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 | Comments (0)

Housing Sales Slowest on Record

The NAR reports that sales of single-family homes and condominiums declined for the sixth consecutive month in January, falling 0.4 percent to a seasonally adjusted annual rate of 4.89 million units. That was the slowest sales pace on record, dating back to 1999 and was interpreted as further proof that the nation's housing slump has yet to reach bottom. NAR further notes that the median price of a residence sold last month dropped 4.6 percent to $201,100, as the inventory of unsold dwellings climbed to a 10.3-month supply.

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

10 Percent of Home Loans Under Water

A recent report from Moody's Economy.com found that 10.3 percent of homeowners nationwide owe more than their properties are worth. As a result, these 8.8 million borrowers have more reason to walk away from their investment than do others.

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

February 22, 2008

FBR Loses $270M in 4Q

Friedman, Billings, Ramsey Group lost $270 million in the fourth quarter and is blaming its performance partly on the bankruptcy of its subprime division, First NLC Financial Services of Florida. For the year, the publicly traded real estate investment trust -- once a major player in the subprime sector -- lost $660 million.

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

New Loan Limits Coming by March 7?

HUD expects to issue the new loan limits for Fannie Mae, Freddie Mac, and Federal Housing Administration loans by March 7. Congress raised the loan limits as part of the economic stimulus bill that President Bush signed on Feb. 13. And lenders are waiting for HUD to compute the new loan limits, which are based on 125% of median home prices, with a $729,750 cap.

Posted by S. Germain at 08:35 AM | Comments (0)

Maryland Governor Makes Loss Mit a Requirement for Servicers?

Maryland Governor Martin O’Malley announced that his office and the Department of Labor Licensing and Regulation (DLLR) are rolling out emergency regulations to insure homeowners at-risk of foreclosure have the assistance needed to prevent more foreclosures.

His office intends to establish public agreements with servicers to insure loan handlers are delivering quality home retention solutions on time. In addition, O’Malley is requiring proof from servicers that they are in fact reaching out to distressed borrowers in an efficient manner. To check on this, he is asking servicers to give the DLLR data on all Maryland homeowners who face significant resets on adjustable rate loans in the near future.

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

Mortgage Delay Rules Approved by Alliance

All of the mortgage lenders and servicers comprising the HOPE NOW Alliance have signed off on a plan that will halt foreclosure proceedings for 30 days to give struggling borrowers time to seek modifications. The Project Lifeline initiative was initially promoted by just a half-dozen leading lenders, extending help to borrowers whose payments are at least three months behind by sending them letters to inform them of the program.

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

Countrywide: Delinquencies Up

Countrywide Financial reports a two-fold increase in its foreclosure rate to 1.48 percent during the year-over-year period ended in January. Over the same time span, the company's delinquency rate surged to 7.47 percent of unpaid balances. Meanwhile, a drop in benchmark interest rates made refinancing an attractive option, bolstering average daily applications by 72 percent from the prior month to $2.64 billion.

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

February 15, 2008

Calyx Software Integrates Flood Certification Providers Into Point

Calyx Software has added a flood certification category in the Calyx Network, connecting users of Calyx Point loan origination software with participating flood certification vendors. The flood certification category is accessed within Point's services menu and includes seven companies.

Currently listed in the new Calyx Point category are Loveland, Colo.-based Factual Data; Sacramento, Calif.-based First American; Columbus, Ohio-based CBCInnovis; Tucson, Ariz.-based First Magnus Lender Services; Arlington, Texas-based FIS Flood Services; Atlanta-based LandAmerica Lender Services; and Plano, Texas-based LandSafe.

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

Morgan Stanley To Reduce Residential Mortgage Businesses

Morgan Stanley says it will scale back its residential mortgage operations in the U.S. (as well as shut down its U.K. residential mortgage arm). The action will involve cutting about 1,000 jobs worldwide. Morgan Stanley notes that it will continue to service mortgage loans in the U.S. through its Saxon Mortgage Services Inc. platform,

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

Subprime Lawsuits on Pace to Top S&L Cases

A new report from Navigant Consulting Inc. reveals 278 civil lawsuits were filed in federal courts last year by borrowers, investors and other parties who sustained losses as a result of the subprime mortgage crisis. While 559 lawsuits were filed over a period of several years in the wake of the savings and loan (S&L) crisis, experts believe the subprime fallout could be worse.

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

Lenders Step Up Effort to Avert Foreclosures

Dubbed Project Lifeline, this latest plan has Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., J.P. Morgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co. all promising to seek contact with homeowners who are 90 or more days overdue on their mortgages. In some instances, homeowners will be given the opportunity to "pause" their foreclosure proceedings for 30 days while lenders try to make the loans affordable. The participating banks, all of which are members of the so-called Hope Now Alliance, are collaborating with HUD and the U.S. Treasury Department as part of the initiative.

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

Cash Out Refi Activity Drops to Lowest Level in 3.5 Years

Freddie Mac reports a drop in cash-out refinancings to 81 percent of refis in the 2007 fourth quarter from 86 percent in the third quarter, a trend that chief economist Frank Nothaft attributes to stricter underwriting standards, home-price declines and rising jumbo loan rates. Regionally, 87 percent of refinancings in the South and West resulted in new mortgage amounts 5 percent greater than the original loan, versus 86 percent in the Northeast and 76 percent in the Midwest.

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

February 08, 2008

State Bank Supervisors: 70% of Troubled Borrowers Don't Get Help

A report from the Conference of State Bank Supervisors claims that seven out of ten seriously delinquent home mortgage borrowers "are not on track for any loss mitigation option." The CSBS's state foreclosure prevention working group has met with the nation's 20 largest servicers of subprime mortgage loans in an effort to increase communication between servicers and troubled borrowers. The task force found that servicers have increased their use of loan modifications and other home retention options. For those delinquent borrowers who are in communication with their servicer, almost half are working toward a loan modification, the CSBS said.

Posted by S. Germain at 08:35 AM | Comments (0)

Freddie to Enter Commercial Space

Freddie Mac is looking to be a player in the commercial-mortgage securitization niche by pooling together multifamily loans and securitizing them through a dealer. The plan is for Freddie Mac to aggregate the loans, buying them from its network of lenders, and either hold on to or securitize the senior pieces of the loans, while securitizing the 'B' pieces through a dealer. If the senior pieces were to be securitized, they would carry the Freddie Mac label.

Posted by S. Germain at 08:34 AM | Comments (0)

OMB To Complete Review of HUD RESPA Rule

The Office of Management and Budget is expected to complete its review of HUD's RESPA Rule in a "few days" so it can be issued for public comment by the end of February, according to a Housing and Urban Development official. HUD deputy assistant secretary Gary Cunningham said the Real Estate Settlement Procedures Act proposal will enhance the Good Faith Estimate so mortgage applicants receive a clear disclosure of the loan terms and settlement costs. The new GFE will also provide a better disclosure of the mortgage broker fee. Once OMB clears the RESPA proposal, HUD will submit it to Congress for a 15-day review before it is published for a 60-day comment period.

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

Bush's 2009 Fiscal Plan for HUD Focuses on Loss Mit

President Bush aims to increase monies allotted to HUD in fiscal year 2009 by nine-percent, or $3.2 billion, to total $38.5 billion, according to a press release issued by HUD this week.

The federal agency says the nine-percent increase between fiscal year 2008 and 2009 will allow the President to gear more funding towards housing counseling initiatives, as well as homeless assistance and affordable housing programs. A breakdown of the proposed budget blue print includes an allotment of $1.636 billion for homeless programs, $2 billion for affordable housing development and $29.4 billion for rental assistance aimed at low-income families and $65 million for housing counseling.

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

MortgageKeeper.org Expands Loss Mit Coverage Area

MortgageKeeper Referral Services Inc. -- a Web-based platform that provides collection and loss mitigation departments with referrals to local home retention nonprofits, lawyers, and an assortment of other resources -- is now offering its resources in 15 new markets.

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

MBA Likes Some FHA/GSE Reforms, Not So Keen on Others

The Mortgage Bankers Association (MBA) issued a statement this week saying the organization agrees with many aspects of the Bush administration's plan to reform the Federal Housing Administration (FHA) program, but the organization also voiced a few concerns.

While the MBA is glad to see the FHA will be modernized to a point where tax exempt bonds can be used to refinance troubled borrowers and an additional $65 million in funding will be provided to give counseling to homeowners, other elements of the plan have raised the association's eyebrows.

Among those concerns, the MBA believes the Bush Administration's new fiscal 2009 guidelines will place a strain on the current FHA budget. Because of this financial strain, the MBA believes more funding, possibly in the form of fees, will be required.

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

Pipeline: Mod Squad

A service that gauges borrowers' eligibility for mortgage modification has been developed by Experian Information Solutions Inc. and Clayton Holdings Inc. Credit scores, payment histories, incomes and loan-to-value ratios are used to determine whether buyers qualify for the Treasury Department's rate freeze plan, the FHASecure refinance program or other arrangements, including short sales and repayment plans.

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

States Say Mortgage Companies Fall Short on Loan Modification

Using data from 13 mortgage servicers accounting for 58 percent of subprime loans, the State Foreclosure Prevention Working Group--made up of state attorneys general and banking regulators from 11 states--found that 45 percent of said loans were under consideration for modifications in October. Of these arrangements, 75 percent required borrowers to bring their payments current; but fewer than 7 percent of borrowers had enough money to do so. The study also determined that 75 percent of borrowers whose loans were 60 days or more delinquent at the end of October had not taken steps to obtain a modification, and more than 30 percent of subprime or Alt-A mortgages had not undergone any rate resets yet but still were 30 days or more past due.

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

Wachovia Tops in Commercial/Multifamily Loan Servicer Rankings

The MBA released its annual rankings of commercial and multifamily loan servicers as of the end of 2007. Wachovia Securities with $407.9 billion in U.S. master and primary servicing topped the list, followed by Midland Loan Services/PNC Real Estate Finance with $268.5 billion, Capmark Financial Group Inc. with $258.1 billion and Wells Fargo with $175.6 billion.

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

GMAC Posts $724 Million Loss

The credit crisis and the housing downturn contributed to a $724 million loss posted by GMAC in the 2007 fourth quarter, prompting the lender to pledge swift action in order to reverse the earnings slump and turn a profit this year. Losses tied to its Residential Capital LLC mortgage subsidiary totaled $291 million during the final three months of last year, attributable to an increase in funding costs, expenses associated with loan restructuring and write-downs on credit residuals and mortgage-backed securities.

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

Beazer Dropping Services, Markets

Beazer Homes USA Inc. has shuttered its Beazer Mortgage Corp. subsidiary and severed ties with Homebuilders Financial Network LLC, making Countrywide Financial Corp. its preferred mortgage lender instead. Additionally, the Atlanta-based home builder announced that it will no longer build homes in Charlotte, N.C.; Columbia, S.C.; Lexington, Ky.; and Cincinnati, Columbus and Dayton, Ohio. Beazer reports a 24-percent drop in home closings, a 29-percent decrease in net new-home orders and a 46-percent cancellation rate for the quarter ended Dec. 31.

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

February 01, 2008

QuestSoft, Calyx Simplify Compliance for Lenders

QuestSoft announced that QuestSoft's Compliance EAGLE, an end-to-end, fully automated compliance review system, has been integrated into Calyx Software's Point and Point Data Server. Through the integration, Compliance EAGLE combines all components of mortgage lending compliance into a single, automated system for Point users.

Posted by S. Germain at 08:59 AM | Comments (0)

Fiserv sells San Diego software unit

Fiserv Inc. has sold its Del Mar DataTrac Inc. back-office lending software business to TVC Capital LLC, a San Diego private equity fund.

Fiserv purchased Del Mar DataTrac in 2005 for an undisclosed sum. San Diego-based Del Mar provides mortgage banking automation software for mortgage brokers and other lenders. The business now serves more than 300 mortgage banking firms throughout the U.S.

Posted by S. Germain at 08:52 AM | Comments (0)

Sambol to Head BoA/Countrywide Mortgage Biz

David Sambol, currently president and chief operating officer of Countrywide Financial Corp., has been chosen to lead the combined consumer mortgage business of Countrywide and Bank of America. When the deal is completed (projected to be in the third quarter), Mr. Sambol will report to Bruce Hammonds, who will move into the new role of global consumer credit executive; he is currently BoA's card services executive.

Posted by S. Germain at 08:43 AM | Comments (0)

Ellie Mae Releases Encompass 3.0

New enhancements include comprehensive audit trails that capture the details around any changes to key loan fields; alert configurations with "snooze" and "dismiss" functions so that users can control alert timing; custom mapping of contact fields to eliminate redundant loan-file data entry; business rules enhancements that improve user control over access to loan fields, in addition to offering control over the times that form buttons are accessible to loan team members; and user-group enhancements that provide flexible access to borrower contacts.

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

A California Bill Monitoring Loss Mit Moves Forward

A California bill has passed the state assembly as assurance that perhaps the state will eventually require lenders and servicers to report loss mitigation results publicly.

Assembly Bill 69 still has to pass the state Senate. Under AB 69, residential mortgage lenders would be required to report on all of their loan loss mitigation efforts to the Department of Corporations every month. State licensed banks and credit unions would report to the Department of Financial Institutions. Both departments would make the information publicly available.

Posted by S. Germain at 08:34 AM | Comments (0)

Treasury Representative Says 370,000 Homeowners Aided in Late 2007

Robert Steel, the U.S. Treasury Under Secretary for Domestic Finance, said that the mortgage industry helped 370,000 homeowners in the second half of 2007, according to data provided by the HOPE NOW Alliance—a program made up of government agencies, foreclosure prevention platforms and mortgage servicers who are trying to prevent foreclosures nationwide.

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

Fed Rate Cut Right Move, Analysts Say

The Federal Reserve has cut the federal-funds rate by 1.25 percentage points since Jan. 22, approving a 0.5-percent reduction at its meeting on Jan. 30. Analysts say two rate cuts within eight days of each other is unprecedented, but they underscore the resulting benefits to consumers and businesses. Freddie Mac says mortgage rates have slipped to about 5.5 percent since the start of January, and the Mortgage Bankers Association reports a year-over-year surge in mortgage applications of 71 percent last week.

Posted by S. Germain at 08:27 AM | Comments (0)

Countrywide Loses $422 Million

Countrywide Financial reported a $422 million loss for the fourth quarter, compared to a profit of nearly $622 million in the comparable period a year ago. About $831 million of its losses were attributed to defaults on home equity lines of credit that might not be repaid; a $394 million hit was taken for holding onto loans that could not be sold as planned; and $87 million in restructuring charges were posted for laying off 11,000 people since July 2007. The nation's largest mortgage lender lost $704 million for the year, compared to a profit of $2.68 billion in 2006.

