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MortgageChronicle.com Archives
November, 2011
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Fannie's 2011 Business Exceeds 1/2 Trillion Dollars
Fannie Mae reported that new business acquisitions have risen each month since July.
October's volume was up 6 percent from September.
During the first 10 months of this year, activity amounted to $504 billion.
Hundreds of Layoffs at Foreclosure Processing Firm
A foreclosure processing firm has disclosed plans to lay off several hundred employees.
The company, Pillar Processing, notified the state of New York of the planned layoffs.
In all, 601 employees are being terminated early next year.
FHA Awards Training Contract
The Federal Housing Administration has awarded a national contract to provide free technical assistance training to FHA mortgagees.
The contract was awarded to the team of AllRegs and Total Learning Solutions.
A survey of thousands of FHA lenders is being used to help determine the content and delivery method of the courses.
FHA Fundings Fall, Delinquency Deteriorates
During October, 90-day delinquency on mortgages insured by the Federal Housing Administration jumped around 30 basis points from September.
Meanwhile, reverse mortgage production sank 21 percent, and purchase activity was down 9 percent.
The decline pulled down overall FHA originations by 3 percent.
Servicers Subject to New Rules on Bankrupt Accounts
Changes to the Federal Rules of Bankruptcy Procedure are scheduled to go into effect on Dec. 1.
The rules change the policies and procedures for servicing loans in bankruptcy.
They are also expected to enhance transparency in the process.
100 Jobs Being Added as Firm Expands West
BBVA Compass runs three mortgage operations centers in Alabama and Texas.
Now the company is opening a fourth center in Tempe.
BBVA plans to employee around a hundred people at the Tempe facility.
Cost Cutting at Fannie Impacts Over 100 Jobs
Fannie Mae said that it has laid off more than 150 employees.
The layoffs occurred over the past few weeks.
The staff reduction was made as part of cost-cutting efforts at the government-controlled enterprise.
Private Mortgage Insurance Activity Picks Up
U.S. mortgage insurance companies wrote 6 percent fewer policies in October than they did in September.
On a dollar-volume basis, business improved by 4 percent.
It looks like policies issued in November might be higher based on new applications, which increased 6 percent.
Report Criticizes FHFA Oversight
A report on the activities of the Federal Housing Finance Agency by the regulator's inspector general found that FHFA didn't do enough of its own testing and validating when approving decisions by Fannie Mae and Freddie Mac.
The report focused highlighted Freddie's repurchase settlement with Bank of America Corp.
The decision proces on executive compensation was also criticized.
Radian Requesting Capital Ratio Waivers
Waivers are being sought in 12 states by Radian Guaranty Inc.
The mortgage insurer has already received approvals for waivers in three states.
While 16 states of the states it operates in statutorily impose a risk-based capital requirement, 15 of the states now permit waivers.
CMBS Delinquency Rises and Could Go Higher
Delinquency on securitized commercial real estate loans climbed nearly 17 basis points in October.
The late-payment rate climbed for the second consecutive month.
In addition, the lack of a credit recovery combined with maturing balloon loans could combine to push delinquency even higher.
NCUA Sets Sights On Wells
A lawsuit has been field by the National Credit Union Administration against Wachovia Capital Markets LLC.
The defendant is a subsidiary of Wells Fargo & Co.
Wachovia is accused of violating federal and state securities laws by misrepresenting the quality of residential mortgage-backed securities purchased by two failed credit unions.
Georgia Ascends to 5-Worst Negative Equity States
In Georgia, 30 percent of borrowers during the third quarter had a loan-to-value ratio in excess of 100 percent.
The state unseated California as the fifth worst state in the nation.
It was the first time that Georgia ranked among the top-five since tracking of such data began two years ago.
Settlement is Another Blow to Nonconforming Lending in Mass.
Massachusetts' attorney general announced a $52 million settlement with RBS Financial Products Inc.
At issue is the securitization of subprime mortgages.
The settlement is just one of several such recent actions in the state tied to non-conforming lending and gives non-agency investors another reason to avoid lending there.
Judge: $285 Million Isn't Enough in Citi-SEC Settlement
A $285 million settlement between Citigroup Inc. and the Securities and Exchange Commission won't cut it, according to a federal judge.
The judge is apparently not satisfied with Citi's failure to admit to allegations that it set up mortgage-backed securities to fail than bet against them. He also considers the deal too advantageous for Citi.
The $285 million was the amount of a fine agreed to by the regulator and the bank.
Mortgage Branches Open, Change Brands
America's Choice Home Loans LP said earlier this month that Matthew A. Krimm has joined the company to run a new branch in Rehoboth, Del.
