4 basis points between August and September.
Compared to a year earlier, the index was down 39 BPS.
The last time COFI was this low was in October 2009.
iPhones, Tablets Render CFPB Disclosure Obsolete
Prospective borrowers are using mobile devices to find information on homes for sale and on loan products.
By the time a consumer receives the proposed loan estimate, he or she has already completed the loan shopping process.
But a proposed loan estimate disclosure from the Consumer Financial Protection Agency unnecessarily focuses on enabling consumers to comparison shop.
Delinquency at Fannie Falls to 2-Year Low
Fannie Mae reported that its 90-day residential delinquency rate during September fell 3 basis points from August.
Late payments were 56 BPS better than in September 2010.
In fact, the last time delinquency was this low at Fannie was in June 2009.
M.I. Business Loses Steam
Mortgage insurers wrote fewer policies during September than in August.
Next month's business looks to be headed even lower.
But the numbers have been distorted by the suspension of business at one insurer and the exclusion of data from another.
Mortgage Crimes Ledger
A federal grand jury indicted the former executive vice president and former senior vice president of United Commercial in connection with the bank's failure.
Monroe L. Beachy was indicted by a federal grand jury over allegations he defrauded nearly 2,700 investors through his company.
The former chief executive officer of Worldwide Financial ResourcesFindel was sentenced in federal court to 63 months in prison.
2 Small Financial Institutions Fail
In Illinois, the state's Department of Financial and Professional Regulation - Division of Banking closed down All American Bank.
Total assets at the failed bank were just $38 million.
The National Credit Union Administration placed Birmingham Financial Federal Credit Union into conservatorship.
CRE Secondary Market Busy
HFF announced in August that it completed the sale of a $238 million loan portfolio to an institutional investor.
More than $154 million in commercial mortgages were recently securitized by Starwood Property Trust Inc.
Financial institutions looking to shore up capital are stepping up the active management of their commercial real estate portfolios, according to DebtX.
Residential Portfolios Trade Hands
A $282 million portfolio was acquired by MountainView Public Private Investment I LLC and Geneva House LLC.
US Debt Ventures said earlier this year that it acquired a $28 million portfolio of first mortgages.
Springleaf Financial recently issued a $242 million residential mortgage-backed security.
FL Foreclosure Backlog Discussed by Judges, Attorneys
A forum held last week tackled Florida's massive backlog of foreclosure cases. Both judges and attorneys participated in the event.
The state has 350,000 pending foreclosures in process.
The forum gave attorneys a chance to ask questions of judges outside the courtroom. It also gave judges the opportunity to voice gripes about the behavior of lenders and borrowers.
Mortgage Activity Slips and Likely to Fall Further
New loan inquiries were down 3 percent from last week in the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended Oct. 28.
The yield on the 10-year Treasury note closed 11 basis points higher than a week earlier.
The bigger rise in the 10-year yield versus mortgage rates suggests that the weekly average has more room to climb -- likely hurting upcoming business.
Strong Originations at MetLife as Servicing Portfolio Slides
During the third quarter, MetLife Inc. originated 47 percent more in home loans than it did in the second quarter.
MetLife was the only company tracked by MortgageDaily.com so far to originate more than it did in the same period during 2010.
Meanwhile, the lender's servicing portfolio shrank 20 percent in the latest period.
CRE Secondary Market Busy
HFF announced in August that it completed the sale of a $238 million loan portfolio to an institutional investor.
More than $154 million in commercial mortgages were recently securitized by Starwood Property Trust Inc.
Financial institutions looking to shore up capital are stepping up the active management of their commercial real estate portfolios, according to DebtX.
Residential Portfolios Trade Hands
A $282 million portfolio was acquired by MountainView Public Private Investment I LLC and Geneva House LLC.
US Debt Ventures said earlier this year that it acquired a $28 million portfolio of first mortgages.
Springleaf Financial recently issued a $242 million residential mortgage-backed security.
CFO Admits to Warehouse and Secondary Fraud
The former chief financial officer of Centennial Mortgage and Funding Inc. has admitted to a scheme where he deceived the company's warehouse lenders and sold the same loans twice.
Proceeds from the fraudulent transactions were used to cover the company's operating expenses.
Centennial was shut down three years ago after state regulators found problems with lines of credit that the firm had with lenders.
Mortgage Rates to Spike
The 30-year fixed-rate mortgage will likely be at least 20 basis points higher in next week's report based on Treasury market activity Thursday.
The yield on the 10-year Treasury note shot up 22 BPS from last Thursday, according to data delivered by the Department of the Treasury.
The steep increase followed news of an agreement to reduce principal owed on Greek bonds and a strong gross domestic product report.
Delaware v. MERS
The state of Delaware has filed a lawsuit against the Mortgage Electronic Registration Systems Inc.
The state claims that the company is not authorized to file foreclosures, doesn't adequately maintain its database and wrongly uses the employees of its members to operate.
MERS called the lawsuit unexpected and said it has no merit.
Refi Rally Fading as Rates Soar
A jump in stock prices had the 10-year Treasury yield up 20 basis points Wednesday.
The activity suggests mortgage rates will move up significantly.
Higher rates are likely to kill the refinance rally that had been building and peaked last month.