Posted by S. Germain at 08:26 AM | Comments (0)

New Homes Set Record: Sales Fell 26 Percent in '07

The Commerce Department's recent new-home sales report reveals substantial weakness in the housing market; and more declines are on the horizon, according to some economists. The report shows a 26-percent plunge in sales volume last year compared to 2006 and just a 0.2-percent increase in the median price to $246,900 over the same period.

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

Jumbo Loans Spell Relief

Economists are optimistic that language included in the stimulus package to raise the limit on jumbo loans will lead to a major refinancing boom this year. The $150 billion package of tax cuts and rebates includes a provision to increase the conforming loan limit from the current threshold of $417,000 to as high as $729,000 in costly housing areas such as New York and California, which would make jumbo loans cheaper for buyers and more marketable for investors.

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

January 25, 2008

President and Congress Agree on Economic Stimulus Package

President George W. Bush and the U.S. House of Representatives announced that they've reached a bipartisan agreement that aims to stimulate the economy by pumping $100 billion in temporary relief to middle and lower class Americans.

The economic stimulus package includes tax rebates—ranging from $600 to $1,200—for single taxpayers making under $75,000 and married couples with a combined household income that's lower than $150,000. Americans eligible for the relief also will receive $300 per child.

The bipartisan package also hopes to jump start the economy and create jobs by changing the tax code and giving businesses the opportunity to deduct new equipment expenses.

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

FBR mortgage unit files for Ch. 11

First NLC Financial Services LLC, the mortgage origination subsidiary of Friedman, Billings, Ramsey Group Inc., has filed for Chapter 11 bankruptcy protection. First NLC, a subprime residential mortgage lender, filed for Chapter 11 to pave the way for an orderly liquidation of its assets.

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

MGIC projects larger 2008 losses

Mortgage insurance provider MGIC Investment Corp. said that it expects its 2008 losses to be larger than previously expected because of a growing number of delinquent loans leading to claims.

As a result, it expects incurred losses for the fourth quarter of 2007 of about $1.3 billion, compared with $187.3 million a year ago.

MGIC said its delinquent loan inventory at the end of 2007 was up about 16,000 loans to 107,120. The percentage of those loans resulting in claims is rising, along with the average claim size. Its insurance in force at the end of 2007 was $211.7 billion, compared with $176.5 billion at the end of 2006.

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

Fair Isaac Introduces New Credit-Risk Tools For Lenders

Fair Isaac Corp. has released a new forward-looking decision tool kit for lenders. The Fair Isaac Risk Management Suite, available in the second quarter of this year, provides deeper insight into the future debt sensitivity and default risk of individuals, as well as more precise understanding of default risk across entire loan portfolios.

According to the company, the suite includes the latest FICO 08 Score, plus a new Credit Capacity Index score, Portfolio Stress Testing analytics, and educational modules known as Fair Isaac Insights.

New features added to the credit risk score are designed to significantly enhance its predictive power across the entire spectrum of credit risk..

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

Federal Funds Rate Cut Again

The Federal Open Market Committee (FOMC) surprised Wall Street again today by lowering its federal funds rate another 75 basis points to 3 ½-percent. In a statement, the FOMC said it expects “inflation to moderate” in coming quarters, but will continue to monitor any inflationary trends closely.

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

Loan Losses Cost National City Millions

National City Corp. announced that experienced a net loss of $333 million, or $.53 per diluted share, in the fourth quarter of last year. The company attributes these losses to “a large provision for credit losses, losses on mortgage loans held for sale, charges related to Visa, Inc., indemnification obligations and severance charges associated with employment reductions during the quarter.”

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

January 18, 2008

12 Mortgage Service Providers Added to Calyx Software Network

Credit
CCR
Credit Plus USA
Information Searching Co.
RCR Credit
Flood
Land America Tax and Flood Services
Closing Docs
ProClose Platinum - Web Interface
PeirsonPatterson, LLP
Hazard Insurance
Safeco Insurance
Internet Services
ComplianceEase
Loan Servicing
Equity Express Biweekly Servicing
Title/Escrow
ClosingPoint
United Title Company

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

Foreclosure in third quarter avoided for 237,000

The mortgage industry modified an estimated 54,000 loans and established formal repayment plans with another 183,000 borrowers during the third quarter of 2007, according to an MBA study.

The report is based on responses from mortgage servicers covering about 33 million mortgage loans, about 62 percent of all mortgage loans outstanding. The report did not have any regional breakdowns.

While the help was good news for some, the pain still continued for others as third quarter foreclosure actions were started on approximately 384,000 additional loans.

The study determined that 63 percent of the new foreclosures were cases where the borrowers did not live in the property and did not respond to repeated attempts at contact, or where the borrowers failed to carry out an existing repayment or loan modification plan.

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

WaMu, Caught in Mortgage Turmoil, Posts Big Loss

Battered by the mortgage meltdown, Washington Mutual Inc. has posted a $1.87 billion fourth-quarter loss that was fueled by a sharp increase in its reserve for loan-related losses. Seattle-based WaMu is exposed to some of the nation's hardest-hit housing markets, most notably California and Florida; and now problems are spreading to credit cards and other types of loans.

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

30-Year Mortgages Fall to 5.69 Percent, Lowest Rate Since 2005

Long-term mortgage rates remain in a downward pattern, registering the third week in a row of declining interest. According to Freddie Mac's numbers, average interest on 30-year fixed loans settled the week at 5.69 percent--the lowest level since July 2005. Rates for 15-year fixed mortgages slipped to 5.21 percent from 5.43 percent a week ago; while the five-year adjustable-rate average retreated to 5.4 percent from 5.63 percent, and interest on one-year ARMs dropped to 5.26 percent from 5.37 percent. Observers generally agree that borrowing costs will remain at or near 6 percent for 2008 unless a U.S. recession surfaces--in which case they expect rates to decline further.

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

City of Cleveland Sues 21 Subprime Lenders

Cleveland has become the second city in two weeks to blame Wall Street for causing a subprime fallout that eventually led to a surge of foreclosures in the city. But, to date, Cleveland is the only local municipality taking the dramatic action of including 21 lenders in a lawsuit that accuses Wall Street companies of violating the “rights and interests” of residents by issuing and backing irresponsible loans.

The suit is filed under a long-standing public nuisance legal concept, which allows communities to recover losses caused by harmful and destructive behaviors in the marketplace.

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

Countrywide Curbed Foreclosures

More than 81,000 homeowners dodged the threat of foreclosure last year because Countrywide Financial agreed to restructure their mortgages, the beleaguered lender reported. The nation's No. 1 lender before the housing market soured, Countrywide services 9.03 million home loans.

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

State Lawmakers Act Aggressively on Foreclosures

The California Assembly recently approved bills aiming to reform the mortgage industry; and similar legislation is up for consideration in Indiana, Utah, Illinois, Maryland, New Hampshire, West Virginia, New York and Kentucky. The bills passed in California would mandate that lenders inform borrowers of pending rate resets and submit reports about subprime mortgage modifications, and they also would establish a registration and surety bond requirement for servicers. Meanwhile, the state Senate Banking Committee is expected to pass a measure that would force lenders to engage in loan workouts instead of filing foreclosures, extend the notification period prior to foreclosure and levy $1,000-per-day fines on lenders that do not maintain foreclosed homes.

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

Citigroup Reports Record Loss on $18 Billion Subprime Writedown

Citigroup wrote down $18 billion in subprime mortgage investments due to rising defaults on home loans, leading the bank to its biggest loss in its 196-year history. The New York-based concern reported a fourth-quarter net loss of $9.83 billion, or $1.99 a share, compared with a profit of $5.1 billion, or $1.03 a share, a year ago and added that it will slash its dividend by 41 percent and receive $14.5 billion from outside investors to shore up depleted capital.

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

MBA Predicts Drop in Lending

The mortgage crisis and the weakening economy will drive home-loan originations down 16.2 percent to $1.96 trillion in 2008 from an estimated $2.34 trillion in 2007, predicts the Mortgage Bankers Association. Additionally, the group expects a 13-percent decline in existing home sales and a 2 percent drop in the median home price.

Posted by S. Germain at 07:57 AM | Comments (0)

Countrywide Draws Ire of Judges

With Bank of America Corp. preparing to buy Countrywide Financial Corp., more and more federal bankruptcy judges are questioning the business practices of the troubled mortgage behemoth. The latest controversy centers on Countrywide admitting to not properly crediting a borrower's payments made during bankruptcy and instead applying them to pre-bankruptcy debt, which is prohibited. If the planned acquisition is completed, Bank of America may inherit a list of other potential legal liabilities from Countrywide. These range from inquiries launched by the SEC and several state attorneys general to shareholder lawsuits tied to Countrywide's financial woes and other class-action and individual suits brought by borrowers for alleged abuses by the company.

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

January 11, 2008

Bank of America agrees to buy troubled mortgage lender Countrywide for $4 billion in stock

Bank of America said it will buy Countrywide Financial for $4.1 billion in stock, a deal that rescues the country's biggest mortgage lender and expands the financial services empire of the nation's largest consumer bank.

The acquisition will make Charlotte-based Bank of America Corp. the nation's biggest mortgage lender and loan servicer.

Bank of America said it initially plans to operate Countrywide separately under the Countrywide brand, with integration occurring no sooner than 2009.

Posted by S. Germain at 08:49 AM | Comments (0)

Flagstar Bank Launches DocVelocity

Flagstar Bancorp Inc. has introduced DocVelocity, an online end-to-end paperless office solution for mortgage originators. DocVelocity is the flagship product of Paperless Office Solutions Inc., a wholly owned subsidiary of Flagstar Bancorp.

With the product, mortgage originators can upload, scan, e-mail or fax their documents into the DocVelocity system, where they are automatically imaged, organized and stored digitally, the company says. DocVelocity then creates a secure electronic file that everyone in the loan process can access, anytime. In addition, borrowers can enter their own documents into the system on a secure, one-way basis.

Posted by S. Germain at 08:30 AM | Comments (0)

Proposed California Law Monitors Loss Mit Efforts

A California lawmaker has proposed legislation, that if passed, would require lenders in the state to publicly report their internal loss mitigation efforts. The purpose of the bill is to expand upon President Bush's push for lender involvement in loss mitigation efforts nationwide by ensuring lenders are actively working with distressed borrowers.

The proposed law—Assembly Bill 69—would require lenders to send a report of their home retention efforts to the Department of Corporations each month, while the Department of Financial Institutions would receive reports from state licensed banks and credit unions.

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

Defaults Rise at Countrywide

Countrywide Financial has disclosed that its foreclosure rate doubled in December to 1.44 percent from 0.7 percent a year earlier and that defaults jumped to 7.2 percent from 4.6 percent over the same 12-month period. Some housing market experts view the rise in foreclosures and defaults at Countrywide as evidence that housing market conditions are worsening.

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

Most Lenders Accept Tough New Mortgage Rules in Mass.

The largest lenders in Massachusetts continue to do business in the state after the toughest restrictions on the mortgage industry in the nation took effect on Jan. 2. Loan originators now must operate under a "reasonable belief" that a loan is affordable, more documentation is required about a borrower's income and mortgage brokers can no longer receive a bigger bonus for selling a more costly loan.

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

Citi Revamps Mortgage Business

Citigroup Inc. recently restructured its U.S. home mortgage operations to align origination, servicing and capital-markets securitization. Additionally, the business overhaul will spur uniform mortgage products, policies and practices and allow the company to concentrate on lowering mortgage exposure when developing portfolio and capital goals.

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

Forecasters: No Quick End to Housing Ills

Federal Reserve Bank of Boston President Eric Rosengren predicted that the housing market will not recover until June at the earliest; and said that with the market posting declines each quarter for the past two years, the downturn could be the longest in five decades. Rosengren talked about a cycle involving a reduction in consumer spending due to drops in home prices that put a damper on the broader economy, which in turn hinders spending on housing.

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

Bear Stearns CEO Quitting Amid Losses

Under pressure from shareholders angry over Bear Stearns' first quarterly deficit in the company's 84-year history, CEO James Cayne reportedly has decided to step down. Cayne has been informing company directors that he will no longer serve as chief executive but will retain the title and responsibilities of chairman of the company, which is one of the biggest underwriters of mortgage-backed bonds in the United States. Rocked hard in the past year by the subprime mortgage mess, Bear Stearns' shares have plunged 53 percent and its profit for all of fiscal 2007 plummeted 89 percent.

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

IndyMac Says GSE Costs May Hinder Loan Originations

IndyMac Bancorp reports a 53-percent drop in its mortgage origination volume during the year-over-year period ended in November, and the Pasadena, Calif.-based lender anticipates additional declines due to stricter mortgage purchasing requirements and higher guarantee fees instituted by Fannie Mae and Freddie Mac. IndyMac reports an increase in prime delinquencies to 6.25 percent in November from 5.8 percent the previous month and a jump in subprime delinquencies to 26.87 percent from 24.43 percent over the same period.

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

Fed Will boost Auction Amounts to Help Banks With Credit Squeeze

The Federal Reserve on Dec. 4 confirmed that it is increasing the amount of money available to banks via the new auction process it created to alleviate the country's credit crisis. The announcement came after a government report was released showing that the nation's jobless rate climbed to a two-year high of 5 percent last month, further stoking fears of a possible recession. Fed officials have vowed to continue the auctions "for as long as necessary." Together, the first two auctions--held in December--offered $20 billion each and ultimately attracted bids for nearly triple that amount.

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

January 04, 2008

Five Banks Launch Mortgage Relief Initiative For New England

Citizens Bank, Sovereign Bank, TD Banknorth, Webster Bank and Bank of America have joined forces to create the Mortgage Relief Fund, which is intended to aid New England homeowners who have been affected - or may soon be affected - by the current mortgage crisis.

The five banks have together committed an initial $125 million for mortgage loans - with the support of the Federal Reserve Bank of Boston. Borrowers will have access to a range of mortgage products that may include FHA and FHA Secure offerings as well as state programs and other programs offered by the five participating banks.

Posted by S. Germain at 08:26 AM | Comments (0)

National City Sheds Division, 900 Jobs

The downturn in the housing and credit markets has forced National City Corp. in Cleveland to close its wholesale mortgage division and hand out 900 pink slips. In recent months, the bank has slashed 3,400 jobs and limited mortgage originations to prime borrowers. It will continue to offer mortgages through the National City retail bank branch network and at National City Mortgage Co. retail offices.

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

Seven States Join Forces to Track Mortgage Brokers

Mortgage brokers and loan officers at state-regulated banks in Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York and Rhode Island will undergo a more thorough licensing process that state banking regulators believe will lead to better monitoring of brokers. And by the end of 2009, a total of 40 state agencies--as well as Washington, D.C., and Puerto Rico--will employ the standardized process and database.

