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Mortgage Industry News Headlines
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Last Updated Friday, February 08, 2008 06:30 PM CST
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Cashout Transaction Volume Tumbles
Cashouts represented 81 percent of all refinances during the fourth quarter, according to Freddie Mac's latest quarterly refinance review. By dollar volume, fourth quarter cashouts were $37.8 billion, down from $58.3 billion the prior quarter, the report said. The volume was less than half the level a year earlier.
Wholesaler Hiring, Growing
Millennium Mortgage Corp. announced Monday its wholesale division is embarking on an expansion in the West. "We see an absolute need in this market for service oriented bankers," the company's president and chief executive officer said in the release. Millennium plans to add approximately 150 new account executives during the first six months of this year, a spokeswoman told MortgageDaily.com.
Foreclosure Prevention Data, Resources
The State Foreclosure Prevention Working Group released a report indicating that almost one-third of hybrid adjustable-rate mortgages are becoming delinquent before payment resets. The findings indicate it is not the resets themselves that are driving foreclosures. A blogger claims to have prevented 18 foreclosures in the six months since launching his Web site. Freddie Mac created a Spanish version of its foreclosure prevention video published on YouTube.com.
Servicer Sued Over Fees, Hazard Policies
A class action lawsuit was filed against Homecomings Financial LLC on behalf of borrowers who claim they were forced to pay illegal fees, according to an announcement from the law firms of Mehri & Skalet and Sprenger & Lang. Among the initial plaintiffs are borrowers in five states. Homecomings also allegedly force placed homeowners insurance even when some properties were already insured.
MBS Downgrades Spread
Standard & Poor's Ratings Services said it lowered ratings on five classes from seven prime jumbo residential mortgage-backed securities transactions issued between 2001 and 2004. Fitch Ratings Services downgraded $511.0 million in classes from two second lien Credit-Based Asset Servicing & Securitization mortgage pass-through certificates issued in 2006 and 2007. S&P announced downgrades to 94 tranches for nearly $9.0 billion from 17 cash flow and hybrid CDO transactions, reflecting credit deterioration and recent negative rating actions on subprime RMBS.
Regulators Call for Tighter GSE Oversight
The director of the Office of Federal Housing Enterprise Oversight testified before a Senate committee about his concerns over Fannie Mae and Freddie Mac. He called on the legislators to give his agency more authority -- the same powers granted to banking regulators. He suggested OFHEO should have more than conservatorship authority; it should have receivership authority. Among the most critical reforms recommended by the director was the flexibility to adjust capital requirements, as the current risk-based capital requirement is failing.
Firms Manage Earnings, Liquidity
Wachovia Corp. announced that it has priced a $3.5 billion preferred stock offering. A $476 million impairment charge related to goodwill and intangible assets at LendingTree led to a fourth quarter operating loss of $508 million, the company's parent announced. Franklin Credit Management Corp. warned about a further delay in filing its Form 10-Q with the Securities and Exchange Commission for the third quarter ended Sept. 30, 2007, because it is still trying to determine its allowance for loan losses.
Purchase Apps Up
The 30-year fixed rate average was 5.7 percent for the week ending Feb. 7, according to Freddie Mac's survey of 125 thrifts, commercial banks and mortgage lenders. The 30-year was just slightly lower than a week earlier but was well below the level a year earlier. A 10 percent increase in purchase applications pushed overall applications higher, the Mortgage Bankers Association reported in its survey for the week ending Feb. 1.
Employee Claims Fired for Reporting Fraud
Alan Archambault has filed a lawsuit against his former employer, SunTrust Banks. The former mortgage loan coordinator claims he was fired after reporting mortgage fraud activity to his supervisors. The reason SunTrust gave for Archambault's firing, according to his attorney, was performance related. The bank allegedly claimed his loan originations were too low.
Federal Licensing Bill Proposed
U.S. Sen. Dianne Feinstein (D-Calif.) and Sen. Mel Martinez (R-Fla) announced their introduction of the Secure and Fair Enforcement in Mortgage Licensing Act. The bill is also dubbed the SAFE Mortgage Licensing Act. The proposed legislation is similar to H.R. 3012 already introduced in the House.