Expected Bailout Costs Lowered for Fannie, Freddie
The Federal Housing Finance Agency projected a year ago that draws under Fannie Mae's and Freddie Mac's stock purchase agreements with the Department of the Treasury could reach as much as $363 billion by 2013.
But a new report from the regulator estimates that Treasury draws will likely only reach a maximum of $311 billion by 2014.
The improved outlook was "attributed primarily to the fact that actual results for the first year of the projection period in the October 2010 projections were substantially better than projected," the FHFA said.
PennyMac Aiming for $1 Billion in Monthly Correspondent Volume
The real estate investment trust said it closed on a $40 million master repurchase agreement with Wells Fargo Bank, N.A., during the third quarter.
That brought its financing capability for distressed mortgages to $590 million.
Now, monthly production at PennyMac Mortgage Investment Trust's correspondent lending unit, which originated less than $0.1 billion in the second quarter, is expected to soar by the end of next year.
Okla County Sues MERS Over Lost Filing Fees
A class action lawsuit has been filed against Mortgage Electronic Registration System Inc., its parent and several mortgage lenders over filing fees an Oklahoma county says it lost because of the MERS system.
The case was filed by Cleveland County.
No dollar amount has been specified in the lawsuit because attorneys are still investigating how much money has been lost, and other counties could join the action later with their own losses.
Flagstar Lifts Lending, Cuts Losses
Flagstar Bancorp. reported that third-quarter first-mortgage residential originations were up by half from the second quarter.
Business appears to be headed even higher based on rate-lock commitments.
Meanwhile, Flagstar cut its losses by more than $60 million from the second quarter.
ABCs of 50-State Settlement
The biggest component of a potential foreclosure settlement between state attorneys general and the country's biggest mortgage servicers is likely to be loan forgiveness. But an agreement is being held up because some states aren't satisfied with servicers being totally relieved of liabilities before other lending and securitization practices have been investigated.
At this point in the game, the potential amount of the settlement stands at $25 billion.
Once state attorneys general do nail down an agreement with the servicers, they will then set their sites on the next tier of servicers. But a settlement isn't likely to be reached anytime soon.
Chairman, CEO and Directors Leaving Freddie
A recent notice was received from Freddie Mac's chief executive officer indicating his intent to step down during the coming year.
The chairman of Freddie's board has reached the company's mandatory retirement age and will relinquish his title in December.
In addition, one director has also reached mandatory retirement age, while another director notified by the board last week that he won't seek re-election.
Fannie Maintains Pace on Multifamily Issuance
During the first two quarters of 2011, Fannie Mae Issued more than $10 billion in multifamily mortgage-backed securities.
Volume during the third quarter maintained the first-half pace.
By the end of the year, total issuance is expected to be more than $20 billion.
Another Strong Month at Freddie
Secondary activity at Freddie Mac was up 16 percent in September.
It was the second consecutive month that volume was stronger.
Delinquency at Freddie was in line with an industry-wide uptick.
The MBS Litigator
The New York State Supreme Court is a frequently used venue for litigation tied to mortgage-backed securities, though some of the cases wind up in federal court.
Often named as a defendant in MBS lawsuits is Countrywide Financial Corp.
Two big investment banking houses, Citigroup and Morgan Stanley, recently settled alleged actions on securitized loans.
2 Tech Firms See Bigger Share of Community Bank Clients
In 2008, roughly 40 percent of Mortgage Builder Software Inc.'s customers were community banks.
Today, an executive for the firm says small banks account for 70 percent of new customers.
The chief executive officer at Global Data Management Systems LLC says his company has seen its client base shift from nearly two thirds being appraisal firms to almost two thirds being lenders -- and many of the lenders are new banks.
MGIC In Better Shape than PMI
Despite losses each year since 2006, MGIC Investment Corp. is in a better position to weather hard times in the housing market than its recently fallen rival, PMI Mortgage Insurance Co.
PMI was seized by Arizona regulators last week, and a plan was implemented to only pay partial claims.
But MGIC raised capital last year and expects a capital contribution from its parent company. One analyst noted that "fundamental trends" have been improving for MGIC.
Acquisition Creates Top-10 Servicer
Ocwen Financial Corp. has reached an agreement to acquire a subprime servicer.
The deal follows Ocwen's recent acquisition of Litton Loan Servicing LP.
Including Ocwen's previous servicing portfolio, the addition of the Litton servicing portfolio and upcoming acquisition -- Ocwen is likely to land as the 10th biggest mortgage servicer in the country.
Ginnie Issuances Stall
Monthly issuance volume at the Government National Mortgage Association was unchanged between August and September.
The lackluster performance came despite a mortgage market that is being rocked by a flurry of refinances.
The issuance of mortgage-backed securities at Ginnie Mae was lower last month than in September 2010.
Senate Addressees 30-Year Subsidies
A hearing was held last week on the subsidization of 30-year fixed-rate mortgages.
The hearing, Housing Finance Reform: Continuation of the 30-year Fixed-rate Mortgage, was held by the Senate Committee on Banking, Housing and Urban Affairs on Wednesday.
Chairing the committee was Sen. Tim Johnson (D-S.D.), while committee member Sen. Richard Shelby (R-Ala.) joined him in questioning the speakers.