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

Reverse Mortgages on the Rise

In fiscal year 1990, HUD insured just 157 such loans. In fiscal year 2007, which ended Sept. 30, the National Reverse Mortgage Lenders Association reports that tally had mushroomed to 107,558.

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

Deal to Buy Mortgage Company Collapses

The inability of the Blackstone Group to find alternative financing for its joint acquisition of PHH with General Electric has prompted New Jersey-based PHH to call off the transaction.

The large private equity investment company was supposed to acquire PHH's mortgage business, and General Electric was supposed to pick up the vehicle leasing unit, according to the $1.8 billion deal announced in March.

Blackstone could not convince JPMorgan and Lehman Brothers that the mortgage business was still worth as much as it was estimated in March and did not want to pay the difference itself.

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

Insured Mortgage Defaults Soar

The Mortgage Insurance Cos. of America reports a 34.7-percent surge in defaulted home loans carrying private mortgage insurance during the year-over-year period ended in November. The 61,300 defaults recorded during the month mark the highest level since the company's first report in 2001.

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

Bush to Revive Push for Housing Remedy

The White House plans to pressure Congress to take action to help stabilize the struggling housing market--although it remains uncertain what steps the administration will take.

Observers point to legislation that has yet to pass on Capitol Hill, including bills that would permit low-income, adjustable-rate mortgage borrowers to refinance into fixed-rate loans through the Federal Housing Administration and that would allow Fannie Mae and Freddie Mac to purchase loans worth more than the current conforming-loan limit of $417,000.

However, the White House would approve an increase in the limit only if Congress passes legislation to reform the government-sponsored enterprises to create a new regulator with power over the size of their mortgage portfolios.

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

December 21, 2007

Resolve and Central Tax Streamline Property Tax Management with Outsourced Solution

Resolve Corporation, a Canadian business leader in business process outsourcing, and Central Tax, an industry outsourcer specializing in property tax solutions, announced today that they have formed a strategic alliance to pursue the market for outsourced property tax solutions in the financial services sector.

There are currently over 2.5 million property tax accounts being administered by Canadian financial institutions on behalf of their mortgage customers, representing a significant opportunity for outsourcing. The combined offering builds upon Central Tax's innovative tax monitoring and administration system, which alleviates many of the challenges involved in the setup and the overall management of the lender's property tax account.

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

Loanbright and Ellie Mae Enter Into Marketing and Technology Partnership

Loanbright, a leading provider of internet lead generation to mortgage brokers and loan officers and Ellie Mae have entered into a marketing and technology partnership. The partnership was designed to give Encompass users a simple, affordable and easy way to purchase locally targeted sales leads from prospective borrowers looking to purchase a home.

Locally targeted marketing continues to grow as a more effective marketing strategy for mortgage professionals and Loanbright's SelectLead Program offers mortgage brokers and loan officers the opportunity to connect with prospective home buyers in their local markets.

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

Default Lines: The New Math of Credit Scores

The three major credit bureaus could implement Fair Isaac Corp.'s new credit scoring system as early as spring 2008. The new system, FICO 08, was developed in response to lenders' demands for a better way to gauge borrower risk amid rising mortgage and auto loan delinquencies. FICO 08 continues to assign consumers scores between 300 and 850 and take into consideration their debt loads, payment histories, recent accounts and inquiries, type of credit and length of credit history; but it now will give higher scores to consumers making timely payments on different types of loans and lower scores to those who have used much of their available credit or have multiple delinquent accounts.

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

Home Building, Bids for Permits Continue to Free Fall

Residential construction activity skidded to an annual pace of 1.187 million units in November, down 3.7 percent from the previous month and off 24.2 percent from November 2006. Single-family home building recorded its eighth straight monthly decline, sliding 5.5 percent to an annual pace of 829,000 and marking a 16-year low. After a 13-percent nosedive last year, National Association of Home Builders expects residential activity to sink 26 percent this year and 19 percent next year, with a rebound anticipated in 2009.

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

Banks to Refinance Home Loans

Citizens Financial Group, Sovereign Bancorp, TD Banknorth, Webster Financial Corp. and Bank of America will participate in a Federal Reserve Bank of Boston plan to refinance subprime loans into mortgages with fixed interest rates. While Bank of America's financial commitment to the program has not yet been decided, each of the other four participating banks will earmark $25 million for the initiative.

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

Fed to Unveil Home Mortgage Plan

The Federal Reserve is expected on Dec. 19 to propose new subprime mortgage lending rules that could prevent lenders from penalizing borrowers who pay their loans off early and force lenders to make sure borrowers have enough money to pay for taxes and insurance. Fed policymakers also want to restrict loans that do not require proof of a borrower's income and establish new standards for determining an applicant's ability to repay a home loan. The new protections for subprime borrowers could be finalized in 2008 and, if adopted, would allow Chairman Ben Bernanke to place more of an imprint on the central bank's regulatory powers.

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

Senate Approves Two Mortgage Bills

A pair of bills intended to help subprime mortgage borrowers were passed by the Senate on Dec. 14. One measure would revamp the Federal Housing Administration loan program. While the House version of the legislation is more far-reaching because it would permit higher loan limits and zero down payments as well as institute risk-based premiums, a compromise should be quick, according to Sen. Charles Schumer, D-N.Y. The other bill would exempt mortgage debt forgiven via modification or refinance from income taxes.

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

December 14, 2007

House Panel OKs Bankruptcy Bill

The House Judiciary Committee approved a narrowly targeted bankruptcy bill by a 17-15 vote that would give subprime and nontraditional mortgage borrowers facing foreclosure one last chance to get their mortgage restructured so they can stay in their homes. Only homeowners who have received a foreclosure notice could seek a Chapter 13 restructuring. Under the bill, bankruptcy judges could waive prepayment penalties and reduce the mortgage amount to the fair market value and reduce the interest rate to a conventional rate plus a risk premium. These restructurings would be limited to subprime and nontraditional mortgages originated from 2000 through the date of enactment of the legislation. The Mortgage Bankers Association and the American Bankers Association oppose the bill.

Posted by S. Germain at 08:40 AM | Comments (0)

IL Probing Countrywide Option ARM, B&C Loans

Investigators for the state of Illinois have issued what one official calls "extensive" subpoenas to Countrywide Financial Corp. as part of a far-reaching probe into its origination of subprime and payment-option ARMs. Debra Hagan, chief of the state's consumer protection division, told MortgageWire that investigators are scrutinizing subprime and payment-option adjustable-rate mortgages that Countrywide funded on a retail basis and through loan brokers.

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

Wachovia doubles 4Q loan-loss provision to $1B

The company said it is doubling its expected loan-loss provision for the fourth quarter to $1 billion in excess of charge-offs. Wachovia previously estimated a loan-loss provision of between $500 million and $600 million because of loans turning sour in its mortgage-loan portfolio. Wachovia has seen loans turn bad in several areas in California and Florida.

According to a filing with the Securities and Exchange Commission, securities backed by loans dropped in value in the past two months at a rate equal to the decline in the third quarter, when Wachovia reported loan losses of $1.34 billion.

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

Washington Mutual ups stock offering

The Seattle-based thrift (said it would offer 3 million shares of convertible preferred stock and expects the offering to generate total proceeds of $3 billion and net proceeds of $2.9 billion. That's up from the $2.5 billion in total proceeds that the company on Monday said it hoped to generate from the stock offering.

Washington Mutual Inc. said it would contribute $1 billion of the net proceeds to Washington Mutual Bank, its principal bank subsidiary, with the rest going to the holding company for general corporate purposes. The company said it expects the offering to close on or about Dec. 17.

Along with the stock offering, Washington Mutual on Monday announced deep layoffs in its mortgage business, a dividend cut and plans for higher-than-expected loan losses.

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

Citigroup says it will absorb SIV assets

Citigroup said late Thursday that it will take $49 billion worth of assets from several investment entities that have been damaged by the subprime mortgage meltdown and add that to its own balance sheet - a move that could cut deeply into the Wall Street giant's capital base.

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

C-BASS LLC Completes Sale Of Litton Loan Servicing

Credit-Based Asset Servicing and Securitization LLC (C-BASS), headquartered in New York, has successfully completed the sale of Litton Loan Servicing to Goldman Sachs. The sale of Litton was a key step for C-BASS to reach a long-term agreement with its secured and unsecured creditors on Nov.13, the company says. The terms of the transaction were not disclosed.

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

Senate Democrats Propose New Restrictions on Mortgage Lenders

Sen. Chris Dodd, D-Conn. introduced the Homeownership Preservation and Protection Act of 2007—which would ban prepayment penalties and yield spread premiums, require mortgage lenders to only make loans that borrowers are able to repay and force loan servicers to implement loss mitigation strategies before initiating foreclosures on homes. MBA Chairman Kieran Quinn said the bill's provisions "concern us deeply" because they would also require mortgage lenders and brokers to make loans in the best interest of borrowers as well as expose investors in mortgage-backed securities to lawsuits by individual borrowers.

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

Panel Looks at Reverse Mortgages

According to statistics, U.S. seniors took out 85,639 reverse mortgages last year—up from 48,493 in 2005. However, some experts continue to warn about the risks associated with this product—which targets homeowners aged 62 and older—as well as the sometimes predatory sales practices and excessive fees.

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

Fed Cuts Rate but Dismays Wall Street

The central bank cut both the federal funds rate and the discount rate by a quarter of a point, lowering the interest rates to 4.25 percent and 4.75 percent, respectively. The move did not please many on Wall Street who were hoping for a bigger cut, such as a reduction by at least a half-percent for the discount rate, and investors responded by sending the Dow Jones Industrial Average down by nearly 300 points. The Fed said it was still concerned about inflation pressures from high energy and food prices.

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

Mortgage Losses Prompt WaMu to Cut More Jobs

Amid mounting mortgage losses, Washington Mutual Inc. has decided to lower its dividend by 73 percent to 15 cents a share, pink-slip 3,150 mortgage and corporate support employees and raise $2.5 billion in new capital. The savings and loan, which is in the process of closing 190 of 336 mortgage offices, has long ranked as one of the nation's biggest home mortgage lenders.

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

New Buyer of Distressed Loans

G8 Capital LLC has been founded by former MoneyLine Lending Services Inc. CEO Evan Gentry to purchase the mortgage portfolios of struggling lenders and financial institutions. With an initial private-sector investment of $50 million, G8 Capital will purchase $3 million to $25 million portfolios for 40 cents to 75 cents on the dollar.

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

Freddie, Fed Try to Limit Damage

In an effort to minimize immediate credit losses, Freddie Mac has instituted a policy to purchase fewer delinquent mortgages packaged into securities—a move that will be mimicked by Fannie Mae. There are concerns that such a move simply alters the accounting treatment of overdue loans and only postpones credit losses, but a Freddie Mac spokesperson insists that investors still will be compensated. The government-sponsored enterprises also began imposing surcharges on loans to borrowers with credit scores under 680 and less than 30 percent equity.

Meanwhile, the Federal Reserve is gearing up to propose regulations that would prohibit prepayment penalties on subprime mortgages and mandate that property tax and insurance be added to the monthly mortgage payments.

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

Big Banks Scale Back Plan to Aid in Debt Crisis

On Dec. 10, following a month of false starts, a new superfund created by banks to keep the housing-related debt crisis from getting worse will start raising money from financial institutions. However, this new entity's role is already being questioned by several of the nation's biggest banks, with Citigroup formulating a separate rescue plan and HSBC and others taking steps to solve its problems internally. Consequently, the new superfund—which was never designed to rescue troubled structured investment vehicles, or SIVs, only to delay their day of reckoning—is looking more and more irrelevant.

Posted by S. Germain at 07:42 AM | Comments (0)

December 07, 2007

MBA Survey: Delinquency Rate Hits Record High

The MBA's National Delinquency Survey shows the U.S. delinquency rate on one-to-four unit residential properties increasing 47 basis points between the second and third quarter of 2007 making 5.59-percent of all loans officially “delinquent” during the third quarter.

According to the latest statistics, subprime adjustable-rate mortgages account for only 6.8-percent of the outstanding loan population, but still account for 43-percent of all foreclosure starts recorded during the third quarter.

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

Bush Wins Agreement to Freeze Mortgages

Major mortgage lenders have agreed to lock in interest rates for five years on loans made to financially troubled homeowners who obtained adjustable-rate subprime mortgages between Jan. 1, 2005, and July 31, 2007. The deal with the Bush administration represents a compromise between mortgage firms and banks that wanted to freeze rates for one or two years and banking regulators who wanted seven years. Mortgage lenders such as Countrywide Financial, big banks such as Citigroup and nonprofit groups as well as Republicans and Democrats all support the agreement.

Posted by S. Germain at 07:57 AM | Comments (0)

Wachovia, WaMu, Deutsche Bank Lead Multifamily Lenders

Wachovia, Washington Mutual Bank and Deutsche Bank Commercial Real Estate were the leading multifamily lenders in the $138 billion multifamily lending market for 2006. Wachovia was the largest multifamily lender closing 1,465 multifamily loans totaling $16.1 billion with an average loan size of $11 million. Washington Mutual Bank and Deutsche Bank made multifamily lending investments at $9.2 billion and $6.3 billion, respectively. The report, which focuses on apartment buildings with five or more units, also indicated an average loan size of $2.7 million based on 50,959 total loan originations.

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

H&R Block Scraps Mortgage Arm (Option One)

H&R Block plans to shutter the operations of Option One Mortgage now that its deal to sell the mortgage-lending unit to Cerberus Capital Management has collapsed. The Kansas City-based tax preparer will lay off about 620 workers, close three offices and take a $75 million restructuring charge. Cerberus was to pay $300 million less than Option One's net asset value, which stood at $1.1 billion in July; but the problems in the mortgage market led to attempts to renegotiate the deal over the past several months.

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

Home Equity Tapped Out

Consumer spending financed through home equity loans rose every year from 1995 to 2005; and although data is not available for 2006, the trend is believed to have continued last year. However, banks are said to be pulling back on underwriting this year; and Freddie Mac estimates that only $60 billion in cash was taken out of homes in the third quarter, down 26 percent from the previous three-month period.

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

Reinsurance Loss-Share Pacts: Next Pain Point

Mortgage lenders increasingly forge loss-sharing agreements with mortgage insurers as a means of boosting revenue, and the weak mortgage market has increased the likelihood of payouts. Countrywide Financial Corp., for instance, had reinsured $109.5 billion of the mortgages it services by the end of the third quarter, with reinsurance arrangements accounting for 5 percent of its pretax net income in 2006. Though the lender stands to lose upwards of $1 billion, it has set aside just $128.2 million for reinsurance losses, down 17.9 percent from the end of 2006. MGIC Investment Corp. anticipates reinsurance payouts of $500 million to $1 billion on mortgages written since last year, and such losses would occur over several quarters.