Since launching six months ago, Menlo Park Funding has opened 12 branches in the Northeast.
TriStar Home Loans in Valencia, Calif., became a retail branch of Bay Equity Home Loans.
Dodd-Frank Co-Author Won't Seek Re-Election
The co-author of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is expected to announce his planned retirement from Congress.
Rep. Barney Frank (D-Mass.) has been at the center of legislation that had a huge impact on mortgage lending.
The Dodd-Frank act, which Frank co-authored with former Sen. Chris Dodd (D-Conn.), has regularly been blasted by Republicans for impeding job creation.
Social Networks Play Big Role in Real Estate Market Recovery
Social networks influence the decision to stop making house payments even when a borrower has adequate resources.
"As social animals, humans knowingly or otherwise look to their peers before reaching financially life-altering choices," a recent study said.
Fragile real estate markets are susceptible to mavens, those considered real estate experts.
New Activity Sinks in Holiday Week
Loan inquiries sank by one-third compared to last week, leaving the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended Nov. 25 at only 161.
New mortgage activity was slammed by the Thanksgiving holiday.
Leading the decline were refinances, which tumbled 35 percent.
AMCs and Tech Providers Help With UCDP Compliance
Loans originated as of Dec. 1 and delivered to Fannie Mae and Freddie Mac on or after March 19, 2012, will need to have appraisals delivered through the Uniform Collateral Data Portal.
GlobalDMS has set up a Web page explaining UCDP requirements and providing links to additional resources.
a la mode announced Monday that its Mercury Network was already submitting appraisals to the UCDP.
Low Rates Could Fall More
The average 30-year mortgage moved up a basis point from last week.
It was the same story for the 15-year mortgage.
An analysis of Treasury market data suggests that the 30-year could be around 8 BPS better in next week's report.
PMI Bankruptcy Follows Denied Motion
The PMI Group Inc. filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.
The followed the company's failed attempt to gain back control of its primary operating subsidiary.
"The company intends to use the protections of the bankruptcy code to assess its strategic and other options for preserving stakeholder value," a public filing stated.
FHA Revises Appraiser Approval Regulations
The Housing and Economic Recovery Act of 2008 required appraisers on Federal Housing Administration loans to be certified by a state appraisal licensing board in the state where the property is located.
But the Departement of Housing and Urban Development regulations were outdated and didn't reflect current practices that do comply.
So a new rule with modified regulations that do compy is being implemented.
CMBS Delinquency Retreats But Still High
The rate of 60-day delinquency during October on loans included in commercial-mortgage backed securities was down 6 basis points.
But the small decline followed a 35-basis-point increase in September.
CMBS delinquency remains 90 BPS worse than in October 2010.
Freddie Turns in Weak Performance
Home-loan delinquency edged 3 basis points higher in October at Freddie Mac.
Secondary marketing activity inched up 3 percent.
The company's mortgage portfolio was down $9 billion.
Another Improvement In Shadow Inventory
The supply of distressed residential properties was down two months between the second and third quarters.
That cut the dollar amount of shadow inventory by $21 billion.
The third-quarter improvement came on the heels of the first decline in two years.
Bankrupt Hard Money Lender Sues State Over License
A hard-money lender that that plans to emerge from bankruptcy has sued the licensing agency in its state because its license was not renewed. The company services mortgages but won't be able to continue doing so without its license.
Integrated Financial Associates Inc. is a hard-money lender based in Las Vegas.
The company filed for Chapter 11 Bankruptcy reorganization in March.
Bank Performance Strengthens
U.S. financial institutions continued a trend of improving income with the ninth consecutive year-over-year in quarterly earnings improvement.
The number of troubled institutions fell by 77 compared to last year.
Meanwhile, residential delinquency improved 20 basis points between the second and third quarters.
2012 Conforming Limits Released
The last time that the conforming limit was increased was in November 2005.
But a decline in national home prices has left the limit unchanged since except in wealthier areas.
That puts next year's conforming limit at $417,000.
Servicers Make Progress on Consent Orders
In response to consent orders issued earlier this year, mortgage servicers said that they assessed risk tied to third-party activities to determine specific levels of oversight and activities.
They also established new policies and enhanced due diligence.
Plans submitted by the servicers include an increase in the number of servicing employees who are dedicated to oversight of Mortgage Electronic Registration Systems activities.
Mortgage Licensees Growing
The number of mortgage licenses in the national registry has grown each quarter this year.
Much of the growth was concentrated in Florida, California and Texas.
Suspensions were extraordinarily high in Pennsylvania, though Texas and Utah were also active in this area.
