July 25, 2008

NatCity Sees Big Loss on 'Liquidating Portfolio'

National City Corp., Cleveland, lost $1.8 billion ($2.45 per share) in the second quarter, driven by a $1.6 billion loss provision related to broker-originated home equity, subprime mortgage, and construction loans to individuals.

Posted by S. Germain at 08:17 AM | Comments (0)

House Passes Landmark Housing Bill

The House has passed a landmark housing bill that includes a financial backstop for Fannie Mae and Freddie Mac, and the measure now goes to the Senate, where a few Republican stalwarts might delay final passage for a few days. The bill increases Fannie's and Freddie's line of credit at the U.S. Treasury and authorizes the Treasury secretary for the first time to purchase stock in the two government-sponsored enterprises, if necessary. The bill also strengthens regulation of Fannie and Freddie, and passage of the bill should make it easier for the mortgage giants to raise additional capital, according to James Lockhart, director of the Office of Federal Housing Enterprise Oversight.

Posted by S. Germain at 08:16 AM | Comments (0)

2Q Home Vacancies Set a Record

The Census Bureau says the 18.6 million homes sitting unoccupied nationwide during the second quarter set a record attributable to the housing slump and rising foreclosure rate. Year-over-year, the number of vacant dwellings was up 6.9 percent, and 2.8 percent of these vacant homes were nonrentals. The report also shows 4 million rentals standing empty during the second quarter and a jump in vacant homes in the "other" category--including foreclosures and those empty while undergoing improvements--to 3.2 million from 3 million in 2007.

Posted by S. Germain at 07:59 AM | Comments (0)

San Diego Sues Bank of America to Halt Foreclosures

Bank of America and its Countrywide unit have been sued by the city of San Diego in an attempt to keep the mortgage lenders from foreclosing on local homes. Filed in San Diego County Superior Court by City Attorney Michael Aguirre, the suit alleges that homeowners were defrauded with subprime loans that did not comply with Countrywide's policies. San Diego County has lost 20,000 homes to foreclosure so far this year, but some analysts believe the number could rise to 40,000 for 2008. "We would like to see San Diego become a foreclosure sanctuary," said Aguirre, who expects to file similar suits against Washington Mutual, Wells Fargo and Wachovia to get lenders to negotiate with borrowers.

Posted by S. Germain at 07:58 AM | Comments (0)

Wachovia and Washington Mutual Post Billions in Mortgage Losses

Wachovia Corp. and Washington Mutual Inc. announced record second-quarter losses tied to the mortgage crisis, indicating that the fallout is now affecting loans to prime borrowers. Wachovia lost $8.9 billion in the second quarter, mainly due to its $122 billion portfolio of option adjustable-rate mortgages (ARMs), with $3.3 billion of the $5.6 billion reserved for loan losses set aside for these mortgages. Washington Mutual, also indicating problems with option ARMs, posted a $3.3 billion loss for the quarter. Its loan loss reserves total $5.9 billion.

Posted by S. Germain at 07:56 AM | Comments (0)

Mortgage Lobby Replaces President

The president of the Mortgage Bankers Association--one of the most powerful lobby groups in the nation's capital and a key player in the housing bill now winding its way through Congress--has announced plans to step down at the end of the year, following more than seven years at the helm. California Housing Finance Agency Chairman and former MBA chairman John Courson has been tapped to replace Jonathan Kempner and will additionally assume the role of COO, beginning on Aug. 1.

Posted by S. Germain at 07:55 AM | Comments (0)

Wachovia to Stop Buying Loans From Mortgage Brokers

Beginning on July 25, Wachovia Corp. will no longer approve mortgages made by mortgage brokers--which, along with other third parties, accounted for 40 percent of the bank's loan volume last year. The company announced the change as part of its plans to recover from losses sustained by Golden West Financial Corp., which it acquired for $24 billion in 2006.

Posted by S. Germain at 07:54 AM | Comments (0)

Trouble at Fannie and Freddie Stirs Concern Abroad

As of the end of this year's first quarter, roughly 20 percent of securities issued by Fannie Mae, Freddie Mac and a few smaller quasi-governmental agencies were held by foreign investors, meaning that one out of 10 American mortgages is essentially owned by institutions and governments not based in this country. Now that the two big government-sponsored enterprises are faltering, analysts note that how their bailout is handled will ultimately test American markets in the world view and could have an effect on the level of interest rates and the strength of the dollar for years to come.

Posted by S. Germain at 07:52 AM | Comments (0)

July 18, 2008

Fed Finalizes Final Amendment to HOEPA

The Federal Reserve Board approved a final rule amendment today to the Truth in Lending Act (TILA), or Regulation Z, requirement of the Home Ownership and Equity Protection Act (HOEPA). This rule addition, which addresses “higher-priced” mortgage loans, loans taken out against a consumer's principal dwelling, and loans advertising standards will further regulate mortgage lending practices and ensure that consumers are protected against many of the same unscrupulous practices that led to the subprime loan delinquencies the market is seeing today.

Posted by S. Germain at 08:22 AM | Comments (0)

Bernanke: Economy Faces 'Numerous Difficulties'

The country's economic problems present "significant challenges" for Federal Reserve policymakers as they try to get the economy back on track, Fed Chairman Ben Bernanke said. Lowering rates to prop up the economy would exacerbate inflation, and an increase to keep prices in check would stifle the struggling economy and housing sector. As a result, most economists expect the central bank policymakers to hold rates steady when they meet on Aug. 5.

Posted by S. Germain at 08:14 AM | Comments (0)

Analysts Say More Banks Will Fail

As many as 150 banks across the country could fail over the next 12 to 18 months, and many other lenders are likely to shut branches or pursue mergers, according to analysts. "Everybody is drawing up lists, trying to figure out who the next bank is, No. 1, and No. 2, how many of them are there," says Richard Bove, a banking analyst with Ladenburg Thalmann.

Posted by S. Germain at 08:12 AM | Comments (0)

Regulators Seize IndyMac Bancorp

The FDIC has taken over IndyMac Bancorp after the bank continued to lose huge amounts of money daily from depositors. The agency will operate the bank while trying to sell it. With $32 billion in assets as of late March, the IndyMac failure represents one of the largest collapses in the history of U.S. banking. An inability to sell off a portion of its Alt-A mortgage loans started creating problems for IndyMac at the tail end of last year.

Posted by S. Germain at 08:12 AM | Comments (0)

U.S. Unveils Plan to Aid Mortgage Giants

The Bush administration has outlined a plan to help Fannie Mae and Freddie Mac weather investor concerns about capitalization and expects the measures to be passed by Congress and signed into law by the president by the end of next week. Under the plan, the government-sponsored enterprises would be able to trade certain assets for cash at the Federal Reserve's discount window in the event of an emergency. Additionally, the Treasury secretary would be given authority to boost Fannie Mae and Freddie Mac's $2.25 billion credit lines as necessary and negotiate terms under which the government would purchase their stock.

Posted by S. Germain at 08:11 AM | Comments (0)

July 11, 2008

ChargeSmart(TM) Launches New Credit Card Bill Payment Solution

ChargeSmart LLC, a provider of online payment solutions to the financial and mortgage industries, today announced the launch of its comprehensive Web-based payment service allowing consumers to pay their mortgage, auto and education loans as well as utility bills using a major credit card. Having a network of more than 4,000 billers across the United States, ChargeSmart completes transactions using a secure Internet-based payment system.

Posted by S. Germain at 08:33 AM | Comments (0)

Governor signs California mortgage bill

Lenders must now call California homeowners or visit them in person and explore restructuring options before foreclosing on their homes under legislation signed Tuesday by Gov. Arnold Schwarzenegger.

The new law also doubles the amount of time tenants have to relocate from a foreclosed property to 60 days and requires owners to maintain foreclosed properties.

Posted by S. Germain at 08:32 AM | Comments (0)

LION Shareholders Approve Sale of Assets to OpenClose

LION, Inc. announced that its shareholders had approved the sale of substantially all of the assets of LION to Beanstalk Networks dba OpenClose(R) pursuant to an asset purchase agreement between Beanstalk Networks Acquisition LLC and LION dated as of May 12, 2008. As a result of this approval, LION expects that the sale will be consummated shortly in accordance with the terms of the agreement.

Posted by S. Germain at 08:31 AM | Comments (0)

Deutsche Bank Is Sued Over Vacant Homes

The nonprofit community development group Price Hill Will has filed suit against Deutsche Bank AG in state court in Hamilton County, Ohio, accusing Deutsche Bank National Trust of failing to maintain foreclosed properties and creating blight in Cincinnati's Price Hill neighborhood. The organization wants Deutsche Bank to pay damages and wants the court to force the company and other financial institutions to ensure that vacant properties comply with building codes.

Posted by S. Germain at 08:09 AM | Comments (0)

U.S. Weighs Takeover Plan for Two Mortgage Giants

With Fannie Mae and Freddie Mac's shares down 30 percent and 45 percent, respectively, in a week's time, senior Bush administration officials have initiated discussions about what do in the event that one or both of the government-sponsored enterprises fails. Although they insist the GSEs are well capitalized for the time being and a crisis is not imminent, there is talk that the government could take control of one or both of them and put them under a conservatorship--which would erode their stock values and make taxpayers responsible for losses--if necessary.

Posted by S. Germain at 08:08 AM | Comments (0)

Legislature Acts to Control Mortgage Servicers

North Carolina lawmakers have approved new rules that require mortgage servicers to be licensed in the state. The measure now goes to Gov. Mike Easley (D) for his signature. State House and Senate legislators voted in favor of the new rules, hoping to prevent the kinds of abuses that contributed to the housing market meltdown and severely undermined consumer confidence in the mortgage system. North Carolina stands to become just the ninth state to regulate mortgage servicers.