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

U.S. Expands Scrutiny of Home Lenders

Countrywide Financial Corp. and GMAC Mortgage Corp. are among the lenders and servicers under investigation by the Justice Department's U.S. Trustee Program, which alleges that they are inflating amounts owed by borrowers who have filed bankruptcy in an effort to avoid or delay foreclosure. While the U.S. Trustee Program cannot impose fines on lenders or servicers, it can request sanctions from bankruptcy courts for failing to adhere to the Bankruptcy Code, fraud investigations by the Federal Trade Commission and standing objections to creditor's claims that would force them to provide more information to prove claims against homeowners.

Posted by S. Germain at 07:45 AM | Comments (0)

November 30, 2007

Beige Book Reports Glut of Unsold Homes

A "glut" of unsold homes is putting downward pressure on prices and construction, while mortgage delinquencies have "increased significantly" in many areas, according to the Federal Reserve Board's Beige Book. The November survey also noted that local contacts generally don't expect a pickup in home construction until well into next year at the earliest. Meanwhile, "residential mortgage lending continued its downward slide," the Beige Book says.

Posted by S. Germain at 09:32 AM | Comments (0)

RealtyTrac: Foreclosures Rose in October

More than 224,000 foreclosure filings were reported nationwide in October, up 2% from the level recorded in September and up 94% from that of a year earlier, according to RealtyTrac. The nation's foreclosure rate stood at one foreclosure filing for every 555 households, the company said in its October 2007 U.S. Foreclosure Market Report. (Foreclosure filings include default notices, auction sale notices, and bank repossessions.)

Posted by S. Germain at 09:31 AM | Comments (0)

Calyx Software Now Offers Automated Verification of Employment and Income

Calyx Software® announced a verification of employment and income (VOE/VOI) category within the Calyx Network, connecting users of Calyx Point® loan origination software to participating employment and income verification vendors.

Posted by S. Germain at 09:24 AM | Comments (0)

Abu Dhabi to invest $7.5 billion in Citigroup

Wall Street rebounded Tuesday after the Abu Dhabi Investment Authority said it will invest $7.5 billion in Citigroup Inc. -- a vote of confidence for the nation's largest bank, which has suffered severe losses amid the ongoing crisis in the mortgage market.

Major financial institutions, including Citi and its competitors, have had to book some $80 billion of writedowns on holdings -- a trend that has left the markets nervous about the full extent of the damage from soured loans. Citi's ability to secure a capital injection raised hope others might be able to do the same.

Posted by S. Germain at 09:18 AM | Comments (0)

BofA: No comment on Citi merger speculation

Bank of America Corp. declines to comment on a published report that says Citigroup Inc. recently rejected a suggested merger with the Charlotte-based bank.

On Wednesday, The Wall Street Journal reported a "prominent investment banker," whom the paper did not name, pitched the idea a few months ago of a Citigroup-BofA merger to Citigroup. But the New York-based bank's board dismissed the idea as "totally out of hand."

According to The Journal, BofA said it did not authorize a formal approach to Citigroup.

Posted by S. Germain at 09:15 AM | Comments (0)

Schwarzenegger, Servicers Agree To Foreclosure Prevention Plan

Gov. Arnold Schwarzenegger has teamed with loan servicers from Countrywide, GMAC, Litton and HomeEq to agree to streamline fast-track procedures designed to help keep more subprime borrowers in their homes. Together, the four firms service more than 25% of issued subprime mortgage loans.

The agreement Schwarzenegger negotiated with the servicers builds off a proposal put forward by Federal Deposit Insurance Corp. chairwoman Sheila Bair that encourages lending agencies to keep subprime mortgage borrowers at their initial interest rate if they are living in their home, making timely payments, but cannot afford the loan rate reset. A half-million Californians have subprime loans that will jump to higher rates in the next two years, the governor’s office adds.

Posted by S. Germain at 09:10 AM | Comments (0)

Bank of America Expands Government Lending Fulfillment Operations

Bank of America plans to open a second fulfillment center for government loan processing due to the robust demand for its FHA and VA loan products. The bank says applications for government loan programs now account for about 18 percent of total volume in its retail sales channel, compared to the low single digits in 2006; and its production volume for FHA and VA loans is projected to reach nearly $2 billion this year, more than double the volume from last year.

Posted by S. Germain at 09:04 AM | Comments (0)

Bracing for Home Loan Losses, Wells Fargo to Take Big Charge

Losses on home equity loans will force Wells Fargo & Co. to take a $1.4 billion charge for the fourth quarter. The second-largest mortgage lender in the country, which also expects to write off $1 billion next year and in 2009, has been able to avoid many of the problems in the credit and capital markets until now. Wells Fargo also announced that it would no longer use indirect channels to originate or acquire home equity loans and that $11.9 billion, or about 3 percent of total loans outstanding, will be placed in a special liquidating portfolio.

Posted by S. Germain at 09:02 AM | Comments (0)

OFHEO: No Change to Conforming Limit

The Office of Federal Housing Enterprise Oversight has announced that the conforming loan limit will remain at its current level of $417,000 in 2008. In light of ongoing home-price declines, the agency decided not to raise the maximum amount on mortgages that can be purchased by Fannie Mae and Freddie Mac. The limit was last changed three years ago.

Posted by S. Germain at 09:02 AM | Comments (0)

Fed to Inject $8 Billion to Lubricate Economy

The Federal Reserve on Nov. 28 will issue an $8 billion, low-interest loan to the nation's banks, which must be repaid on Jan. 10. Although the infusion of cash is larger than normal and comes earlier in the fourth quarter than usual, economists say the move is justified because concerns about the credit market has banks even more reluctant to provide peer institutions with overnight loans at this time of year. Market pressure to lower the federal funds rate next month could also ease as a result of the central bank's decision to pump up liquidity in the financial system.

Posted by S. Germain at 09:00 AM | Comments (0)

Bank of America Takes Lead in Backing 'SuperSIV' Fund

Bank of America Corp. has agreed to spearhead efforts by Citigroup Inc. and JPMorgan Chase & Co. to convince smaller rivals to help finance the "SuperSIV fund," which essentially is an $80 billion bailout of short-term debt markets. Championed by Treasury Secretary Henry Paulson, the fund's mission would be to purchase assets from structured investment vehicles (SIVs), whose $300 billion of holdings include corporate and mortgage debt in danger of default. Some analysts, though, have blasted the proposal for its potential to mire new participants in losses created by their larger competitors.

Posted by S. Germain at 08:58 AM | Comments (0)

Greenspan: Home Prices Still Falling

The housing market has yet to bottom out, and home prices nationwide will continue to fall, predicts former Federal Reserve chairman Alan Greenspan. He does not foresee a recession, however, due to economic flexibility created as a result of bipartisan deregulation of the financial markets, among other factors. Greenspan says he does not regret the stance he took on housing while at the helm of the central bank, even though some observers believe he helped to create a housing bubble by holding interest rates down for an extended period.

Posted by S. Germain at 08:57 AM | Comments (0)

November 16, 2007

NAR: 1 in 3 Homebuyers Put Up No Cash

Nearly one in three buyers between June 2006 and June 2007 had no skin in their deals, according to new research that represents further evidence of the poor quality of loans that helped fuel the rising tide of delinquencies and foreclosures. Though the study of nearly 10,000 transactions by the National Association of Realtors did not note whether the loans were prime or subprime, it found that 29% of all buyers -- and 45% of all first-timers -- financed the entire purchase price. Somewhat surprisingly, considering that they usually have money from the sale of their previous residence to put into the transaction, 18% of repeat buyers also put up none of their own money. In addition, the study found that more existing-home buyers than new-home purchasers used 100% financing, 30% vs. 25%. More than half -- 53% -- of all buyers made downpayments of 10% or less, and almost three out of four -- 72% -- financed 80% or more of what they paid. As for the source of their downpayments, 10% of all buyers used money from gifts, 8% sold stocks or bonds, 6% raided their retirement accounts, and 3% got a loan from a relative or a friend.

Posted by S. Germain at 08:34 AM | Comments (0)

Nationstar Exits Subprime

Subprime lender Nationstar Mortgage says it is no longer funding A-minus to D loans. In March 2006, a unit of Fortress Investment Group agreed to purchase Centex Home Equity Co., Dallas, in a deal valued at about $575 million. After the sale, Fortress changed CHEC's name to Nationstar. At the time of the deal, CHEC was the nation's 28th-largest subprime lender.

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

Bank Of America Expands Reverse Mortgage Business

Bank of America has made its Senior Equity Reverse Mortgage suite of products available in Georgia, North Carolina and South Carolina. Later this month, the bank will expand into Florida and northern California.

The company notes that this expansion into the Southeast follows its recent reverse mortgage acquisition from Seattle Mortgage Co., which marketed its products under Reverse Mortgage of America.

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

Countrywide: Loan Fundings Drop in October

Calabasas, California-based Countrywide Financial Corp. reported Tuesday that mortgage loan fundings for the month of October, as well as the company's average daily mortgage loan application activity, fell last month when compared to the same period in 2006.

More specifically, the lending giant said mortgage loan fundings in October hit $22 billion—a 48-percent decline from October of last year. Meanwhile, average daily mortgage loan application activity hit $1.8 billion—a 34-percent decrease from October of 2006. And, the company says, "The mortgage loan pipeline was $41 billion at October 31, 2007, as compared to $61 billion for the same period last year."

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

Controversial H.R. 3915 Hits the House Floor

A house reform bill that has raised a few eyebrows in the mortgage banking industry is scheduled to hit the house floor. Reform bill H.R. 3915 -- otherwise known as the Mortgage Reform and Anti-Predatory Act -- aims to implement new lending standards that are designed to protect borrowers while also curtailing predatory lending in the mortgage market.

To date, the bill has its fair share of critics—including prominent industry organizations like the Mortgage Bankers Association (MBA) and the National Association of Mortgage Brokers (NAMB)—who have criticized the bill for proposing regulations that will end up hurting borrowers on the front end by eliminating yield spread premiums that help homeowners avoid higher costs during loan origination. DSNews.com will provide full coverage when the voting results of H.R. 3915 are released.

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

HSBC and Bear Stearns Increase Loan Write-Downs

HSBC Holdings says the "broader deterioration" of the U.S. housing market has forced it to set aside $3.4 billion to cover bad loans and adds that its housing losses are starting to spread to credit cards and other consumer loans. The investment bank has to earmark $1.4 billion more than it anticipated and says it could take three years to resolve its subprime mortgage problems.

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

Foreclosures Hit a Snag for Lenders

The inability of Deutsche Bank National Trust Co. to prove to a federal judge in Ohio that it owned properties it was trying to seize in 14 foreclosure cases could cause problems for lenders seeking to reclaim properties from delinquent borrowers. Consumer advocates have complained that it has become more difficult for borrowers to work out their troubled mortgages because they are often unable to determine who holds the mortgage note once the home loan has been pooled into securities. "This is the miracle of not having securities mapped to the underlying loans," says Josh Rosner, a specialist in mortgage securities.

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

Better Odds Seen for New RESPA Rewrite

With the national housing slump deepening, HUD has prepared yet another proposal to modernize the Real Estate Settlement Procedures Act (RESPA) and has forwarded it to the Office of Management and Budget for review. While the new version of RESPA reform is fundamentally the same as the last one, killed three years ago, insiders who have had an early peek at the measure say it is likely to win over more parties than its predecessor--largely because it will not promote bundling of settlement services.

One point of contention appears to be the length of the good-faith estimate that borrowers would receive spelling out the details of their loan terms. HUD is planning a four-page document, which it says is easier for consumers to comprehend; while the National Association of Mortgage Brokers--the proposal's primary critic at this point--wants the estimate kept to a single page.

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

Commercial/Multifamily Originations Dip in 3Q, MBA Says

Commercial/multifamily mortgage banker loan originations dipped in the third quarter, with originations 4 percent lower than during the same period last year, according to the Mortgage Bankers Association’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The year-over-year decrease was seen across most property types and investor groups.

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

BofA May Write Down $3 Billion

A write-down of $3 billion could be on the horizon for Bank of America, officials with the country's second-biggest bank have warned. Defaults on subprime mortgages have eroded the value of related debt securities at BofA, which CFO Joseph Price said may pay out as much as $600 million to funds that purchased the debt. BofA joins Citigroup, Morgan Stanley and Merrill Lynch & Co. in writing down assets tied to the slumping housing market. When all is said and done, according to Deutsche Bank AG analyst Mike Mayo, the biggest banks and brokers on Wall Street will have to write down as much as $130 billion--including up to $70 billion in 2007 alone.

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

November 09, 2007

Byte Software Releases BytePro 2.1

This latest edition to Byte Software's suite of products boasts enhanced management reports, Web Services and an all-new Software Development Kit (SDK). Additional features include interfaces to new credit and marketing partners as well as added support for ARM and interest-only loans.

Posted by S. Germain at 08:43 AM | Comments (0)

Fed chief shakes up market

The nation's top banker drew a dreary sketch of the economy Thursday, telling Congress that growth is slowing "noticeably" while risks of inflation continue.

Federal Reserve Chairman Ben Bernanke said a surge in mortgage delinquencies has contributed to "financial market volatility and strains" at a time when rising oil and commodity prices and a weaker dollar are adding to the problems.

Read the entire story here.

Posted by S. Germain at 08:27 AM | Comments (0)

Wachovia Corp. takes $1.1 billion more in credit losses

Wachovia Corp. took $1.1 billion more in credit losses in October, according to a filing with the Securities and Exchange Commission.

Wachovia also expects to record a loan-loss provision in the fourth quarter of $500 million to $600 million in excess of charge-offs for the quarter.

The news follows the Charlotte, N.C.-based bank's disclosure last month that it had written down $1.3 billion in the third quarter for mortgage-backed securities and loans from leveraged buyouts. Wachovia (NYSE: WB) quadrupled its loan-loss provisions in the latest quarter to $408 million.

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

Proposed House Bill Introduces New Servicing Requirements

The Escrow, Appraisal and Mortgage Servicing Improvements Act (H.R.2837) would amend several previous mortgage servicing laws and require certain new practices of servicers.

According to the bill’s text, the purposes of this legislation are "to require escrows for certain mortgage loans, to improve mortgage servicing, to promote sustainable homeownership opportunities, to enhance appraisal quality and standards, to better appraisal oversight, to mitigate appraiser pressure" and to achieve additional unspecified goals. Among the areas of focus are practices related to default, late fees and foreclosure, and the bill instructs the secretary of Housing and Urban Development to study and report to relevant congressional committees on mortgage servicing fraud.

H.R.2837 would specifically amend the Real Estate Settlement Procedures Act of 1974 to "proscribe specified practices by the servicer of a federally related mortgage, including obtaining force-placed hazard insurance coverage to protect the mortgagee’s interest in the property," and amend the Truth in Lending Act to "require a creditor, in a consumer credit transaction secured by the consumer’s principal dwelling, to establish an escrow or impound account to pay taxes and hazard insurance, and, if applicable, flood insurance, mortgage insurance, ground rents, and any other required periodic payments or premiums."