Foreclosure Rescue Promises Land Defendants in Court and Jail
While many of the defendants who are named in government lawsuits that allege modification and foreclosure-rescue schemes are often accused of the same thing -- collecting up-front fees for services they never performed -- some of the cases can be quite colorful.
Marien Brown, who was indicted in August for allegedly duping 80 Hawaiian borrowers into using her foreclosure-rescue service and keeping their payments instead of passing them along to the lenders, pled guilty.
Alan David Tikal will serve 16 months in prison after being found guilty of filing false documents and accepting advance fees on loan modifications.
Purchase Activity, Rates Inch Up
Inquiries for mortgage to finance home purchase were 3 percent higher than the prior week in the Mortgage Market Index for the week ended Nov. 18.
The improvement occurred despite no change in overall activity.
The average 30-year fixed-rate mortgage moved up 3 basis points.
Purchase Production Previously Underestimated as FHA Outlook Slashed
The quarterly estimate of government-insured loan production has been cut 21 percent.
But a 9 percent increase in the projection for conventional business offset the reduction.
Third-quarter purchase transactions were previously underestimated by 19 percent.
Freddie Updates Servicer Guidelines
Several servicing policies have been revised or clarified by Freddie Mac.
Impacted areas include short sales, deeds in lieu and repurchase demands.
Also addressed were loan modification requirements that are subject to the Servicemember's Civil Relief Act and the loss of mortgage insurance coverage.
Iowa, La. Banks Fail
Polk County Bank was seized by the Iowa Division of Banking.
Central Progressive Bank was placed into conservatorship by the Louisiana Commissioner of Financial Institutions.
Both banks were handed over to the Federal Deposit Insurance Corp. as receiver.
President Signs Bill Reinstating Jumbo FHA Limits
President Obama signed into law H.R. 2112, Consolidated and Further Continuing Appropriations Act, 2012.
The bill includes a provision to extend higher limits on loans insured by Federal Housing Administration.
Under the new legislation, the $729,750 FHA loan limit in high-cost areas has been extended until December 2013.
Purchase Lending Outlook Increased Along With Refis
Fourth-quarter refinance production is expected to come in at $270 billion.
The refinance forecast was raised from $263 billion in last month's outlook.
In addition, the fourth-quarter forecast for loans to finance home purchases was raised by $3 billion.
Delinquency Down Despite Deteriorating Foreclosures
October's total delinquency rate, including foreclosures, improved 5 basis points from September.
The decline came despite an 11-basis-point increase in the foreclosure inventory rate.
The drop in the overall rate was the result of a 16-basis-point improvement in the 30-day rate excluding foreclosures.
Appraisal Fraud Down as Income Fraud Surges
The risk of appraisal fraud has fallen 15 percent during the past year.
The risk of employment-income fraud continued a trend started in the third-quarter 2009, rising nearly 9 percent from the second quarter.
The risk in this category has increased 21 percent from a year earlier.
Robo-Signing Moves from Civil to Criminal
Two employees of Lender Processing Services Inc. have been criminally charged for allegedly robo-signing thousands of foreclosure documents.
The indictment came Tuesday from Nevada's Office of the Attorney General.
LPS acknowledged the allegations but said that the actions led to no wrongful foreclosures.
Rates Inch Up But Could Fall
The average 30-year mortgage moved up a basis point from last week.
It was the same story for the 15-year mortgage.
An analysis of Treasury market data suggests that the 30-year could be around 8 BPS better in next week's report.
Best Mortgage Originators
Quicken Loans Inc. topped a customer satisfaction ranking by J.D. Power and Associates.
The report was based on a survey of borrowers who recently closed on a new mortgage.
Quicken's standing was attributed to it strong performance in the application-approval process and the closing process.
Seasonal Adjustments Drive Delinquency Down
After making adjustments for seasonal variations, late payments on residential loans fell 45 basis points in the third quarter.
But without seasonal adjustments, there was a 9-basis-point deterioration.
Delinquency has more than doubled over the past decade.
Previously Delinquent Loans to Be Re-Securitized
Loans that were previously part of mortgage-backed securities, became delinquent and have since been cured will be securitized again.
What's more, the securities will essentially be guaranteed by the U.S. government.
News of the re-securitizations came Wednesday from Freddie Mac.
5 Million Modifications Completed
Mortgage servicers have reached a milestone in the number of loan modifications completed.
HOPE NOW reported that 5 million modifications have been completed. Most of the modifications are proprietary.
One servicer in particular was recognized for its "bold" modification programs.
