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Mortgage Headlines
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Last Updated Friday, February 25, 2005 11:16 AM CST
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Mortgage Bankers Discuss Offshore Servicing
Offshoring was the topic of one panel session held this week at the Mortgage Bankers Association's Servicing Conference & Expo. Some 40% of U.S.-based companies have or plan to have offshore operations, according to estimates, and the mortgage industry is just catching up with that trend. Companies that choose offshoring can reap considerable savings. An engineer in India, for example, can be paid $10,000 a year, where an equally qualified U.S. counterpart typically earns $75,000 annually, often with better benefits.
Most Admired Mortgage Companies
The mortgage-related entity named within the ranking of the nation's overall top 10 "most admired" was Berkshire Hathaway in seventh place, down five spots from last year's list, FORTUNE said. The holding company stepped into the mobile home sector with its August 2003 purchase of manufacturer Clayton Homes, whose finance units are Vanderbilt Mortgage and Finance and 21st Century Corp.
Rates May Fall
The average for the 30-year fixed-rate mortgage increased seven basis points within the past week to 5.69%, according to Freddie Mac's latest survey. "The Consumer Price Index...posted a less than expected rise in inflation, causing bond yields to fall," commented Freddie chief economist. "This means that next week's survey results may retreat to prior levels of a week or two ago."
AEs Push Option One Production Higher
Option One Mortgage Corp.'s originations of $8.2 billion during its fiscal third quarter -- which ended Jan. 31, 2005 -- soared from the previous quarter, according to the latest financial supplement report of parent company H&R Block. The upturn for the third quarter was attributed to an increase in the number of account executives.
TV News Reporter Turns Originator
Mike Boguslawski has entered the mortgage business vowing to keep the industry honest by becoming the biggest borrower advocate yet. The former news reporter told MortgageDaily.com that while he was working as a consumer advocate reporter in Los Angeles, he publicly challenged the governor to solve a gasoline problem for the people. Shortly thereafter, he was let go.
Freddie Business Off
Last month's new business purchases of $35.9 billion dropped from December, according to Freddie Mac's latest monthly volume summary. The total was barely changed from January 2004.
Fannie Ads Slashed, More Accounting Woes
Fannie Mae's regulator approved its proposed capital restoration plan, which includes cost-cutting efforts such as its plan to "sharply curtail its corporate advertising campaign and use of political consultants," Fannie announced this week. "OFHEO indicated that it...has identified policies that it believes appear to be inconsistent with generally accepted accounting principles," the company said.
Fannie, Freddie Forced to Fight Fraud
The Office of Federal Housing Enterprise Oversight has proposed a regulation that would require Fannie Mae and Freddie Mac to report to the agency fraud or possible fraud in a timely fashion, according to an announcement Tuesday. It would also require that Fannie and Freddie establish internal controls, procedures and training programs to detect and report such activity.
Mortgage Broker, Doctor in Lawsuit Over Kid's Hockey
A Maine mortgage broker sued an ear, nose and throat doctor over an outrageous outburst when the doctor stormed into the broker's son's locker room because of a body check his son received from the broker's son. The jury voted in favor of the mortgage broker and awarded him $320.
Wachovia Adding 100s of Originators
In an effort to provide better coverage for consumers, Wachovia Corp. expects to grow its mortgage staff by 300 mortgage consultants this year, a Wachovia spokeswoman told MortgageDaily.com in an e-mailed statement. The new hires will primarily focus on expanding Wachovia's sales capabilities in the 15-state footprint it currently serves, she said.
Fannie Business Continues Slide
Fannie Mae's business volume of $48.1 billion in January was off from the previous month, according to its latest monthly summary report. For all of 2004, the Washington, D.C.-based company reported volume way below the record set in 2003.
Countrywide Restates Income
Countrywide Financial Corp. announced a change in the timing for the gain on sale from certain securitizations originally recognized during 2004. The net effect of the change on previously announced unaudited 2004 earnings was a reduction of $0.20 to $3.63 per diluted share. A corresponding estimated increase of $0.20 per diluted share is to be recognized in the first quarter of 2005.
Dynex Accused of Hiding Repos
Dynex Capital Inc. is named in a class action lawsuit filed in U.S. District Court. Because of the fierce competition Dynex abandoned "any meaningful underwriting standards," according to the lawsuit. Lawyers for the plaintiffs allege "that the bonds prices were inflated due to misrepresentations of the true repossession rates."
Strategic Selling
The key to securing referrals is to manage every sales objective as a joint venture -- a mutually beneficial transaction where both buyer and seller "Win," according to the book The New Strategic Selling. The book promotes a non-manipulative selling philosophy based on the principle that getting an individual sale is never enough.
The Credit Score
FICO scores, used by most mortgage lenders to determine a borrower's level of future credit risk, are derived from data reported by the "Big Three" national credit-reporting agencies -- Equifax, Experian and TransUnion. Each independently collects data from creditors, public records agencies and other sources of financial information, then uses software developed by Fair Isaac and Company to formulate a credit score, according to myFICO.com.
FBR Now an Originator
Friedman, Billings, Ramsey Group Inc. announced it completed the acquisition of 100% of the equity interest of First NLC Financial Services LLC.The investment banker said the acquisition was part of a broader strategy to expand the types of mortgage assets it owns in its real estate investment trust portfolio -- keeping for portfolio a significant portion of First NLC's originated loans and financing them through the issuance of asset-backed securities.
Financial Freedom Reports Record
Financial Freedom Senior Funding Corp. announced Thursday it funded more than $1.6 billion in loans last year -- a jump over 2003. The volume consisted of a record 19,850 loans closed.
IndyMac Stands Out
An executive vice president from IndyMac Bank wrote a letter to MortgageDaily.com regarding previous coverage of FindProfit's analysis of financial activity for various subprime lenders. The executive criticized a comparison with Accredited Home Lenders -- noting that thrifts like IndyMac have always received significantly higher P/E multiples than mortgage banks and securitizers.
Spouses Compete for Originations
The co-CEO of a Miami, Fla.-based lender works with her husband, a production manager. The company also employs twohttp://www.mortgagedaily.comcompete for sales production incentives, as well as the president and his wife.
Rates Up, Apps Stagnant
At 5.62%, the average 30-year fixed-rate mortgage increased 5 basis points within the past week, according to Freddie Mac. Application volume was unchanged for the week ending Feb. 11, the Mortgage Bankers Association reported.
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