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

BoA Picks Clarifire to Automate Processes

eMason Inc. has announced Bank of America's implementation of the eMason Clarifire enterprise-level application to automate workflow processes and communications with vendors and enable managing by exception. The company said that within 30 days of implementing Clarifire, 3,600 Bank of America internal and external users had reduced paper, phone calls, and e-mail by more than 90%; increased end-to-end process efficiency; and realized a 25% reduction in the cost of business. First implemented on the mortgage side to handle foreclosures, bankruptcies, and loss mitigation, Clarifire is now being implemented in the bank's consumer-lending division to automate handling of car loans and other consumer products.

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

Cuomo Subpoenas GSEs in Loan Probe

New York Attorney General Andrew Cuomo said Wednesday that his office will subpoena Fannie Mae and Freddie Mac as part of a widening probe of the residential mortgage industry. Among other things, the subpoenas seek information on mortgages purchased by the government-sponsored enterprises from their seller/servicers, including Washington Mutual of Seattle. The GSEs also agreed to a demand by the New York AG that they hire an independent examiner to conduct a review of all WaMu appraisals on mortgages they purchased.

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

ResMae Stops Funding Again

ResMae Mortgage of LaBrea, Calif., says it has once again suspended wholesale production but will honor commitments made prior to Nov. 6. Earlier this year ResMae was bought out of bankruptcy by Citadel Investment Group LLC, a hedge fund. Citadel purchased ResMae's assets -- including its servicing operation -- for $180 million, beating out Credit Suisse in an auction. Among subprime wholesalers, ResMae ranked 14th in 2006.

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

Morgan Stanley Takes Big Subprime-Linked Hit

Morgan Stanley has written down its revenue by $3.7 billion (about $2.5 billion after taxes) due to the deterioration in value of U.S. subprime mortgage-related exposures since August. The company said the writedowns would likely hurt its fixed-income business' fourth-quarter results, but that relative gains in other business lines may offset the concern.

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

BB&T Buys Finances Company

Looking to expand its commercial lending operations, BB&T confirms that it has acquired Collateral Real Estate Capital for an undisclosed sum. Operating the new moniker of Grandbridge Real Estate Capital, the Charlotte-based company boasts a commercial property servicing portfolio of approximately $20 billion.

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

Sub-Prime Crisis Claims Boss of Biggest Bank

Citigroup's Charles Prince announced during an emergency board meeting on Nov. 4 that he will step down as CEO because of the Wall Street firm's subprime mortgage lending problems. After an analyst predicted that Citigroup would follow up October's $5.9 billion write-off with a $4 billion hit, the nation's largest banking company announced that it could face an additional $11 billion in mortgage-related losses.

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

November 02, 2007

Countrywide Reports a Net Loss of $1.2 Billion

The lender said its losses in the third quarter totaled $1.2 billion, or $2.85 per diluted share, compared to a net income of $648 million, or $1.03 per diluted share, for the third quarter of 2006.

“Countrywide's results for the third quarter of 2007reflect the impact of unprecedented disruptions in the U.S. mortgage market and the global capital markets, as well as continued weakening in the housing market,” said Angelo R. Mozilo, chairman and chief executive officer of Countrywide. “However, during the period we also laid the foundation for a return to profitability in the fourth quarter. Countrywide has responded decisively and taken the steps we believe are necessary to address the current challenging market environment.”

Posted by S. Germain at 08:27 AM | Comments (0)

Countrywide & Nonprofit Focus on Loss Mit

Countrywide Financial Corp. is offering its struggling borrowers a way out of trouble by partnering with the Neighborhood Assistance Corporation of America (NACA)--a nonprofit that offers home retention programs and individual counseling for struggling homeowners.

Using its traditional Home Save approach, NACA will reach out to distressed Countrywide borrowers by offering individual counseling and loss mitigation plans, that with Countrywide's approval, can take effect and save the life of a loan.

Posted by S. Germain at 08:27 AM | Comments (0)

PMI Group posts first loss in 17 years

PMI Group Inc., the second-largest U.S. mortgage insurer, posted its first quarterly loss since its 1995 public offering as borrower defaults rose in September, forcing the company to pay more to bail out lenders from bad loans. The company told investors Oct. 18 that it would lose about $1.05 a share after the default rate "significantly worsened" last month.

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

Calyx Software Integrates Product and Pricing Engine Providers Into Point

Calyx Software® announced the addition of a product and pricing engine category to the Calyx Network, connecting users of Calyx Point® loan origination software to participating product and pricing engine (PPE) vendors. The new category is accessed within Calyx Point’s interfaces menu and includes six new companies offering PPE services.

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

Chase Boosts Mortgage Lending

Chase has announced that it originated $39.2 billion in mortgages in the third quarter, an increase of 35% from the level recorded a year earlier. The company reported that its originations totaled $119 billion for the first nine months, a 33.6% increase, despite pullbacks by competitors.

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

BB&T Buys Collateral RE, Forms Grandbridge RE

BB&T Corp., Winston-Salem, N.C., has completed its acquisition of Collateral Real Estate Capital, Birmingham, Ala., combined it with its commercial mortgage banking arm, Laureate Capital LLC, and renamed the combined company Grandbridge Real Estate Capital LLC.

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

Foreclosures Skyrocket in 3Q

Residential properties that are in some state of foreclosure rose 30% in the third quarter and doubled on a year-over-year basis, to 446,726 units, according to new figures released by RealtyTrac, Irvine, Calif. Nevada had the highest foreclosure rate in the nation, with one filing for every 61 households, according to RealtyTrac, a mortgage information company.

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

Mortgage Refi Applications Soar

Demand for home loans jumped 3.8 percent during the week ended Oct. 26, buoyed by a 9.2 percent surge in requests for refinance, according to the Mortgage Bankers Association. Both refi and overall loan application activity were at the highest levels seen in seven months. Despite a continued downward trend in borrowing costs that has boosted application volume, requests for purchase loans slipped 0.7 percent and approached a six-month low.

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

Fed Cuts Key Interest Rate a Quarter-Point

The Federal Reserve reduced its benchmark interest rate for the second time in as many months, but suggested that the cut is likely to be the last one for some time. Falling home prices and tightening credit due to problems in the subprime mortgage market were key factors in the central bank's decision to lower the key interest rate by a quarter of a point to 4.5 percent on Oct. 31.

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

Equifax Program Provides Lenders ARM Reset Alerts

Equifax Inc.'s new ARM Predictor aims to help mortgage, credit card and automobile lenders improve their loss-mitigation strategies by letting them know the likelihood that adjustable-rate mortgages obtained by their borrowers through other lenders will reset. ARM Predictor issues a score of 1 to 5 for each borrower, with 1 meaning that the borrower will not experience an ARM reset and 5 signifying an 80-percent chance of an ARM reset.

Posted by S. Germain at 07:57 AM | Comments (0)

October 26, 2007

Countrywide Reports Loss of $1.2 Billion for Third Quarter

"Countrywide's results for the third quarter of 2007 reflect the impact of unprecedented disruptions in the U.S. mortgage market and the global capital markets, as well as continued weakening in the housing market,"said Angelo R. Mozilo, Chairman and Chief Executive Officer.

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

Commercial real estate survives slump better than housing

The excesses that led to a bust in the housing boom haven't spread to the commercial real estate market, where the outlook is cautious but decidedly upbeat.

Led by strong growth in the office and retail segments, commercial property sales hit $401 billion through Oct. 18, outpacing last year's $359 billion total, according to Real Capital Analytics, a New York based real-estate research firm.

Construction spending on office buildings, shopping centers and other private, nonresidential projects jumped 15.2 percent in August, the Commerce Department said last month.

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

Grim Housing Data Lifts Wall St. Hopes for Rate Cut

The National Association of Realtors this week announced an unexpectedly steep 8 percent, month-to-month slide in sales of previously owned homes in September. A total of 5.04 million units changed hands on an annualized basis, down from 5.48 million in August, the group calculated. The bleak report also noted that the median U.S. home price was down to $210,200 from $223,700. While the stock market had a bad reaction to the news initially, share prices picked back up on the increasing possibility that the Federal Reserve--faced with the risk of a deteriorating credit market--will lower interest rates once again when it holds its next policymaking session a week from now.

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

Countrywide to Offer Refinance Options

Countrywide Financial Corp. plans to refinance or modify up to $16 billion in loans for borrowers who have adjustable-rate mortgages that will reset next year. The mortgage company plans to contact some 52,000 subprime borrowers with strong payment histories on about $10 billion in loans and offer them the opportunity to refinance into prime or Federal Housing Administration loans. Some 20,000 borrowers who are unlikely to qualify for a refinance and are likely to have problems with a rate reset will be offered a modification option.

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

B of A: No-Fee Loan Bringing Company More Market Share

Bank of America Corp. was the No. 1 retail mortgage lender in the second quarter, boasting a market share of 12.7 percent, Countrywide Financial Corp. fell to second place. BofA attributes its recent success despite weakness in the mortgage market to its "No Fee Mortgage Plus" product, which allows borrowers with credit scores as low as 620 to borrow 95 percent of a home's value. Borrowers do not have to pay mortgage insurance or application, appraisal, origination, title, flood determination or other closing costs on the product, which now accounts for more than 50 percent of BofA's retail production; and BofA President Floyd Robinson says the company has not offset the loss of such fees by hiking interest rates on other mortgage products.

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

October 19, 2007

GMAC to Cut Jobs in Mortgage Unit

Continuing problems in the mortgage industry and housing market have prompted GMAC Financial Services to eliminate 3,000 jobs in its mortgage unit, Residential Capital (ResCap). The move, which will cut about a quarter of ResCap's worldwide staff, is part of GMAC's efforts to restructure its mortgage business as market conditions change. Meanwhile, Countrywide Financial said its plan to slash 20 percent of its workforce, announced in early September, will force the company to take a pretax charge of up to $150 million.

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

Mortgage Originations Expected to Plunge

The Mortgage Bankers Association expects loan origination volume to fall about 15 percent this year to $2.31 trillion, decline 18 percent in 2008 and then slip another 6 percent in 2009 as the flow of cash from investors to lenders dries up and as overall economic growth slows.

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

Fair Isaac Adds Collections Scoring

Fair Isaac Corp.'s new Collection Scores product, unveiled at the recent Collections and Recovery User Group conference in Las Vegas, aims to improve collections management and drive up recovered amounts. The new scoring method gauges which accounts are most likely to become delinquent and determines the cases in which collection efforts will yield higher recovered amounts.

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

Banks to Start Fund to Protect Credit Markets

Citigroup, Bank of America and JPMorgan Chase, with the help of the Treasury Department, will launch a conduit in 90 days that will be responsible for purchasing AAA and AA bonds from structured investment vehicles (SIVs) that have encountered financing difficulties since the credit crisis began in early August. The fund will purchase between $75 billion and $100 billion in bonds using capital from these banks and others around the globe as well as money raised by the sale of commercial paper. The securities will be purchased at market rate, though the price calculations of bonds that recently ceased trading has yet to be clarified.

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

October 12, 2007

ChoicePoint's MARI Adds License Verification of Appraisers and Realtors to National Mortgage Fraud Database

The Mortgage Asset Research Institute has now added License Verification of appraisers and realtors to the MIDEX platform. The initial launch covers 14 states and is expected to be expanded nationally by the end of the year.

Posted by S. Germain at 08:44 AM | Comments (0)

Countrywide Home Loans Partners with RealEC Technologies to Deliver Online Closing Platform

RealEC Technologies Inc., announced it has entered into an agreement with Countrywide Home Loans, Inc., allowing Countrywide to use RealEC's Web-based closing platform for mortgage refinance and home equity lending transactions.

Through the new agreement, Countrywide has licensed RealEC's Web-enabled closing service and has integrated the service into its TS2 settlement services platform, which was built using the RealEC Collaborative Network Platform.

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

RESPA GFE Revamp Proposal Coming Soon

The Department of Housing and Urban Development is very close to sending a RESPA proposal to the Office of Management and Budget that revamps the good-faith estimate and HUD-1 settlement sheet. The proposal includes a standard GFE form to create more consistency in the initial disclosure that mortgage applicants receive from lenders on the costs of a mortgage transaction. The GFE will be comparable to the HUD-1 settlement sheet, and fees that might change before closing are grouped together.

Posted by S. Germain at 08:30 AM | Comments (0)

Experian: Model Offers Finer B&C Definition

VantageScore, Experian's most recently developed credit scoring model, provides lenders with a "more refined segmentation" of the subprime consumer segment than other models, according to the Costa Mesa, Calif.-based provider of information services. Many credit scoring methodologies group subprime consumers into one category, Experian said, but VantageScore allows lenders "to identify pockets of relatively low-risk consumers" within that category.

Posted by S. Germain at 08:27 AM | Comments (0)

Foreclosures Soar 149% at Countrywide

Countrywide Financial Corp., had a 1.27% foreclosure rate on its servicing portfolio at the end of September, a 149% increase from that of the same period last year. According to September operational figures released by the company, Countrywide serviced $1.459 trillion worth of loans at Sept. 30, which means $18.5 billion worth of mortgages it services are in the "foreclosures pending" category. Roughly 5.85% of its servicing portfolio is delinquent.

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

Countrywide Lending Plunges

Countrywide Financial Corp. reports that its total mortgage volume plummeted 44 percent last month from the $21 billion tallied a year earlier. The California-based lender is now expected to post a third-quarter loss, the size of which will be determined by how much the firm will have to write down the value of mortgages and securities it holds

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

Mortgage Rates Rise Across the Board

Freddie Mac says the 30-year fixed mortgage rate edged up to 6.40 percent from 6.37 percent over the past week. The 15-year fixed mortgage rate climbed to 6.06 percent from 6.03 percent. Meanwhile, interest on one-year adjustable loans jumped to 5.73 percent from 5.58 percent; and the five-year ARM bumped up to 6.12 percent from 6.11 percent.

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

Bush Officials Launch Mortgage Coalition

The Bush administration has announced that a broad coalition of residential-loan providers, mortgage counselors, trade organizations and investors will work together to help keep thousands of borrowers from losing their homes to foreclosure. The alliance will make use of a direct-mail and advertising campaign to help convince homeowners to contact their mortgage servicer or a credit counselor as well as to encourage servicers and nonprofit counselors to explain their options.

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

MBA Study Shows Drop in 2006 Industry Profits

Mortgage banking production profits fell to negative $50 per loan in 2006 from positive $258 per loan in 2005, according to the Mortgage Bankers Association's annual Cost Study. While production revenues increased on a per-loan basis, this increase did not keep pace with the increase in production operating expenses, which grew by 17 percent to $3,416 per loan in 2006.

