Mortgage Broker News Archives February 1, 2008 from MortgageChronicle.com

Mortgage Industry News Headlines

Summary of stories published by
| The Mortgage Graveyard

Last Updated Sunday, February 03, 2008 04:34 PM CST

Negative Ratings Actions on Over $139 Billion MBS
Fitch Ratings announced adjustments to its subprime loss projections as a result of marked deteriorating performance over the last several months, according to an announcement. As a result, Fitch said it placed 2,972 classes for $139 billion on Rating Watch Negative. On the commercial side, Fitch said it placed the $17.8 million class L of GCCFC Series 2006-FL4 on Rating Watch Negative because of delinquent underlying loans. Moody's Investors Service reported it placed eight classes for $126.6 million Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Securities Trust, Series 2007-TFL2, on review for possible downgrade due a default on one of the underlying loans.
Offices & Apartment Deals Arranged
Cunningham Heights Apartments in Queens Village, N.Y., served as collateral for a $58.8 million first mortgage financing, NorthMarq Capital Inc. announced. Over in Austin, Texas, two multifamily properties secured $35.4 million in 5.83 percent fixed-rate, permanent refinancing of seven years with interest-only payments, Capmark Finance Inc. said. M&T provided $36.0 million in first-mortgage construction financing and TriSail Funding Corp. funded $9.6 million in mezzanine debt for the Hamaker Court Medical Office Building in Fairfax, Va., Capmark announced.
Beazer Mortgage Done
The parent of Beazer Mortgage Corp. announced it would immediately discontinue mortgage origination services through the unit. The announcement indicated an agreement was reached with Countrywide Financial Corp. to refer prospective borrowers to dedicated Countrywide loan counselors. A FORM 8-K filed with the Securities and Exchange Commission in March indicated the company was subpoenaed by the U.S. Attorney's Office in the Western District of North Carolina.
COFI Down Again
The Cost of Funds Index was 4.07 percent during December, according to the Federal Home Loan Bank of San Francisco. COFI was down from November and from December 2006, according to the data. The index has fallen each month since September.
Mortgage Jobs Continue Contraction
There were 369,000 people working in mortgage-related jobs during December, the Bureau of Labor Statistics reported. Mortgage employment was down by more than 5,000 from November, the data indicated. Compared to a year earlier, jobs were down by more than 100,000.
Countrywide Accused of Firing Whistleblower
A former regional vice president who managed a division of Countrywide KB Home Loans has filed a lawsuit charging he was dismissed for failing to meet loan approval deadlines that would have required that he engage in illegal and fraudulent practices. He claims he had unsuccessfully alerted Countrywide executives to the practices. In a statement sent to MortgageDaily.com, Countrywide said it had investigated each of the plaintiff's claims "and found no merit to his accusations."
Prudential Volume Up 32%
Prudential Mortgage Capital Co. originated $14.5 billion during 2007, according to an announcement. The mortgage lender specializes in commercial mortgage loans. Volume was up nearly one-third from 2006, Prudential said.
M.I. Activity Worsens
During December, 143,602 mortgage insurance policies were written, the Mortgage Insurance Companies of America reported. The number of policies was lower than November and December 2006. Primary insurance defaults were up for the fifth consecutive month, MICA reported.
HUD Terminates Georgia Lender
The U.S. Department of Housing and Urban Development terminated the origination approval agreement of Putnam Mortgage & Finance, LLC. The affected location is the company's headquarters, according to the notice. As a result of the termination, the company can no longer originate and approve loans insured by the Federal Housing Administration.
Refis Strong, Rates Worse
The average 30-year fixed rate was 5.7 percent, according to Freddie Mac's weekly survey announced today. The 30-year climbed from a week earlier, though is was better than a year earlier. MBA said total loan applications, driven by a surge in refinance activity, were 8% higher than the prior week.
BoA Names New Chief for Mortgage Unit
Bank of America Corp. announced David Sambol will lead the combined consumer mortgage business. Sambol will assume the position after the purchase of Countrywide is completed. Sambol is currently the president and chief operating officer of Countrywide.
Subprime Performance Deteriorates