Posted by S. Germain at 08:07 AM | Comments (0)

IndyMac to Exit Most Home Lending, Slash 3,800 Jobs

IndyMac Bancorp has announced that it will reduce its payroll by more than 50 percent in the wake of growing defaults by borrowers. The savings and loan is the latest in a series of major California-based lenders that have either been absorbed by other firms or forced to stop making home loans altogether.

Posted by S. Germain at 08:05 AM | Comments (0)

Mortgage Giants Take Beating on Fears Over Loan Defaults

Fannie Mae and Freddie Mac watched their share prices fall to more than 14-year lows on July 7, as investors remain concerned about the government-sponsored enterprises' ability to meet capital requirements and the jump in borrowing costs and decline in home prices that would result. Investors worry that Fannie Mae and Freddie Mac's stock will be worthless if they are forced to issue billions in stock to offset mortgage-related losses. Experts note that the GSEs have purchased insurance to safeguard against rising mortgage defaults, but losses registered by these insurers could make it mandatory that Fannie Mae and Freddie Mac reserve more capital to cover losses.

Posted by S. Germain at 08:04 AM | Comments (0)

June 27, 2008

Revamp Appraisal Standards, Regulators Urged

Senate Banking Committee leaders are urging federal banking regulators to "wake up" and revamp their appraisal standards, instead of complaining about the changes Fannie Mae and Freddie Mac have agreed to implement under a settlement with New York Attorney General Andrew Cuomo. The bank agencies have a role in setting appraisal standards for lenders, committee Chairman Christopher J. Dodd, D-Conn., said during debate on a major housing reform bill. "However, the appraisal fraud over the past couple of years, and the attorney general's action, should serve as a wake-up call to the regulators that their appraisal standards must be revamped and their enforcement stepped up," Sen. Dodd said.

Posted by S. Germain at 08:32 AM | Comments (0)

Countrywide's Litigation Problems Growing

Countrywide Financial Corp.'s litigation problems are growing as California and Washington state officials filed separate complaints against the giant mortgage lender for its lending practices. California Attorney General Edmund G. "Jerry" Brown Jr. has sued Countrywide and its chairman Angelo Mozilo and president David Sambol for allegedly using deceptive practices to "push" borrower into complex, risky, and expensive loans they did not understand and could not afford so the company could sell as many loans as possible to Wall Street securitizers at the highest premiums.

Posted by S. Germain at 08:31 AM | Comments (0)

Operation Malicious Mortgage Results In Over 400 Charged

The FBI have performed a national takedown of mortgage fraud schemes, the culmination of substantial coordinated efforts during the last three and a half months to identify, arrest and prosecute mortgage fraud violators through the U.S.

From March 1 to June 18, Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged. Last week, 60 arrests were made in mortgage fraud-related cases in 15 districts. The FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.

Posted by S. Germain at 08:28 AM | Comments (0)

Fed Holds Rate Steady as Inflation Worries Rise

The Federal Reserve on June 25 ended its aggressive campaign of interest rate cuts, holding its target for the federal-funds rate—charged on overnight loans between banks—at 2 percent. The decision to stand pat contrasts with recent actions by numerous central banks overseas that have begun hiking interest rates amid inflation concerns.

Posted by S. Germain at 08:22 AM | Comments (0)

Alt-A Slips Again

None of the country's top 15 alternative-A lenders recorded an increase in business volume during the first quarter of 2008. Eight of the top lenders had declines of more than 80 percent--including Wells Fargo and Wachovia Mortgage, which had 99 percent declines in volume in the first quarter compared to a year ago. Bank of America had the highest dollar value, with a volume of $20.15 billion in alt-A lending in the first quarter. In the last three months of 2007, the top alt-A lenders saw volume decline an aggregate 87 percent.

Posted by S. Germain at 08:18 AM | Comments (0)

Freddie: No Restrictions for 3 Insurers

Freddie Mac will continue to do business with MGIC Investment, PMI Group and Radian Group, even though the mortgage insurers have been downgraded by the ratings agencies. The government-sponsored enterprise says it has reviewed their plans to regain double-A ratings from the credit agencies but adds that it could "rescind or modify" at any time its decision not to impose restrictions on the mortgage insurers.

Posted by S. Germain at 08:17 AM | Comments (0)

Servicer Offers a Deal to Banks Clinging to Assets

Residential Credit Solutions Inc. is a startup devoted to purchasing and servicing distressed mortgages, but its president, Dennis Stowe, says banks and lenders are hesitant to unload their assets as they weigh whether it is better to sell nonperforming assets at substantial discounts or hang onto them despite the likelihood of additional price declines. The firm could handle up to $6 billion in loans and services $1 billion currently, and Stowe points out that its loss mitigators handle only 125 cases each—far fewer than the 500 to 1,000 cases taken on by loss mitigators at many third-party servicing firms.

Posted by S. Germain at 08:16 AM | Comments (0)

June 20, 2008

FHA Lessons 90-Day Rule to Help Lenders Sell REOs

Lenders will no longer find themselves struggling with the Federal Housing Administration's (FHA) 90-day rule, which prevents sellers who have owned a property for less than 90-days from offloading a home to a buyer who intends to be insured by the FHA.

While the FHA implemented this rule to prevent the practice of flipping in the otherwise safe FHA-insured atmosphere, lenders who are trying desperately to remove distressed properties from their books have been unable to seize the day with qualified borrowers because of the three-month waiting period.

Posted by S. Germain at 08:13 AM | Comments (0)

WaMu Drops Ax Again, Cuts 1,200 Jobs

Washington Mutual plans to lay off workers in its mortgage business as part of a new round of job cuts that will impact 1,200 employees across the board. The Seattle-based company has already eliminated more than 3,500 jobs this year.

Posted by S. Germain at 08:09 AM | Comments (0)

Investment in U.S. Commercial Real Estate Falls 70 Percent

Banks continued to clutch their purse strings during the first quarter of 2008, contributing to a 70-percent slide in U.S. commercial property investment. According to the National Association of Realtors, investor commitment to commercial real estate during the January-through-March period sank to $48.2 billion from $157.8 billion a year earlier.

Posted by S. Germain at 08:07 AM | Comments (0)

Countrywide Will Rework $16B in Mortgages

Countrywide Financial plans to restructure or refinance $16 billion in adjustable-rate mortgages that have recently reset higher or that will reset by the end of 2009. The program is set up primarily to help borrowers with subprime credit who have continued to pay on time; and they will have an opportunity to refinance into a lower-interest prime loan or a mortgage insured by the Federal Housing Administration, Fannie Mae or Freddie Mac.

Posted by S. Germain at 08:06 AM | Comments (0)

New Products, Approaches as Firms Feel Burned by FICO

Fair Isaac Corp. and the credit bureaus have rolled out numerous products to provide lenders and investors with alternatives to the FICO score in assessing borrowers' default risk. The Credit Capacity Index from Fair Isaac gauges how well borrowers manage incremental debt, while Trend Data from TransUnion gauges the performance of loan portfolios when specific variables and regional economic indicators are factored in.

Posted by S. Germain at 08:05 AM | Comments (0)

GSE to Servicers: Help Flood Victims

Freddie Mac will provide mortgage relief to homeowners who have been affected by the recent floods in the Midwest. Loan servicers have been instructed by the federally chartered company to use their discretion on how to assist borrowers with home loans owned by Freddie Mac, such as by reducing or suspending mortgage payments for up to 12 months. Freddie Mac will also allow servicers to waive penalties or late fees and suspend foreclosure and eviction proceedings for as long as a year.

Posted by S. Germain at 08:01 AM | Comments (0)

June 13, 2008

Equifax, Fair Isaac Call Off FICO War

Equifax and Fair Isaac have ended their war over FICO 08 and VantageScore. When FICO 08 was introduced earlier this year, Equifax said it was not ready to support the product because Fair Isaac was suing it over VantageScore. But the two companies in a joint statement said they are now forming a partnership to develop and sell advanced analytics and scoring solutions for businesses and consumers.

Posted by S. Germain at 08:23 AM | Comments (0)

Company Rolls Out New Reverse LOS

Reverse Mortgage Solutions, Spring, Texas, has rolled out RM Compass, a loan origination system that it called the first front-end product built from the ground up specifically for the reverse mortgage origination process. RM Compass, an Internet-based Application Service Provider software system, is designed for both established reverse mortgage originators and new players, the company added.

Posted by S. Germain at 08:22 AM | Comments (0)

OCC Study: Subprime Accounted for 43% of Workouts in March

Between October 2007 and March, the foreclosure rate grew from 0.9 percent to 1.23 percent, according t the Office of the Comptroller Currency (OCC), which focused on mortgage delinquencies, workouts, and foreclosures that are serviced by nine national banks.

When it came to loss mit, at the end of March, it was subprime mortgages that accounted for 43 percent of workouts. The popular workout solutions: payment plans superseded loan modifications in March, outnumbering by more than four to one.

Posted by S. Germain at 08:08 AM | Comments (0)

Freddie Is Seeing 'Dramatic' Growth in Repossessions

Ingrid Beckles, Freddie Mac's vice president of servicing and asset management, reports that the government-sponsored enterprise's volume of repossessed properties "is rising quite dramatically" and could double this year as it did in 2007. She adds that the GSE is starting several aggressive loss-mitigation programs to modify loans for borrowers that its servicers have been unsuccessful in contacting.

Posted by S. Germain at 08:05 AM | Comments (0)

NAR: HUD Underestimates RESPA Reform Costs

A recent study funded by the National Association of Realtors and conducted by economist Ann Schnare finds that HUD's proposal to revise the Real Estate Settlement Procedures Act to require new good-faith estimate forms and permit packaged settlement services would actually boost loan costs by about $413-- rather than save $700 per loan, as the agency claims. According to Schnare, it is reasonable to estimate 2.7 to 3.4 good-faith estimates would be prepared for every loan, versus HUD's projection of 1.7. Additionally, the study says application processing and tracking would add up to $89 per loan, interest-rate locks would add $272 for $200,000 mortgages and other underwriting costs would add $52.