• Overall, the average firm posted pre-tax net financial income of $6.4 million in 2006, compared to $26 million in 2005.

• Retail sales productivity averaged 62 loans per loan officer in 2006, compared to 83 loans per loan officer in 2005.

• On a per loan basis, the net "cost to originate" increased to $2,476 in 2006 compared to $2,049 per loan in 2005.

• Servicing financial profits per loan serviced declined by 44 percent, primarily because of mortgage servicing hedge losses that were only partially offset by gains in servicing valuations. Per-loan financial profits averaged $58 per loan in 2006, down from $104 per loan in 2005.

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

Fed Takes Wait-and-See Approach

Federal Reserve policymakers have no specific plan to continue to lower interest rates, according to minutes of the Sept. 18 meeting of the Federal Open Market Committee. Central bank officials expressed concern about how the financial markets and economic growth would respond to further cuts, adding that market developments and other factors would determine whether they proceed with any reductions.

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

Web to Aid Title Insurer

This week, the title industry and California Insurance Commissioner Steve Poizner are launching TitleWizard, a Web-based tool that enables consumers in the state to compare premiums and title insurers in their communities. The online tool, which comes as title insurance companies look to rebound from a series of scandals and government investigations, reportedly is the first of its kind in the nation. To date, almost 100 insurance companies have agreed to be part of the Title Wizard database. In the Sacramento metro area, for instance, the Web site (at www.clta.com) lists 10 firms offering policies.

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

Bank of America to Take $1B Hit

Bank of America will take a $1 billion write-down in mortgage securities and leveraged home loans in its third-quarter earnings statement, and JPMorgan Chase will take at least $2 million in mortgage-related charge-offs in its quarterly report, according to Howard Mason, an analyst with Sanford Bernstein. The asset write-downs would bring the total to $22 billion for big U.S. banks this year as a result of the problems in the mortgage market, including rising defaults among borrowers with subprime mortgages.

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

October 05, 2007

Avista Solutions Monthly Processed Volumes Top 100,000 Mortgage

Powered by new customers coming online this year, and a continued dramatic shift to FHA, Freddie Mac and Fannie Mae loan products Avista Solutions saw solid volume gains across its customer base in August. Mortgage applications processed across all customers jumped 18% between July and August as volumes surged to over 107,000 unique mortgage applications across all customers making Avista the leading provider of all-in-one, 100% web-based, end-to-end enterprise mortgage loan origination software.

Posted by S. Germain at 09:18 AM | Comments (0)

Ellie Mae Offers Hosted Version of Encompass

Ellie Mae has announced that Encompass Banker Edition is now available as a hosted system., enabling mortgage bankers and brokers-becoming-bankers to leverage the software on a pay-as-you-go model without having to maintain it in-house.

Posted by S. Germain at 09:05 AM | Comments (0)

AllRegs Buys Lender E-Source

AllRegs, an information provider for the mortgage lending industry based in Eagan, Minn., has announced the acquisition of Lender E-Source, a Web-based purveyor of mortgage lending product and underwriting guidelines. The terms of the transaction were not disclosed. Lender E-Source provides solutions that allow lenders to manage constantly changing loan product and underwriting guidelines through a searchable, automatically managed loan guideline library.

Posted by S. Germain at 09:03 AM | Comments (0)

House Passes Bill to Aid Strapped Homeowners

Legislation sponsored by House Ways and Means Committee Chairman Charles Rangel, D-N.Y., that would exempt mortgage debt forgiven by lenders from income taxes and offset the estimated $650 million in lost tax revenue as a result of the measure by imposing new restrictions on capital-gains tax exemptions on second homes has been approved by the House. Meanwhile, a House Judiciary subcommittee has okayed a bill that would let judges require primary mortgages to be restructured during bankruptcy proceedings--a move that is opposed by the Mortgage Bankers Association.

Posted by S. Germain at 09:01 AM | Comments (0)

Mortgages for Those Who Lack Credit Data

CitiMortgage plans to offer $200 million in home loans to Washington, D.C., region borrowers with limited credit histories, and Fannie Mae and State Farm Insurance will participate in the test project by purchasing $100 million worth of mortgages. Targeting immigrants and others who avoid using credit cards and taking out loans, the program will be open to borrowers who are in the country legally and have alternate credit lines--such as rental payments and utility bills--that CitiMortgage can use to assess their creditworthiness.

Posted by S. Germain at 09:00 AM | Comments (0)

Contracts on Home Resales at All-Time Low

The National Association of Realtors reports that its seasonally adjusted index of contracts on resale homes fell 6.5 percent in August to 85.5--the lowest reading ever for the measure, which first started tracking the statistic in January 2001.

Posted by S. Germain at 08:58 AM | Comments (0)

Citigroup, UBS Feel the Subprime Sting

Problems in the subprime mortgage market are responsible for the closure of several U.S. lenders and have sparked losses at banks in Germany, France and Britain as well. UBS of Switzerland and Citigroup Inc. of New York are the latest to report substantial write-downs tied to subprime-mortgage-backed securities, reporting losses of $3.4 billion and $5.9 billion, respectively, for the third quarter.

Posted by S. Germain at 08:57 AM | Comments (0)

Fannie, Goldman Seen Bidding for C-Bass Unit

Fannie Mae and Goldman Sachs Group Inc. have emerged as the leading candidates to acquire C-Bass LLC's Litton Loan Servicing LP. Distinguished by its success in working out problem loans, Litton currently services an estimated $58 billion of mortgages.

Posted by S. Germain at 08:57 AM | Comments (0)

WaMu Calls for Mortgage Disclosure

Beginning Oct. 9, brokers arranging loans for their clients through Washington Mutual Inc. (WaMu) must provide enhanced disclosures to borrowers. Brokers must detail the loan amount, prepayment penalties, broker compensation and any future adjustments in interest rates or payments, among other details.

Posted by S. Germain at 08:56 AM | Comments (0)

Greenspan: Housing Woes Lasting

The housing downturn has "a long way to go," with stability in residential prices not expected until new-home inventory reaches its peak, says former Federal Reserve chairman Alan Greenspan. The global economy and U.S. consumers will be hit hard by the weakness, although an increase in demand for high-risk assets leads Greenspan to believe that the credit crunch is letting up. Over the next several years, meanwhile, Bill Gross of the bond fund Pimco believes the central bank will pay close attention to home prices when making interest-rate decisions. Gross expects the federal-funds rate to fall to 3.75 percent from 4.75 percent during the next 12 months.

Posted by S. Germain at 08:55 AM | Comments (0)

September 28, 2007

SEC Continues Probe into Rating Agencies' Subprime Practices

The chairman of the SEC confirmed in front of the U.S. Senate Banking, Housing, and Urban Affairs Committee that his regulatory agency continues its probe into the practices of major credit rating agencies and their impact on the subprime mortgage market.

SEC Chairman Christopher Cox said, while his agency has yet to make a conclusive decision about the practices of credit rating agencies, the SEC’s investigation continues with an emphasis on how different ratings companies evaluated subprime residential mortgage backed securities.

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

Intellidyn Enables Refi Targeting

Intellidyn Corp. has announced that it now enables clients to identify and target refinance offers to homeowners currently in the market who had originated with lenders that no longer exist. "Years of business intelligence data show that typically 50% to 60% of refinance borrowers return to their prior lender for refinancing," said Intellidyn president and chief executive officer Peter Harvey. "But now more than 130 of those lenders have 'imploded' and disappeared from the landscape. Identifying these homeowners, then targeting them with appropriate offers when they are in-market to refinance again creates a mini-boom-type niche that won't last very long.

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

Countrywide Rescues 35,000 Loans from Foreclosure

Countrywide Financial Corp., one of the nation's largest subprime lenders, says its home preservation efforts are paying off with internal statistics indicating the company has saved 35,000 mortgages since the onset of the year.

Through loan modifications, repayment plans, the postponement of payments, and refinancing measures, Countrywide continues to rescue borrowers who are facing escalating mortgage payments.

Citing internal statistics as evidence of the company's successes, Countrywide says this year alone, it completed 17,000 loan modifications and is expected to complete 25,000 modifications by year's end.

Posted by S. Germain at 07:57 AM | Comments (0)

Home Sales in 'Free Fall'

The National Association of Realtors reports a month-to-month decline in existing-home sales of 4.3 percent and a year-over-year drop of 12.8 percent in August to an annual rate of 5.5 million, marking the lowest level of sales in five years. The report shows the first uptick in median price in a year, rising 0.2 percent to $224,500 from August 2006. However, the supply of resale properties on the market edged up 0.4 percent to a 10-month supply of 4.58 million units.

Posted by S. Germain at 07:45 AM | Comments (0)

Ross Offers to Acquire Major Mortgage Servicer

American Home Mortgage Investment Corp. has received an offer from billionaire investor Wilbur Ross for its loan-servicing division. Ross recently established AH Mortgage Acquisition Co. to function as the initial bidder for the unit, which is charged with collecting loan payments from homeowners and paying such expenses as property taxes. Ross, who must win an auction for the unit early next month, reportedly has made an offer of more than $400 million.

Posted by S. Germain at 07:42 AM | Comments (0)

September 21, 2007

Fed Cuts Funds, Discount Rates 50bps

The Federal Open Market Committee of the Federal Reserve Board has cut the discount and target federal funds rates by 50 basis points each, citing "the tightening of credit conditions" and its "potential to intensify the housing correction and to restrain economic growth more generally." Developments since the Fed committee's last meeting "have increased the uncertainty surrounding the economic outlook," it said, adding that it plans to "continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth."

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

Paulson Gives Qualified OK for Eased MI Regs

To help struggling borrowers with little or no equity in their homes, the Bush administration would support GSE legislation that relaxes the mortgage insurance requirements on the loans Fannie Mae and Freddie Mac purchase, Treasury Secretary Henry Paulson has told Congress. Such a change would significantly increase the credit risk the government-sponsored enterprises take on, the Treasury secretary said, so it should only be done as part of a comprehensive GSE regulatory reform bill.

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

MortgageHub & USFN Launch Home Retention Alliance

USFN has forged a partnership with mortgage solutions provider MortgageHub to increase home retention and loss mitigation options for troubled borrowers nationwide.

The merger's resulting entity is an organization called the Home Retention Alliance (HRA), which plans to focus on creating “innovative alternatives to foreclosure” across the United States. Functioning as an integrated, open platform solution, HRA helps servicers respond to the surge in defaults and foreclosures, counteracting the steep increase in workload and costs associated with loan workouts.

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

American Home Reaches Deal With Freddie Mac

If approved by the bankruptcy court, Bank of America Corp. will temporarily handle the servicing of 4,547 mortgages tied to the $7 million in mortgage payments seized by Freddie Mac from American Home Mortgage Investment Corp. in early August.

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

Home Woes Seen Aiding Repeat Try at RESPA Fix

The housing downturn and turmoil in the subprime mortgage market have prompted HUD to re-focus on reforming the Real Estate Settlement Procedures Act, with initial results expected by early next year. The proposal reportedly will be centered on creating a new good-faith estimate form that is more in line with the HUD 1 statement of settlement charges, disclosing such things as yield-spread premiums and providing the form to borrowers earlier in the mortgage process, says a former HUD official. Even though a controversial provision from HUD's last reform attempt--the bundling of settlement services--likely will be eliminated, experts still expect industry representatives to butt heads over the matter to some extent.

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

September 14, 2007

Portellus Winding Down Mortgage Ops

Citing declining market conditions, Portellus Inc., Irvine, Calif., has announced plans to wind down its mortgage technology business unit and sell the unit's supporting technology assets. Portellus said, however, that arrangements have been made to preserve the company's multipurpose business rules management system, which will continue to be sold via licensing agreements into other vertical markets.

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

Countrywide Gets $12B in 'Secured' Financing

Countrywide Financial Corp., says it recently obtained $12 billion in additional "secured" financing through new and existing credit facilities. The company also announced that it funded $34 billion of new loans in August, a 17% decline from the level recorded in the same month last year and a 12% drop from that of July.

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

WaMu Closing 2 Mortgage Divisions

Washington Mutual Inc. announced 1,000 layoffs on Wednesday due to the closing of two mortgage divisions, one of which provided money to mortgage companies and another that purchased home loans from other lenders. Alan Gulick, spokesman for the Seattle-based company, said, "Some of the changes we've made today are in response to market conditions, but they're also about accelerating our growth." In the coming months, the company expects to add 1,000 loan officers to its mortgage and bank branches.

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

WaMu, Wachovia Expect More Fallout

Both Washington Mutual Inc. and Wachovia Corp. are forecasting more fallout from the flailing mortgage lending industry. WaMu, which says a continued increase in bad loans is practically inevitable, has allocated up to $2.2 billion this year to cover potential loan losses. However, Kerry Killinger--the company's CEO--suggests that boosting its market share could help WaMu profit from the mortgage turmoil. At the same time, Wachovia is nabbing more mortgage business amid the shakeout; but its investment bank will likely have much more difficulty selling loans intended to fund leveraged buyouts.

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

Countrywide Job Cuts May Lead to 20 Percent Contraction in Industry

Graham Fisher & Co. managing director Josh Rosner estimates that another 20 percent of loan officers and mortgage brokers across the country will lose their jobs as a result of the housing slowdown and a substantial decrease in mortgage originations. Upwards of 12,000 layoffs recently were announced by Countrywide Financial Corp., and experts believe the lender will announce additional cuts in the future. Credit Suisse Group analyst Moshe Orenbuch expects mortgage originations to fall to $1.8 trillion in 2008 from $4 trillion in 2003, with signs of recovery not expected until the following year.

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

September 07, 2007

White House Pushing for RESPA Proposal

The Bush administration is pressuring the Department of Housing and Urban Development to speed up the issuance of a Real Estate Settlement Procedures Act proposal to improve good-faith estimate disclosures of mortgage broker fees and settlement costs. HUD officials were planning to issue the proposal in January after completing the required Office of Management and Budget review, which can take up to 90 days.

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

Quarterly Foreclosure Rate Again Sets Record

The Mortgage Bankers Association reports a jump in the rate of mortgages entering the foreclosure process to 0.65 percent in the second quarter--the highest level in more than 30 years--marking a gain from 0.58 percent in the first quarter and 0.43 percent a year ago. MBA chief economist Doug Duncan blames defaults on second homes and investment properties, particularly in Florida, Nevada, Arizona and California, noting that the foreclosure rate would have registered a quarterly decline otherwise.