Fannie, Freddie Subpoenaed by California AG
Fannie Mae and Freddie Mac have been subpoenaed by the attorney general's office in California, according to a person familiar with the matter. Investigators are trying to determine what role the two government-controlled enterprises played in the Golden State's foreclosure crisis.
State investigators will be looking into the two companies' role as a landlord in the state. In addition, they seek to gain information about what mortgage servicers are doing and which servicers are the worst performers.
Investigators are also trying to determine what role Fannie and Freddie played in selling or marketing mortgage-backed securities.
Chase Recruiting More Ohio Employees
JPMorgan Chase has been recently hiring employees in the Ohio communities of Columbus and Cleveland.
Headcount in Ohio now stands at more than 20,000.
This week Chase is holding a job fair in Cleveland in an effort to recruit 120 employees.
Mortgage Bankers Increase Origination Outlook Again
Four months ago, the Mortgage Bankers Association predicted that U.S. lenders would originate just $171 billion in residential loans during the fourth quarter.
Even as recently as September economists at the trade group forecasted fourth-quarter volume at only $234 billion.
In MBA's forecast released Wednesday, the association upped its fourth-quarter outlook to $343 billion.
Former Subprime Executive to Head New Wholesaler
Performance Home Loans has launched as a national wholesale lender.
Leading Performance as its president is Shabi Asghar.
The new leader previously held senior executive positions at Encore Credit Corp. and New Century Financial Corp.
Early Stage Delinquency Improves
In September, 30-day delinquency increased 3 basis points.
That followed an 8-basis-point rise in August.
But last month, past-due payments plunged 11 BPS.
Hard Money Lender Sees Continued Losses
A hard money lender based in Las Vegas is having a harder time as its borrowers are unable to resolve their short-term loans.
Three funds managed by Vestin reported that third-quarter losses were in the millions of dollars.
One of the fund reported that more than a third of its outstanding loans were in distress.
Judge Rules for Allied in Lawsuit Against HUD
A federal judge has granted Allied Home Mortgage Corp.'s motion for a preliminary injunction preventing its suspension as an approved Federal Housing Administration mortgagee.
The Houston-based company was suspended by the Department of Housing and Urban Development on Nov. 1.
Allied successfully argued that the mortgagee that caused FHA losses was separate from the current operating entity and that its suspension would have consequences that can't be reversed.
Updated HARP Guidelines Released
Last month, the Federal Housing Finance Agency announced enhancements to the Home Affordable Refinance Program.
Changes to the program included the elimination of a maximum loan-to-value ratio and the waiver of representations and warranties.
Now, Fannie Mae and Freddie Mac have issued updated HARP guidelines.
Business Jumps by More than Half at Wholesaler
United Wholesale Mortgage saw third-quarter loan production jump more than 58 percent from the first quarter.
Production was also higher than during the same period last year.
Business is generated from approximately 3,000 approved mortgage brokers
Fast Growing Firm On Track to Grow by 300 Employees
Nearly a year ago, Stonegate Mortgage Corp. negotiated a deal with the Indiana Economic Development Corp. to create 300 new mortgage jobs by 2015.
The company said in a news release that it has hired 45 employees so far this year.
Stonegate said that it was named the fastest-growing independent mortgage company in the country by Inc. magazine.
Double Dip Delinquency
Ninety-day delinquency during October on first mortgages was up 9 basis points from September.
It was the second consecutive month that the rate was higher.
The deteriorating first-mortgage performance was responsible for an increase in the aggregate consumer late-payment rate.
Mixed Outlook for FHA
The Department of Housing and Urban Development Tuesday reported that the capital ratio for Federal Housing Administration's Mutual Mortgage Insurance Fund is still positive this year.
If U.S. housing markets see no further downturns, then the fund will return to a 2 percent capital ratio by 2014.
But Wharton School's Joseph Gyourko predicts that FHA will need taxpayer bailout of as much as $100 billion unless the economy quickly recovers.
Impac Boosts Lending, Hopes to Expand Products
Residential originations at Impac Mortgage Holdings Inc. increased 14 percent between the first and second quarters.
Compared to a year earlier, volume has skyrocketed.
The company is looking to add jumbo mortgages and apartment loans to its menu of offerings during the next few months.
Settlements Reached With 2 Firms Over RMBS Losses
A settlement announced by the National Credit Union Administration has Deutsche Bank Securities paying $145 million.
The settlement resolves losses suffered by five failed wholesale credit unions as a result of investments in residential mortgage-backed securities.
Also agreeing to a settlement was Citigroup Inc.
All-Time Low for MTA
In October, the Monthly Treasury Average fell 1 basis point from September.
The MTA has fallen each month since April 2007.