Posted by S. Germain at 08:03 AM | Comments (0)

Nat'l City Agrees to Oversight

National City reportedly is on probation, agreeing to a "memorandum of understanding" with the Office of the Comptroller of the Currency. Submitting to stricter federal oversight could mean capital levels at the nation's 10th largest bank have dropped under the minimum required level, according to observers. The mortgage crisis has hit the bank hard, forcing it to obtain a $7 billion capital infusion from equity investors in May.

Posted by S. Germain at 08:01 AM | Comments (0)

June 06, 2008

Preston Confirmed as HUD Chief

The Senate has confirmed Steven Preston to be the new secretary of the Department of Housing and Urban Development as the agency steps up its efforts to help struggling homeowners and tries to finalize a RESPA proposal before year's end.

Posted by S. Germain at 08:29 AM | Comments (0)

Franklin Credit Signs Servicing Agreement

Franklin Credit Management entered into various agreements to service approximately $245 million in residential home equity line of credit mortgage loans for Bosco Credit LLC, which is owned and controlled by Thomas J. Axon, chairman of Franklin Credit. The loans that are subject to the loan servicing agreement were acquired by Bosco on May 28, the firm adds.

Posted by S. Germain at 08:18 AM | Comments (0)

Delinquency Rate for Mortgage Loans Increases 53-Basis Points

The delinquency rate for mortgage loans on one-to-four unit residential properties rose 53-basis points between the fourth quarter of 2007 and the first quarter of 2008 to reach a rate of 6.35-percent of all loans in delinquency on a seasonally-adjusted basis, according to the MBA's latest National Delinquency Survey. The MBA says the delinquency rate also is up 151-basis points when compared to a year ago.

Posted by S. Germain at 08:14 AM | Comments (0)

Bank of America Gets Federal Reserve's Approval to Buy Countrywide

Bank of America Corp.'s acquisition of Countrywide Financial Corp. has been given the green light by the Federal Reserve, and the deal is now expected to be finalized in the third quarter. Once the deal closes, Bank of America will control 10.9 percent of the nation's insured bank deposits, or $773.4 billion. The all-stock deal will cost the company approximately $4 billion.

Posted by S. Germain at 08:12 AM | Comments (0)

First Horizon Sells Mortgage Biz to MetLife

First Tennessee Bank National Association has agreed to sell more than 230 retail and wholesale offices across the country to MetLife Bank N.A., a unit of MetLife Inc. The deal, which is expected to close by the end of September, enables the First Horizon National Corp. subsidiary to sell its entire mortgage business outside of the state and retain its 21 mortgage offices in and around Tennessee.

Posted by S. Germain at 08:11 AM | Comments (0)

Fremont and Litton Close Deal

In response to an order from the Federal Deposit Insurance Corp. to either generate capital or put itself up for sale, Fremont General Corp. says Litton Loan Servicing LP has purchased the last of its servicing rights on $12.2 billion in mortgages. In April, CapitalSource Inc. agreed to purchase the troubled subprime mortgage lender's branches, deposits and other assets.

Posted by S. Germain at 08:10 AM | Comments (0)

Fed Chairman Signals an End to Interest Rate Cuts Amid Concerns About Inflation

The Federal Reserve is unlikely to continue to cut interest rates due to concerns about inflation, Chairman Ben Bernanke suggested during remarks delivered via satellite to an international monetary conference in Barcelona, Spain. "For now policy seems well positioned to promote moderate growth and price stability over time," said Bernanke in his June 3 comments.

Posted by S. Germain at 08:09 AM | Comments (0)

Wachovia CEO Forced Out

Wachovia has fired CEO Ken Thompson less than a month after relieving him of his position as chairman. The board ousted Thompson as Wachovia continues to struggle with its widening losses linked to its acquisition of troubled Golden West Financial, and there is speculation that the company could deliver more bad news or might be taken over.

Posted by S. Germain at 08:08 AM | Comments (0)

7 Percent April Workout Increase

The HOPE NOW Alliance reports a 7-percent jump in mortgage workouts to 183,000 in April from the prior month. Principal reductions and other such modifications occurred with 77,000 of the loans, while others had late payments added to the end of the loan or saw other modest changes. The report also reveals that 9,000 homeowners received a five-year interest-rate freeze. Over the past 10 months, 1.6 million workouts have been performed.

Posted by S. Germain at 08:05 AM | Comments (0)

May 30, 2008

CFC Still Top Lender in Nation

Despite its financial problems, Countrywide Financial Corp. ranked first among all residential originators in the first quarter, funding $73 billion in home mortgages, according to exclusive survey figures compiled by National Mortgage News. Wells Fargo Bank ranked a close second with fundings of $65 billion.

Posted by S. Germain at 08:21 AM | Comments (0)

BofA picks insider to run mortgage business

Bank of America Corp. will divide consumer banking into three main responsibilities: deposits, credit cards and consumer real estate.

Barbara Desoer, a 31-year veteran of Bank of America, will lead the combined mortgage operations, which will be based in Countrywide's home of Calabasas, Calif.

Posted by S. Germain at 08:16 AM | Comments (0)

Regulator Criticizes Appraisal Agreement

The agreement Fannie Mae and Freddie Mac to buy only loans from lenders that receive appraisals from independent companies has come under criticism from John Dugan, the comptroller of the currency. Dugan--the regulator of mortgage lending by national banks--says federal and state enforcement is the way to create a conflict-free environment for regulating mortgage lenders and brokers. The agreement, which is scheduled to take effect next year, should be withdrawn because its violates federal law and would have a negative impact on the mortgage industry, Dugan adds.

Posted by S. Germain at 07:59 AM | Comments (0)

System Designed to Expedite Short Sales for Lenders

National Quick Sale says its new automated system can make it possible for short sales to be closed within 10 days, rather than the typical two months. Rich Rollins, president and CEO of the company, says the system gathers information from real estate brokers and sellers electronically and collects broker price opinions so that sellers are presented with an analysis of the home's net present value.

Posted by S. Germain at 07:56 AM | Comments (0)

Next HUD Boss Says RESPA Reform Workable

HUD has addressed most of the concerns of the Small Business Administration in its recent Real Estate Settlement Procedures Act (RESPA) reform proposal, according to SBA head Steve Preston, who is also President Bush's nominee for Housing Secretary. Many real estate industry groups representing realtors, title insurers and settlement service providers continue to criticize the proposal due to concerns that lenders would gain too much control over settlement services--which they argue would curb competition. HUD wants to improve loan disclosures and allow lenders to package settlement services with loans, which it believes could save consumers $8.35 billion annually.

Posted by S. Germain at 07:51 AM | Comments (0)

May 23, 2008

Wells Fargo Tightens Home Loan Policies

In response to rising defaults and changes in mortgage insurers' requirements and pricing, Wells Fargo & Co. is requiring higher credit scores on mortgages for 95 percent or more of the property value. Additionally, it will no longer permit cash-out refinancings for loans for 80 percent or more of the home value.

Posted by S. Germain at 08:24 AM | Comments (0)

Home Prices Drop Most in 17 Years

The Office of Federal Housing Enterprise Oversight (OFHEO) confirms that residential prices declined 3.1 percent nationally in this year's first quarter compared with the first three months of 2007. It was the sharpest decline in the index's 17-year history and only the second quarter in which prices had declined since the index began in 1991.

Posted by S. Germain at 08:23 AM | Comments (0)

Fannie Mae Announces Single National Down Payment Policy

Fannie Mae has introduced a new, national policy on down payment requirements for conventional, conforming mortgages the company will purchase or guarantee. Starting June 1, Fannie Mae will accept up to 97% loan-to-value (LTV) ratios for conventional, conforming mortgages processed through its Desktop Underwriter (DU) automated underwriting system, and 95% LTV ratios for loans underwritten outside of DU, in all geographic locations in the U.S.

Posted by S. Germain at 08:10 AM | Comments (0)

GMAC's ResCap Says $9.5 Bln Bonds Tendered

Residential Capital LLC in Minneapolis reports that investors tendered about $9.5 billion of bonds late on May 21. The GMAC mortgage unit wants to restructure or buy back $14 billion worth of bonds to avoid a shortfall on cash. ResCap, the second-largest independent mortgage lender in the United States after Countrywide Financial, says the exchange will help it reduce its debt burden after losing $5.3 billion over the past six quarters on rising delinquencies and declining volumes.

Posted by S. Germain at 07:49 AM | Comments (0)

Impac Mortgage Posts $2 Bln Loss in 2007 on Credit Woes

Impac Mortgage Holdings Inc. posted a $2.05 billion loss last year due to rising delinquencies and defaults. The Alt-A lender registered a $75.3 million loss in 2006. After recording an $8 million profit from continuing operations in 2006, the company reported a $1.65 billion loss last year.

Posted by S. Germain at 07:48 AM | Comments (0)

New Effort to Block GSE Appraisal Pact

The banking industry is pushing for the inclusion of an amendment from Sen. Elizabeth Dole, D-N.C., that would require federal regulators to set new appraisal standards as part of legislation to beef up oversight of Fannie Mae and Freddie Mac and permit the FHA to insure mortgages with balances exceeding home values. The amendment would eliminate an appraisal agreement that New York Attorney General Andrew Cuomo forged with Fannie Mae and Freddie Mac compelling lenders and brokers to use outside appraisers if they want to sell loans to the government-sponsored enterprises (GSEs).

Posted by S. Germain at 07:47 AM | Comments (0)

Senate Strikes Housing Rescue Deal

Democrats and Republicans in the Senate have ended weeks of negotiations with a plan that would allow the federal government to insure up to $300 billion in refinanced loans for at-risk homeowners. The bipartisan accord, which represents the clearest sign yet that Congress is ready to pass sweeping legislation on housing, also seeks to tighten up oversight of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.

Posted by S. Germain at 07:46 AM | Comments (0)

May 16, 2008

OpenClose to Purchase Assets of LION Inc.