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

Mortgage Apps Rise; So Do Rates

During the week ended Aug. 31, mortgage applications edged up 1.3 percent. The Mortgage Bankers Association attributes the seasonally adjusted gain to turmoil in the credit markets forcing prospective borrowers to refile their applications. The percentage of applications tied to adjustable-rate loans slipped to 12.6 percent from more than 30 percent over the past few weeks. Interest rates on one-year adjustable-rate mortgages rose to 6.52 percent, while the 30-year fixed mortgage rate climbed to 6.42 percent from 6.41 percent the prior week.

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

Ameriquest Is History as ACC Sells Off Remaining Assets

Ameriquest Mortgage Co. has officially gone out of business, with loan applications no longer accepted as of Aug. 1. Along with its sister company, Argent Mortgage, Ameriquest was the biggest subprime lender in the country in 2005, but all of its retail branches were shuttered the following year by its parent company, ACC Capital Holdings. The rest of ACC's mortgage assets and servicing rights on $45 billion in mortgages have been acquired by Citigroup Inc.

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

Mortgage Servicers Urged to Reach Out

The Federal Reserve, the Federal Deposit Insurance Corp. and other federal banking regulators are encouraging mortgage servicers to help cash-strapped borrowers stay out of foreclosure. In addition to helping borrowers refinance into fixed-rate products, servicers are urged to use such loss-mitigation tools as loan modifications and payment deferrals. Regulators believe such steps are necessary as 14 percent of subprime mortgages will experience a rate increase by 2009, but there are concerns that mortgage securitizations can complicate loan modifications.

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

Reappraising Third-Party Originators

Many lenders have turned to retail underwriting due to concerns about credit quality in loans originated by brokers and correspondents. IndyMac Bancorp Inc. is among the lenders that no longer purchase loans from correspondents, which once accounted for upwards of 70 percent of mortgages. First Houston Mortgage President David Zugheri says brokers opted to send loans to mid-level aggregators rather than directly to the big lenders because correspondents lack the financial resources to verify employment, credit and other criteria for every loan.

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

August 31, 2007

AllRegs Launches Lending Patterns

AllRegs launched a Web-based HMDA data mining and exploration tool, called Lending Patterns™, on Thursday to help lenders analyze millions of records.

The data, which is pooled because of initiatives like the Home Mortgage Disclosure Act and the Loan Application Register, includes 37,000,000 records from 8,800 lenders.

Posted by S. Germain at 08:55 AM | Comments (0)

Florida Resales Decline 24%

Sales of existing single-family homes in Florida totaled 11,674 in July, a decrease of 24% from the level recorded a year earlier, according to the Florida Association of Realtors. The median sales price of homes sold in July declined to $237,500, down 5% from $250,400 in July 2006, FAR reported. Among the state's larger markets, resales decreased 35% in the Orlando metropolitan statistical area and 25% in the Miami MSA, while median resale prices fell to $258,000 in Orlando, down 3% from $266,800 a year earlier, and to $377,400 in Miami, down 1% from $382,200 a year earlier.

Posted by S. Germain at 08:51 AM | Comments (0)

Wachovia Tops Commercial Servicer List

Wachovia Securities was the largest commercial and multifamily mortgage servicer as of midyear, at $356.6 billion in primary and master servicing volume, according to the Mortgage Bankers Association. According to the Washington-based trade association's midyear update, the other large commercial mortgage servicers are: Capmark Finance ($252.3 billion), Midland Loan Services ($245.5 billion), Wells Fargo ($153.2 billion), and KeyBank Real Estate Capital ($133.2 billion).

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

30-Year Mortgages Fall to Lowest Rate in 3 Months, 6.45 Percent

Borrowing costs on home loans dipped to a three-month low this week, providing much-needed relief to home buyers who are facing a tight lending climate. Freddie Mac reported a drop in the 30-year fixed rate to 6.45 percent from 6.52 percent a week earlier, while interest on 15-year fixed loans slipped to 6.12 percent from 6.18 percent. Adjustable-rate mortgages, however, moved in the opposite direction. The five-year ARM settled at 6.35 percent for the week, up a notch from 6.34 percent a week ago; and interest on one-year ARMs averaged 5.84 percent compared to 5.6 percent.

Posted by S. Germain at 08:34 AM | Comments (0)

Investors Default on Outsize Share of Home Loans

Investors—having accounted for a substantial number of home sales in such markets as Arizona, California, Nevada and Florida during the recent boom—now make up a large amount of defaulted prime mortgages because the weak market has made it nearly impossible for them to quickly sell their units at a profit. Of the prime mortgages in default in these states at the end of June, the Mortgage Bankers Association says 32 percent in Nevada, 25 percent in both Florida and Arizona and 20 percent in California were tied to non-owner-occupied units; nationally, such properties accounted for 16 percent of prime mortgage defaults.

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

Bush to Propose Aid to Mortgage Holders

President Bush wants to address the problems in the mortgage industry by enabling the Federal Housing Administration to insure loans for borrowers who are delinquent on their payments and by raising the agency's ceiling for insuring loans to $417,000 from $362,790. In addition to the FHA-related proposals, which would help troubled borrowers refinance and allow more high-risk buyers to take advantage of better terms, Bush plans to temporarily suspend the tax on mortgage debt forgiven by a lender to help borrowers work out lower loan balances and payments to avoid foreclosure.

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

H&R Block Reopens Option One Talks, Posts Big Loss

After agreeing earlier this spring to sell its Option One subprime lending unit to Cerberus Capital Management for about $1 billion, H&R Block is now renegotiating the deal after several closing conditions were not satisfied. The new talks center around divesting or winding down Option One's mortgage lending operation, and additional costs may be incurred as a result.

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

Bernanke Opposes Lift of Fannie, Freddie Caps

Federal Reserve Chairman Ben Bernanke favors allowing the Federal Housing Administration to do more to help borrowers facing foreclosure, rather than enabling Fannie Mae and Freddie Mac to buy more mortgages and mortgage-backed securities or provide refinancing assistance to homeowners.

Posted by S. Germain at 08:30 AM | Comments (0)

CIT Will End Home Mortgage Operation

Increased subprime defaults, declining home values and a drop in investor demand for subprime mortgages have prompted CIT Group Inc. to shutter its home-loan division and lay off 550 workers nationwide. The closure of its mortgage operation—which was tied to just 10 percent of the commercial lender's earnings—will trigger a $35 million charge for the third quarter.

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

IndyMac to Shift Focus to Prime Loans

IndyMac Bancorp Inc., a top 10 U.S. mortgage lender, estimates that 90 percent of its loans will now be the conventional kind that Fannie Mae and Freddie Mac purchase and that the remaining 10 percent of its volume will consist of prime home-equity loans and prime jumbo loans. The Pasadena, Calif.-based savings and loan also says it will be more of a player in the retail market and will have at least 134 retail lending offices with about 1,466 full-time employees, compared to its current nine offices and 126 employees, when its pending retail asset deals with American Home Mortgage Investment Co. and Barrington Capital are completed.

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

August 24, 2007

Calyx Software Maintains Dominant Market Leadership Position

Calyx Software® reported a market share of 67.9 percent from the recently completed Wholesale Access 2006 Mortgage Broker Study. Calyx Software has maintained a consistent market-leading share of 67.9 percent for the last two Wholesale Access studies.

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

Lehman Brothers Closes BNC Mortgage

Lehman Brothers has made plans to shut down its BNC Mortgage LLC subsidiary in a move that affects about 1,200 employees in 23 U.S. locations. The Wall Street firm cited "market conditions have necessitated a substantial reduction in its resources and capacity in the subprime space" as the reason for the shutdown. Lehman will continue to originate mortgages in the U.S. through its Aurora Loan Services LLC platform.

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

BofA Throws Countrywide $2-Billion Lifeline

Countrywide Financial Corp. received a $2 billion bailout from Bank of America on Wednesday in a deal that puts the Charlotte, N.C., bank in a good position to acquire the nation's largest mortgage lender. Calabasas, Calif.-based Countrywide is giving BofA preferred stock that pays a 7.5-percent dividend that can be converted into its common stock at $18 a share, which would give the bank 16 percent of the mortgage company.

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

Four Major Banks Tap Federal Reserve for Financing

Citigroup, Bank of America, JPMorgan and Wachovia have each borrowed $500 million from the Federal Reserve at the urging of central bank officials. The borrowing is largely symbolic, considering the four biggest banks in the United States have cheaper options for obtaining funds and have significant liquidity, but the Fed said it hoped to show lenders that tapping the so-called discount window is not a sign of weakness.

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

Troubled Loans Increase 49 Percent at Federally Regulated Thrifts

The nation's 836 federally regulated savings-and-loan associations, which are responsible for 25 percent of mortgages originated, were saddled with more distressed loans in the second quarter than they have seen since 1993. According to statistics from the Office of Thrift Supervision, the volume of loans at least 90 days delinquent jumped 49 percent at these companies to $14.2 billion from $9.5 billion a year ago.

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

Capital One Will Close Loan Unit

Capital One Financial said on Tuesday that it will shutter all 31 offices of its GreenPoint Mortgage subsidiary due to weakness in the mortgage market, with the accompanying 1,900 layoffs added to the 2,000 it announced a few months ago.

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

Steady Growth Forecast in India’s KPO Market

India’s knowledge process offshoring (KPO) market is steadily accelerating and could yield annual levels of spending of $10 billion-$12 billion by 2010. KPO’s specialized nature offers quality resources and capacity apart from cost savings, according to a new report from Houston-based TPI.

KPO distinctly differs from business process offshoring (BPO) and information technology offshoring (ITO) in that it involves analysis and insight based on skills, experience and judgment. KPO processes are performed based on domain knowledge and intellectual capacity rather than driven by a set of rules. Interpretation, analytical skills and reasoning set KPO apart from BPO and ITO. Most often, for KPO, higher education and a specialized and differentiated set of knowledge and skills are required, said Indy Banerjee, project director at TPI.

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

Fed's Surprise Cut of Discount Rate Cheers Up Investors

In an effort to ease fears of investors worried about the impact of problems in the subprime mortgage market, the Federal Reserve on Friday unexpectedly lowered to 5.75 percent the discount rate imposed on banks when they borrow emergency funds. The decline by half of a percentage point will not affect the economy or the credit markets, but it helped bolster the stock market and revealed the central bank's concerns about slower economic growth in the coming months.

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

August 17, 2007

SF Housing Starts Fall 7.3%

Single-family housing starts fell 7.3% in July as builders are becoming more cautious in the face of tough credit conditions, slowing consumer demand and offering little hope of any improvement for the rest of the year. The U.S. Census Bureau reported that single-family housing starts declined from a seasonally adjusted annual rate of 1.15 million in June to 1.07 million in July. Single-family starts are off by 25% since July 2006, and National Association of Home Builders economists are forecasting starts will be off by a 32% annual rate by the end of the third quarter.

Posted by S. Germain at 08:35 AM | Comments (0)

National City Terminating Home Equity Unit

National City Corp. is closing its home equity division, and most of the unit's 450 employees are likely to lose their jobs. The announcement comes a week after the Cleveland bank temporarily suspended second-mortgage applications through National Home Equity; and Terry McEvoy, a banking analyst with Oppenheimer & Co. in Portland, Maine, says the move was "the next logical step." Investor demand for the unit's packaged home equity loans and lines of credit had cooled because the loans were considered to be too much of a risk.

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

Big Changes and Big Loan for Countrywide

Unable to generate cash by issuing commercial paper, Countrywide Financial Corp. obtained an $11.5 billion loan on Wednesday from more than three dozen leading banks--a move that drove its stock price down 11 percent and prompted a ratings downgrade by Moody's Investors Service, Standard & Poor's and Fitch Ratings. Analysts are expressing concerns that the subprime fallout could result in bankruptcy filings by even those lenders with the best reputations. However, Countrywide officials announced plans to scale back originations of jumbo mortgages, increase down payment requirements and stop lending to borrowers with poor credit ratings. The number of loans originated by Countrywide that are eligible for purchase by Fannie Mae and Freddie Mac is expected to reach 90 percent, marking a gain from 50 percent in June.

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

Pipeline: Sideways Mortgage

As Bank of America Corp., Countrywide Financial Corp. and other large lenders enter the reverse mortgage arena, Oliver Wyman Group managing director Michael Poulos believes more innovation is necessary. He notes that not every senior homeowner wants to tap into his or her equity to help finance retirement, and products that allow them to simply reduce their monthly mortgage payments should be developed.

Posted by S. Germain at 08:30 AM | Comments (0)

Fed Could Cut Rates If Markets Worsen

In a move designed to prevent the snowballing credit crunch from slamming the economy, the Federal Reserve on Wednesday flooded the banking system with an additional $7 billion, bringing the total amount that it has pumped into the system this month to $71 billion. The goal of these cash injections is to keep the federal funds rate from climbing above its current benchmark of 5.25 percent, but analysts say the central bank may be forced to lower that key rate--possibly as early as September. The economy is already being roiled by higher subprime mortgage defaults, but more reports of serious credit issues at major banks or hedge funds could escalate into a full-out credit crisis that will require Fed action on interest rates.

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

Countrywide Reports Rising Defaults

Countrywide Financial Corp.'s stock dipped 8 percent following news of an increase in foreclosures and delinquencies in the company's servicing portfolio to a more than five-year high and possible layoffs. The nation's biggest mortgage lender said its foreclosure rate climbed to 0.79 percent in July, versus 0.48 percent in July 2006 and 0.74 percent in June 2007. Meanwhile, delinquencies rose to 5.1 percent from 4.98 percent the prior month and 4.11 percent year-over-year. Countrywide also reported a 46-percent drop in subprime originations to $1.18 billion from $3.35 billion a year ago, with an overall month-to-month decrease in new loans of 14 percent.

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

Subprime Lender Seeks Protection From Creditors

Aegis Mortgage Corp., which was among the 12 biggest subprime home lenders a year ago, this week filed for Chapter 11 bankruptcy protection. The Houston-based company owes more than $100 million to creditors, including several of the investment banks that until recently financed many loans to subprime borrowers. Among its biggest creditors are units of Countrywide Financial Corp. and Morgan Stanley, to which it owes $14.3 million and $16 million, respectively. Aegis is majority-owned by a Cerberus Capital Management affiliate.

Posted by S. Germain at 08:26 AM | Comments (0)

Homeowners Are Still 'Cashing Out' Billions in Equity Through Refinancings

Freddie Mac's "Cash-Out Refi" report for the second quarter indicates that $76.7 billion in equity was extracted by refinancing from April through June. About 83 percent of refinancings during this period involved cash outs that boosted the new mortgage balance by 5 percent or more, down from a record high of 88 percent last year. Additionally, the median increase in interest rates was one-eighth of a percentage point above the original rate. Freddie Mac deputy chief economist Amy Crews Cutts predicts a 33 percent decrease in cash-out refinancings over the remainder of the year, though she insists that homeowners have plenty of equity to extract--if they so choose--during this extended period of reasonable mortgage rates.