LTV, Appraisal and Reps/Warranty Requirements Removed from HARP
The 125 percent loan-to-value limit is being removed on Home Affordable Refinance Program transactions.
Another big obstacle, representations and warranties, is being waived.
"Reliable" automated valuation models will be accepted in lieu of new property appraisals.
HARP Improvements Ahead
Rules for the Home Affordable Refinance Program are about to be eased, though HARP isn't the only initiative on the table.
Agency officials are looking at reducing fees, streamlining processes and raising the loan-to-home value ratio cap for the program.
The HARP revisions could expand the number of participating borrowers from less than a million so far to millions.
FHA Market Share Falls, Delinquency Jumps
The Federal Housing Administration endorsed 27 percent fewer loans during fiscal 2011 than it did the prior year, dragging down its market share in the process.
A slump in purchase production versus August hurt overall monthly activity, though refinance volume was up.
Delinquency jumped around 30 basis points during the latest month.
Another Shakeup Impacts BofA Mortgage President
The combination of two units at Bank of America Corp. has the company reorganizing management in a move that impacts the president of the mortgage unit.
BofA is combining its consumer and small-business banking unit with its home loans division.
While Barbara Desoer will maintain her title of president of home loans, she will manage integration of home loans into the new business unit.
Billion Dollar Bank Goes Bust
The Federal Reserve Board seized control of Community Banks of Colorado.
The Fed handed over the failed institution to the Federal Deposit Insurance Corp. as receiver.
The bank had $1.4 billion in assets.
PMI Seized
An order obtained by the Arizona Department of Insurance has been issued againt PMI Mortgage Insurance Co.
The order was disclosed in a message to policyholders and servicers.
The regulator now has full possession, management and control of PMI.
Purchases, Jumbos Improve
Inquiries for home-purchase loans were 4 percent higher than last week based on the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com.
Jumbo borrowers paid a 64-basis-point premium over conforming borrowers this week.
But jumbo-conforming spread was lower than 67 BPS last week.
Broker Business Leaps at SunTrust
Wholesale originations were $1.0 billion during the third quarter at SunTrust Banks Inc.
Wholesale business leapt from $0.5 billion in the second quarter.
The strong performance helped push overall production at SunTrust up nearly a quarter.
90-day Delinquency & Foreclosures Up, 30-Day Rate Down
The rate of 90-day delinquency on first mortgages was 7 basis points higher in September.
Second-mortgage delinquency was up 5 BPS.
The deterioration was accompanied by a rise in foreclosures and a decline in the 30-day delinquency rate.
Foreclosures Lift Delinquency
A 7-basis-point increase in foreclosures was reported for September.
Including delinquent loans and loans in foreclosure, the rate of late payments was 3 BPS higher.
The increase came despite a decline in the delinquency rate excluding foreclousres.
Senate Passes Amendment to Reinstate Higher Limits
The Senate approved an amendment that would reinstate higher loan limits that expired last month.
The legislation impacts loans insured or guaranteed by the Federal Housing Administration, Fannie Mae, Freddie Mac or the Department of Veterans Affairs.
The extension would be in place until the end of 2013.
Dallas Feels CRE Strain
Like in much of the country, commercial lending has stalled in Dallas as lenders hesitate and delinquency rates linger above national levels. But one bright spot is multifamily, though some question if that market still has room to grow.
Just as the commercial real estate market was beginning to improve, a wave of uncertainty cast a cloud over the sector.
At Dallas-area banks and thrifts, 30-day delinquency on commercial mortgages was around 0.1 percentage points higher in the second quarter than the national average. The rate on securitized CRE loans backed by properties in the Dallas-Fort Worth area was around 0.7 percentage points worse as of September.
Fed Moves Could Drive Rates to New Lows
Mortgage rates fell to their lowest levels on record on Oct. 6.
But they have since drifted higher.
However, potential moves discussed Thursday by a Federal Reserve Board governor could have new record lows on the horizon.
Fannie, Freddie See Rates Moving in Different Directions
Freddie Mac forecasts that the 30-year mortgage will average 4.0 percent in the fourth quarter.
The secondary lender then sees the 30 year rising 20 basis points each quarter through the second-quarter 2013.
But Fannie Mae's forecast has the 30-year mortgage falling from 4.0 percent this quarter to 3.9 percent in both the second and third quarters of 2012.
Fifth Third Increases Home Loan Investments
Fifth Third Bancorp reported that more than $10 billion in residential loans were on its balance sheet as of the third quarter.
Home-loan assets grew from less than $10 billion in the second quarter.
The increase was more than a quarter when compared to a year earlier.
Business Builds at BB&T
Third-quarter home-loan production increased 41 percent from the second quarter at Branch Banking and Trust Co.
BB&T's servicing portfolio grew by around $900 million during the period.
Mortgage banking income jumped by nearly half from the second quarter.
Obama Nominates FHA Chief
The Obama administration announced the president's nominee to be Department of Housing and Urban Development assistant secretary and Federal Housing Administration commissioner.
The White House announced the president's intent to nominate Carol Galante for the post.
Galante served as deputy assistant secretary for multifamily housing at HUD, where she was appointed by Obama in 2009.