OpenClose, developers of Web-based, end-to-end mortgage software, has agreed to purchase the assets of LION, Inc. and will continue to operate its Precision LPX suite of mortgage software and retail Web site services. The transaction is anticipated to close this summer, subject to shareholder approval and regulatory consent.

Posted by S. Germain at 08:08 AM | Comments (0)

REO Inventory Now 34% of California's Home Sales

REO properties recently accounted for 34-percent of the state's home sales in April, according to a new report from ForeclosureRadar. In April alone, California set a new record when 44,101 new notices of default were filed. In addition, Notices of Trustee Sale increased 7.8-percent to 29,892, dwarfing the previous record. The number of foreclosures sold in California auctions (22,838) also increased 44-percent when compared to March.

Posted by S. Germain at 08:00 AM | Comments (0)

BofA: More Losses Likely in Home-Equity Loans

The $118 billion home equity portfolio of Bank of America has become the biggest problem area for the Charlotte, N.C.-based bank, which saw its profits sink 77 percent to $1.21 billion in the first quarter. Profits were hurt by the $6 billion Bank of America had to set aside to cover current and future loan losses; in response, the bank is now focusing more on lending smaller amounts of money to borrowers, tightening lending standards and devoting more staff to providing assistance to borrowers.

Posted by S. Germain at 07:55 AM | Comments (0)

Plots & Ploys: End Run Around Cuomo?

Sen. Elizabeth Dole, R-N.C., is expected to propose an amendment to a bill that would beef up regulatory oversight of Fannie Mae and Freddie Mac, calling for the government-sponsored enterprises' new regulator to create new appraisal standards for the mortgages they buy or guarantee. The amendment would overrule a code of conduct created by New York Attorney General Andrew Cuomo that would prevent mortgage brokers and loan officers from selecting appraisers and prohibit lenders from using valuations by in-house or affiliated appraisers.

Posted by S. Germain at 07:55 AM | Comments (0)

2007 Subprime Off 70 Percent

Subprime origination volumes plummeted 70 percent to $180 billion in 2007, according to a new survey from National Mortgage News and the Quarterly Data Report. Countrywide Financial originated $16.9 billion in subprime loans (down 58 percent) and was followed by Option One Mortgage with $13.9 billion (down 53 percent), First Franklin Financial with $13.6 billion (down 51 percent), Wells Fargo with $13.3 billion (down 52 percent) and Chase with $11.4 billion (down 1 percent).

Posted by S. Germain at 07:53 AM | Comments (0)

Fannie Mae to Offer New Mortgage

Fannie Mae reportedly will unveil a new product allows homeowners whose mortgages have been packaged by the government-sponsored enterprise to refinance at a lower rate even if they owe more than the property is worth. However, homeowners cannot be late on their current loan payments, and current mortgage rates must be low enough to justify the refinancing.

Posted by S. Germain at 07:50 AM | Comments (0)

May 09, 2008

Fiserv Buys Web-Based LOS Tech

Fiserv Inc. has announced the acquisition of rights to Portellus Inc.'s loan origination system technology. The terms of the transaction were not disclosed. Fiserv said the acquisition is part of a strategy to bring a common LOS to market that will allow lenders to originate their mortgage, consumer, and commercial loans on one platform.

Posted by S. Germain at 08:07 AM | Comments (0)

Countrywide's Subprime Delinquencies at 36%

At the end of March, 36% of subprime mortgages being serviced by Countrywide were in some stage of delinquency. Countrywide services roughly $100 billion in subprime mortgages, which means that nearly $36 billion worth of loans are at risk of going into foreclosure. The 90-day-plus late ratio on the portfolio is 21.04%. A year ago the 90-day rate was 7.82%.

Posted by S. Germain at 08:05 AM | Comments (0)

Pair Automate Pipeline Risk Management

Optimal Blue, has formed a joint limited liability company with Secondary Interactive, to offer mortgage pipeline risk management. The companies touted the partnership as a way of providing bankers secondary-market services such as loan eligibility and pricing, lock desk management, pipeline risk management, and investor relations. They said this marks the first time a vendor has coupled best efforts and mandatory functionality.

Posted by S. Germain at 08:03 AM | Comments (0)

PCLender.com Extends Mortgage Lending Compliance Functionality

PCLender.com has extended the compliance functionality of its InHouse Mortgage enterprise lending platform to encompass the entire front to back end mortgage lending continuum, protected by its SAS 70 Type II certified security and redundancy enabled infrastructure.

Utilizing an integrated library of over 3,000 forms allows lenders to ensure disclosures are accurately completed for RESPA, FACTA, and TILA for conforming, FHA, VA, HELOC's, and construction lending programs. InHouse Mortgage back end compliance features provide high cost checks via Interthinx or ComplianceEase, HMDA reporting and data verification.

Posted by S. Germain at 07:56 AM | Comments (0)

Ellie Mae Releases Version 3.5 Of Encompass Software

Ellie Mae has announced version 3.5 of the Banker and Custom Editions of the Encompass mortgage management system, adding many new enhancements. According to the company, the enhancements, which improve security and increase compliance, also streamline a number of tasks in loan processing, secondary marketing, process management, business management, and security and administration.

Posted by S. Germain at 07:46 AM | Comments (0)

Controversial Foreclosure Prevention Bill Passes House

Despite threats of a presidential veto, the U.S. House of Representatives passed The Neighborhood Stabilization Act (H.R. 5818). The bill aims to clear up urban blight by providing $15 billion in federal grant funding to help local and state governments clean up and restore neighborhoods impacted by foreclosures.

The bill has serious critics with opponents saying it benefits lenders and may actually encourage borrowers to give up on saving their homes.

Posted by S. Germain at 07:41 AM | Comments (0)

HUD Extends RESPA Reform Comment Period

While officials at HUD are bent on finalizing a rule for RESPA reform before President Bush's term ends, they have agreed to give the public an extra 30 days to comment on the White House proposal to overhaul the Real Estate Settlement Procedures Act. A total of 148 members of Congress—along with such industry groups as the MBA and the NAR—petitioned HUD Deputy Secretary Roy Bernardi to extend the comment period.

Posted by S. Germain at 07:39 AM | Comments (0)

Home-Appraisal Row May End Up in Court

The appraisal code of conduct orchestrated by New York Attorney General Andrew Cuomo and slated for implementation by Fannie Mae and Freddie Mac on Jan. 1 likely will face litigation if Cuomo fails to collaborate with the mortgage industry to revise the regulations. The code of conduct aims to prevent lenders from pressuring appraisers for inflated valuations, would make it illegal for bank employees and mortgage brokers to select appraisers and would ban the use of in-house or affiliated appraisers by lenders. The mortgage industry and certain federal regulators worry about disruptions in the appraisal industry and higher borrowing fees as a result of the code, and some are criticizing Cuomo for instituting new rules without soliciting feedback from federal regulators or Congress.

Posted by S. Germain at 07:38 AM | Comments (0)

UBS Mortgage Sale a Cautionary Tale

Following on the heels of Deutsche Bank AG and Citigroup Inc., UBS AG has become the latest investment bank to sell off unwanted assets, which some observers believe indicates signs of recovery in the credit markets. UBS is unloading $15 billion in Alt-A and subprime mortgages to asset manager BlackRock Inc., reportedly for about 68 cents on the dollar.

Posted by S. Germain at 07:37 AM | Comments (0)

Home Lender ResCap Facing Cash Crunch

Residential Capital (ResCap) posted a total of $5.3 billion in losses over six consecutive quarters due to rising mortgage foreclosures, and it is working hard to amend credit terms before it is found in violation of loan agreements. In order to meet debt obligations, the GMAC mortgage-finance subsidiary needs to raise $600 million by the end of June. The company is seeking $350 million ResCap notes outstanding from GMAC by the end of May and hopes to borrow $150 million more from GMAC under a credit facility already in place.

Posted by S. Germain at 07:35 AM | Comments (0)

Treasury Plans to Press Lenders

The Treasury Department has announced plans to meet with at least 10 big lenders, including Bank of America and Countrywide Financial Corp., as part of an effort to pressure them into hastening the time it takes to modify mortgages for financially distressed borrowers. Treasury officials are also pressing to make the modification process more consistent across institutions.

Posted by S. Germain at 07:34 AM | Comments (0)

Fannie, Freddie to Report Third Straight Loss on Credit Costs

Fannie Mae and Freddie Mac are each expected to post losses for the third consecutive quarter amid the worst housing slump in decades. The two GSEs, which own or guarantee 40 percent of the $12 trillion in U.S. residential mortgages, are reeling from record home foreclosures and delinquencies that have pushed their stocks down more than 50 percent in the past year. According to a recent Bloomberg poll of analysts, the GSEs may each need to raise as much as $15 billion in capital after more than $9.4 billion of mortgage-related losses.

Posted by S. Germain at 07:32 AM | Comments (0)

May 02, 2008

Origen Selling Servicing Platform to Green Tree

Origen Financial, a manufactured housing lender based in Southfield, Mich., has agreed to sell its servicing platform and related assets to Green Tree Servicing, St. Paul, Minn. The deal includes the transfer of approximately $1.6 billion of manufactured housing loans.

Posted by S. Germain at 08:02 AM | Comments (0)

Ross Closes on Option One Purchase

An affiliate of WL Ross & Co. has closed on its $1.3 billion purchase of Option One Mortgage Corp., Irvine, Calif., which services $55 billion in A-minus to D loans. WL Ross chief executive Wilbur Ross said he is now in the hunt to buy savings and loan institutions. In a recent interview with National Mortgage News, Mr. Ross said he eventually wants to enter the loan production business.

Posted by S. Germain at 08:01 AM | Comments (0)

Ellie Mae to Acorn's Rescue?

Ellie Mae has decided to provide Acorn Housing—a nonprofit that is focused on providing houseling counseling for low-to-moderate income borrowers—with its Encompass Mortgage Management solution, which is designed to smooth out the process of dealing and working with loans, especially on the loss mitigation-end.

