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

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Last Updated Friday, December 10, 2004 09:30 AM CST

Fraud Notes Cost Fannie $7.5 Million
Fannie Mae announced it entered into a consent order with the Department of Justice in which the mortgage giant agreed to forfeit $7.5 million. The settlement stems from fraudulent mortgages purchased from First Beneficial Mortgage Corp. When Fannie learned the loans were phony, it demanded First Beneficial repurchase the notes. The same false notes were then sold to Ginnie Mae, and those proceeds were used to repay Fannie. But Fannie, a government sponsored company, neglected to notify Ginnie, a government owned company, that the loans were fraud.

Rates Slip, But Heading Higher
The average 30-year fixed-rate mortgage came in at 5.71%, spiraling down from last week by 10 basis points, according to Freddie Mac's latest survey. In its December outlook, Freddie predicted the 30-year will average 6% next quarter. Mortgage application activity edged up 3% from the previous week, according to the Mortgage Bankers Association's latest survey

Mortgage Co. at Center of High Profile Lawsuit
The Second U.S. Circuit Court of Appeals in New York has ruled that the 2002 Sarbanes-Oxley Act cannot be applied to actions before it was enacted into law. The ruling impacts a long-running legal battle involving Enterprise Mortgage Acceptance Co., a company that was sued in June of 2002 for alleged securities fraud by a litany of investors who purchased interests in pools of loans

Delinquency Down, But Subprime Soars
The seasonally adjusted delinquency rate for one-to-four unit residential mortgage loans was 4.41%, according to the Mortgage Bankers Association's third quarter National Delinquency Survey. From July to September, the delinquency rate for subprime loans reportedly soared 35 BPS.
Countrywide Originations Up
Countrywide Financial Corp. reported November volume of $31 billion, up from October. "Overall production levels increased over last month driven by higher refinance activity," said the company's COO in an announcement.

$4 Billion Mfg Housing Portfolio Trades Hands
Vanderbilt Mortgage and Finance Inc. is expected to acquire a $4 billion portfolio of manufactured housing loans from Chase Home Finance, the two companies said in a joint press release Tuesday. Terms of the agreement, which is expected to close by Dec. 31, were not disclosed.

Bigger Share of Cashout Proceeds Going to Investments
NASD announced it issued a notice to members in which it reminded firms of their obligation to perform a suitability analysis and recommended additional factors to consider when evaluating investors. "Turning equity into cash to make financial investments isn't an appropriate strategy for many investors," said NASDs vice chairman in the announcement. "That strategy poses significant and unique risks, and failure to understand those risks could cost them their biggest asset -- their home."

Fitch Ups First Horizon Servicer Ratings
Fitch Ratings announced it bumped up First Horizon Home Loan Corp.'s residential primary servicer rating on the Alt-A and home equity product to 'RPS2'. Fitch's actions were based on First Horizon's experienced management team, among other things.

NovaStar Helps Delinquent Borrowers Find Jobs
Several hundred unemployed NovaStar Mortgage Inc. borrowers have sought help through a job counseling and placement service the company launched for borrowers who are delinquent on their loans. Underemployed borrowers -- those which don't earn enough to maintain their payments -- are also eligible for the program.

Amerisave Adding Origination, Production Employees
Amerisave will quadruple its staff throughout 2005, according to a company spokesman. The online lender strategically pushed into the subprime market about eight months ago and plans to widen its presence in this sector.

Fundings Hold Steady at New Century
New Century Financial Corp. announced November fundings of $3.6 billion were unchanged from the previous month's total. The subprime lender remains positive it will achieve its annual goal.

Famous Figure Fights Fraud
At the recent annual Mortgage Bankers Association convention and expo in San Francisco, Frank W. Abagnale, a former master forger who now works for the FBI and is author and subject of the hit movie Catch Me If You Can, informed industry executives how to prevent their companies from being victim of the national epidemic of check fraud and protect themselves, employees and customers from identity theft. "I am a strong believer that most of these crimes are easily preventive," Abagnale said. "So I've always portrayed to tell my audience how not to be a victim...once you lose your money, you will never get your money back."

2 Brokers Murdered
A 37-year-old model who had recently started his own mortgage brokerage in Chicago apparently died of stab wounds to his chest while in southwest Florida on a business trip to consummate a deal. His wallet and cell phone were not taken, but police refused to confirm if his money and credit cards were missing. In an apparently unrelated incident, a New York mortgage broker was killed execution style, according to the New York Post.

Mortgage Employees, Evangelist Among Players in Ponzi Scheme
What do two California mortgage workers, a homeowner and a traveling evangelist have in common? The four have been arrested in what the Los Angeles County Sheriff's Department has termed a Ponzi scheme. Police say the four stand accused of embezzling nearly $400,000 from 24 people.

Wheel and Deal
This week's mortgage deals include the possible sale of Independence Community Bank Corp. of Brooklyn, N.Y.; the possible sale of Massachusetts-based Northeast Mortgage Bank; and the creation of new mortgage unit by Weststar Financial Services Corp.

Robinson Vs Neiman Marcus
Seven years ago, the owner of a mortgage business school in Fort Lauderdale was accused of stealing a pair of $80 Cole Haan shoes from a Last Call Outlet store in Broward County operated by The Neiman Marcus Group. After a recent civil trial, a Broward County jury awarded the owner $2.6 million and found the store negligent for failing to adequately train employees and falsely imprisoning him, court records show.

Founder of Mortgage Unit Sues Bank for $28 Mil Over Firing
The founder and former CEO of a Massachusetts mortgage company and its Internet unit is seeking $28 million in compensation from the bank that fired him from his job overseeing the mortgage companies. But the bank issued a written statement saying he was fired over his performance and that the bank wanted to head in a new direction with its mortgage division.

Mortgage Jobs Jump
According to the Bureau of Labor Statistics, mortgage jobs in October totaled 465,500, up from the prior month and the prior year. In its announcement the Bureau, a division of the U.S. Department of Labor, said unemployment was unchanged at 5.4%

Fixed Rates Rise, ARMs Off
The average 30http://www.mortgagedaily.comt 5.81%, jumped from a week ago, according to Freddie Mac's latest survey, while the 1-year Treasury-indexed ARM averaged 4.19%, down from last week. The Thanksgiving holiday aided a 6% slowdown in overall mortgage applications, the Mortgage Bankers Association reported.

Mortgage Banker Inks CSU Sports Complex Deal
California State University, Stanislaus recently announced that it would rename its arena and sports fields after DreamLife Financial. As part of a five-year agreement for the naming rights, Dhttp://www.mortgagedaily.com is contributing $1 million to be used for athletic scholarships, equipment, and program operations, a press release said.

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