Mortgage Broker News Archives January 23, 2009 from MortgageChronicle.com

Mortgage Industry News Headlines

Summary of stories published by
| Mortgage Statistics

Last Updated Friday, January 23, 2009 06:53 PM CST

Lender Collapses Amid Litigation
1st Republic Mortgage Bankers has shut down. Calls to the headquarters are answered, "The office is now closed." A $5 million judgment was issued against the company this week by a warehouse lender that alleged loans it financed were also securing other financing. Another lawsuit was filed this week by a reverse mortgage lender that claimed funds escrowed by 1st Republic for reverse mortgage borrowers had been stolen by the company.
Nevada Mortgage Regulators On the Block
A draft being circulated by the mortgage industry indicates plans are underway in Nevada to combine the regulatory oversight of the Mortgage Lending Division with the Financial Institutions Division. "The effect of this merger will eliminate the commissioner responsible for managing, policing, and assisting only those who work in mortgage lending.," the draft said. The mortgage lending division was criticized in a recent state audit for failing to perform annual licensee examinations during 2007, among other things.
FTC Busts Broker for Dumping Files
The Federal Trade Commission has filed a complaint in federal court against Gregory Navone. The mortgage broker allegedly discarded hundreds of loan files with personal financial documents and private credit records in a public dumpster. Navone is accused of failing to implement and monitor policies and procedures for the handling of sensitive records by the company, its employees and its service providers.
New HUD Secretary Confirmed
The U.S. Senate announced that it confirmed Shaun L. S. Donovan as secretary of the U.S. Department of Housing and Urban Development. Donovan was originally nominated by President Obama during December. He replaces outgoing HUD Secretary Steven C. Preston.
Alt-A Outlook Ugly
Last year, serious delinquency on Alt-A loans backing securitizations from 2006 and 2007 deteriorated substantially, Moody's Investors Service reported. The poor performance reflected a deterioration in the underwriting requirements for the most recent Alt-A originations. "Average losses will generally be lower for loan securitizations made early in 2006 and become progressively higher moving through the two-year period," Moody's said.
Firm Hiring 150 Pittsburgh Employees
ServiceLink is holding a job fair to fill more than 150 available positions in the Pittsburgh area, a spokeswoman told MortgageDaily.com. Some of the openings are in information technology. Other availble positions include closing coordinators, reverse mortgage specialists and closing schedulers.
Business Deteriorates at Freddie
Purchases and issuances at Freddie Mac fell 20 percent last year from 2007. Fourth-quarter volume was down 13 percent from the third quarter. December residential delinquency was up 20 basis points from November. Compared to December 2007, delinquency was up 107 BPS.
Recruiter to Fill 500 Birmingham Positions
Addeco USA announced that it currently has demand for more than 500 Birmingham, Ala., mortgage professionals. Adecco describes the jobs as "great positions." The workforce solutions firm says that its services include temporary staffing, contract staffing and permanent recruitment.
Fifth Third Struggling
Fifth Third Bancorp reported that second-half 2008 originations fell 44 pecent from the first half. Last year's earnings were $3 billion worse than 2007. Meanwhile, mortgage delinquency jumped by 13 basis points during the fourth quarter.
Mortgage Market Outlook Improves
Freddie Mac has lowered its projection for the rate on 30-year fixed-rate mortgages by more than 50 basis points from its December projection. The secondary lender raised its forecast for residential fundings this year by $400 billion. Freddie's estimate of 2010 originations is a $125 billion increase over 2009.
BB&T Performance Holds Up
BB&T Corp. reported that fourth-quarter 2008 originations were down just 3 percent from the third quarter. However, originations were up 13 percent from a year earlier. Mortgage banking income more than doubled from a year earlier.
Poor Performance at SunTrust
Residential originations during 2008 were down $20 billion last year at SunTrust Banks Inc., earningddata indicated. Fourth-quarter fundings fell more than $5 billion from a year earlier. Delinquency of between 30 and 59 days jumped 90 basis points from the third-quarter 2008 to the fourth quarter.
Rates, Apps Deteriorate
Average 30-year fixed-rate 30-year mortgages were 16 basis points higher in Freddie Mac's Primary Mortgage Market Survey for the week ending Jan. 22. The average 15-year fixed-rate mortgage jumped 15 basis points from the previous week. Meanwhile, new loan applications declined 10 percent in the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending Jan. 16.
Citi Changes Chairman
Richard D. Parsons has been named chairman of the board at Citigroup Inc. He replaces current Citigroup Chairman Sir Win Bischoff. The handover is scheduled to take place on Feb. 23.
Rate Spread Reporting Rules Revised
The Federal Reserve Board has revised the Home Mortgage Disclosure Act. The revised rules are effective on Oct. 1, 2009, and must be followed for loan applications taken on or after that date. In addition, the rules apply to loans closed on or after Jan. 1, 2010 -- regardless of when the application was taken. The new rule modifies the method of determining when the rate spread for a mortgage loan must be reported under HMDA.
The Short Sale Directory
The U.S. Department of Housing and Urban Development issued a Mortgagee Letter indicating that delinquent FHA borrowers with negative equity might qualify for a pre-foreclosure sale. The Internal Revenue Service recently announced that, under certain circumstances, taxpayers with federal tax liens may request that the claim be discharged if the home is being sold for less than the mortgage balance. WayForward Realty is promoting short refinancings, where the original lender discounts the balance if another lenders refinances the loan.