Standard & Poor's Ratings Services warned it took negative ratings actions on 6,389 classes from subprime residential mortgage-backed securities issued in 2006 and 2007. The agency said the moves follow a recent announcement that it further revised RMBS assumptions that reflect the expectation of further defaults and losses on the underlying mortgage loans and the consequent reduction of credit support. Moody's Investors Service said it expects lifetime losses on 2006 subprime deals to be between 14 percent and 18 percent.
Pain Felt Domestically and Abroad
Securities fraud is the basis for a class action suit against National City Corp. and some of its officers and directors commenced by purchasers of the company's common stock. Japan's Sumitomo Trust & Bank Co.'s provisions related to investments in overseas credit products contributed to a 53 percent downturn in net income. UBS anticipates a net loss of over $11.4 billion in the fourth quarter as results will reflect a $12 billion hit on positions related to the U.S. subprime mortgage market and $2 billion on other positions associated to U.S. residential mortgages, the Swiss bank said in an earnings pre-announcement.
Mixed Results at Flagstar
Flagstar Bancorp Inc. reported nearly $7 billion in fourth quarter residential originations. Volume edged lower from the third quarter but increased from a year earlier. Flagstar said it had a net loss in the latest quarter, though less than the loss in the third quarter but worse than the profit a year earlier.
Lenders Expand Tech Services
A+ Mortgage Inc. recently subscribed to SearchMyLoan.com to automate its loan searches and gain access to over 12,500 lending products and programs. Sun West Mortgage touted its new, flagship reverse loan origination system, ReverseSoft, empowers originators to increase revenue by enabling them to capture new reverse mortgage business from conventional, non-reverse loan customers. Questsoft announced it integrated its Compliance EAGLE into Calyx Software's Point and Point Data Server, a move that combines all components of mortgage lending compliance into a single, automated system for Point users.
60,000 Reports of Fraud Likely in 2008
During the fiscal first quarter of 2008, the Federal Bureau of Investigation received 15,000 Suspicious Activity Reports, an FBI spokesman told MortgageDaily.com. He said if the pace continues, there is the potential they will reach 60,000. That would be about 20 times the level in 2003.
Mortgage Spam is Back
Spam about mortgage refinancing represented about one-in-ten of all Spam sent during the past week, Commtouch Software Ltd. announced. The figures were way higher than in the fourth quarter. The increase in Spam activity is the result of falling mortgages rates.
Layoffs, Consolidations Continue
B.F. Saul Mortgage has closed three California wholesale lending offices, resulting in dozens of layoffs. Residential Mortgage Capital, based in California, has closed down. And Paragon Home Lending has lost mortgage licenses and apparently shut down.
Rough Outlook for CMBS Servicers
For the first time since the birth of the U.S. CMBS market in the early 1990s, commercial mortgage-backed securities servicer capabilities will undergo rigorous testing this year, Fitch Ratings announced. This is because this is the first significant capital-markets-driven stress servicers have experienced. Currently low delinquencies of 31 basis points are expected to double in the next year. "Due to the current liquidity environment, it will no longer be as easy to dispose of real estate owned assets," Fitch said.
Groups Attack Mortgage Bankers
Ocwen Financial, reportedly the fourth-largest U.S. subprime servicer, is being targeted by the Association for Community Organization for Reform Now, which engaged in national and overseas protests, with the goal of demanding that the servicer adopt a set of best practices principles that will modify loans to allow borrowers willing to make payments to remain in their homes. A group of subprime borrowers in Minnesota filed a class action suit against Mortgage Electronic Registration Systems Inc. for allegedly skipping legally required steps in the foreclosure process, the Center for Responsible Lending announced. The center on Monday reported the Treasury Department's plan involving voluntary streamlined loan modifications will prevent only 118,200 foreclosures -- about 3 percent of all the outstanding adjustable-rate subprime mortgages. The Mortgage Bankers Association testified before Congress to ignore the center's data on loan modification and expressed discontent with the bankruptcy reform.
Eliminating Mortgage Fraud Losses