Posted by S. Germain at 07:41 AM | Comments (0)

Credit-Related Charges Hinder Countrywide's First Quarter

Countrywide Financial Corp. announced that the company experienced a net loss of $893 million in the first quarter of this year compared to a much more generous net income of $484 million during the first quarter of last year. Countrywide blames most of its losses on credit-related subtractions that were driven by the need for higher loan loss provisions, mortgage delinquencies, foreclosures and a drop in home prices.

Posted by S. Germain at 07:39 AM | Comments (0)

Mortgage Demand Hits '08 Low

The MBA reports an 11.1-percent drop in home loan applications last week, following a 14.2-percent plunge the previous week. Purchase loan requests slipped 4.8 percent to their lowest point in five years, while refinancing applications declined 16.7 percent to their lowest level this year.

Posted by S. Germain at 07:36 AM | Comments (0)

Fed Cuts and Signals Halt

The Federal Reserve reduced its key interest rate by a quarter of a percentage point to 2 percent, with hopes of preventing the downtown in the economy from worsening. The cut in the federal funds rate is expected to eventually result in lower borrowing costs for consumers who take out adjustable-rate mortgages. The central bank has lowered the interest rate seven times since September but suggested in a statement that the campaign has ended, unless the financial markets deteriorate further.

Posted by S. Germain at 07:35 AM | Comments (0)

2010 Is Predicted Date for Housing Recovery

Fannie Mae President and CEO Daniel Mudd anticipates "some recovery and growth" in the country's residential property market--but not until 2010. Speaking before a business journalism conference in Baltimore, the executive predicted that the rockiness experienced last year will continue through 2008, with a similar climate forecast for 2009.

Posted by S. Germain at 07:33 AM | Comments (0)

Countrywide Clients Get More BofA Help

BofA announced that it would take steps to help Countrywide's borrowers keep their properties out of foreclosure. During the next two years, BofA plans to help 265,000 or more borrowers by modifying $40 billion in troubled mortgages. In addition to offering modifications and forbearance arrangements, BofA will eliminate prepayment penalties in some instances, halt new late fees on loans in the foreclosure process and reach out to borrowers who are making timely payments but with some difficulty.

Posted by S. Germain at 07:32 AM | Comments (0)

'Workouts' on U.S. Prime Mortgages Rise--Hope Now

The HOPE NOW Alliance reports 502,520 mortgage workouts in the first quarter, up 6 percent from the 2007 fourth quarter and 26 percent from the third quarter. While workouts on prime loans surged 19 percent to 206,495 in the first quarter from 173,499 in the fourth quarter, the alliance reports that subprime workouts fell to 296,025 from 301,244.

Posted by S. Germain at 07:31 AM | Comments (0)

Presidential Candidates Call for Government to Rescue Homeowners

In response to falling home prices and soaring mortgage default rates in numerous states, the presidential candidates are touting homeowner rescue plans that call for increased involvement by the federal government. Sen. Hillary Rodham Clinton, D-N.Y., wants lenders to voluntarily institute 90-day moratoriums on foreclosures to ensure plenty of time for loan modifications or workouts; and both she and Sen. Barack Obama, D-Ill., support a proposal from House Financial Services Committee Chairman Barney Frank, D-Mass., that calls for lenders to lower mortgage balances by 15 percent so that struggling borrowers could refinance into FHA loans. Meanwhile, Sen. John McCain, R-Ariz., has proposed a refinancing plan to help as many as 400,000 homeowners.

Posted by S. Germain at 07:30 AM | Comments (0)

April 25, 2008

BofA to sweep Countrywide name into history bin

Bank of America plans to drop the Countrywide Financial moniker after it closes on its purchase of the troubled mortgage lender later this year. California's largest bank generally drops the name of an acquired institution.

Posted by S. Germain at 08:19 AM | Comments (0)

BoA Announces Home Lending Guidelines

BoA will discontinue non-traditional mortgages where monthly payments may not cover all interest (option ARMs); significantly curtail other non-traditional mortgages, such as certain low-documentation loans; and implement enhanced borrower protections soon after completion of the Countrywide purchase, including limits on prepayment penalties and protections on non-traditional loans such as interest-only and hybrid ARMs.

Posted by S. Germain at 08:13 AM | Comments (0)

Bush Picks New HUD Secretary

President Bush has appointed Steve Preston, head administrator of the U.S. Small Business Administration (SBA), to the position of U.S. Secretary of Housing and Urban Development (HUD). Preston is taking HUD's reigns after former Secretary Alphonso Jackson resigned in the midst of extensive criticism related to allegations of cronyism and political favoritism.

Posted by S. Germain at 08:09 AM | Comments (0)

National City to Raise $7 Billion in Capital

After a first quarter net loss of $171 million, or $.27 per diluted share, Cleveland, Ohio-based National City Corp. said its Board plans to raise $7 billion in capital, with a large portion of that capital infusion—approximately $985 million—coming from private firm Corsair Capital, LLC. The remaining capital will be raised through investors, including some of National City's existing institutional stockholders.

Posted by S. Germain at 08:08 AM | Comments (0)

New-Home Sales Fall to Low Last Seen in Early 1990s

The Commerce Department reports an 8.5 percent drop in new-home sales to an annual pace of 526,000 in March, with economists blaming the largest job cuts since the start of the year for the greater than expected decline. New-home sales have not seen such low levels since the 1990s housing recession, and the 11-month supply of unsold new homes marks a 27-year high.

Posted by S. Germain at 08:04 AM | Comments (0)

House Panel Approves $15 Billion Foreclosure Bill

The House Financial Services Committee recently passed bills that aim to ease the housing crisis. The bill supported by Democrats seeks to avoid blight in neighborhoods hit hard by foreclosures by giving $15 billion in loans and grants to states, which would distribute the money to cities, counties and town to purchase and repair foreclosed homes. The measure was opposed by Republicans who insisted that private lenders who have taken ownership of these properties will be the main beneficiaries.

Posted by S. Germain at 08:02 AM | Comments (0)

Home Sales Fall, But Signs of Stability Emerge

NAR reports a 2-percent decline in existing-home sales to an annual rate of 4.93 million in March from the prior month and a 19.3-percent drop from 6.11 million a year ago. Although weak sales caused a jump in resale inventory to a 9.9-month supply, NAR reports an increase in the national median home price to $200,700 in March from $195,600 in February, while the Office of Federal Housing Enterprise Oversight says home prices edged up 0.6 percent in February from the previous month.

Posted by S. Germain at 07:59 AM | Comments (0)

BofA Warns More Home Equity Losses Are Coming

Bank of America saw its earnings decline 77 percent during the first quarter to $1.2 billion as a result of the impact of increased provisions for bad loans as housing prices fall and defaults rise. The bank also reports that it has reserved $1.6 billion for future home equity losses, which is more than it set aside for all loan losses during the first quarter of 2007. The volume of home-equity loans on its books was $117 billion compared with $90 billion a year ago; and the bank had $496 million in home-equity defaults that accounted for 1.71 percent of home-equity loans, up from $17 million in defaults, or 0.08 percent.

Posted by S. Germain at 07:58 AM | Comments (0)

Mortgage Servicing Litigation Grows

MortgageDaily.com's First Quarter 2008 Mortgage Litigation Report shows a jump in legal battles fought by mortgage servicers due to increases in delinquencies, bankruptcies and foreclosures. The report indicates nine secondary marketing lawsuits in the first quarter, with the total for 2008 likely exceeding the 23 cases recorded in 2007.

Posted by S. Germain at 07:56 AM | Comments (0)

April 18, 2008

Wells Accepting E-Docs From Fiserv

Wells Fargo Funding has added Fiserv to the list of vendors from which it will accept e-1003s and e-disclosures. The company recently announced that such e-docs would be accepted from DocuSign, Encomia, and eLynx.

Posted by S. Germain at 08:41 AM | Comments (0)

Some Good News: Wells Earns $2B in 1Q

Wells Fargo & Co. posted a $2 billion profit in the first quarter on record revenue of $10.6 billion. It originated $61 billion in single-family loans during the quarter, a 7% gain from the volume of a year earlier. Its servicing portfolio increased to $1.53 trillion, up 10% from March of last year. The banking giant's strong performance came despite a 16% sequential increase in its portfolio of nonperforming loans. At the end of March, the San Francisco-based Wells had $4.5 billion in NPLs, including $658 million worth of foreclosed and repossessed real estate and auto loans. It had $314 million of first-lien residential mortgages that were 90 days or more past due and another $228 million in late second-lien mortgages. A year ago it held $223 million in late firsts and seconds.

Posted by S. Germain at 08:39 AM | Comments (0)

Merrill Takes $4.5B in Subprime Hits

Merrill Lynch -- once the largest Wall Street player in the subprime market -- took $4.5 billion in mortgage-related writedowns in the first quarter and revealed that it has additional asset-backed security exposure of $6.7 billion. The $4.5 billion in subprime charges includes a $1.5 billion writedown on ABS-related collateralized debt obligations and $3 billion in charges that Merrill says are "related to hedges with financial guarantors."

Posted by S. Germain at 08:36 AM | Comments (0)

Knives Out at Citi

Citigroup is preparing for more surgery as it reports another big quarterly loss and additional write-downs as a result of the credit crunch. The bank has already been cutting jobs—more than 4,000 announced earlier this year—reorganizing businesses and selling some units, like Diners Club.

The bank took $12.1 billion in write-downs: $6 billion on investments related to subprime mortgages, $3.1 billion on leveraged loans, $1.5 on its exposure to bond insurers, and $1.5 billion on its inventory of auction-rate securities. Citi is also accounting for an increase of $3.1 billion in credit costs tied to consumer lending.

Posted by S. Germain at 08:23 AM | Comments (0)

Foreclosures Up 57-Percent from March 2007

Foreclosure filings in the United States rose 5-percent between the months of February and March of this year and were up 57-percent when compared to March of last year, according to RealtyTrac's latest March 2008 U.S. Foreclosure Market Report.