Based on an analysis of Federal Reserve statistical data back to 1953, last month's MTA was the lowest ever.
Minnesota Bankruptcy Case Impacted 2nd Lien Holders
It was a Chapter 13 bankruptcy case where the second mortgage lender didn't object to a plan where the second lien was stripped from the property. But when the bankruptcy judge didn't go for the plan, the borrower appealed -- and won.
Minnesota borrower Michael Fisette filed for bankruptcy last year. His Chapter 13 listed assets of $189,000, and his liabilities -- mostly mortgage debt -- were listed at $347,000.
When his attorney took the case to court, he filed a plan that stripped off the second mortgage on Fisette's home. The bank that held the loan didn't object.
Mortgage Employment Expands in Q3
Total mortgage-related layoffs between July 1 and Sept. 30 covered by MortgageDaily.com exceeded 2,500.
But hirings numbered more than 5,200.
That left a third-quarter net gain of 2,738.
Mortgage Recruitment Journal
Jacksonville, Fla., is among cities that JPMorgan Chase & Co.'s home lending division is considering for a new site that will house 250 full-time mortgage servicing jobs.
Headcount at Wingspan Portfolio Advisors grew by around 200 employees between February and September.
Around 249 mortgage jobs are currently open at Wells Fargo & Co.
CA and FL Seeing Many of Mortgage Layoffs
American Home Mortgage Servicing Inc. notified the state of California about 149 layoffs there.
Wells Fargo & Co. advised the Florida's employment department that it is laying off more than 600 employees in the state.
Fireside Bank laid off more than 80 California employees last month.
Correspondent Layoffs Start at BofA
Nearly 200 job cuts have been announced by Bank of America Corp. The layoffs, which impact employees in two Southern California communities, appear to be taking place at the company's correspondent lending unit.
The cities of Thousand Oaks and Agoura Hills have been notified about 190 positions that are being eliminated by next month.
The layoffs are likely tied to BofA's prior announcement that it will wind down its correspondent lending business, though a spokesman wasn't available Friday to confirm this.
Refis Retreat, FHA Share Up
Refinance inquiries fell 19 percent from the prior week in the U.S. Mortgage Market Index from Mortech Inc. and MortgageDaily.com for the week ended Nov. 11.
Two-thirds of weekly activity was for refinances.
Federal Housing Administration share rose to 10.85 percent from the previous week's 10.01 percent.
No. 88 Goes Down
Community Bank of Rockmart was closed down by bank regulators.
The shuttered bank was established in 2005.
It was the 88th federally insured bank to faile this year.
Clerk in Fla Jumps on MERS Litigation Bandwagon
Another county clerk sees an opportunity to sue the Mortgage Electronic Registration Systems and make up for lost revenue. This time the county is in Florida.
The lawsuit was filed late last month by the Duval County Clerk of Court.
Class action certification is sought in the latest case.
New COO at Ellie
Ellie Mae Inc. announced that Jonathan Corr was named chief operating officer.
He joined the company in 2002.
In his new role, Corr will oversee all sales, marketing and client support divisions.
30-Year Under 4% and Less than Last Year's Record
Fixed-rate 30-year mortgages fell 1 basis point from last week.
That put the average 30-year rate at 3.99 percent.
The 30 year was better than a year ago when it had fallen to the lowest level on record at that point.
Bargain Hunting for GSE Execs Not Wise
Seven senators are sponsoring an amendment that would prohibit bonus compensation to executives of Fannie Mae and Freddie Mac for as long as the two government-controlled enterprises remain in conservatorship.
But the acting director for their regulator, the Federal Housing Finance Agency, said that it wouldn't be wise to go bargain hunting for executives who will oversee more than $5 trillion in assets.
"It would be irresponsible of me to risk this enormous contingent taxpayer liability with a rapid turnover of management and staff, replaced with people lacking the institutional, technical, operational and risk management knowledge."
FHA Market Share Falling
When financial markets seized up in late 2008, loans insured by the Federal Housing Administration accounted for 24 percent of residential originations.
By last year, FHA market share fell to around 20 percent.
Full-year 2011 FHA market share is on track to come in at around 16 percent.
Bill Proposes Phase-out of Fannie, Freddie
A Republican senator has introduced legislation that would wean the mortgage market off government support and stop the financial hemorrhaging.
Since being seized by their regulator in 2008, Fannie Mae and Freddie Mac have received $169 billion in government bailout funds.
But, according to Sen. Bob Corker (R-Tenn.), "We are no closer to transitioning Fannie Mae and Freddie Mac off government life support than the day the firms were taken under direct government control in 2008."
