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Mortgage Industry News Headlines
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Last Updated Friday, February 02, 2007 02:58 PM CST
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Weak Mortgage Outlook
The Mortgage Bankers Association has released the report indicating that mortgage originations will fall in 2007 compared to 2006. The decrease was attributed to declining home sales and diminishing refinance activity. "They should decline by an additional 4 percent to $2.29 trillion in 2008 as a result of a drop in refi originations of 10 percent," the group said in the report.
Brokers Better for Subprime Borrowers
A joint study from economists at George Washington and Oklahoma State Universities indicated that subprime borrowers who use mortgage brokers pay less than when obtaining their loans from mortgage bankers. "The results indicate that broker-originated mortgages are not more costly and generally less costly to the borrower than lender-originated mortgages after holding other loan terms and borrower characteristics constant," the economists reported. But a Mortgage Bankers Association economist told MortgageDaily.com that he didn't think these results would be consistent study after study.
Mortgage Jobs Decline
Jobs in real estate finance totaled 494,700 in December, the Bureau of Labor Statistics reported Friday. The latest number is lower than the prior month, the data indicate. Mortgage jobs are also below the level a year earlier.
Bulk Deals Drive M.I. Surge
Private mortgage insurers wrote $27.3 billion in new one- to four-family conventional mortgage policies during December, the Mortgage Insurance Companies of America announced. Policies written soared from the prior month's activity. December's volume was the highest of any month during 2006.
Rates Jump Higher
The average 30-year fixed-rate mortgage came in at 6.34%, according to Freddie Mac's latest weekly survey. The 30-year was higher than the prior week and the prior year, Freddie reported. The 15-year fixed-rate average was also higher.
COFI, LIBOR Higher
During December, the average Cost of Funds Index was 4.396%, according to the Federal Home Loan Bank of San Francisco. Meanwhile, the 6-month London Interbank Offered Rate was 5.4014% in January, Fannie Mae reported. Both indexes were higher than the prior months.
Most Expensive States
Bankrate.com announced the results of its annual closing costs survey. The closing costs for a 30-year fixed-rate $200,000 single-family loan with a 20 percent downpayment for borrowers with good credit were compared. Closing costs were reportedly the highest of all states in New York.
Former Exec Sues Ameriquest
A former senior executive has filed a lawsuit against Ameriquest Capital Corp. He claims the subprime giant owes him $30 million it agreed to pay him when he signed on as a consultant and consented to a five-year non compete clause. But an attorney for the company told MortgageDaily.com that the "complaint is a ridiculous work of fiction."
Chase Dumps Subprime Loans
JP Morgan Chase & Co.'s chief executive officer told investors and analysts this week that the subprime sector will continue to have problems. He said the company has sold off most of its subprime loans. He also said the company is still selling $4.5 billion of subprime loans.
Warehouse Lender Collects $65 Million
State Bank of Long Island has paid $65 million to settle a lawsuit with a warehouse lender. The lawsuit was filed by HSA Residential Mortgage Services of Texas. HSA alleged State Bank aided a now defunct mortgage banker in a Ponzi scheme.
Flagstar Firms
Residential loan volume was $5.1 billion during the fourth quarter, Flagstar Bancorp Inc. announced. Originations rose from the previous quarter, the report said. But fundings were lower than the fourth quarter 2005, according to the data.
Subprime Storm Isn't Over
Countrywide Financial's co-founder and CEO talked to analysts in an earnings conference call reviewed by MortgageDaily.com. He said subprime lenders are operating in a challenging environment. "We've got another eight, nine, 10, 12 months of headwinds," he told the analysts.
RMBS Report Card
This year will be the second year of declining overall issuance of residential mortgage-backed securities, Moody's Investors Service said in an RMBS market annual review and outlook report. Mortgage pools issued in recent quarters have exhibited some deteriorating performance trends relative to older vintages, Moody's noted. Deterioration was most pronounced in subprime pools.
FTC Touts '06 Mortgage Actions
The Federal Trade Commission outlined the mortgage-related enforcement actions it engaged in last year in a report to the Federal Reserve Board. Amongst the mortgage-related activities the commission engaged in was the ongoing litigation of Chase Financial Funding. Another FTC initiative was a daylong workshop focused on issues arising from the growth of "nontraditional" or "alternative" mortgages.
Licenses Lost
Georgia regulators have issued cease and desist orders to four mortgage brokers. None could be reached for comment by MortgageDaily.com. Several alleged offenses were given by the department in its announcements, including making false statements to lenders.
Execs Play Musical Chairs
On Thursday, William Ott will be the interim president and chief executive officer of the Federal Home Loan Bank of Atlanta, according to an announcement. At FNB Corp., William B. Littreal was reportedly hired as the chief financial officer. North Central Bancshares Inc. appointed Paul F. Bognanno as president and CEO.