BofA Subpoenaed Over MBS
Bank of America Corp. has reportedly been subpoenaed by California as the state determines whether investors were misled about mortgage-backed securities. There is speculation that the move is being made to increase the state's leverage in a broader settlement with multiple state attorneys general.
A person familiar with the probe but not authorized to speak publicly said that the subpoenas were issued by California's attorney general.
The subpoena follows California's exit from talks on a broad foreclosure settlement by a coalition of state attorneys general and federal agencies -- though the Golden State has left the door open to signing on to a bigger settlement.
Citi Settles Subprime CDO Lawsuit for $285 Million
Citigroup Inc. has settled allegations that it structured a collateralized-debt obligation that was destined to plummet in value, misled investors in the marketing of the security then bet against it.
The New York-based company will pay $285 million to settle a lawsuit filed by Securities and Exchange Commission.
A recent settlement by Goldman Sachs alleged a similar scheme. But the security marketed by Goldman was structured by an outside hedge fund that bet against it, whereas Citi was responsible for structuring its CDO and placing the bets.
PNC Turns In Weak Performance
Third-quarter residential delinquency was 7 basis worse than in the second quarter at The PNC Financial Services Group Inc.
Home-loan originations were essentially flat between the two quarters.
But out of six other lenders that have reported third-quarter production so far, five have reported increases from the second quarter.
Delinquency Down, Originations Up at U.S. Bank
Quarterly residential loan production shot up 42 percent at U.S. Bancorp.
Residential delinquency of at least one month, including nonperforming loans, finished September at 30 basis points lower than at the end of June.
Commercial delinquency tumbled 35 BPS.
Annual Apartment Originations Up Almost a Third
Apartment loan production jumped 31 percent last year.
The growth impacted a variety of properties.
While more than 2,500 lenders originated the loans, more than half of the business we generated by just 1 percent of the lenders.
Bank Continues Expanding Mortgage Staff
During July, TD Bank disclosed plans to recruit 100 loan originators from Maine to Florida.
The planned hirings followed the addition of 50 mortgage jobs added in South Carolina.
Now the bank is hiring production personnel to support expanded operations.
CMBS Performance Takes Turn for Worse
September's delinquency rate on securitized commercial real estate loans was 35 basis points worse than in August.
The rate is up 112 BPS when compared to September 2010.
Overall performance was hurt by deterioration in the office property sector.
M.I. Program Enhanced for Brokers
United Guaranty Corp. is expanding its underwriting requirements to allow greater flexibility on broker-originated loans.
The mortgage insurer issued a bulletin outlining revised third-party originator requirements.
United Guaranty needs the full submission file to insure loans under the expanded requirements.
Foreclosure Attorney Network being Disbanded
Fannie Mae and Freddie Mac currently utilize a foreclosure attorney network.
But their regulator wants the pair of government-controlled enterprises to transition away from their current networks.
Fannie and Freddie have been directed to transition to a system where servicers select qualified law firms based on certain minimum, uniform criteria.
BofA Production Tumbles, Earnings Improve
Third-quarter residential originations were more than 151,000 loans.
Based on the dollar volume, production was down 19 percent.
Quarterly earnings improved by $15 billion at the parent company.
Generation Grabs Top Reverse Wholesale Lender Spot
Generation Mortgage Co. closed more than 400 reverse mortgages through its wholesale channel in August.
The volume made the company the biggest wholesale reverse mortgage lender.
Among all wholesale lenders, home-equity conversion mortgage endorsements were down 3 percent from July.
CRE Borrowers Sue BofA
A group of borrowers hoping to stop foreclosure on four commercial properties in North Carolina have filed a lawsuit against Bank of America Corp. The plaintiffs claim that the bank wrongly stopped funding loans, didn't follow through with promised loan modifications and forced them into costly interest rate swaps.
The lawsuit was filed last week by borrowers represented by Charlotte, N.C., developer American Asset Corp.
A longstanding relationship between BofA and American Asset started to sour in spring 2008, after the company's president told the bank that it was stopping development on two projects.
2nd Half Funding Forecast Lifted $100 Billion Again
Fannie Mae predicts that second-half production by all residential lenders will be $706 billion.
Last month's estimate from the secondary lender had originations during the last six months of this year at $606 billion.
It was the second consecutive month that Fannie raised its second-half outlook.
Citi Volume Leaps by More than Half
Third-quarter residential originations at Citigroup Inc. skyrocketed 55 percent from the second quarter.
During the first nine months of 2011, volume totaled more than $40 billion.
Quarterly production fell from a year earlier.
Q4 Refi Forecast Doubled
Expected refinance production for the fourth quarter was revised up 98 percent from last month's outlook.
Refinance production is now forecasted to reach $286 billion this quarter.
Expected refinance share was raised to 77 percent.
Higher Originations Likely to Keep Rising at Wells
Third-quarter originations at Wells Fargo Home Mortgage up 39 percent from the second quarter.
Applications strengthened again, this time rising 55 percent from the prior quarter.
The unclosed pipeline swelled to $84 billion at the end of third quarter from $51 billion three months earlier.
Brutal Week As 6 Firms Finished
Four banks with assets of between $161 million and $204 million each failed Friday, and related losses will range from $38 million to $72 million each.