BasePoint Analytics LLC released a White Paper that discusses how mortgage companies can reduce losses resulting from mortgage fraud. Mortgage bankers need to identify misrepresentations as "fraud," instead of just ignoring them and approving the loan anyway. The company called on originators to focus more on the role of underwriting in approving good loans while avoiding unacceptable risk. In addition, a process should be established to handle and, when relevant, challenge repurchase requests.
Lenders Launched, Closed & Merged
Florida Bank Group Inc. announced it hired an executive to lead its residential mortgage efforts under the name Florida Bank Mortgage. The Office of the Comptroller of the Currency close down Douglass National Bank. The Federal Reserve Board has approved a merger between The PNC Financial Services Group Inc. and Sterling Financial Corp.
Fannie Volume, Delinquency Rise
New business acquisitions were $73 billion during December, Fannie Mae reported. Volume was higher than the prior month and the prior year. Residential loans past due at least three months jump in November from the prior month and a year earlier, according to the government sponsored housing enterprise.
Foreclosure Filings Continue Climbing
During December, there were 215,749 foreclosure filings nationally, according to data released by RealtyTrac. Filings increased from the prior month and a year earlier. Fourth quarter foreclosures were 642,150 filings, also rising from the prior period and prior year.
Bank United Slashes Wholesale Jobs
Bank United Financial Corp. announced a consolidation of its wholesale lending operation. The company cut its wholesale lending staff by 45 percent, according to an investor presentation for the quarter ended Dec. 31. The presentation indicated that four out of its nine broker sales offices will be closed down.
First Horizon to Cut Construction Lending Jobs
First Horizon National Corp. announced it would discontinue its national home builder and commercial real estate lending through its First Horizon Construction Lending offices. The move will result in the elimination of 160 positions, an executive for the company told MortgageDaily.com. The jobs will be eliminated over a 12 month period.
Enhancements to LOS, CRM, AU & Other Tech
The latest custom version of the Encompass Mortgage Management Solution offers a complete end-to-end business solution designed for small- to mid-size retail and correspondent lenders, and brokers looking to become bankers. ShoreTel Inc. announced its new application links its call management and control capabilities with immediate access to comprehensive customer data. DocuTech Corp. touted its release of ConformX® 3.10, enabling users to automatically manage their rules for prepayment penalties.
Commercial Mortgage Tracker
The Lake Morton Apartments in Lakeland, Fla., collateralized an $0.8 million loan from StanCorp Mortgage Investors. Tuffy's Auto Center secured a 10-year loan of $0.9 million from Skymar Capital Corp. at a permanent fixed rate of 6.375 percent, 25-year amortization and 70 percent LTV, NorthMarq Capital Inc. announced. The 9600 Office Building in Coral Springs, Fla., secured a $1.0 million loan at a permanent fixed rate of 6.29 percent for 10 years and 25-year amortization, NorthMarq said.
Branch Manager Funds Gone
A former Phoenix branch manager of First Magnus Financial Corp. filed a lawsuit against the bankrupt company. She claimed that a branch agreement identified First Magnus, doing business as Great Southwest, as her employer, clearly making her an employee who was entitled to more than $358,000 in branch profits. But in response, First Magnus she is now due nothing because no money was ever placed in an escrow or trust account as required under a settlement agreement it signed on Feb. 28, 2007, following arbitration with the American Arbitration Association.
Losses Undermine Mortgage Market
E*Trade Financial Corp. reported a fourth quarter net loss of $1.7 billion, which was deeply impacted by the $2.2 billion pre-tax loss on a previously announced sale of a $3 billion asset-backed securities portfolio. Fitch Ratings announced it lowered the Long-term Issuer Default Ratings of IndyMac Bancorp Inc., reflecting the expectation that IndyMac' near-term return to profitability will be challenging as changes in mortgage industry dynamics, once viewed as temporary, become more permanent. Freddie Mac is being accused of causing up to $27.2 million in losses to the Ohio Public Employees Retirement Fund by failing to disclose it was heavily investing in subprime mortgages but not protecting itself from the "billion-dollar" risks it incurred, the state's attorney general announced.
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.

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