Allied Asked to Remove Notice from Web Site
State regulators in Maryland have suspended Allied Home Mortgage Corp.'s license and asked the struggling firm to remove an online notice indicating that it expects to resume lending this week.
The company's Maryland license was suspended on Tuesday.
A notice on Allied's Web site Wednesday said it expected to resume processing loans Thursday.
Faulty Documents Continue to Hinder Foreclosures
Delinquent borrowers continue to challenge foreclosures not based on whether they were delinquent, but based on faulty foreclosure and title documentation.
While some have had success stopping servicers from completing foreclosures, others have not.
The U.S. Supreme Court recently declined to hear Gomes v. Countrywide Home Loans Inc., MERSCORP announced.
Plunging Stocks Drive Down 10-Year Yield
In late afternoon trading, the Dow Jones Industrial Average was trading down more than 370 points.
The volatility had investors rushing to Treasury bonds -- pushing the yield on the benchmark 10-year Treasury note down to 1.97 percent.
A week ago, the 10-year yield was 2.03 percent.
Wholesale HECM Originations Reach Record Low
Home-equity conversion mortgages originated by wholesale lenders fell to the lowest level on record based on data back to 2008.
Things have gotten so bad among reverse mortgage wholesalers that a company with less than a dozen monthly closings ranked among the five-biggest reverse mortgage wholesale lenders.
But the retail channel saw a gain compared to a year earlier.
Judge Rules on Allied Motion
Allied Home Mortgage Corp. filed a motion for a preliminary injunction to force the Department of Housing and Urban Development to reinstate it as an approved mortgagee.
The company warned that if the judge didn't grant the motion -- the company would be put out of business and its more than 700 employees would be unemployed.
On Tuesday, the judge ruled against Allied.
Compliance Quandaries and Solutions
Rules and regulations for mortgage lenders continue to evolve, and a host of mortgage service providers are eager to help lenders comply without slowing down operations.
AllRegs is filling a gap that opened up when the Federal Housing Administration stopped providing handbooks.
Meanwhile, the Consumer Financial Protection Bureau is moving forward with rules and procedures.
Wholesale Lender to Wind Down
The wholesale operation at Walker Jackson Mortgage Corp. is being closed down.
The company will move its focus entirely to retail lending.
Walter Jackson expects to close out its pipeline by the end of the year.
Help Wanted in Arizona
JPMorgan Chase & Co. announced plans to increase its mortgage staffing in Arizona.
The company is holding a job fair this week in Phoenix.
Many of the jobs being filled will be on a schedule that starts in the afternoon and continues through midnight.
Delinquency Rise Mostly Limited to Nonconforming, FHA
Third-quarter delinquency of at least two months was up 6 basis points from the second quarter.
During the same period, 90-day delinquency at Fannie Mae was down 8 BPS, while Freddie Mac's rate inched up a single basis point.
But 90-day lates at the Federal Housing Administration rose 50 BPS, suggesting that the deterioration appears to be concentrated in non-conforming and government mortgages.
Technology is Top Topic at Industry Events
The Citi 2011 Financial Technology Conference is being held this week in Boston.
The 13th Annual Mortgage Technology Conference is being hosted by Source Media from Nov. 14 through Nov. 16.
Ellie Mae held its Encompass360 Connex 2011 user group event on Nov. 2 at the Georgetown University Hotel & Conference Center in Washington, D.C.
Banks See Stronger Demand for Closed-End Mortgages
Financial institutions reported that demand for closed-end home loans has grown.
But demand for lines of credit secured by residential properties was lower.
Commercial mortgage standards, meanwhile, were at the tightest levels in six years.
Bank of America Gives Up its No. 2 Ranking
In its third-quarter ranking of residential mortgage lenders, Mortgage Daily reported that Bank of America Corp. lost its No. 2 title among residential lenders.
BofA at one time was the biggest U.S. mortgage lender just after its acquisition of Countrywide Financial Corp.
But it has since eliminated Countrywide's subprime lending, mortgage broker business and correspondent operations.
Carrington Hiring at Least a Hundred
Carrington Mortgage Services is recruiting as many as 120 new employees.
While many of the open jobs are in Southern California, positions are available across the country.
The number of recruits could increase by the hundreds if the company closes on pending contracts this week.
Hearing Set in Allied v. HUD
In a lawsuit filed against the Department of Housing and Urban Development, Allied Home Mortgage Corp. -- which says it is "on the brink of collapse" -- claims that the entity which broke the rules on Federal Housing Administration loans is separate and distinct.
In addition, any alleged shortcomings have been eliminated through a new operational entity which has exemplary performance.