The smallest of the banks had the most employees, while one of the firms had a big concentration in commercial mortgages.
Recent non-bank casualties include an operation that securitizes commercial real estate loans and an appraisal management company.
Secrets of Mega-Producing Loan Originators
The 2011 Loan Originator Survey from MortgageDaily.com reflected results from the nation's top-producing loan originators.
A majority of this elite group of mortgage salespeople indicated that tending to existing referral sources was a "very effective" way to generate new business.
Almost all of the respondents indicated that customer satisfaction is "very important" in their overall success.
Refis Down More than a Quarter
Refinance inquiries dropped 27 percent over the past seven days, according to the U.S. Mortgage Market Index report.
Refinance business was 21 percent lower than last year at this time.
The refinance share was 65 percent, down from 71 percent last week.
Fannie Ranks Servicer Performance
Fannie Mae recognized 11 mortgage servicers who are on track to receive at least a three-star ranking.
A three-star rating indicates that the servicer's performance was at least median relative to its peers.
"Through the STAR Program, Fannie Mae provides clear expectations and specific, consistent measurements to help servicers increase their focus on customer service and foreclosure prevention outcomes for homeowners," the statement said.
House Passes Legislation to Expand VA Eligibility
Legislation that would expand eligibility to certain spouses of deceased veterans has made its way through the House and will now be considered by the Senate.
The bill was overwhelmingly approved on Wednesday.
Under current law, VA loan eligibility is not available to surviving spouses when the service member's death was not connected to service disabilities.
Best and Worst RMBS Servicers
A new report rated the biggest servicers of securitized mortgages.
Among poor performers, the integration of acquired servicing operations was a big obstacle to better performance.
The report found that "Chase and Bank of America exhibited poorer overall performance relative to other servicers analyzed."
Rising Rates Could Hold
The average 30-year mortgage soared 18 basis points from last week.
A better-than-expected employment report was blamed for the increase.
Given no significant economic events, mortgage rates can be expected to at least stay this high through next week's reports based on the 10-year Treasury yield.
Servicer Examinations Explained
The Consumer Financial Protection Bureau released its Mortgage Servicing Examination Procedures.
The publication is part of the CFPB Supervision and Examination Manual.
The procedures describe information that CFPB examiners will gather to evaluate mortgage policies and procedures, determine compliance with applicable laws and identify risks to consumers in servicing operations.
Chase Originations and Mortgage Staff Up, Delinquency Down
JPMorgan Chase & Co. has added nearly 9,000 mortgage jobs during the past year.
Third-quarter home-loan production strengthened 8 percent from the second quarter and looks to be headed higher.
Delinquency declined 16 basis points despite a shrinking servicing portfolio.
Appraiser Profession Evolves Over Past 2 Decades
Appraisers are doing more work and earning less income, according to the owner of a Minnesota appraisal firm who has a disdain for appraisal management companies. While new regulations can be burdensome, he acknowledged some benefits for appraisers operating in today's environment.
One criticism of AMCs is that they don't provide training.
He explained that appraisal fees aren't rising because too many appraisers are willing to work for half the price.
REOs Up, Falling Foreclosures to Turn Higher
Foreclosures were filed on 6 percent more properties in September than in August.
But foreclosure filings are expected to slowly start rising.
Real-estate-owned filings inched higher last month.
Delinquency Rises Again
Residential delinquency of at least 30 days was 3 basis points higher in September than in August.
It was the second month in a row that the rate deteriorated.
It was also the highest rate of late payments during the past six months.
MetLife Home Loans For Sale
MetLife Inc. disclosed in July its decision to sell MetLife Bank, N.A.
Now the company has put another unit on the block.
"In addition to its previously announced decision to explore a sale of MetLife Bank, N.A.'s depository business, the company will now also explore a sale of the bank's forward mortgage business," MetLife said in a news release.
Chief of Failed Firm Pleads Guilty
Ideal Mortgage Bankers lost its FHA approval in November 2009.
Within a month, the company was out of business.
The Department of Housing and Urban Development announced this week that the former president of the company pled guilty to running a scheme that diverted refinance proceeds to cover company operating expenses.
Mortgage Fees Litigated
The Supreme Court agreed to hear a lawsuit against Quicken Loans Inc. that asks whether the Real Estate Settlement Procedures Act applies when no third parties are compensated.
The Court of Appeals of North Carolina upheld a summary judgment against Community Bank of Northern Virginia over alleged loan discount fees charged when the interest rate wasn't discounted.
Nationstar Mortgage LLC is fighting a federal lawsuit that claims the borrower is being overcharged because of the manner in which Nationstar applies late charges.
HUD Chief Outlines 2 QRM Down Payment Options
The secretary of the Department of Housing and Urban Development spoke this week at the Mortgage Bankers Association conference.
He outlined two down payment alternatives for the "qualifying residential mortgage" rule.
One option would require a 20 percent down payment, while an alternative would be available with a 10 percent downpayment combined with a mix of private mortgage insurance and credit enhancements.
Credit Scores Highest in Wisconsin, Worst in Texas
Wausau, Wis., has the highest credit score of all U.S. cities.
In fact, four Wisconsin cities were among the 10 cities with the highest credit scores.