Bank Regulator Praises Brokers
"Mortgage brokers have made significant contributions to help fulfill the aspirations of people to own homes," the director of the Office of Thrift Supervision said at a mortgage broker conference. "The majority of these mortgages were made responsibly," he said. The regulator commended brokers for supporting licensing and registration requirements in pending legislation.
Jumbo Activity Stabilizes
Securitizations of jumbo loans were $35.0 billion during the third quarter, Standard & Poor's Ratings Services reported. Voume edged down slightly from the second quarter. The modest decrease in the issuance of jumbo residential-backed mortgage securities followed a 26 percent second quarter drop from the first quarter, S&P said.
MTA Continues Lower
The Monthly Treasury Average stood at 4.33 percent during January, according to data from the U.S. Treasury. The index was lower than December and below the level a year earlier. MTA has fallen month since April 2007, the data indicated.
Technology Integrates
Experian and Clayton Holdings have agreed to provide analytics and outsourcing services to the mortgage and securitization industries, an announcement said. Fiserv Inc. announced the integration of its easyLENDER loan origination solution into its Cleartouch account processing and Customer Relationship Management solution, enabling customer service representatives to begin the loan application process. Through a new strategic alliance, customers of Fidelity National Information Services Inc. will have access to the online premium bill pay and presentment services of Digital Insight, the companies announced.
MBS Downgrades Accelerate
Fitch Ratings downgraded $737 million in classes from several subprime Structured Asset Securities Corp. issuances from 2005 and 2006 due to a deterioration in the relationship between credit enhancement and expected losses. Moody's Investors Service took negative ratings actions on a number of subprime deals because of credit enhancement, overcollateralization and excess spread relative to expected losses. Standard & Poor's Ratings Services reported recent revisions to its assumptions for RMBS ratings will impact CDOs backed by Alt-A, subprime, prime, HEL and tax lien RMBS issued during or after the fourth quarter of 2005.
Net Branch Companies Tout Growth
American Pacific Mortgage announced it added 24 branches to its network last year. Primary Residential Mortgage Inc. announced 69 branches joined the company last year. Allied Home Mortgage Capital Corp. issued news releases indicating the addition of branches in three states.
Foreclosure Prevention Resources Continue Expanding
The Bush Administration has proposed around $0.1 billion for foreclosure counseling services at 2,300 housing counseling agencies, the U.S. Department of Housing and Urban Development announced. North Carolina officials announced $300,000 would be provided to reimburse home counseling agencies that help borrowers avoid foreclosures. Ohio will provide $2 million for foreclosure counseling to 24 organizations through the Foreclosure Prevention Housing Counseling Program.
ResCap Production Tumbles
U.S. mortgage production was $16 billion during the fourth quarter at Residential Capital LLC, according to an earnings report from its parent. Fundings tumbled from the prior quarter and the prior year. For all of 2007, originations were down $68 billion.
Servicers Short on Modifications
Pooling and servicing agreements allow enough flexibility for mortgage servicers to engage in loan modifications without liability to investors, the chairman of the Federal Deposit Insurance Corporation testified to Senators last week. In fact, warned the chairman, whose background includes a law degree, the opposite could be the case, according to a transcript of her prepared testimony provided by the Mortgage Bankers Association. Servicers who do nothing to deal with upcoming mortgage rate resets that would be unaffordable to borrowers, and instead follow traditional processes that lead to foreclosures, she pointed out, "probably run a greater risk of legal liability to investors for their failure to take steps to limit losses to the loan pool as a whole."
Biggest Commercial Servicers
The Mortgage Bankers Association released its Year-end Survey of Commercial/Multifamily Mortgage Servicing Volumes. Wachovia Securities ranked No. 1. Wachovia serviced 30,731 loans for $407.9 billion as primary and master servicer as of Dec. 31.
Corporate Struggle Goes On
Capstead Mortgage Corp. announced the successful closing of an 8 million share public offering that netted the Dallas-based company $118 million. CenturyPoint Mortgage has been launched as an online lending division of First Century Bank, N.A., according to an announcement last week. The acquisition of Countrywide Financial Corp. by Bank of America Corp. is being challenged by SRM Global Fund.