Mortgages By the Book
Implementation of a final rule on the Real Estate Settlement Procedures Act has been delayed until April 16, a Federal Register notice last week said. Fannie Mae and Freddie Mac will be required to obtain loan-level identifiers, an announcement from their regulator -- the Federal Housing Finance Agency -- said. A press release earlier this month from the Comptroller of the Currency indicated the asset size exemption for reporting data under the Home Mortgage Disclosure Act has been raised to $39 million.
Wells Adding Hundreds of Mortgage Temps
As mortgage rates have tumbled recently, Wells Fargo Home Mortgage has seen the volume of U.S. loan application surge, a spokesman told MortgageDaily.com in a statement. The increased demand has the lender adding temporary employees."To better meet this demand and the needs of our customers, we are currently increasing our staffing levels with a number of temporary workers to process these applications in various locations around the country," the statement said.
U.S. Bancorp Production Better
U.S. Bancorp reported that fourth-quarter originations were $0.5 billion better than the third quarter. Compared to the fourth-quarter 2007, volume was up $0.4 billion. Full-year 2008 production jumped $7.1 billion from 2007.
Subprime Downgrades Abundant
Moody's Investors Service cited updated loss projections in its downgrade of certificates from several subprime issuances. Another round of subprime downgrades by Moody's was attributed to an analysis of underlying ratings on subprime RMBS that are guaranteed by financial guarantors. Standard & Poor's Ratings Services cited deterioration of available credit support and its loss expectations based the balance of delinquent loans in its class downgrades of dozens of issuances.
Volume at PA Firm Down Over $20 billion
Fourth-quarter commercial volume at HFF Inc. was down more than $2 billion from the third quarter, a press release indicated. Compared to the fourth-quarter 2007, activity was down $4 billion. Full-year 2008 volume was $24 billion lower than during all of 2007.
FDIC Settles Secondary Subprime Suit
A lawsuit against the Federal Deposit Insurance Corporation has been dismissed, according to a court filing. The plaintiff, Beal Bank, S.S.B., claimed that the FDIC refused to repurchase more than 1,000 defaulted subprime mortgages Beal acquired in 2001 and 2002. An FDIC spokesman told MortgageDaily.com in a statement that the agency agreed to pay $90 million to settle the lawsuit.
Huge Subprime Settlements at Merrill
The Ohio State Teachers' Retirement System has agreed to settle a lawsuit against Merrill Lynch & Co. Inc., according to a Securities and Exchange Commission filing. The settlement will cost Merrill nearly $0.5 billion. Another settlement with Merrill employees will cost nearly $0.1 billion. Both cases were primarily tied to subprime-related losses and disclosures.
Executives Out
Randall S. Kroszner will resign his membership on the Federal Reserve's Board of Governors, a copy of a letter to President Bush said. Thomas E. Hoaglin is out as chairman of Huntington Bancshares Inc. Richard I. Linhart is done as chairman, president and CEO of Millennium Bankshares Corp. John C. Dicus is being replaced as chairman of Capitol Federal Financial.
Modification Statistics and Programs
Fannie Mae and Freddie Mac servicers modified 13,450 loans during the third-quarter 2008, according to a foreclosure prevention report released from the Federal Housing Finance Agency. Chase said that it hopes to expand loan modifications from loans it owns to loans included in residential mortgage-backed securities that its services. Loan modification firms seeking new business can now look to LeadPoint.com for voice and data loan modification leads, a statement said. Just Price Solutions announced last week BestFIT, a service that rapidly analyzes potential loan modification solutions while minimizing re-defaults.
2 Banks First to Fail in '09
The Washington Department of Financial Institutions has shut down Bank of Clark County. Another failure was National Bank of Commerce, which was closed down by the Office of the Comptroller of the Currency. The Federal Deposit Insurance Corporation was named receiver of both failed institutions. The two banks were the first FDIC-insured failures of 2009.
Mortgage Job Losses Ease
Net job losses in the mortgage industry during the fourth quarter were down 24 from the third quarter, according to an analysis of mortgage job activity by MortgageDaily.com. Net job losses are the difference between layoffs and hirings. Compared to a year earlier, mortgage job losses were 54 percent lower. For all of 2008, real estate finance jobs losses fell 58 percent from 2007.
Another 800 Laid Off
JPMorgan Chase & Co. laid off more than 600 mortgage employees during the fourth quarter, a spokesman told MortgageDaily.com in a statement. A Bank of America Corp. spokesman confirmed to MortgageDaily.com that more than 100 layoffs reported to the State of Pennsylvania were part of 7,500 layoffs planned over a two-year period. HFF Inc. announced the elimination of more than 50 jobs, while Genworth Financial told MortgageDaily.com that nearly 50 of the 1,000 layoffs it announced last month were tied to mortgage insurance operations.
First Horizon Originations Evaporate
First Horizon National Corp. announced fourth-quarter originations of less than $0.1 billion. Volume plunged from more than $6 billion a year earlier. The decline reflected the sale of most of its mortgage operations to MetLife Bank, N.A., in August 2008.

This mortgage news summary reprinted with permission of

advertise | home | mortgage employment | mortgage brokers | wholesalers

mortgage newsletter