On the other side of the spectrum was Texas, where four cities were among the 10 U.S. cities with the worst credit scores.
Ginnie Makes Warehousing, Servicing Transfers Easier
Ginnie Mae said that changes to its acknowledgement agreement will make it simpler to honor servicing pledges and permit the transfer of related servicing rights.
The firm is responding to issuer concerns about the difficulty of pledging servicing portfolios.
In an attempt to help warehouse lending proceed more smoothly, Ginnie said that it clarified creditor rights when mortgages are pledged prior to securitization.
Senators Call for Obama to Move on Refis
Twelve Democrats and four Republicans signed a letter addressed to the Obama administration.
The group discussed pending Senate legislation that deal with a host of issues hindering refinances for underwater borrowers.
"All of these changes can be accomplished administratively and we urge that you take immediate steps to do so," the letter said.
Purchase Outlook Dims as Refi Forecast Flourishes
Mortgage bankers cut their forecast for fourth-quarter 2011 production by 16 percent.
But the outlook for refinance originations was raised 45 percent.
The strong improvement in expected refinances had the projection for overall production up 21 percent.
HSBC Resumes N.Y. Foreclosures
Almost a year after it suspended foreclosures in the state of New York, HSBC has restarted some foreclosure actions.
In December 2010, the company joined other mortgages servicers in halting foreclosures while the foreclosure process was corrected.
The suspension was made amid allegations of invalid loan titles and robo-signings.
LOS Systems Enhanced as Originations Increase
Lenders have changed their technology buying habits since 2007, and many have opted for low-cost solutions.
But MortgageFlex Systems Inc. says that an increase in activity and growth at some lenders has increased the need for more sophisticated technology.
Mortgage Builder said that its LOS was used by Quadriga Mortgage Group to launch its wholesale portfolio lending business.
Reverse Lender Launches with Former Wells LOs
Wells Fargo Home Mortgage said in June that it planned to shut down its reverse mortgage business.
However, Reverse Mortgage Network saw an opportunity in Wells' exit.
The company recruited some of the impacted loan originators and opened for business last month.
Protesters Put MBA On Alert
A planned protest had attendees on alert at the Mortgage Bankers Association's 98th Annual Convention and Expo in Chicago.
Protestors aligned with the Stand Up Chicago coalition crossed paths with Occupy Wall Street protesters as mortgage bankers are holding their premier networking event in the Windy City.
MBA advised conference attendees not to "engage or confront" the protesters.
Maximizing Web Site Conversions
New research indicates that customers who complete loan applications online have high quality risk characteristics and a better closing ratio.
The report noted that online applications took nearly a quarter more clicks to reach at less successful Web sites.
But more successful sites generated eight times more loan volume.
Business Picks Up at Fairway
Third-quarter fundings at Fairway Independent Mortgage Corp. climbed 21 percent from the second quarter.
Fairway's chief executive officer explained that the company "far exceeded our expectations."
While full-year production isn't expected to match last year, the CEO still expects "plenty of activity through the rest of 2011 due to the effect low interest rates are having on the refinancing side of our business."
Lenders One Reports Milestone
Around this time last year, Lenders One reported that it had 180 members.
The count was up from around 135 members reported for a year earlier.
Now Lenders One is reporting that the 200th member has joined the organization.
Another Portfolio Lender Emerges
Quadriga Mortgage Group has commenced business.
The company is looking to acquire non-agency, broker-originated mortgages with low loan-to-value ratios.
The move follows the June launch of New Penn Financial LLP's portfolio programs.
New Credit Risk Scoring Model in Works
Last week, CoreLogic issued a news release about a new credit report.
Now the Santa Ana, Calif.-based company has reached an agreement with FICO to develop a new credit scoring model.
The joint offering promises to provide deeper insight into consumer credit risk.
Pulte Mortgage Chief Among Host of MBA Appointments
Debra W. Still was sworn in as chairman-elect of the Mortgage Bankers Association.
Still is president and chief executive officer of Pulte Mortgage.
She's worked for the company since 1983.
Title to Loans Disputed in Court
National City Mortgage Co. realized that it had failed to notify a junior lien holder about an impending foreclosure sale, leaving it With a lien against its real-estate-owned asset.
The Court of Appeals of Texas overturned a trial court's judgment that found 21st Mortgage Corporation Inc. had no lien on a property.
A federal judge rejected the plaintiffs' arguments that challenged the validity of the MERS deed of trust assignment.
103-Year-Old Institution Among 2 Bank Failures
The RiverBank was closed down by the Minnesota Department of Commerce.
The former institution was established in 1908.
After that, the Missouri Division of Finance took possession of Sun Security Bank.
Sinking Rates Raise this Week's New Loan Activity
The conforming 30-year mortgage improved 4 basis points in the week ended Oct. 7.
As a result, loan originators pulled 3 percent more pricing inquiries than the prior week.
Refinance activity was up 4 percent.
Mortgage Employment Falls; 2010 Data Revised Up
Mortgage industry employment fell by 2,800 jobs during August.
Compared to a year earlier, the count was down by 25,000 positions.
However, the year-earlier total was revised up by 13,900 from what was originally reported.
