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Mortgage Industry News Headlines
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Last Updated Friday, February 16, 2007 04:59 PM CST
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World Decline Goes On
World Savings Bank originated $2.7 billion in loans during January, according to an announcement by parent Wachovia Corp. The month was off from December's level, the statement said. Mortgage volume has fallen for five consecutive months at World.
More Mortgage Mergers
C-BASS, announced that it will acquire Fieldstone Investment Corp. That deal is expected to close during the second quarter. New York Mortgage Trust Inc. said Tribeca Lending Corp. agreed to buy substantially all the assets of New York Mortgage Co.'s wholesale lending arm.
Reverse Programs Improved
Live Well Financial Inc. announced it is offering a Home Equity Conversion Mortgage that allows seniors more proceeds at a lower rate of interest than the standard HECM 150 Monthly product. Financial Freedom announced a new reverse program which offers a lower interest rate. Wells Fargo Home Mortgage said it recently cut the margin it charges on its variable rate HECM.
Pay Per Funding Leads
PPF Network announced it has set up a lead management system online that tracks the leads it provides. An annual membership fee enables access to the Web-based leads manager. A flat fee is then charged per closed loan.
Bankruptcy Lawsuits
A U.S. Bankruptcy Court judge ruled that the trustee for bankrupt American Business Financial Services can proceed with lawsuits against Greenwich Capital and Ocwen Financial Corp. The trustee accused Greenwich of fraud for receiving nearly $16 million in fees for providing credit to American Business Financial during the bankruptcy. In an unrelated case, Washington Mutual, National City, Countrywide Home Loans and several other lenders are facing court scrutiny over the loans they made to NJ Affordable Homes.
Delinquencies to Peak in 2008
Mortgage delinquency in the fourth quarter last year was 2.51%, according to a report by CreditForecast.com. The period was worse the the third quarter, the report said. Delinquency is expected to rise to a peak at this time next year, the analysts added.
Rates, Apps Up
The 30-year fixed-rate mortgage average came in at 6.30%, Freddie Mac said in its latest survey. The 30-year was up slightly from a week earlier, Freddie said. Mortgage application volume increased about 2 percent during the week ending Feb. 9, according to the Mortgage Bankers Association.
Subprime Outlook Extremely Challenging
In a letter to her clients, a Goldman Sachs analyst took a posture similar to other recent reports, comments from industry executives and others in calling the situation "bleak." She wrote that the outlook for subprime credit quality remains "extremely challenging." She put the blame squarely on what she describes as lax underwriting standards by lenders chasing new business.
Subprime Layoffs at WaMu
Washington Mutual Inc. informed 250 people on Tuesday their positions were cut, a spokeswoman told MortgageDaily.com. The affected employees support Long Beach Mortgage at four sites, Riley said. WaMu will redirect the volume to four other fulfillment sites.
Wholesalers Stop Seconds
Accredited Home Lenders will no longer make stated-income loans with high combined loan-to-values to borrowers with low credit scores, the company's chief operating officer told analysts Wednesday. Accredited will also curtail its first-time homebuyer programs. Fremont General Corp. sent e-mails to its brokers Monday telling them that it would no longer make second lien loans, a Fremont spokesperson told MortgageDaily.com.
Downey Declines Again
Downey Financial Corp. originated $0.38 billion in January, according to an announcement Wednesday. Production was down from December, according to the data. Fundings were also down from January 2006.
Bankers' Secondary Activity Off
America's Community Bankers announced its 14th annual Real Estate Lending Survey. The volume of loans sold into the secondary market dropped, the survey said. For the third consecutive year, banks sold more of their home loans to aggregators or conduits than to the government-sponsored enterprises, according to the announcement.
Accredited Activity, Earnings Deteriorate
Accredited Home Lenders Holding Co. originated $3.9 billion in mortgages in the fourth quarter 2006, according to its earnings announcement Wednesday. Fundings were off from the prior quarter. Accredited reported a net loss of $37.8 million for the period.