In the latest report, RealtyTrac says foreclosure filings were issued on 234,685 properties in March — a statistic that includes filings on all default notices, auction sale filings and bank repossessions.

Posted by S. Germain at 08:16 AM | Comments (0)

Fannie and Freddie Discuss Foreclosure Prevention & Servicing Act Before House Subcommittee

Leaders with Fannie Mae and Freddie Mac testified alongside consumer advocacy representatives and housing counseling agencies at the U.S. House Subcommittee on Housing and Community Opportunity's hearing on "The Foreclosure Prevention and Sound Mortgage Servicing Act of 2008” this morning. The Act is a legislative proposal that attempts to create mandates that forbid servicers from foreclosing on a property without first making a concerted effort to help borrowers stay in their homes.

Ingrid Beckles, vice president of servicing and asset management at Freddie Mac, testified on behalf of the GSE, saying with the GSEs already encouraging servicers to pursue home retention options, a new federal requirement is not needed.

Posted by S. Germain at 08:15 AM | Comments (0)

MISMO Rolls Out MXCompliance Title

MISMO announced the availability of the MXCompliance Title v2.32 Request and Response certification this week.

“The MXCompliance Title Request and Response certification allows organizations working in the title insurance industry to affirm their support of, and compliance to, MISMO standards for the transactions that help mitigate losses and protect property owners' and lenders' financial interest in real property.”

Posted by S. Germain at 08:13 AM | Comments (0)

Freddie Mac, Banks Reach Deals on Jumbo Mortgages

Wells Fargo, J.P. Morgan Chase, Citigroup and Washington Mutual will offer lower interest rates on home loans greater than $417,000 as a result of an agreement the lenders have reached with Freddie Mac. As much as $15 billion in big loans and related bonds will be bought or guaranteed by Freddie Mac this year. Jumbo borrowers, meanwhile, are likely to face an interest rate that is 0.50 percentage point to 0.75 percentage point higher than on smaller loans.

Posted by S. Germain at 08:10 AM | Comments (0)

Why Lenders Are Leery of Short Sales

The National Association of Realtors says 18 percent of home transactions are now short sales, though experts point out that lenders are reluctant to approve such deals. Research from Clayton Holdings Inc. reveals that lenders lose only 19 percent of the loan amount on average with a short sale, compared to 40 percent on a traditional foreclosure sale. However, short sales require approvals from primary lenders, servicers, investors and home-equity lenders--a process that can take several months to complete.

Posted by S. Germain at 08:09 AM | Comments (0)

WaMu Posts 2nd Consecutive Quarterly Loss

WaMu this week reported its second consecutive quarterly loss. The Seattle-based thrift, which recently secured a $7 billion capital infusion, recorded a first-quarter loss of $1.14 billion versus a profit of $784 million a year earlier. WaMu has consistently ranked among the nation's biggest subprime mortgage companies. According to Moody's Investors Service, it still has $19 billion of subprime loans, $43 billion of second-lien home equity credit and $58 billion of option-ARMs on its books.

Posted by S. Germain at 08:07 AM | Comments (0)

Private-Equity Group Makes Deal for Clayton

Greenfield Partners LLC has agreed to acquire Clayton Holdings Inc., the beleaguered provider of mortgage due diligence and servicing.

Posted by S. Germain at 08:06 AM | Comments (0)

For Lenders, New Costs to Foreclose

Many municipalities--mainly in Southern California and the Midwest--are changing their approach to the foreclosure crisis, moving from efforts to help homeowners avoid foreclosure to making sure those who take control of foreclosed properties prevent them from falling into disrepair. Lenders and servicers in these areas are being hit with hefty fines for code violations in vacant homes; more than a dozen companies have been given 30 days to formulate rehabilitation plans for homes in St. Paul, Minn., for instance, before facing legal repercussions. In Chula Vista, Calif., meanwhile, a $70 fee has been imposed to register vacant properties; and some cities are levying fines up to $1,000 per day for code violations. Asset managers insist they are being hit with excessive fees, given that code violation notices initially are sent to high-ranking executives by mistake.

Posted by S. Germain at 08:02 AM | Comments (0)

April 04, 2008

FHA Requiring 2nd Appraisals on Jumbos

The Federal Housing Administration is requiring a second appraisal on jumbo mortgages above $417,000 in declining markets and limiting the maximum LTV on cash-out refinancings to 85%.

Posted by S. Germain at 08:41 AM | Comments (0)

Fed Introduces Maps With Data On Mortgage Conditions

The Federal Reserve System has made available a set of dynamic maps and data that illustrate subprime and Alt-A mortgage loan conditions across the U.S.

The maps, which are maintained by the Federal Reserve Bank of New York, will display regional variation in the condition of securitized, owner-occupied subprime and Alt-A mortgage loans. The maps and data can be used to assist in the identification of existing and potential foreclosure hotspots.

The maps can be accessed at www.newyorkfed.org/mortgagemaps/. Monthly updates are planned.

Posted by S. Germain at 08:28 AM | Comments (0)

MISMO & PRIA Publish IP Property Rights Disclosure Draft

MISMO, the data standard subsidiary of the MBA, and the Property Records Industry Association (PRIA) have published the Intellectual Property Rights Disclosure Draft of a Business Requirements Document.

According to the MBA, the draft lays out the business requirements that should be met when dealing with electronic document formats like MISMO SMART Doc, eSigned PDF and Adobe Intelligent Document Format, as well as Microsoft Word that has embedded XML.

Posted by S. Germain at 08:25 AM | Comments (0)

FTC Advises USFN: Attorneys Can Assist Debtors With Loss Mit Info

Attorneys representing creditors can now help their servicing and lending clients with loss mitigation efforts, thanks to a recent FTC advisory opinion. Recognizing that many servicing shops are now asking creditors' attorneys to help them inform borrowers about loss mitigation options, USFN saw it a necessity to ask the Federal Trade Commission about the role of creditor’s rights attorneys in the overall loss mitigation process.

The FTC answered this question last week, saying as long as attorneys follow all of the FDCPA rules, they would not automatically violate the FDCPA by providing loss mitigation options at the commencement and during the foreclosure process.

Posted by S. Germain at 08:21 AM | Comments (0)

HUD Secretary Resigns

Alphonso Jackson said that he will be resigning from the agency, effective April 18, 2008. Jackson's announcement comes after much speculation about his pending resignation and after two U.S. Senators sent letters to the president, saying they do not have confidence in Jackson's leadership in times when the whole U.S. economy is suffering under the weight of a housing slowdown.

Posted by S. Germain at 08:20 AM | Comments (0)

MetLife to Buy Mortgage Firm

EverBank Financial Corp. will sell its EverBank Reverse Mortgage LLC unit to Met Life Inc. The acquisition will help Met Life Bank quickly expand its presence in the reverse mortgage market, having added these loans to its portfolio for the first time last year.

Posted by S. Germain at 08:13 AM | Comments (0)

MBA's Top CRE, Multifamily Lenders

The MBA reports that the highest dollar volume for multifamily and commercial mortgage originations in 2007 was recorded by Wachovia Corp., totaling $90.3 billion. Originations amounted to $71.6 billion for second-place Wells Fargo Co., followed by $69.7 billion for Bank of America Corp. The average deal size was $25.4 million for Bank of America, $22.2 million for Wachovia and $6.1 million for Wells Fargo.

Posted by S. Germain at 08:12 AM | Comments (0)

FHA Loans Grow Costly as Banks Add Fees

Mortgage industry professionals say more big lenders will follow JPMorgan Chase's lead and add fees to loans that are insured by the Federal Housing Administration. The move comes at a time when Congress wants to rely more on the FHA to jump-start mortgage lending and revive the housing market.

Posted by S. Germain at 08:12 AM | Comments (0)

Court Approves Review of Countrywide Mortgage Practices

The Office of the United States Trustee will investigate the mortgage processing systems of Countrywide Financial in an attempt to uncover evidence that the lending giant systematically abuses borrowers by chronically mishandling mortgage payments, padding bills with improper fees and charges and ignoring court orders while dogging troubled consumers.

Posted by S. Germain at 08:11 AM | Comments (0)

Bernanke Sees '08 Rebound

The United States economy could possibly slip into recession, Federal Reserve Chairman Ben Bernanke conceded to the Joint Economic Committee of Congress on Wednesday; however, he predicted that economic recovery could begin by the end of 2008. Bernanke indicated that the central bank had done its job and likely would not continue its aggressive rate-cutting campaign.

Posted by S. Germain at 08:10 AM | Comments (0)

Senators Move on Housing Relief

Several key senators this week came to terms on a $15 billion bipartisan plan aimed at bolstering the struggling housing market. To get the package up for debate in front of the full Senate, Democrats dropped a bankruptcy provision opposed by Republicans and agreed to halve funds for counseling at-risk homeowners to $100 million. For their part, GOP lawmakers agreed to a smaller tax credit for homeowners than they initially sought and accepted $4 billion in block grants for communities to buy and refurbish foreclosed homes.

Posted by S. Germain at 08:08 AM | Comments (0)

Fannie Mae Tightens Rules for Mortgages

Fannie Mae recently imposed stricter rules for the mortgages it purchases or guarantees, including a 580 minimum credit score for individual loans purchases. Additionally, the government-sponsored enterprise extended by one year the period following foreclosure that is needed for borrowers to re-establish credit to five years. However, Fannie Mae says it will purchase mortgages with credit scores under 580 and permit credit recovery periods of less than five years in certain situations. With regard to servicers, the company boosted the maximum forbearance period to six months from four months in an effort to minimize losses from foreclosures.

Posted by S. Germain at 08:07 AM | Comments (0)

MBA Unit Seeking Database Vendor

Lender Technologies Corp. hopes to develop a national fraud database that encourages information-sharing by mortgage lenders to guard against fraudulent transactions. The for-profit subsidiary of the Mortgage Bankers Association currently is seeking proposals from vendors to develop the project, which MBA senior director of government affairs Corey Carlisle says would be more comprehensive than existing fraud databases in that it aims to stop fraud during origination.