BofA Short Sale Incentive Pays Borrowers Up to $20k
Bank of America Corp. has rolled out a program in Florida that gives defaulted borrowers up to $20,000 if their houses are sold through a short sale. Some in the industry say the offer is a move to ensure outgoing borrowers keep their properties in good condition.
While the program is new for BofA, other mortgage servicers already have similar programs in place.
The short-sale program is being offered for a limited time. If it is successful, it could be expanded to more states.
Rates Set New Records as 30-Year Cracks 4% Floor
The average 30-year fixed-rate mortgage fell 7 basis points from last week.
It was the lowest level ever recorded for the 30 year.
It was also the first time that the 30-year mortgage was less than 4 percent.
More Details Expected Soon on Negative Equity Refis
The secretary of the Department of the Treasury testified before a Senate committee about, among other things, the housing market.
He noted that the Federal Housing Finance Agency is considering reforms that would enable negative-equity borrowers to refinance at today's low interest rates.
The secretary said more clarity is expected to be provided on eased refinance requirements within the next few weeks.
Texas Pricing Engines Merge
An acquisition by a mortgage technology firm has resulted in the merger of two Texas-based product and pricing engines.
The acquisition was announced by Optimal Blue.
The target of the transaction was Sollen Technologies LLC.
Wholesale Lenders Seek Mortgage Brokers
Wholesale lenders across the country have been busy rolling out new conventional, government and commercial mortgage programs.
Even correspondent lenders are stepping up their offerings.
Two firms hope to fill the void left by departing reverse wholesale lenders with their own wholesale offerings.
Servicer Sued for Defamation, Misrepresentation
A Missouri borrower who was unable to make her mortgage payment was able to negotiate a $15,000 payoff on her $93,000 home. But two years later the settlement still hadn't consummated, prompting the borrower to sue the servicer and its law firm for defamation and misrepresentation.
The mortgage servicer in the case, American Home Mortgage Servicing Inc., allegedly can't produce the note -- holding up settlement.
In the meantime, multiple foreclosure notices have been published.
HAMP Volume Plunges to All-Time Low
The monthly volume of modifications completed under the Home Affordable Modification Program fell to the lowest level since the first completed modification was reported in November 2009.
But J.P. Morgan Chase Bank, N.A., managed a monthly gain.
The improvement helped Chase ascend to the top-producer spot.
BofA Laying Off Hundreds of Retail LOs
Bank of America Home Loans is closing several dozen retail sales offices.
More than 300 mortgage loan originators are being laid off as a result.
The move was made as part of a "general streamlining of the business" as the company focuses on stronger markets.
Negative Equity Much Worse on Non-Agency MBS
Less than a quarter of all residential loans have a loan-to-value ratio in excess of 100 percent.
But when considering only prime loans included in private-label residential mortgage-backed securities, the share jumps past a third.
Further deterioration in home values is expected to drive non-agency RMBS LTVs past half.
Mixed Delinquency Data
Quarterly delinquency was 26 basis points lower for closed-end home-equity loans.
Late payments on home-equity lines of credit, however, was up 11 BPS.
Deliquency on mobile-home loans and property improvement loans was also higher.
Borrowers Underestimate Home Values, Credit Scores
During the third quarter, homeowners underestimated their home values by an average of more than $10,000.
But the disparity was less than three months earlier.
Nearly a third of borrowers with "excellent" credit scores indicated that their scores were less than "excellent."
Available Equity for Reverse Mortgages at 7-Year Low
The aggregate amount of home equity held by homeowners who were at least 62 years old was down 2 percent in the second quarter.
It was the lowest level of senior home equity since the second-quarter 2004.
Senior home equity has fallen more than percent from its peak in 2006.
Major Lenders Accused of Charging Illegal VA Fees
A lawsuit was filed by two mortgage brokers against more than a dozen major lenders.
The lenders allegedly hid attorneys fees, which aren't allowed on VA refinances, by labeling them as "title examination fees."
The lawsuit claims that the government is now on the hook for tens of thousands of defaulted loans that included the fees.
Fewer Consumers Resort to Bankruptcy
Consumer bankruptcy filings during September slipped 4 percent from August.
The decline was even more profound when compared to a year earlier.
Year-to-date Sept. 30, the volume of filings was down 10 percent from the first nine months of last year.
NMLS Deadlines Ahead
Mortgage Call Reports for state-licensed companies have two components with separate deadlines, according to the Nationwide Mortgage Licensing System.
The first component, residential mortgage loan activity, needs to be submitted within 45 days of the end of each quarter.
The second component of the Mortgage Call Reports is financial condition, which is due within 90 days of the company's fiscal year end.
BofA Correspondent Closing Impacts Mostly Countrywide Employees
No buyer was found for Bank of America Home Loans' correspondent lending division.
So the unit will be shut down.
Many of the more than 1,000 employees who are impacted by the closure were employees of Countrywide Home Loans before the company was acquired by BofA.
Wholesaler Hirings AEs
The wholesale lending division of Total Mortgage Services LLC is expanding its staff of wholesale account executives.
The hirings are expected to be completed by the end of this year.
New employees will handle business in 21 states.
FHFA Could Have Reined in Foreclosure Mills Earlier
A new report found that Fannie Mae and the Federal Housing Finance Agency could have done more early on to prevent foreclosure-process abuses by the secondary lender's network of law firms.
