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Mortgage Industry News Headlines
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Last Updated Friday, February 22, 2008 06:26 PM CST
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2 Wholesalers Close Shop
Lydian Mortgage is apparently abandoning its wholesale channel. The company has indicated on several of its Web pages that it will now direct its efforts to its retail channel. OMG Wholesale Lending suspended operations on Feb. 20, according to a message reviewed by MortgageDaily.com.
Firm Touts Growth
Advantix Lending originated $320 million in loans last year, its owner told MortgageDaily.com. But fundings have surged over the past several months, he said. The California-based firm projects 2008 production of $400 million.
Indiana Layoffs at Citi
Citigroup will close a center located in Indiana, a spokeswoman told MortgageDaily.com. The closing will result in nearly 200 layoffs, she confirmed. The facility prints bill statements for a number of Citi units, including CitiMortgage.
Foreclosure Prevention Advances
Automated loan workout services are being offered to mortgage lenders and servicers by iMortgage Services LLC. Maryland's governor promoted the Bridge to Hope Loan Program, which will provide gap loans with no interest to Maryland borrowers who are a few months delinquent on their mortgage. Mortgage Help Now, which said it is comprised of a group of mortgage executives and lawyers, announced it will use its industry contacts to help delinquent borrowers find an alternative to foreclosure.
Freddie Boosts Delivery Fees
Freddie Mac will charge a 30 basis points post-settlement delivery fee on loans with loan-to-values at 80 percent or higher and indicator scores under 740, a bulletin said. The secondary lender said the fee is effective June 1. "In response to the continued deterioration of credit quality and declining home values in most areas of the country, we are further expanding our use of risk-based pricing and increasing our post-settlement delivery fee rates for certain Mortgages with higher risk," Freddie stated.
FHA Limits May Rise in March
A new higher limit for loans insured by the Federal Housing Administration could become effective next month. A spokesman for the U.S. Department of Housing and Urban Development told MortgageDaily.com borrowers can apply after the agency publishes the temporary maximum loan amounts. HUD expects to publish the new limits in early March.
Leads for FHA Loans in Demand
Adchemy Inc. announced leads for loans insured by the Federal Housing Administration. Touchstone Communications reported a recent shift in business from subprime to government mortgage lead activity. The Texas-based company claims its leads have resulted in more than $1 billion in loan fundings.
Over $7 Billion RMBS Downgraded
Changes to Fitch Ratings subprime loss forecasting assumptions led to the downgrading of around $1.2 billion in classes of four Residential Asset Securities Corp. securitizations from 2006. In addition, Fitch's changes left $0.7 billion in classes of People's Choice mortgage pass-through certificates from 2006 downgraded. Among the largest downgrades as a result of Fitch's subprime updates were $5.0 billion in classes of Long Beach mortgage pass-through certificates issued in 2006.
ARMs Attractive as Fixed Rates Soar
The average 30-year fixed-rate mortgage was 6.04 percent, Freddie Mac reported. The 30-year was up 0.32 percent from the prior week. Meanwhile, as the spread between fixed rates and adjustable rates continued to widen, so did the share of adjustable-rate mortgages in the Mortgage Bankers Association's weekly survey.
Freddie Purchases at Lowest Level in Years
Freddie Mac purchases and issuances were $32 billion during January, according to a monthly operational summary. Business tumbled from $55 billion in December. The monthly volume level is the lowest since at least 2001.
Michigan Firm Sees Success
Gold Star Mortgage Financial Group has been opening new offices and adding staff. The Ann Arbor, Mich.-based company's chief executive officer told MortgageDaily.com it expects to originate at least $1 billion this year. Part of their success comes from its pricing, and another important factor is its reputation for getting deals done.
Automated Operations
Plaza Home Mortgage Inc. will utilize Loan-Score Decisioning 's automated underwriting solution, product and pricing engine, a press release said last week. SPENDonLIFE.com is giving away free Web site calculators. Wolters Kluwer Financial Services announced its Wiz Sentri enables institutions to identify and track internal fraud and fraudulent trends and behavior in real-time.
Community Bankers See Acquisitions
The American Bankers Association released a survey of community bankers Tuesday. ABA said 37 percent of the respondents plan to acquire another bank during the next five years. In contrast, just 7 percent expect to be acquired.
Fund Established for Displaced CA Workers
The U.S. Department of Labor announce a $5.6 million fund to help former employees of California mortgage companies. The grant was awarded to the California Employment Development Department. The fund will be used for employment and training assistance.
Thrifts in the Red
Fourth quarter earnings were a $5.2 billion loss for the thrift industry, the Office of Thrift Supervision announced. The loss, which reversed from an $0.7 billion profit in the prior period, was a record. In the fourth quarter 2006, thrifts earned $3.1 billion.