Posted by S. Germain at 08:06 AM | Comments (0)

March 28, 2008

Best Launches Title, Mortgage Guaranty Center

A.M. Best Co., has announced the launch of Best's Title & Mortgage Guaranty Center, a Web portal that provides access to information generated by the company on title insurance and the mortgage guaranty industry. Content available on the site includes Best's ratings of title insurers, links to Best's rating methodology documents and relevant industry research, and news stories related to the title industry from A.M. Best's news publications. Best's Title & Mortgage Guaranty Center can be found on the Web at http://www.ambest.com/title.

Posted by S. Germain at 08:12 AM | Comments (0)

'08 Mortgage Fraud Losses Forecast at $2.5B

Losses from mortgage fraud will reach $2.5 billion in 2008 and comparable losses will continue for several years thereafter, according to new research from TowerGroup. TowerGroup anticipates that lenders will respond by deploying technology to assist in the detection and prevention of mortgage fraud and that their annual spending on such tools will reach several hundred million dollars in the next few years.

Posted by S. Germain at 08:11 AM | Comments (0)

Billionaire Purchases Option One Mortgage

H&R Block Inc. has agreed to part with its Option One Mortgage Corp. loan servicing subsidiary in a deal inked with WL Ross & Co. LLC — a platform run by billionaire investor Wilbur L. Ross Jr. The transaction, which is the second major subprime-related transaction headed by Ross in the last year, is valued at $1.1 billion.

Posted by S. Germain at 07:54 AM | Comments (0)

Sen. McCain Contrasts Clinton: No Bailout for the Irresponsible

Republican Presidential Candidate John McCain drew significant contrasts between his plan for settling the mortgage crisis and that of Democratic Presidential Candidate Sen. Hillary Rodham Clinton.

McCain said he pushes for greater accountability and transparency in lending and believes lenders who initiated poorly underwritten loans should be held accountable, as well as those homeowners who misstated information on loan applications to gain a mortgage.

In addition, McCain is asking for a return to the philosophy that down payments should be required during the purchase of a home and opposes proposals to push down initial down payment requirements on FHA mortgages.

Posted by S. Germain at 07:52 AM | Comments (0)

Fannie Mae Tightens Loan Restrictions

To minimize credit losses, Fannie Mae recently made policy changes that could make it more difficult for borrowers in markets experiencing home-price declines to refinance into less expensive loans. The changes prohibit borrowers from obtaining cash-out refinancings to repay second mortgages, allowing them to use equity only to repay first mortgages, prepaid interest or closing costs.

Posted by S. Germain at 07:48 AM | Comments (0)

Clinton Details Mortgage Plan

On March 24, Hillary Clinton rolled out a four-part plan that supports a federal mortgage auction system under legislation proposed by Rep. Frank, and Sen. Dodd,; but she goes further by calling for the FHA to supplement the auction plan by purchasing problem mortgages as necessary. Clinton's proposal also calls for enhanced protection for mortgage servicers from investor lawsuits as a way to bolster loan restructuring efforts, a $30 billion initiative to eliminate blight by permitting cities and states to snap up foreclosed homes and a nonpartisan housing panel, with members including former Federal Reserve chairman Alan Greenspan and former Treasury secretary Robert Rubin.

Posted by S. Germain at 07:46 AM | Comments (0)

Existing-Home Sales Rise as Prices Plummet

The NAR reports that sales of previously owned homes rose an unexpected 2.9 percent in February as buyers took advantage of the large supply of properties on the market that were available at low prices. The median sales price of existing homes last month was $195,900--down 8.2 percent from $213,500 a year earlier--and also represented the biggest decline since 1999, when NAR started tracking the data.

Posted by S. Germain at 07:44 AM | Comments (0)

Washington Sees Several Fronts for Attacking Mortgage Crisis

With regard to housing, proposals in both the House and the Senate would allow the FHA to refinance problem loans after lenders or investors agree to forgive a portion of the principal; $300 billion in refinances would occur under the plan promoted by House Financial Services Committee Chairman Barney Frank, while $400 billion in government insurance would be provided for refinancings under a proposal from Senate Banking Committee Chairman Christopher Dodd.

However, the Bush administration continues to push for borrowers and lenders to work problems out amongst themselves, with Congress taking steps to pass FHA modernization legislation and beefing up regulation of Fannie Mae and Freddie Mac. Other proposals would bolster mortgage counseling funds, offer tax relief to home builders and allow the Federal Home Loan Banks to buy $160 billion in mortgage-backed securities.

Posted by S. Germain at 07:41 AM | Comments (0)

March 21, 2008

JPMorgan Chase To Acquire Bear Stearns

JPMorgan Chase & Co. is acquiring The Bear Stearns Companies Inc. in a stock-for-stock exchange. Based on the closing price of March 15, the transaction would have a value of approximately $2 per share.

Posted by S. Germain at 08:23 AM | Comments (0)

Bid to Regulate Reverse Mortgages Stalls in House

Some state lawmakers in Arizona have joined the mortgage and banking industry in opposing a bill sponsored by Rep. Bill Konopnicki, R-Safford, chair of the House Committee on Financial Institutions and Insurance, that would regulate reverse mortgages. HB 2506--which would require disclosures of all terms, including interest rates and fees, and ban the practice of requiring a homeowner to buy an annuity as part of the deal--stalled in the House.

Posted by S. Germain at 08:11 AM | Comments (0)

US Mortgage Lenders to Pump $200 Bln Into Markets

Efforts are being made to pump liquidity into the mortgage markets to ease the credit crunch and head off a recession. A decision by Fannie Mae and Freddie Mac's regulator to ease capital requirements will pump $200 billion into the markets, while additional liquidity is expected if the regulator of the Federal Home Loan Bank System approves a plan to increase some mortgage holdings two-fold to approximately $300 billion.

Posted by S. Germain at 08:10 AM | Comments (0)

Fed Cuts Key Interest Rate

The Federal Reserve has reduced the federal funds rate by three-quarters of a percentage point, to 2.25 percent, in an effort to lower interest rates across the board, alleviate the credit crunch and prevent the economy from sliding into recession. The central bank also slashed the discount rate to 2.5 percent. The federal funds rate and the discount rate stood at 5.25 percent and 6.25 percent, respectively, last August; but the Fed's cuts since then have not produced the effect policymakers had anticipated because many banks have not respond by lowering rates on mortgages, credit card debt and business loans.

Posted by S. Germain at 08:08 AM | Comments (0)

Investor Buying Option One

H&R Block's mortgage servicing unit, Option One, will be acquired by investor Wilbur Ross Jr. of WL Ross & Company for $1.1 billion. The purchase price includes $41 million for Option One's servicing rights and $65 million for other servicing-related assets valued at $85 million. After he snaps up Option One's $53 billion portfolio, Ross will be second only to Countywide Financial in the ranks of the nation's biggest subprime mortgage servicers.

Posted by S. Germain at 08:06 AM | Comments (0)

HUD Official Says Respa Reform Can't Wait

The public comment period on HUD's proposed revisions to the Real Estate Settlement Procedures Act ends May 13, but more than a half dozen trade groups representing the mortgage industry insist that more time is needed to review the nearly 300-page document. A proposal formally introduced on March 14 would create a four-page, standard good-faith estimate detailing settlement costs and loan terms; it would limit how much closing costs can rise at the settlement table, and it also call for legislation that would beef up HUD's enforcement powers. The agency says borrowers would save an average $518 to $670 per transaction, or $6.5 billion to $8.4 billion per year overall, if the rules are implemented.

Posted by S. Germain at 08:03 AM | Comments (0)

March 14, 2008

MARI Finds Fraud Spread More Evenly

Although Florida remains a hotbed for mortgage fraudsters, the crime is becoming more evenly spread among all states as opposed to being concentrated in just a few, according to the latest report from the Mortgage Asset Research Institute. MARI's 10th period fraud case report also found that while the most common types of fraud continue to involve erroneous employment histories and false income statements, the failure to disclose debts, liens, or judgments is an up-and-coming problem.

Posted by S. Germain at 08:36 AM | Comments (0)

National City Corp. on the Market?

With the credit crunch causing millions of dollars in subprime-related losses, National City Corp. is looking for an escape route by putting the company up for sale, the Wall Street Journal reported this week. The business publication said it interviewed sources close to the situation to confirm news of a potential sale. National City Corp. experienced a trying fourth quarter after posting a $333 million loss.

Posted by S. Germain at 08:20 AM | Comments (0)

Countrywide Delinquencies Drop

Countrywide Financial reports a decrease in delinquencies to 7.44 percent of mortgages in February from 7.47 percent the prior month. Delinquencies were up substantially, however, from 4.48 percent in February 2007. Meanwhile, the Calabasas, Calif.-based lender recorded a jump in foreclosures to 1.64 percent from 1.48 percent in January and from 0.80 percent in February 2007.

Posted by S. Germain at 08:18 AM | Comments (0)

White House Offers Plan to Ward Off Credit Crisis

The Bush administration wants states to issue licensing standards for mortgage brokers, lenders to provide more information on payment terms to home buyers and companies to limit conflicts of interest in assigning levels of risk to mortgage securities sold to investors. The White House sees the proposal, which was welcomed by industry representatives, as having the potential to prevent future problems in the credit markets. Federal banking and securities regulators and new committees run by industry executives will issue regulations in the next few months to execute the plan, while federal legislation might be crafted to tighten rules for mortgage brokers.