Banks Offer Gloomy Outlook
During the past three months, 55 percent of banks tightened prime mortgage standards, according to the January 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices by the Federal Reserve. Demand for prime mortgages has dropped at 60 percent of domestic banks, the report said. "Between about 70 percent and 80 percent of domestic respondents expect the quality of their prime, nontraditional, and subprime residential mortgage loans, as well as of their revolving home equity loans, to deteriorate in 2008," according to the Fed.
Commercial Originations Off
Commercial production dropped 16 percent during the fourth quarter from a year earlier, the Mortgage Bankers Association reported. Office property financing tumbled 73 percent, according to the report. Industrial property loans were down 50 percent, while mortgages on retail properties dropped 38 percent and multifamily volume was off 7 percent.
Groups Debate Foreclosure Solutions
The Senate Committee on Banking, Housing and Urban Affairs held hearings Thursday on foreclosure prevention. A basic mortgage that would be offered to everyone unless they choose to opt-out and a basic mortgage disclosure form that would be provided to all borrowers were among the proposals presented. Some speakers went back to federal programs initiated in the 1970s and even the 1930s, drawing on these past efforts to deal with housing finance crises to suggest similar undertakings today, according to transcripts of prepared statements released by the Mortgage Bankers Association.
Fraud Exceeds $4 Billion in 2007
During 2007, an estimated $4,004,127,260 in mortgage fraud was identified nationwide by FraudBlogger.com. The activity brought the FraudBlogger Index to 6550. The dollar volume soared from $1,593,572,894 in 2006, when the index stood at 5020.
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.
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Copyright © 2007 MortgageDaily.com
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Bank Regulator Praises Brokers
Most mortgage brokers have acted responsibly in originating loans, a banking regulator said today. And while many parties -- including borrowers, Realtors, investment bankers and originators -- are responsible for the current chaos, inaccurate reports of failing companies have only made things worse.
Brokers accounted for $1.7 trillion of 2006 originations, John M. Reich, director of the Office of Thrift Supervision, said today. He said broker share of originations that year was 58 percent.
He made his comments at the National Association of Mortgage Brokers' Legislative & Regulatory Conference in Washington, D.C., according to a transcript of his prepared testimony released by OTS.
MortgageDaily.com subscribers read full story
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Net Branch Companies Tout Growth
As firms collapsed and more than 100,000 employees left the mortgage industry last year, three net branch companies are reporting growth.
Since the beginning of 2007, MortgageDaily.com has tracked the demise of more than 150 mortgage firms -- including several net branch companies.
In addition, approximately 114,600 people employed in mortgage lending exited the industry last year, according to data from the Bureau of Labor Statistics.
MortgageDaily.com subscribers read full story
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Mass. Exodus
A new law in Massachusetts that took effect on Jan. 2, which limits fees and yield spread compensation and imposes other restrictions on mortgage broker originations, has at least 15 wholesale lenders modifying or curtailing operations and has brokers scrambling.
But the reasons why lenders, which include Wells Fargo and IndyMac, are taking these steps and the impact on mortgage originations and employment is in dispute.
"It's going to curtail the availability of credit for all mortgage lending -- subprime, prime, refinances, equity loans," Paul Richman, vice president for state government affairs at the Mortgage Bankers Association, told MortgageDaily.com.
MortgageDaily.com subscribers read full story
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State Mortgage Licensees Tumble
Mortgage regulators in several states have reported a significant drop in the number of mortgage broker licensees.
Ohio has seen its mortgage licensees drop by more than one-third.
Licensed mortgage brokers, which numbered 2,239 on Jan. 1, 2007, have declined to 1,611 as of Tuesday, Dennis Ginty, a spokesman with the Ohio Department of Commerce, told MortgageDaily.com in an e-mail Thursday.
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WaMu Employee Admits to Bribes
A former loan coordinator at Washington Mutual F.A.'s subprime unit was bribed with $100,000 in payments from a mortgage broker to help process fraudulent loan packages. He also was paid by in-house loan officers to fund mortgages with fraud.
John Ngo pleaded guilty Monday to lying under oath to a grand jury in September about whether he had received money from a mortgage broker while he was a senior loan coordinator at WaMu subsidiary Long Beach Mortgage, according to an announcement from U.S. Attorney McGregor W. Scott.
Ngo, who worked at Long Beach from September 2001 through May 2006, was responsible for verifying information from packages submitted by brokers and inside originators.
MortgageDaily.com subscribers read full story
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