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MortgageChronicle.com Archives
week ended Jan. 15, 2010
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Hotel Delinquency Soars
Delinquency on hotel loans that are part of commercial mortgage-backed securities jumped 160 basis points in December, Moody's Investors Service reported. The prior month, hotel delinquency was up 160 BPS. Overall CMBS delinquency was nearly a half percent worse.
Mod Production Leaps
The number of borrowers who have obtained a permanent loan modification under the Home Affordable Modification Program soared 112 percent in December, according to data provided by the U.S. Department of the Treasury. In addition, pending permanent modification are likely to push permanent modifications completed up another 70 percent. "Treasury is committed to working with servicers and borrowers to sustain this improved pace," Chief of Treasury's Homeownership Preservation Office Phyllis Caldwell said in a statement.
FHA Volume Higher But Headed Lower
The Federal Housing Administration reported that it endorsed 14 percent more loans last month than in November. Compared to December 2008, endorsements were up 28 percent. But new FHA applications tumbled by nearly a third -- indicating that January endorsements may head south.
Chase Results Portend Drop in Q4 Originations
Fourth-quarter 2009 originations at JPMorgan Chase & Co. fell 6 percent, according to earnings data. The total included home-equity loan production. During all of 2009, total production was 17 percent lower than in 2008.
Over $300 Billion in Alt-A RMBS Face Downgrade
Moody's Investors Service said that it placed more than 10,000 tranches of Alt-A residential mortgage-backed securities on review for possible downgrade. Rising delinquency, additional home-price declines and increasing unemployment were cited for the move. Cumulative losses realized on the pools have more than doubled.
Severe Nonprime Negative Equity
Nationally, around one-quarter of nonprime borrowers owed more on their homes than their properties were worth, according to a report released today by the Government Accountability Office. In the Las Vegas metropolitan area, around 94 percent of subprime borrowers are in a negative equity position. Not far behind is Phoenix, where 89 percent of its nonprime loans have a loan-to-value in excess of 100 percent.
Strong Q3 Forecast
U.S. residential originations will be $381 billion during this quarter, Freddie Mac projected today in its economic outlook. Fundings will fall from an estimated $400 billion in the fourth-quarter 2009. But production is expected to reach $520 billion by the third quarter.
Improvement in Mortgage Market
The average 30-year fixed-rate mortgage fell 3 basis points from the prior week in Freddie Mac's latest survey. The 15-year fixed-rate was down 5 BPS, Freddie said. In the Mortech-MortgageDaily.com Mortgage Market Index for the week ended Jan. 13, overall loan activity jumped 49 percent from the prior week.
New Warehouse, Correspondent Lender May Emergee
As the credit crisis was in full swing, warehouse lending capacity tumbled 85 percent -- from $200 billion in 2007 to around $20 billion in 2008, according to industry data. But just as warehouse lenders had exited the market in 2008, new players expanded or emerged in 2009. The latest to do so was MetLife Home Loans -- which told MortgageDaily.com that it is exploring entering warehouse lending and corresondent lending.
Foreclosures Resume Ascension
During December 2009, the number of U.S. properties that faced a foreclosure filing increased 14 percent from the prior month, RealtyTrac reported. The monthly increase followed four consecutive months of declines. For all of last year, filings were 21 percent higher than in 2008.
Subprime RMBS Warning
Moody's Investors Service revised projected cumulative losses on subprime mortgage-backed securities. The revised outlook prompted Moody's to place 5,598 subprime RMBS tranches on review for a possible downgrade. The ratings agency explained that delinquency on the remaining pool loans has climbed. In addition, Moody's expects home prices to continue falling.
VA Clarifies GFE
In response to the new form of Good Faith Estimate required under the revised Real Estate Settlement Procedures Act rule, the Department of Veterans Affairs has issued a circular with guidance on how VA origination fees should be disclosed. The new GFE consolidates the fees that all originators on the transaction will receive, other than those for the rate chosen, into a single fee called "Our Origination Charge." The circular explains how to disclose the fees on the GFE where the traditional "origination fee" plus the allowable fees taken together exceed one percent of the loan amount.
Chase Loses Overtime Appeal
A federal appeals court has ruled against JPMorgan Chase & Co. in a case brought by an employee. The employee worked as a mortgage loan underwriter. The court ruled that the underwriter does not qualify for the administrative exemption under the federal Fair Labor Standards Act, and thus is eligible for overtime pay.
$200 Million Mortgage Portfolio For Sale
A $196,327,037 portfolio is being offered by Clark Street Capital, a news release indicated. A Chicago-area financial institution is the seller. Among the property types securing the first mortgages are residential, condominium and commercial.
Nearly 9,000 Mortgage Hirings
Wells Fargo & Co. reported that it has hired 7,600 employees to support its loan modification efforts. A thousand jobs are expected to be created at loanDepot.com by 2013, a news release said. More than 60 employees were being added to Superior Bank's mortgage banking operation Alabama, an announcement indicated.
Jumbo Performance Sinks
Delinquency on securitized jumbo loans to borrowers with prime credit has risen 600 basis points over the past 12 months, Fitch Ratings reported. Loans are considered delinquent if they are at least 60 days past due. The ratings agency noted that for just the 2006 and 2007 vintages, the jumbo delinquency rate shot up past 12 percent.
15 FHA Firms Face Subpoenas
The U.S. Department of Housing and Urban Development inspector general issued subpoenas against 15 Federal Housing Administration mortgagees, a news release indicated. The actions were prompted by an alarming number of claims on loans originated by "a number of poor performing companies." The subpoenas, which were served to the companies' corporate offices, demand documents and data tied to loans for which claims were paid from the FHA mortgage insurance fund.