Foreclosed Borrowers Destroy Homes
People who lose their homes to foreclosure and in a pique of revenge strip the homes before the bank takes them back. Florida experts estimate such borderline looting occurs in roughly 20 percent of bank repossessions. Banks sometimes file hazard insurance claims to cover the damage, particularly if a missing air conditioner or hot water heater has left the place uninhabitable. The more expensive the repair, the more likely the bank and insurer will hound the former owner, one expert said. Usually the homes are sold "as is" and discounted accordingly.
Executive and Earnings Shakeups
MBIA Inc. ousted its chairman and CEO Gary Dunton, according to a press release. KeyCorp. warned in a Securities and Exchange Commission filing it will likely take a $65 million after-tax first quarter charge on its commercial real estate mortgage loans held for sale. Radian Group Inc. reported a net fourth quarter loss of $0.6 billion. Credit Suisse said Tuesday repricing of asset-backed investments will lead to a first quarter charge of $2.9 billion.
Accredited CEO Out
James A. Konrath has retired from Accredited Home Lenders Holding Co., according to an announcement. In addition to his role as co-founder, Konrath was chairman and chief executive officer. The retirement takes effect immediately, Accredited said.
Reducing Foreclosures
Operation HOPE logged 7,263 telephone calls to its hotline within 24 hours of its announced launch, an announcement said. Wells Fargo will donate $1.5 million to support foreclosure counseling, a statement Friday said. The board of The New York Times Neediest Cases Fund recently announced the launch of the Subprime Neediest Program with a $1 million contribution.
$17 Billion in Subprime RMBS Downgraded
Fitch Ratings announced downgrades to $5.0 billion in classes from five Fremont Home Loan Trust mortgage pass-through certificate transactions issued in 2006 based on deterioration in the relationship between credit enhancement and expected losses, continued poor loan performance and home price weakness. Securitized Asset Backed Receivables LLC Trust deals from 2006 had $6.2 billion in classes downgraded and $2.4 billion placed on watch because of Fitch's updates. And the updated assumptions left $2.2 billion in classes from three Societe Generale Mortgage Securities Trust mortgage pass-through certificate transactions downgraded.
Biggest Online Mortgage Advertisers
NexTag Inc. spent $65.5 million online during December, according to Nielsen Online's Top 10 Advertisers by Estimated Spending for January. NexTag's level of spending made it No. 1 on the list for last month. NexTag sells mortgage leads to originators.
Credit Reporting Liability
A current loan was erroneously reported by Fifth Third Bank as two separate loans, each "being in arrears and with 27 late payments," according to a lawsuit filed by Mark S. Blythe. He claims that in addition to the inccorred payment histories, loans that had been paid off and closed were showing as open. In his complaint against Fifth Third Bank, Blythe alleges the bank "has caused plaintiff to lose all of the goodwill and profitability in excess of $80,000 which plaintiff would have received had the slander of his credit by defendant not occurred."
Broker Sued for $6 Million in Fraud
1st Mariner Bank filed a lawsuit against East West Mortgage Company Inc. 1st Mariner, a wholesale lender, alleges employees and agents of East West provided it with fraudulent loan applications. Nearly $6 million in loans went into default soon after the closings as a result of the mortgage fraud, according to the complaint.
Wholesalers Tout Subprime, Hard Money & YSPs
Accredited Home Lenders is promoting 80 percent loan-to-value for borrowers with 30-day mortgage lates and for self-employed borrowers with stated-income. Charter Bank Specialty Lending Group said it recently closed a transaction with a seller second where the borrower put 5 percent down and had a 498 credit score. Wachovia Bank said its yield spread premiums go as high as three points.
Countrywide Delinquency, Production Worse
Residential production was $22 billion during January, Countrywide Financial Corp. announced. Volume fell from $37 billion a year earlier. Delinquency rose for the 10th consecutive month to end January at 7.47 percent.
Over $30 Billion in Subprime Downgrades
Changes Fitch Ratings made to its subprime loss forecasting assumptions that better capture deteriorating performance from residential mortgage-backed securities pools issued from 2005 to 2006 affected over $30 billion in classes of subprime securities. Among the actions were downgrades to $1.4 billion in classes from four NovaStar subprime deals issued in 2006, with $0.5 billion placed on Rating Watch Negative. Fitch downgraded $11.3 billion in classes from 16 Morgan Stanley transactions from 2006 as result of its updates and put $4.0 billion on Rating Watch Negative.
Nearly 300 Subprime Lawsuits in 2007
Last year, 278 subprime-related cases were filed in federal courts, according to a study released by Navigant Consulting Inc. During the first half of 2007, 97 cases were filed, Navigant said. But the figure jumped to 181 lawsuits in the second half.
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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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