Posted by S. Germain at 08:17 AM | Comments (0)

Mortgage Application Fees May Rise on Appraisal Reform

Borrowers can expect to see an increase in mortgage application fees beginning in 2009, when a new agreement that New York State Attorney General Andrew Cuomo reached with Fannie Mae and Freddie Mac takes effect. In an effort to crack down on inflated appraisals, Cuomo hammered out a pact that calls for the government-sponsored enterprises to buy mortgages only from lenders that use independent appraisers and for separate appraisals to be submitted for each lender that a borrower applies to. The cost will be passed on to consumers, and a borrower who chooses to shop around might have to pay as much as $1,000 to $2,000 in appraisal fees for loans submitted--compared to about $400 previously--and might even lose the lower interest rates they had locked in for 30 days because turning in applications individually is time-consuming.

Posted by S. Germain at 08:15 AM | Comments (0)

Latest Trouble Spot for Banks: Souring Home-Equity Loans

Declining residential values are leaving banks with little or nothing to collect on many home-equity loans in case of default. Equifax Inc. and Moody's Economy.com report that nearly 4.65 percent of all fixed-rate home-equity loans were delinquent in last year's October-through-December period, an increase from 3.11 percent during the fourth quarter of 2006. Doug Duncan, chief economist of the Mortgage Bankers Association, forecasts, "We will continue to see banks increasing reserves for their home-equity portfolios and tightening their home-equity policies, changing their credit standards in response to price declines."

Posted by S. Germain at 08:13 AM | Comments (0)

Fed Announces $200-Billion Securities Swaps to Help

The Federal Reserve surprised many this week with its decision to begin temporarily lending major banks and brokerages as much as $200 billion in U.S. Treasury securities that it owns. In exchange, the Fed will receive mortgage-backed securities, many of which have lost value because of market jitters over the rising number of loan defaults. Central bank officials hope that, armed with rock-solid Treasury bonds, financial firms will return to normal lending and investing practices and that the credit crisis will subsequently level off.

Posted by S. Germain at 08:13 AM | Comments (0)

Mortgage Mess Becomes Prime Territory for Law Firms

Navigant Consulting Inc. says civil lawsuits tied to the subprime mortgage crisis totaled 278 in 2007, and experts believe mounting subprime losses will push the total number of cases above the 559 filed during the savings and loan crisis. Of last year's cases, 43 percent involved allegations of predatory lending, and 22 percent involved securities.

Posted by S. Germain at 08:10 AM | Comments (0)

Mortgage Lenders See More Borrowers Give Up

Mortgage lenders report that many borrowers whose mortgage balances exceed the value of their homes are making no attempts to iron out new payment plans and simply are walking away, especially in Florida, California, Nevada and other states plagued by substantial home-price declines. Freddie Mac reports that more than 50 percent of foreclosures involve borrowers who failed to respond to letters and calls from their lenders, and the Mortgage Bankers Association notes that 18 percent of foreclosures in the fall of 2007 involved absentee owners.

Posted by S. Germain at 08:06 AM | Comments (0)

March 07, 2008

Delinquencies Hit 23-Year High

The overall home mortgage delinquency rate jumped to 5.82% in the fourth quarter, the highest level since 1985, according to the national delinquency survey of the Mortgage Bankers Association. When the foreclosure inventory is added to the delinquency rate, nearly 8% of all homeowners with a mortgage were not making payments in the fourth quarter.

Posted by S. Germain at 08:24 AM | Comments (0)

Citi to Reduce Mortgage Holdings by $45B

Citigroup disclosed plans to reduce its on-balance-sheet mortgage holdings by $45 billion over the next year, or 20% of its total portfolio. Officials in Citi's mortgage division told MortgageWire that it will not be selling loans per se, but instead will try to achieve the reduction through normal portfolio runoff. Citi also clarified that it will remain a retail, wholesale, and correspondent lender but will no longer buy mortgages in bulk packages.

Posted by S. Germain at 08:24 AM | Comments (0)

OCC Asks Major Banks for Loan Data

America’s leading regulator of national banks sent letters recently to nine major banking platforms asking them to supply loan data each month. The request, which came from the Office of the Comptroller of the Currency (OCC), was issued so the regulatory agency will be able to analyze mortgage data and utilize the findings to help distressed homeowners. Comptroller of the Currency John Dugan said the data collection initiative was designed “in order to assure that we have a detailed picture of the activities of national bank servicers and the performance of loans serviced by them.”

Posted by S. Germain at 08:04 AM | Comments (0)

Increase in Conforming Loan Limits Sets In

HUD announced that it is increasing FHA conforming loan limits temporarily to provide liquidity to a sluggish real estate market, according to a HUD press release.

The temporary maximum limit is $729,750. Only homeowners needing safer loan options in high-cost metropolitan areas will be eligible for the higher cost loans. The lower limit is $271,050.

Posted by S. Germain at 08:02 AM | Comments (0)

Merrill Shuts Unit Making Home Loans

Merrill Lynch has announced the closure of its First Franklin Financial unit and the loss of 650 jobs as a result. The firm decided to shutter the subprime lending unit due to market deterioration, but officials note that its Merrill Lynch Credit Corp. and international mortgage operations will continue to write prime mortgages.

Posted by S. Germain at 08:00 AM | Comments (0)

Fed Likely to Cut Rates Sharply Again

The Federal Reserve is likely to implement an additional interest-rate cut in a few weeks as the housing downturn and credit crunch continue to worsen, with the degree of the cut likely to be debated at a March 18 meeting of Fed policy makers. It is not likely that the Fed will consider a three-quarter-percentage-point rate cut in light of the current economic situation, unless markets or economic data show a marked degradation over the next two weeks.

Posted by S. Germain at 07:59 AM | Comments (0)

In Deal With Cuomo, Mortgage Giants Accept Appraisal Standards

Effective in 2009, Fannie Mae and Freddie Mac will no longer purchase mortgages from lenders that use in-house appraisers, subsidiaries or affiliated companies to value homes, as part of an agreement with New York Attorney General Andrew Cuomo. The deal represents a victory for Cuomo, however, the National Association of Mortgage Brokers warned that the deal could hurt competition, and the Office of Thrift Supervision expressed concern that "the closed-door fashion in which it was reached could result in negative unintended consequences." Also under the agreement, Fannie Mae and Freddie Mac will contribute $24 million to establish the Independent Valuation Protection Institute, which will be tasked with investigating consumer and appraiser complaints and ensuring that the new rules are enforced.

Posted by S. Germain at 07:51 AM | Comments (0)

Broadened Respa Plan Attracting More Critics

The 271-page plan proposed by HUD to reform RESPA is broader than a proposal considered in 2007, drawing more scrutiny from the real estate industry. The latest proposal calls for a standardized good-faith estimate spelling out such details as the initial interest rate and monthly payment, the possibility of a rising balance and whether or not property taxes are put in escrow. Additionally, limits would be imposed on fees charged by lenders to prepare the estimate, and settlement costs could not exceed the estimate by more than 10 percent; however, the proposal calls for eliminating the 1-percent limit on fees in exchange for more transparency when writing FHA loans.

Posted by S. Germain at 07:50 AM | Comments (0)

Countrywide's Mortgage Woes Deepen

In its yearly filing with the Securities and Exchange Committee, Countrywide Financial Corp. reported a substantial jump in defaulted option adjustable-rate mortgages and steep losses tied to obligations on home-equity lines of credit. Countrywide reported a surge in option ARMs in its portfolio that are 90 days or more late to 5.4 percent in the fourth quarter of 2007 from 0.6 percent the prior year. The lender also disclosed that minimum payments on these option ARMs were made by 71 percent of borrowers, and income documentation before origination was required for just 20 percent of borrowers. Additionally, homes in hard-hit Florida and California account for 50 percent of the company's $87.04 billion mortgage portfolio.

Posted by S. Germain at 07:48 AM | Comments (0)

February 29, 2008

MBA Forecasts 1.8M Foreclosures in '08

The mortgage industry is facing the prospect of 1.8 million foreclosures this year, up from 1.5 million in 2007, according to a prediction by the Mortgage Bankers Association's chief economist. Doug Duncan.

Posted by S. Germain at 08:50 AM | Comments (0)

Senate Won't Hear Bankruptcy Cramdown Bill

After President Bush vowed to shoot down a bankruptcy reform bill that, among other provisions, would give judges the power to amend the terms of filers' home loans, the Senate voted not to vote on the measure. The MBA, which had supported many aspects of the bill but was strongly opposed to the modification language, hailed the move as a "major victory." The lending industry had warned that giving bankruptcy judges the authority to revise loan terms would hurt investor confidence in the secondary mortgage market, leading to higher borrowing costs for home buyers.

Posted by S. Germain at 08:24 AM | Comments (0)

J.P. Morgan's Losses From Loans May Double

J.P. Morgan Chase reports a surge in charge-offs for home-equity loans to $564 million last year from $143 million the prior year. In the 2007 fourth quarter by itself, charge-offs soared more than 65 percent to $248 million from $150 million during the previous three-month period. The company's net charge-off rate rose to 0.62 percent in 2007 from 0.18 percent in 2006, hitting 1.05 percent in the fourth quarter.

Posted by S. Germain at 08:23 AM | Comments (0)

Bernanke Signals Rate Cuts on Concern About Economy

Federal Reserve Chairman Ben Bernanke--citing concerns about the economic downturn, further softening in the labor market, worsening credit availability and even more declines in the housing market--insisted that the central bank is willing to reduce interest rates to prevent a major economic slump. In response to Bernanke's testimony, the future markets are looking for a 0.5-percentage point cut in the federal-funds rate at the central bank's meeting on March 18.

Posted by S. Germain at 08:21 AM | Comments (0)

Cool Reception to Fannie Idea on Appraisals

In response to an investigation by New York Attorney General Andrew Cuomo into whether Washington Mutual pressured The First American Corp. and its eAppraiseIT LLC subsidiary to artificially boost home values, Fannie Mae will institute new appraisal policies on Sept. 1. At that time, the government-sponsored enterprise will cease buying mortgages whose appraisals were ordered by brokers and prohibit lenders from using in-house appraisers and appraisal management units. Lenders are balking at the new rules, insisting that appraisal units eliminate pressure on appraisers to meet a particular valuation.

Posted by S. Germain at 08:19 AM |