A hearing on Allied's motion for a preliminary injunction is scheduled for Tuesday.
MortgageDaily.com Releases Q3 Ranking
Wells Fargo & Co. retained its No. 1 lender title during the third quarter.
But Bank of America Corp. slipped to third place behind JPMorgan Chase & Co.
Ally Financial Inc. also moved down a notch.
Death of 2 Banks to Cost Over $60 Million
The Nebraska Department of Banking and Finance closed down Mid City Bank Inc.
The associated loss to the Deposit Insurance Fund from the failure of Mid City is projected to be $13 million.
In addition, the Utah Department of Financial Institutions seized SunFirst Bank at an expected loss of $50 million.
LPS Scores Point in $155 Million Appraisal Lawsuit
The judge in a lawsuit filed on behalf of failed Washington Mutual Bank against Lender Processing Services won't let one of the claims in the case stand.
The Federal Deposit Insurance Corp., which became the receiver of WaMu after it failed in 2008, subsequently filed a $154.5 million claim against LPS contending that services by its appraisal subsidiary set the stage for losses when loans went bad.
The FDIC alleged that LPS is liable on grounds of gross negligence and breach of contract.
Mortgage Firms Report Growth in Business
PrimeLending originated 27 percent more in the third quarter than three months earlier.
IBERIABANK Corp. pushed up production 43 percent.
A "record surge" in mortgage applications reported by Navy Federal Credit Union has the financial institution expecting full-year originations to fly past $5 billion.
Refinance Activity Strengthens as Rates Fall
Twenty-one percent more homeowners inquired about a refinance this past week as interest rates improved, according to the U.S. Mortgage Market Index.
Refinance activity was even 15 percent higher than a year ago when the mortgage industry was in the midst of the biggest quarterly refinance wave during the past two years.
Rates are poised to come in even lower in the next report, based on Treasury yield activity.
Market Seems to Be Functioning Fine Despite Lower Limits
Dire predictions about the expiration of super-conforming loan limits so far have not come to fruition, according to Edward J. Pinto.
Pinto is a resident fellow at the American Enterprise Institute.
He presented evidence that the private market has stepped up to the plate to take on jumbo lending.
Outsourcing Firm Expands Mortgage Services with Acquisition
Among the businesses operated by Accenture is an outsourcing service.
That business has just expanded with its acquisition of another outsourcing firm.
Accenture said that it has completed the acquisition of Zenta Mortgage Services.
$2 Billion Bank Jumping Into Wholesale Lending
First Bank has reached an agreement to acquire a wholesale lender.
The deal is expected to close by Dec. 31.
As of June 30, First Bank had $2 billion in total assets.
Mortgage Jobs Down Despite Bump in Broker Staffing
A report from the Department of Labor put the number of people working in the mortgage industry during September at 300 fewer than in August.
Compared to a year earlier, headcount was down more than 25,000 positions.
The month-over-month decline came despite an increase of 700 mortgage broker jobs.
Jumbo Spreads Improve as Greece Drives Rates
Greece's retreat from its stance that it would hold a referendum on the European bailout package had the stock market rallying and bond prices falling.
The yield on the 10-year Treasury note closed up 6 BPS from a day earlier.
Meanwhile, the premium for a jumbo mortgage was down 4 basis points over the past week.
Banks Lead CRE Originations Higher
Third-quarter commercial mortgage production by U.S. originators climbed 10 percent from the second quarter.
The increase was led by strong performance at commercial banks.
Originations jump 55 percent from the second quarter at banks.
Allied Home Mortgage Suspends Operations
Allied Home Mortgage Capital Inc. was suspended this week as a Federal Housing Administration mortgagee.
In addition, it was sued by the U.S. Department of Justice.
Now, a spokesman has confirmed that the company has stopped originating new loans.
Monthly HAMP Volume Nearly Doubles
Modifications completed under the Home Affordable Modification Program totaled 29,643 during September.
The volume on modifications nearly doubled from August.
In fact, it was the busiest month since March.
Nearly a Quarter of Non-Agency RMBS Loans Modified
As of September, 24 percent of non-agency securitized mortgages have been modified.
On subprime loans included in residential mortgage-backed securities, the rate of modification is double.
At the same time, the re-default rate on modified loans has fallen.
Distressed CRE Loans Great Opportunity for Some
Some investors see a big opportunity in acquiring distressed commercial mortgages. But experience and deep pockets are a must in this market, and some buyers are already paying too much for such assets.
One Florida firm recently purchased a commercial real estate note for $161 million with the intention of taking over the property and re-developing it. But an offer to sell the note four months later at a $61 million profit was too much to resist.