AVMs Reduce Fraud
FirstClose recently announced it now offers guaranteed automation value models. Essentially, an insurance carrier insures the value, a spokesman told MortgageDaily.com. eAppraiseIt also offers insured AVMs based on client-specific conditions, a spokesman told MortgageDaily.com.
Servicing Jobs Trimmed
AMCORE Financial Inc. recently said sell a servicing portfolio. The transaction will impact 50 workers, an AMCORE spokeswoman told MortgageDaily.com. The portfolio sale is expected to be completed by the end of the third quarter, she said.
Foreclosure Data Mixed
Nearly 1.26 million foreclosures filings were reported nationwide last year, according to RealtyTrac. The figure is up significantly from 2005, the report indicates. But RealtyTrac's data differs from competitor ForeclosureS.com, which reported that 2006's foreclosure filings amounted to about a quarter million fewer.
Fannie Business Off
Fourth quarter business volume was $155.7 billion, Fannie Mae reported. The period's level was lower than the third quarter, the Washington, D.C.-based company said. The quarter was also down from a year earlier.
BoA, Countrywide Deal
Bank of America and Countrywide Financial Corp. have held discussions about an alliance, the Financial Times reported Friday. The potential deal could be one reason why Countrywide's chief postponed his retirement last year. Neither company would comment on the reports of discussions between the two.
Record IndyMac Volume
Fourth quarter mortgage production was about $26 billion, according to IndyMac Bancorp's latest earnings report. The latest quarter was an improvement over the third quarter, the announcement indicated. IndyMac said the fourth quarter represented an all-time high in fundings.
Mortgage Fraud Index Worsens
CoreLogic announced the results from its quarterly publication about mortgage risk. The company said it tracks risk in 379 metropolitan markets. Fraud and collateral risk rose for the ninth consecutive quarter, CoreLogic noted.
Wachovia Closes Wholesaler
Wachovia Corp. has decided to shutter EquiBanc Mortgage Corp., according to an announcement Friday on the unit's Web site. The decision was made after "an intensive strategic review of its mortgage business," the statment said. The move leaves brokers in 25 states with one less wholesaler.
TIL Errors Lead to Class Action
A federal judge recently ruled that Chevy Chase Bank violated the federal Truth in Lending Act. A Wisconsin couple claimed they believed the payments and the interest rate on their option ARM mortgage from the bank were fixed for five years. The judge ruled in favor of the couple and granted class action status to the case.
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Copyright © 2005 MortgageDaily.com
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| Brokers Better for Subprime Borrowers
Subprime borrowers who use mortgage brokers pay less than when obtaining their mortgage from a mortgage banker, according to a joint study from economists at George Washington and Oklahoma State Universities. But a mortgage banking group questions the consistency of the findings.
This was the conclusion from data analyzed from the third quarter of 1995 through the end of 2003 from the subprime mortgage subsidiaries of 10 large financial institutions, the report said.
"The results indicate that broker-originated mortgages are not more costly and generally less costly to the borrower than lender-originated mortgages after holding other loan terms and borrower characteristics constant" the economists reported. "They are consistent with hypotheses that brokers may be more efficient than lenders in originating loans and may be better able to match borrowers' and lenders' reservation prices."
MortgageDaily.com subscribers read full story
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| Licenses Lost
Georgia regulators have issued cease and desist orders to four mortgage brokers.
None could be reached for comment by MortgageDaily.com and the department only releases limited information on cease and desist orders.
Several alleged offenses were given by the department in its announcements, including making false statements to lenders, employing felons, making illegal payments to employees, not keeping proper records, conducting business with unlicensed brokers and lenders and making false statements to the state.
MortgageDaily.com subscribers read full text of story
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Broker Named to Fed Council
A mortgage broker is one of 10 new members of a Federal Reserve Board council.
The Fed appointed Joseph Falk, the legislative chair of the National Association of Mortgage Brokers, to its Consumer Advisory Council, according to an announcement today.
Falk will reportedly serve a three-year term on the council, which meets three times a year in Washington, D.C., and advises the board on important policy issues related to consumer financial services under the Consumer Credit Protection Act.
MortgageDaily.com subscribers read full story
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CA Broker Busy Growing
A mortgage broker is looking to double its staff of high producers and support personnel in California next year.
Business is booming at Twin Capital Mortgage and the employee base must expand to keep the momentum rolling, company Chief Executive Officer Darius Mirshahzadeh told MortgageDaily.com.
In the past seven months alone, the San Francisco brokerage originated $220 million of the year's expected total of $300 million -- surpassing the total of $150 million in all of all of 2005, according to the executive.
MortgageDaily.com subscribers read full story
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