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Mortgage Industry News Headlines
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Friday, November 24, 2006
Last Updated 11:37 AM CST
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Fannie Compromises on Tech Patent
Fannie Mae's senior vice president and principal deputy general counsel sent a letter Tuesday to seven mortgage industry groups. He told the trade groups Fannie's patent loan customization technology will be available to all lenders. "While Fannie Mae has a strong corporate interest to protect its intellectual property, it also has an interest in fostering innovation that would facilitate the secondary market," the executive said.
Freddie Business Holds
New business purchases were $41.8 billion in October at Freddie Mac, according to an announcement Wednesday. The latest month was slightly higher than September, according to the data. But October business purchases were down from the same month during 2005.
Refis Gain Steam
The 30-year fixed-rate mortgage averaged 6.18%, Freddie Mac said in its latest mortgage rate survey. The latest level is lower than the last week. The refinance share of mortgage applications edged up to the highest level since early last year, the Mortgage Bankers Association reported.
Warehouse Fraud at Flagstar
Flagstar Bancorp Inc. announced it will record a one-time pretax charge this quarter of approximately $8.7 million. The charge is due to disagreement with a federal judge's dismissal of a lawsuit it filed against an insurance company. The insurer denied a claim on fraudulent warehouse loans at Flagstar.
FHA Audit
Urbach, Kahn & Werlin LLP audited the Federal Housing Administration. Three main reportable conditions were cited, according to the audit for the year ended Sept. 30, 2006. But, unlike other years, no material weaknesses were cited.
Legal Battle Brewing
Stamm Mortgage Management Inc. has filed a demand for arbitration over a management agreement it had with Greater Atlantic Financial Corp. The agreement reportedly governed Stamm's management of Greater Atlantic Mortgage Corp. before its operations were terminated earlier this year. The demand for arbitration alleges recession, breach of contract and defamation and that Stamm is seeking damages related to the closure of the mortgage unit, Greater Atlantic said in a written statement.
Banks Post Strong Earnings
The Federal Deposit Insurance Corp. announced it's Quarterly Banking Profile for the third quarter on Tuesday. Third quarter net income for FDIC-insured banks was $37.6 billion, according to the agency. The latest period was "the second-highest total ever," the statement said.
Armed & Dangerous
A former mortgage executive of CHL Mortgage has been indicted by a federal grand jury in Oakland. The man is accused of masterminding a $13 million fraud that included reselling loans multiple times. But when federal agents tried to apprehend him on Nov. 17, he fled.
Banks Forge Ahead
Standard and Poor's recently announced U.S. Bancorp is among six financial holding companies placed on its CreditWatch with positive implications. Sky Financial Group Inc. announced it completed acquiring Wells River Bancorp Inc. Sterling Financial Corp. received regulatory approval from the Federal Deposit Insurance Corp. to acquire FirstBank NW Corp., according to a statement.
Broker Sued for Faxing Prospects
A Denver mortgage broker was sued for sending faxes to prospective borrowers. After receiving several complaints, "We stopped sending the faxes immediately," she said told MortgageDaily.com. But one of the fax recipients assigned his legal right to sue to the U.S. Fax Law Center.
MTA Higher
The monthly Treasury average was 4.83% in October, Federal Reserve data showed. The index was higher than September, according to the data. The latest level is more than 1.5 % higher than a year prior.
Secrets of Time Management
Author Michael Angelo Caruso has written an e-book about time management. Effective time management can add at least an extra hour to a person's daily schedule, Caruso said. He explained there are three hours in the day that most people need to stop wasting in order to gain more time in their day.
Brokers Oppose National Registry
The National Mortgage Brokers Association announced on Friday that a proposed national licensing system for loan originators is "fatally flawed." The system is sponsored by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. Referring to loan originators, NAMB's president said, "It just doesn't make sense to include some and not others."
Foreclosures Worsen
Last month, 115,568 properties nationwide entered some stage of foreclosure, according to RealtyTrac. October's activity was slightly higher than September's. Foreclosures were way up from the same time a year earlier.
Thrift Production Holds
One- to four-family mortgage originations at thrifts amounted to $149.9 billion in the third quarter, the Office of Thrift Supervision recently announced. The quarter was slightly better than the prior period, the data indicate. However, fundings were down from the third quarter 2005.
Foreclosure Impact Minimal
First American Real Estate Solutions announced it investigated the increasing prevalence of foreclosure sales and the depth of discounts. Foreclosure prevalence and discounts to sell lender-repossessed properties have been rising, the announcement said. But the trend remains "a ripple that has not become the tidal wave some expected would overwhelm the market."
WaMu Rating Improved
Fitch Ratings announced it upped Washington Mutual Bank's residential primary servicer rating. The upgrade applies to subprime and Alt-A products. The rating now stands at RPS2+.