However, one player notes that some buyers are beginning to pay more than justified based on fundamentals.
2-Year Free Ride for Majority of FL Borrowers in Foreclosure
More than half of Florida borrowers who are in foreclosure haven't made a payment in at least two years -- delaying the state's real estate recovery and driving up the cost of lending in the state.
By the time mortgage servicers do start the foreclosure process, it's nearly another two years before the property becomes a real-estate-owned asset.
In order to cope with the excessive time frames, servicers use a cash-for-keys strategy that cuts their losses.
Ally Slashing Correspondent Originations
Ally Financial Inc.'s mortgage unit had a $422 million loss before taxes during the third quarter.
Earnings reflected a $471 million loss from servicing asset valuation and hedge activities.
"In order to proactively address the changes in the mortgage industry as a whole, the company will take immediate action to reduce its focus on the correspondent mortgage channel," the report stated.
More Consumers Resort to Chapter 13 Bankruptcy
Nearly a third of consumer bankruptcy filings during October were chapter 13 cases.
That worked out to around 33,470 chapter 13 bankruptcies.
Compared to September, filings fell around 3 percent.
NEW CRE Lender Emerges
CIT Real Estate Finance is opening for business.
The company will finance commercial real estate.
Loans will be originated on properties in Boston, New York and Washington, D.C.
CMBS Delinquency Up, Spreads Down
Last month's 30-day delinquency rate on loans included in commercial mortgage-backed securities came in 21 basis points higher than in September.
It was the second month in a row that CMBS late payments were worse.
CMBS spreads improved in October after three months of deterioration.
Quicken Raises Originations
Quicken Loans Inc. reported that its home-loan production climbed 53 percent between the second and third quarters.
Business slipped, however, from the same period in 2010.
Home-equity conversion mortgage production at its reverse mortgage subsidiary was off 2 percent from the second quarter.
MetLife Grabs No. 1 Reverse Lender Spot
For the first time in at least three years, MetLife Bank became the biggest originator of home-equity conversion mortgages.
The elevated ranking came even as the company's monthly reverse mortgage volume slipped in October.
But MetLife dominated by default; the formerly top-two HECM lenders -- Wells Fargo Bank, N.A., and Bank of America, N.A. -- are getting out of the business.
Originations Improve at PHH, But Not Earnings
Third-quarter mortgage production at PHH Mortgage was 31 percent higher than the second quarter.
But losses at its servicing unit tripled.
At parent PHH Corp., losses quadrupled.
Net Branching at Issue in Allied's FHA Suspension
Allied Home Mortgage Corp. has been suspended by the Federal Housing Administration and has been sued by the government over allegations of fraud.
The company is accused of operating its offices as net branches in violation of FHA requirements.
"Allied's 'net branch' system enabled it to open more than 2,000 branches, far more than it could supervise and control," the lawsuit states.
Refis Back in Play?
As government data released last week indicated that the economy might be improving, rates shot up and refinance activity retreated.
Now, as Greece's prime minister is calling for a referendum on the bailout package from its European neighbors, that country's increased likelihood of default has rattled markets and driven down the 10-year Treasury yield.
The movement suggests that the 30-year mortgage could slip below 4 percent again -- potentially putting a refinance rally back in play.
Servicers Carrying Out Consent Order Requirements
Earlier this year, consent orders were issued against the country's biggest mortgage servicers.
The orders require the servicers to correct deficiencies that were summarized in the Interagency Review of Foreclosure Policies and Practices.
On Tuesday, the OCC said that the servicers had started mailing out letters to eligible borrowers that explain how to request a review of their case if they believe they suffered financial injury.
Agency Issuance Higher Despite Drop at Ginnie
Fixed-rate issuance of mortgage-backed securities by Fannie Mae, Freddie Mac and Ginnie Mae climbed 9 percent between September and October.
Both Fannie and Freddie saw an increase in securitizations.
But Ginnie's volume was down 6 percent.
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Mortgage Branches Open, Change Brands
Nov. 28, 2011
Mortgage banking firms are scooping up local branches at a healthy pace, and at least three of the branch recruiting operations are based in Houston. More than a thousand branch locations have been added to the national registry during the most-recent quarter.
As of the end of the third quarter, 18,466 branches were registered through the Nationwide Mortgage Licensing System & Registry. NMLS registrations grew from 17,387 as of June 30.
The most recent total worked out to an average of 1.1 registered branches per company. Including multiple jurisdictions that the branches were licensed in, total branch registrations stood at 28,322 at the end of the third quarter.
<MortgageDaily.com subscribers read full story>
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