Fundings Forecasted to Fall
One- to four-unit production is projected to tumble by 44 percent between the fourth quarter and first quarter, the Mortgage Bankers Association reported. For all of this year, fundings are expected to fall 40 percent. The decline in estimated originations was accompanied by a decline in estimated refinance share.
Credit Scoring Insight
The Federal Trade Commission announced that the maximum that reporting agencies can charge consumers for an extra copy of their credit report has been lowered to $10.50. The move followed a letter last month to the FTC from 43 state attorneys general calling for tougher restrictions on firms that advertise free credit reports but actually require the purchase of other products or services, a news release from Illinois Attorney General Lisa Madigan said. FundingSuite enables originators to mine data from previously purchased credit reports, Cogent Road said in a statement.
Radian Expands Guidelines
Radian Guaranty Inc. has expanded its standard underwriting guidelines, according to a bulletin. Among the changes is mortgage insurance eligibility on prime rate-term refinances. The update applies to mortgage loans with full documentation.
Delinquency Worse, FL & NV Worst
During November, U.S. residential delinquency of at least 60 days rose 62 basis points from October, Lender Processing Services Inc. reported. Excluding foreclosures, Nevada's delinquency rate was higher than any other states. Looking at foreclosure inventory, Florida's rate exceed all other states.
Wave of I.O. Recasts Ahead
More than $47 billion in prime and Alt-A residential mortgage-backed securities are due to recast from an interest-only payment to a fully amortizing payment during the next 12 months, Fitch Ratings reported. Looking at the next 24 months, $80 billion in prime and Alt-A loans a scheduled to recast. In addition, $50 billion in subprime mortgages are set to recast.
Billion Dollar Player Among Recent Mergers
Alerus Financial, N.A., announced on the acquisition of Residential Mortgage Group. Residential Mortgage reportedly originated $720 million in first and second mortgages during 2009. Alerus Mortgage Solutions, which was already owned by Alerus, originated $130 million last year.
Bank M&A's Flowing
Horizon Bancorp announced a definitive agreement to acquire approximately $110 million in banking-related assets of Am Tru Inc. and subsidiary American Trust & Savings Bank. The Federal Reserve Board reported that 21 merger applications were recently received. AMCORE Bank, N.A., said on Jan. 5 that it has agreed to sell 12 Illinois branches to Midland States Bank.
The FHA Journal
A proposed rule setting minimum standards that states must meet to comply with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 has been published by the U.S. Department of Housing and Urban Development, a statement indicated. HUD also has issued a proposal for the implementation of the provisions of the Helping Families Save Their Homes Act of 2009. Borrowers in California, Nevada and Arizona can now use the FHA Streamlined Section 203(k) rehabilitation program in conjunction with two of the Federal Home Loan Bank of San Francisco's matching grant first-time homebuyer programs.
First Bank Failure of 2010
On Friday, the Washington Department of Financial Institutions announced the seizure of Horizon Bank. The state said inadequate capital and severe loan losses were responsible for the Bellingham, Wash.-based bank's failure. It was the first federally insured failure this year.
Market Improvement Prompts M.I. Update
An update was announced by United Guaranty in a bulletin. The mortgage insurance company said that more than 45 market are being removed form its declining market list. However, two markets are being added to the list.
FDIC Unloads $1 Billion in Loans
The Federal Deposit Insurance Corporation created a limited liability company to house distressed commercial mortgages from failed banks. More than 20 firms bid to acquire an interest in the LLC. The FDIC announced that Colony Capital Acquisitions LLC was the winning bidder.
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Consumer Group Takes on Broker YSPs
A consumer group is at odds with mortgage brokers over the use of yield spread premiums.
On Christmas Eve, the National Association of Mortgage Brokers said it issued a letter to the Federal Reserve Board asking for a delay in the implementation of a final rule that would prohibit broker compensation on closed-end mortgages based on the loan's terms or conditions.
The McLean, Va.-based trade group claims the rule doesn't fairly regulate all compensation for all types of mortgage originators.
MortgageDaily.com subscribers read full story
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Huge Broker Acquiring Wholesaler
A California mortgage broker with nearly $3 billion in annual originations announced a deal to acquire a wholesale lender.
The broker, First Priority Financial Corp., said in a news release yesterday that it reached an agreement to acquire privately held Austin Perry Financial Corp.
Terms of the transaction, which is expected to close by Dec. 31, weren't disclosed.
MortgageDaily.com subscribers read full story
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MD Firm Loses FHA Approval
The Federal Housing Administration announced the suspension of a Maryland mortgage broker over allegations of overcharging borrowers and failing to disclose yield spread premiums.
The agency said Equitable Trust Mortgage Corp. can no longer originate and underwrite FHA-insured mortgages.
The suspension will last a minimum of six months.
MortgageDaily.com subscribers read full story
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Firms Make Broker Compliance With HVCC Easier
As mortgage brokers continue to battle the Home Valuation Code of Conduct, one firm is addressing a concern by brokers about not being able to transfer appraisals. Another firm is providing a solution to communication between originators and appraisers.
The National Association of Mortgage Brokers issued a Nov. 6 statement highlighting a one-quarter increase in third-quarter property valuation fraud reported last month by Interthinx.
The brokers, who want the HVCC repealed, called the code "a failure."
MortgageDaily.com subscribers read full story
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Lower Fees for NAMB Members
A wholesale lender based in Washington is offering discounts to members of the National Association of Mortgage Brokers.
NAMB members will receive a $100 discount on NetMore America Inc.'s administration fees, an announcement today said.
Brokers must show that they are an active NAMB member or show that they join before Dec. 10.
MortgageDaily.com subscribers read full story
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