Mortgage Banker May Shut Down
Summit Financial Group Inc. intends either to sell or terminate substantially all residential mortgage business activities, according to an announcement Friday. The unit's operations will cease on or about Jan. 31, 2007, if not sold by then. "The decision to exit the mortgage banking business was based on this business unit's poor operating results and the continuing uncertainty for performance improvement."
Fraud King Caught
Matthew B. Cox was nabbed Thursday afternoon in Nashville by U.S. Secret Service agents. Cox allegedly masterminded a multimillion dollar mortgage fraud scheme across the South. The agents were tipped off by a babysitter.
Mortgage Market Improves
The 30-year fixed-rate mortgage averaged 6.24%, , according to Freddie Mac. The 30-year was down from the prior week, Freddie said. Loan application volume improved over the prior week, the Mortgage Bankers Association reported on Wednesday.
Mortgage Job Shuffle
HomeBanc Mortgage Corp. plans to add up to 100 employees within the next year, a spokesman told MortgageDaily.com. The slated hires offset recently announced job reductions at the company. The layoffs were the result of cost cutting.
Mortgage Banker, Movie Producer
Joe Shanley is a private mortgage banker for Wells Fargo Home Mortgage. He is also an executive producer for movies. Simply stated, he's the guy that raises the money, he told MortgageDaily.com.
Foreclosure Scam Stopped
A Baltimore borrower was about to lose her home to foreclosure when a local business offered her a deal. AZP Home Owners would purchase the home and then rent it back to her. But Maryland state regulators say that AZP was in the deal to make a profit, not help the borrower.
Parent Bruises PHH Mortgage Rating
Fitch Ratings announced it downgraded the residential primary servicer ratings of PHH. The ratings apply to various nonprime products. The downgrade reflects the senior debt rating of parent PHH Corp., which was lowered in July.
Portfolio On the Block
Webster Financial Corp. announced it will sell $250 million in residential loans. The move is part of a balance sheet transformation process, the company said. The sale proceeds will reportedly be utilized to pay down short-term borrowings.
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Copyright © 2005 MortgageDaily.com
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Mortgage Database Stolen
A mortgage broker has been jailed for stealing the customer database of a now bankrupt company.
Sales for Denver-based Mile High Capital Group hit $120 million in 2005 and grew to $175 million a year later, the company touted in a press release issued last year.
"I was drawn to Mile High because there was such a fantastic business plan in place," Jeffrey Dietz said in a July 2005 press release announcing his promotion to company president. "We supply good affordable housing in areas that need housing. We serve the client; we serve the tenant. It's a win-win situation."
But prosecutors and securities regulators in Colorado tell a different story.
MortgageDaily.com subscribers read full story
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Brokers Oppose National Registry
Mortgage brokers call a proposed national licensing system for loan originators "fatally flawed."
The system, sponsored by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, continues to be "fatally flawed" as it is solely focused on the mortgage broker community and excludes originators at banks and other federally-regulated financial institutions, the National Mortgage Brokers Association announced on Friday.
"We support a nationwide license registry only if it includes all mortgage originators," said NAMB President Harry Dinham in the announcement. "It just doesn't make sense to include some and not others because all consumers should benefit regardless of the distribution channel chosen."
In October, the conference and the American Association announced that it was working on developing a national mortgage licensing system and database registry that would be in operation by early 2008 and managed by the State Regulatory Registry LLC.
MortgageDaily.com subscribers read full story
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| Broker Originators Disadvantaged
Mortgage brokers seek a level playing field for all loan officers who originate exotic loans.
The National Association of Mortgage Brokers announced its board unanimously agreed to urge federal banking agencies to delay implementation of nontraditional mortgage guidance until companion guidance that embodies the same principles can be applied evenly to all originators.
The guidance on nontraditional loans, including interest-only and payment option adjustable-rate mortgages, was jointly issued in September by the Federal Reserve Board, Office of Thrift Supervision, Federal Deposit Insurance Corp., Office of Comptroller of the Currency, and National Credit Union Administration.
Among other things, it encourages lenders to qualify borrowers of nontraditional loans on their ability to pay at the fully indexed rate, assuming a fully amortizing payment, including potential negative amortization amounts.
MortgageDaily.com subscribers read full story
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| Brokers Drive Early Defaults
A recent analysis revealed that just a few brokers are responsible for a big share of early payment defaults.
CoreLogic announced that it found seven percent of brokers account for 63 percent of early payment defaults, with the riskiest 0.05 percent of brokers accounting for 70 percent of all losses.
"These figures are based on predicted first year loss concentrations," said Mark Fleming, CoreLogic chief economist, in the written statement. "While the first year is generally characterized by low rates of default and in most cases little loss, when losses do happen, they are big."
The statistics from CoreLogic's broker management database, which tracks more than 38 million loans and 190,000 brokers, illustrates the key link brokers play in the risk management chain and why broker monitoring and management tools are critical to the financial prospects of wholesale originators, according to the announcement.
MortgageDaily.com subscribers read full story
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