MortgageChronicle.com -- Free Mortgage Industry News Archives January 25, 2008

Mortgage Industry News Headlines

Summary of stories published by
| The Mortgage Graveyard

Last Updated Sunday, January 27, 2008 07:33 PM CST

Biggest Mortgage Lenders
Countrywide Financial Corp. maintained its standing as the No. 1 residential lender, with a reported $408.2 billion in residential production during 2007. But the mortgage behemoth saw a decline from 2006. Wells Fargo & Co. maintained its No. 2 spot, though the San Francisco-based giant also reported a drop in annual fundings.
FHA Limits Set
The single-family loan limit on FHA-insured loans has been established at $362,790 for 2008, the U.S. Department of Housing and Urban Development has announced. The limit is unchanged from last year. But the limit might increase based a proposed economic stimulus package announced by the Bush administration this week.
Citi Proceeds With Mortgage Layoffs
CitiMortgage advised about 100 mortgage servicing employees in Iowa this week that their positions would be eliminated by June, a spokeswoman told MortgageDaily.com. In addition, she said 80 Montana employees were also advised they would be laid off. The job cuts are part of 17,000 positions the New York-based company said it planned to eliminate in an announcement last April.
Residential Ratings Activity Contrasts Commercial
Fitch Ratings cited a deterioration of credit enhancement relative to future expected losses in negative actions taken on residential Alt-A transactions issued between 2004 and 2007. Moody's Investors Service downgraded classes from BankUnited Trust deals from 2005 backed by negatively amortizing adjustable-rate Alt-A loans based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. But defeasance of 15 percent and pay down of 15 percent since its last review led Fitch to upgrade two classes for $30.9 million of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates.
Depression Era Solution to Foreclosures
Senate Banking Committee Chairman Christopher J. Dodd is proposing the Federal Homeownership Preservation Corporation to purchase delinquent mortgages at steep discounts. Lenders and investors would take a "haircut" and the discounts would be passed to borrowers in the form of new, lower-balance, 30-year fixed-rate mortgages backed by the Federal Housing Administration or the government-sponsored enterprises. Dodd's proposal appears to be modeled after a Depression era program that, according to a recent report, was very successful.
Emergency Action May Boost Loan Limits
An economic stimulus package was announced by President Bush. House Speaker Nancy Pelosi is calling for the conforming limit on government sponsored enterprises purchases to be raised to $729,750 for one year, according to a statement from her office. She is also proposing that FHA loans limits be raised permanently to $729,750.
The Foreclosure Ledger
Foreclosure deeds in Massachusetts numbered 7,653 last year, The Warren Group reported. The level of activity is 148 percent higher than in 2006. Mortgage default notices filed against California borrowers totaled 81,550 last quarter -- jumping 12 percent from the linked quarter and 115 percent annually to the highest level in more than 15 years, DataQuick Information Systems announced.
Mixed Results for Freddie
December purchases and issuances amounted to $55 billion, according to Freddie Mac's monthly summary. Purchases rose from the prior month and the prior year. However, fourth quarter volume fell from the third quarter. Meanwhile, delinquency rose for the sixth consecutive month.
National City Production, Earnings Tank
Mortgage originations at National City Corp. totaled $8 billion in the fourth quarter, according to its earnings report. Volume tumbled from the prior quarter and the prior year. Fourth quarter mortgage banking earnings were a loss of $445 million, deteriorating significantly from the loss in the previous quarter and profit during the fourth quarter 2006.
15-Year Falls Below 5%
The average 15-year fixed rate was 4.95%, according to Freddie Mac's survey of 125 thrifts, commercial banks and mortgage lenders for the week ending Jan. 24. The 15-year was down more than one-quarter percent from the prior week, the data indicated. The 30-year average was down 21 basis points in the latest survey.
New Wachovia Mortgage President
David Pope was named president of Wachovia Mortgage Corp., according to an announcement. He has been with the Wachovia organization for 20 years, the company said. Previously, Pope was chief operating officer for the mortgage and retail credit group.
States Modify, Clarify New Legislation
Lawmakers in Maine and the state's governor have tweaked an anti-predatory lending law for fear it would prevent some qualified and legitimate borrowers from receiving loans. Concerns about over-aggressive legislation enacted in the wake of the credit crunch have been raised in Minnesota and Massachusetts as well. Clarity was also used in defining a new mortgage broker licensing requirement in Colorado. "Individuals who perform purely administrative or clerical tasks do not fall within the licensing requirement," Colorado regulators said.