There were signs of heightened risk in the network prior to August 2010 as foreclosures jumped.
Those signs included consumer complaints, media reports and public court filings in Florida and elsewhere.
HECM Endorsements Drop
The Federal Housing Administration endorsed 4 percent fewer home-equity conversion mortgages in September than in August.
Compared to a year earlier, volume was off 6 percent.
Focusing only on retail HECM production, the biggest lender saw a decline, while No. 2 pushed volume higher.
MTA Records Keep Coming
In September, the Monthly Treasury Average dropped a basis point from August.
It was the lowest level on record for the index.
The MTA was down 12 BPS from a year earlier -- which was a record at that point.
Radian Adjusts Pricing, Credit Score Requirements
Upcoming updates at Radian Guaranty Inc. impact pricing and minimum credit scores.
The mortgage insurance company has also revised its appraisal requirements.
In addition, refinance eligibility guidelines and the policy on automated underwriting have changed.
See Saw Activity Continues With COFI
The Cost of Funds Index fell 3 basis points between July and August.
The decline followed an uptick in July.
But COFI was 39 BPS better than than a year earlier.
BofA Suspends FHA Cashouts
Cashout refinance transactions insured by the Federal Housing Administration have been suspended by Bank of America Home Loans.
A spokesman for the company confirmed the move Monday.
The suspension, however, is only temporary.
VA Payments On Hold
The Department of Veterans Affairs has asked lenders not to submit payments on loans closed after Sept. 1.
The move was made as a result of legislation that has been passed in the House and the Senate.
But the bill still awaits President Barack Obama's signature.
Capital Requirements Revised for Ginnie Issuers
Ginnie Mae has revised its capital requirements.
A bulletin indicated that banks, thrifts and their holding companies are subject to one set of revised minimums.
A second set of capital requirements applies to non-banks, credit unions and subsidiaries of banks and thrifts.
Pricing Platform Expanded
Marksman was originally launched as a product and pricing engine.
But now the service has been expanded to a loan origination platform.
Among the enhancements are lead acquisition, prospect marketing and initial loan processing.
Signs of Life in CMBS
The 30-day delinquency rate last month on commercial real estate loans included in commercial mortgage-backed securities improved 4 basis points from August.
But the rate on hotel loans was 46 BPS better.
In addition, CMBS spreads improved.
Fannie Issuance Up Sharply in September
Fixed-rate issuance during September at Fannie Mae was 25 percent higher than in August.
Securitizations were also higher at its agency counterparts Freddie Mac and Ginnie Mae.
From Jan. 1 through Sept. 30, volume at Fannie totaled more than $340 billion.
Bank Failures Sink
At this point in 2010, MortgageDaily.com had tracked 158 mortgage-related firms and businesses that had failed or closed.
So far during 2011, the casualty list stands at just 105.
A 42 percent decline in bank failures this year was responsible for the decline.
Excessive Asset Concentration Cause Institutions' Failures
The Texas Department of Banking closed First International Bank.
Its commercial real estate loans accounted for a concentrated share of its overall assets.
A report from the National Credit Union Administration Office of Inspector General found that the management and board of directors of failed Southwest Corporate Federal Credit Union allowed for a significant concentration of investments directly in privately-issued residential mortgage backed securities.
24 Arrested in BofA Foreclosure Protest
Two dozen individuals protesting Bank of America Corp.'s foreclosures were booked and jailed this week. But a bank spokesman called the actions a public relations stunt.
A total of around 3,000 protesters converged in downtown Boston Friday.
Police arrested 24 people. One of those who were jailed explained that the group was taking a stand in an effort to let BofA know that it cannot foreclose on borrowers. |
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M.I. Program Enhanced for Brokers
Oct. 18, 2011
Mortgage brokers are being cut a break on underwriting requirements by one mortgage insurance company.
United Guaranty Corp. is expanding its underwriting requirements to allow greater flexibility on broker-originated loans.
The Greensboro, N.C.-based company issued a bulletin Monday outlining the revised third-party originator requirements for mortgage brokers.
<MortgageDaily.com subscribers read full story>
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Another Portfolio Lender Emerges
Oct. 10, 2011
Another portfolio lender is wading into the waters of non-agency investments. The latest entrant is looking to acquire broker-originated mortgages with low loan-to-value ratios.
A news release Monday promoted the launch of Quadriga Mortgage Group.
The San Diego-based lender says it provides wholesale lending programs on a portfolio basis.
<MortgageDaily.com subscribers read full story>
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Wholesale Lenders Seek Mortgage Brokers
Oct. 6, 2011
Wholesalers across the country have been busy rolling out new conventional, government and commercial mortgage programs. Even correspondent lenders are stepping up their offerings. Two firms hope to fill the void left by departing reverse wholesale lenders.
An Aug. 11 news release from Reverse Mortgage Solutions Inc. indicated that the Spring, Texas-based company has launched a third-party origination channel.
Ralph Rosynek was recruited to head up the new business, while Garrett Kolb was hired to oversee originations in the West and Jamie Longe was brought on to oversee the Midwest.
<MortgageDaily.com subscribers read full story>
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