Wachovia Assembles Option ARMY
Wachovia Corp. is training financial specialists to sell option adjustable-rate mortgages, the company's CEO said at a recent investor conference reviewed by MortgageDaily.com. Option ARMs had been the specialty of Golden West, which Wachovia acquired last year. Wachovia expects to add nearly 1,000 option-ARM salespeople this year.
Wholesale Closings Enhanced
On Monday, IndyMac Bank announced, iDraw. The new enhancement gives brokers the ability to order, view and draw their own closing documents on line. The Impac Companies recently announced several user-friendly enhancements to its Impac Direct Access System for Lending web-based automated underwriting and pricing engine.
ResMAE Files for Bankruptcy
ResMAE Mortgage Corp. has filed voluntarily filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code, according to an announcement Tuesday. The company also announced it reached an agreement with an investment banker to buy some of its assets. That agreement calls for the creation of a post-petition warehouse line.
NY Lender Adding 100 Jobs
Refinance.com announced it will be moving to a new location in New York City. The new diggs will accommodate over 80 new loan officers. The lender has already started recruiting for the new office, which will open doors by the end of March, Refinance.com's chariman and CEO told MortgageDaily.com.
State Licensee Actions
Hawaii's Department of Commerce and Consumer Affairs announced an action it took in November against Star Financial LLC. In Georgia regulators have issued cease and desist orders to three brokers and one brokerage firm. A final order from the Georgia Department of Banking and Finance has been issued to PFS Mortgage.
NV Foreclosure Rate Highest
Nevada held the title of the state with the highest foreclosure rate during January, RealtyTrac announced Monday. The state had one new foreclosure filing for every 362 households, the statement said. Nevada had a month-to-month increase of 8 percent.
Fraud Fuels Early Defaults
Seven out of 10 early payment defaults can be linked to a significant misrepresentation on the original loan application, BasePoint Analytic said in an announcement Monday. The company reportedly analyzed over 16,000 loans. The study further found that loans with egregious misrepresentations were up to 5 times more likely to default in the first six months.
Jumbo Delinquency Elevates
During November, serious delinquency on securitized prime jumbo mortgage loans was 0.323 percent, Moody's Investor Service announced Monday. The figure was worse than the same month a year earlier, Moody's said. The ratings agency did say, however, that the rate of increase slowed.
Mortgage M&A
MGIC Investment Corp. will buy Radian Group Inc., according to an announcement. U.S. Bancorp announced that it has completed acquiring United Financial Corp.Bank. Mercantile Bancorp Inc. agreed to purchase HNB Financial Services Inc., according to a press release. Marshall & Ilsley Corp. Friday said it had agreed to acquire Excel Bank Corp.
Shareholders Sue New Century
Lawsuits seeking class action status have been filed against New Century Financial Corp., according to announcements from multiple law firms. The subprime giant is accused of violating of federal securities laws. But the company told MortgageDaily.com its denies allegations of wrongdoing.
Subprime Default Analysis
Credit Suisse released a report on rising subprime mortgage default rates. The 23-page report reveals that one-quarter of subprime mortgage deals issued last year have hit a delinquency rate of at least 8 percent at the end of 2006. The market's weakness has prompted originators to tighten their underwriting guidelines.
Warehouse Margin Calls
Merrill Lynch is performing margin calls on subprime originators it has been funding through its warehouse lending group. The move was driven by the "financial situation" some of its clients are in. "That is a normal part of our business that happens when the financial factors require it," he said.
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Copyright © 2005 MortgageDaily.com
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| State Licensee Actions
Several states have taken a range of actions against individual and company mortgage licensees.
In Georgia regulators have issued cease and desist orders to three brokers and one brokerage firm.
A final order from the Georgia Department of Banking and Finance has been issued to PFS Mortgage of Alpharetta, Ga.
MortgageDaily.com subscribers read full story
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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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