Technology Advances Go On
Lenders will be able to extend their ability to predict and manage credit risk effectively when Fair Isaac Risk Management Suite becomes available next quarter, Fair Isaac Corp. announced. MRG Document Technologies reported it updated its document preparation systems to enable originators to automatically upload their own documents to MRG for inclusion in document packages. LogicEase Solutions Inc. said it received a patent from the U.S. Patent and Trademark Office for its "System and Method For Automated Compliance With Loan Legislation."
Texas Branches Acquired
Southwest Mortgage Corp. announced Tuesday that it has acquired 15 branches. In addition, it has hired 114 branch employees. The acquired branches are located throughout Texas, Louisiana, Washington and Utah.
Retail Tops Commercial Deals
Carl M. Freeman Cos. received from Principal Global Investors a $67 million loan with a 6.5 percent fixed-rate, for Cabin John Shopping Center and Cabin John Mall in Potomac, Md. Retail and office property Magnolia Square secured a 12-year first mortgage of $22.0 million, with a 30-year amortization schedule, provided by The Guardian Life Insurance Company of America. An $8.0 million loan was secured by the Mill Towne Center, an retail facility of 82,187 square feet in Tempe, Ariz., NorthMarq Capital Inc. said.
Production Improves at SunTrust
Fourth quarter mortgage originations were $13 billion, SunTrust Banks Inc. announced. Fundings rose from the prior period, the earnings data indicated. During all of 2007, mortgage production also climbed from the prior year.
FHA Expansion Sought For Mfg Homes
In a press briefing this week, the Manufactured Housing Institute called for an expansion of loan programs for manufactured homes. The group is focused on improving capital flow to manufactured housing by modernizing Federal Housing Administration's Title I and Title II programs. The institue said it expects the FHA Manufactured Housing Loan Modernization Act to become law.
Positive Ratings Actions Emerge
Fitch Ratings announced it removed 87 classes of residential mortgage-backed securities from Rating Watch Negative. The move was taken because the classes are supported by a financial guaranty policy provided by MBIA. The removal followed a $1 billion capital infusion at MBIA.
Worse Wachovia Performance
Fourth quarter residential loan production was $18.5 billion, according to Wachovia Corp. Fundings fell from the prior period and a year earlier. Net earnings were just a fraction of the level during the third quarter.
10-Year Yield Tumbles
The yield on the 10-year Treasuy fell to 3.53 percent this week, and had fallen even lower at some points. The price on the benchmark Treasury was 25/32 higher. The 10-year rally was sparked by a world-wide selloff in stocks and a massive reduction of 75 BPS in the federal funds rate target announced by the Federal Open Market Committee.
BoA Originations Off, Earnings Tumble
Fourth quarter home lending volume was $44.1 billion, Bank of America Corp. reported. Production was off from the the prior quarter and the prior year. Meanwhile, earnings fell by $5 billion from a year earlier.
Nearly 150 Mortgage Operations Collapse in 2007
During 2007, 147 mortgage units were shut down, according to the Mortgage Graveyard. Companies tracked primarily included those that employed at least 50 people. Among last year's most notable failures were American Home Mortgage Investment, Mortgage Lenders Network USA and New Century Financial.
Some Good News Emerges
GMAC LLC expects Residential Capital LLC to meet its financial covenants at yearend 2007, according to a filing with the Securities and Exchange Commission. GMAC additionally said in the filing that it remains adequately capitalized and expects to be profitable in 2008. The Federal Reserve Board said it approved for eBANK Corp., based in Tokyo, Japan, to establish a representative office in San Francisco, Calif.
2 Wholesalers Scale Back Offerings
Eagle Funding stopped accepting applications on stand alone second mortgages, according to a message sent to brokers. Simultaneous seconds had to close with a first mortgage from Eagle. Flagstar Bank notified brokers it stopped taking new registrations Thursday for its jumbo fixed- and adjustable-rate mortgage program.
The Net Branch Journal
Allied Home Mortgage Capital Corp. announced it added three branches to its network since December. Another net branch reporting growth is First Houston Mortgage, as it will add 100 positions this year after having hired 135 last year. Primary Residential Mortgage Inc. announced it funded $1.74 billion in loans through about 160 branches in 2007, off 13 percent from the previous year.

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