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

August 10, 2007

Fed acts to stem credit turmoil

The Federal Reserve, trying to calm financial turmoil on Wall Street, announced that it will provide liquidity to help bolster U.S. financial markets.

The Fed, in a short statement, said it will provide "reserves as necessary" to help the markets safely make their way. The central bank did not provide details but said it would do all it can to "facilitate the orderly functioning of financial markets."

The Fed's action comes one day after a financial panic about a credit crunch swept through Europe. That prompted the Europeans to pump $130 billion into their financial system. The Fed moved Thursday to add an extra $24 billion in temporary reserves to the U.S. banking system.

The Fed chose not to cut a key interest rate, called the federal funds rate, to address the problem. That interest rate still stands at 5.25 percent. The funds rate is interest banks charge each other on overnight loans.

Instead, the Fed is seeking to provide reassurance to investors that the central bank will pump extra money into the U.S. financial system to make sure the credit crunch doesn't worsen.

Posted by S. Germain at 08:59 AM | Comments (0)

Reverse Mortgage Leader Vertical Lend to be Acquired by KBC Financial Products

Vertical Lend announced that it has signed a definitive agreement to be acquired by KBC Financial Products, a wholly-owned subsidiary of Belgian-based KBC Bank NV. The acquisition is expected to accelerate Vertical Lend's objective to increase market share and brand recognition in the reverse mortgage lending market through its highly recognized Senior Lending Network.

Posted by S. Germain at 08:51 AM | Comments (0)

Bush Rules Out B&C Bailout

President Bush, at a news conference Wednesday afternoon, ruled out any type of taxpayer bailout for lenders threatened by the subprime crisis. According to news reports on the president's remarks, he also dismissed proposals to grant Fannie Mae and Freddie Mac greater leeway in increasing their balance sheets. Fannie has asked its regulator for permission to increase the cap on its on-balance-sheet portfolio, a move that could increase liquidity in the secondary market.

Posted by S. Germain at 08:34 AM | Comments (0)

Countrywide Sees Trouble Ahead

Countrywide Financial Corp. and Washington Mutual Inc. this week informed investors that the weakening mortgage market likely will have a negative effect on their near-term operations. The former stated that "unprecedented disruptions" in the credit markets could have an adverse impact on earnings, while the latter conceded that turmoil in the subprime secondary mortgage market during the first six months of 2007 has spilled over into markets for higher-quality loans.

Countrywide, the nation's biggest mortgage lender, reported that payments were at least 30 days late on a fifth of the non-prime loans it serviced as of last month.

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

Housing Slump Likely to Worsen

The National Association of Realtors expects tightening credit to result in a five-year low for home sales in 2007. For the eighth time this year, the trade group reduced its forecast for housing sales--this time to 6.04 million units, down 6.8 percent from last year and its lowest level since 2002.

Posted by S. Germain at 08:30 AM | Comments (0)

HomeBanc Is Latest to Halt Mortgages

Without the ability to borrow money to fund new loans, HomeBanc Corp. of Atlanta has ceased underwriting operations and is in the process of allowing Countrywide Financial Corp. to acquire as many as five of its branches. Countrywide expects to hire HomeBanc's 1,100 retail loan originators and will apply its underwriting standards to applications submitted to HomeBanc prior to the acquisition. HomeBanc, meanwhile, will continue servicing mortgages.

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

National City Halts Equity Loan Applications

Based on the growing crisis in the mortgage sector, National City Bank confirmed on Monday that it is no longer accepting applications for home equity loans and lines of credit.

Posted by S. Germain at 08:27 AM | Comments (0)

Reverse Loans Moving Forward

The National Reverse Mortgage Lenders Association expects volume of more than 120,000 reverse mortgages this year, which would be a 57 percent increase from 2006. Although the reverse mortgage market is still in its infancy, with only 1 percent of senior homeowners having taken out the most popular offering--the Federal Housing Administration-insured Home Equity Conversion Mortgage--industry observers say business is starting to take off. The trade association projects that the amount of equity locked up through the mortgages will mushroom from $4.3 trillion this year to $37 trillion by 2030.

Posted by S. Germain at 08:26 AM | Comments (0)

August 03, 2007

FlexPoint Shutting Wholesale Division

FlexPoint Funding, a hard-money lender based in Irvine, Calif., has shut its wholesale division. The company and its officials, including senior executive Dan Rawitch, could not be reached for comment. At its peak, FlexPoint was funding between $600 million and $700 million a year.

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

Wells, Countrywide to Buy From ACB JV

Wells Fargo Funding Inc. and Countrywide Institutional Mortgage Services Group have agreed to purchase mortgages from 32 community banks that are part of a joint venture put together by a for-profit subsidiary of America's Community Bankers. The trade group launched ACB Mortgage LLC in February to act as a negotiating agent with investors to get the best secondary-market execution. "We anticipate that this new venture will immediately benefit" from Countrywide's and Wells Fargo's inclusion, said Deborah Whiteside, president of ACB Mortgage. CIMSG president Doug Jones said a "coordinated execution" involving ACB Mortgage and Countrywide "is designed to offer product solutions and help community banks become more successful in today's environment of declining market shares, reduced margins, and increased competition."

Posted by S. Germain at 08:27 AM | Comments (0)

Accredited Says It May Not Survive

Accredited Home Lenders, San Diego, said Thursday that it may not continue to operate as a "going concern," sending its stock price down 25% to just over $6 a share. According to the Quarterly Data Report, Accredited is the nation's 18th-largest subprime funder. The company cited deteriorating conditions in the market, including rising delinquencies and early payment defaults.

Posted by S. Germain at 08:26 AM | Comments (0)

Mortgage Lenders Revise Policies, Raise Rates

IndyMac Bancorp is the latest in a line of home lenders to respond to the decline in mortgage-backed securities by raising interest rates and tightening underwriting standards. Many lenders no longer are offering "piggyback" second mortgages, and Wachovia is among those that have ceased underwriting Alt-A home loans. National City, meanwhile, says it will no longer write stated-income loans or purchase second mortgages from other lenders.

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

RamQuest Software, Ellie Mae Link Title Companies, Brokers

RamQuest Software Inc., Plano, Texas, a business services provider for the title and escrow industry and developer of the Closing Market digital network, and Ellie Mae, Dublin, Calif., a provider of software and services for the mortgage industry, formed a partnership that integrates the ePASS Network with RamQuest Closing Market systems. The partnership enables users of each system to expand their network of customers and suppliers.

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

Mortgage Firm Out of Cash

American Home Mortgage may be the next lender to file bankruptcy, having announced that UBS, Bear Stearns, J.P. Morgan Chase and other investment banks have cut off funding and ordered the company to pay back previous loans. After the struggling Alt-A lender reported its lack of cash, its stock tumbled 90 percent.

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

July 30, 2007

VantageScore Gains Market Momentum Among Industry Leaders

Equifax Inc. announced that several banking, retail and technology customers are incorporating VantageScore(sm) into their decisioning processes.

VantageScore, a credit score jointly developed by Equifax, Experian and TransUnion, is a direct result of market demand for a more consistent and predictive approach to credit-scoring methodology across all three national credit reporting companies. Introduced to the market in March 2006, VantageScore is recognized today as an alternative risk management scoring solution.

Posted by S. Germain at 08:45 AM | Comments (0)

Opteum Sub Sells Servicing Portfolio

Opteum Inc., a real estate investment trust based in Vero Beach, Fla., has announced a sale by its majority-owned subsidiary Orchid Island TRS LLC of substantially all its remaining mortgage servicing portfolio. The terms of the agreement were not disclosed. The aggregate unpaid principal balance of the loans underlying the mortgage servicing rights sold was approximately $2.97 billion as of June 30, Opteum said. The proceeds of the sale will be used to repay debt currently secured by Orchid Island's mortgage servicing portfolio and for other corporate purposes, Opteum said.

Posted by S. Germain at 08:42 AM | Comments (0)

Chase Simplifies Disclosures, Tightens Standards

As part of a plan to help borrowers better understand their mortgage options, JPMorgan Chase has unveiled simplified disclosures, tightened credit standards, and a requirement of an initial fixed rate of at least five years on adjustable-rate mortgages for nonprime borrowers. The company said it will also use underwriting guidelines that require borrowers to demonstrate their ability to handle increases in interest rates on nontraditional mortgages.

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

Panel OKs Flood Coverage Bill

A flood coverage bill has cleared the House Financial Services Committee on a 38-to-29 vote. The legislation seeks to overhaul the National Flood Insurance Program by increasing its borrowing authority, phasing out subsidies for secondary and vacation homes, bringing flood maps up to date and offering wind coverage as an option.

Posted by S. Germain at 08:37 AM | Comments (0)

Open House: Licensing Laws for Title Insurance Sales Agents

California is among the states considering legislation to license title insurance sales agents, a move supported by the California Land Title Association because it would clarify marketing rules and help to prevent kickback violations. If passed, registration with the California Department of Insurance would be mandatory for all title insurance agents.

Posted by S. Germain at 08:35 AM | Comments (0)

Multi-family Housing Starts Up 40 Percent in June

McGraw-Hill Construction Research & Analytics reports that new multifamily construction soared 40 percent from May to June, which helped residential building activity increase 4 percent overall for the month. For the first half of the year, though, multifamily and single-family construction combined is still down 26 percent to an annual rate of $283.2 billion.

Posted by S. Germain at 08:34 AM | Comments (0)

New Mexico Pushing 6.3 Percent Cut in Title Insurance Rates

In response to a new study on competition in New Mexico's title insurance industry and consumer litigation over allegedly inflated premiums, authorities in the state are lobbying for lower costs. According to reports in the Santa Fe New Mexican newspaper, the New Mexico Land Title Association has indicated its support for a rate cut of no more than 1.4 percent and the Insurance Division staff of the New Mexico Public Regulation Commission has recommended a rate reduction of 1.7 percent. State superintendent of insurance Morris Chavez, however, is lobbying for a 6.3-percent rollback, effective Sept. 1.

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

Mortgage Firm Is Being Sold

Senior Financial of Virginia has inked a $50 million deal to acquire Liberty Reverse Mortgage, a California-based firm that ranks as the country's biggest non-bank provider of reverse mortgages for seniors.

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

Wells Fargo Ends Sub-Prime Loan

Wells Fargo & Co. has joined Countrywide Financial Corp., Washington Mutual Inc., Merrill Lynch & Co. subsidiary First Franklin and H&R Block Inc. subsidiary Option One Mortgage in ceasing originations of 2/28 adjustable-rate loans. These subprime products boast fixed borrowing costs during the first two years, after which the rate adjusts two times annually over the remainder of the loan term. Last year, 65 percent of all subprime mortgages were 2/28s. Lenders have backed away from such loans in response to calls by regulators to underwrite mortgages at their fully indexed rates.

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

July 20, 2007

GE sheds subprime mortgages

General Electric Co. is getting out of the subprime mortgage business, the latest company to distance itself from an industry that seems to grow messier by the week.

The industrial, finance and media conglomerate, announcing second-quarter profits on Friday of $5.42 billion, said it took a $160 million hit on the sale, but that it has dumped $3.7 billion of its subprime mortgage portfolio, easing the company out of a worsening environment.

GE's WMC Mortgage has $1.1 billion in mortgage loans remaining.

Posted by S. Germain at 11:35 AM | Comments (0)

Fannie to Give Lenders Appraisal Alerts

Starting July 22, Fannie Mae's automated underwriting system will alert lenders if the collateral for a mortgage is located in an area where house prices are declining. In such cases, Fannie's Desktop Underwriter will send a message to lenders that they need to carefully review the appraisal to ensure its accuracy and require additional information from the appraiser, if necessary. Appraisers should describe market trends and the effects it will have on the value of the property, Fannie says in an announcement to its seller/servicers.

Posted by S. Germain at 11:21 AM | Comments (0)

Bernanke Sees B&C Losses of $50-100B

The deterioration in the credit quality of subprime mortgages could result in losses ranging from $50 billion to $100 billion, Federal Reserve Board chairman Ben Bernanke told Congress July 19. The chairman indicated that delinquencies and foreclosures are rising faster than the Fed anticipated only a few months ago. And these problems "likely will get worse before it gets better," he said.

Posted by S. Germain at 11:18 AM | Comments (0)

Mozilo: No End in Sight for Subprime Crisis

"We have a long way to go" in the subprime mortgage crisis, Countrywide chairman Angelo Mozilo said. Pouring cold water on statements by other mortgage executives, including Countrywide Financial Corp.'s own Todd Dal Porto, Mr. Mozilo said the current subprime collapse is causing a paradigm shift that will bring down an avalanche of regulatory scrutiny.

Posted by S. Germain at 11:17 AM | Comments (0)

Fed Chairman Vows to Curb Mortgage Abuses

In testimony before the Senate Banking Committee on Thursday, Federal Reserve Chairman Ben Bernanke said the central bank is looking into ways to protect home buyers from predatory lenders. Under consideration are enhanced disclosures as well as restrictions on the use of prepayment penalties and mortgages with no income verification. Bernanke speculated that credit losses tied to delinquent subprime mortgages ultimately could reach as high as $100 billion. Despite the central bank's plans, Sen. Charles Schumer, D-N.Y., insisted that federal legislation is necessary to protect consumers and "prevent this subprime mess from happening again."

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

Title Co. Partnerships Continue Under Heat

Affiliated business arrangements--which allow title insurers to partner with lenders, realtors or builders for the purpose of obtaining referrals--continue to be a source of concern within the property industry. ABAs are recognized under and governed by the Real Estate Settlement Procedures Act--which stipulates that the financial interest be revealed to the borrower, that the customer is not obligated to use the services of the affiliated business and that no other payments banned under RESPA are made. Despite clear guidelines designed to avoid illegal kickbacks, RESPA fears dominated the National Association of Realtors 2007 Legal Scan survey released earlier this month. "Growing problems with RESPA-related issues are expected by a large number of agents," according to the report, "especially disputes triggered by alleged kickbacks, affiliated business arrangements and inadequate disclosure of settlement costs."

Posted by S. Germain at 11:10 AM | Comments (0)

'It's for You': Hard-to-Reach Borrowers Get New Approach

In an effort to talk with delinquent borrowers who have not answered their numerous phone calls, mortgage servicers are getting creative. Quantum Servicing Corp. plans to mail out 100 prepaid cell phones at no cost to borrowers, although they will have to first make contact with the company in order to activate the phones for personal use. While some experts believe such a move is cost-prohibitive, Quantum executive Joe Caravetta says the company can save upwards of 70 percent of the mortgage's value by helping borrowers avoid foreclosure.

Posted by S. Germain at 11:09 AM | Comments (0)

Subprime Staple Is Phased Out

Subprime adjustable-rate mortgages with low fixed rates during the first years and a variable rate sometimes above 10 percent for the remainder of the loan term have been discontinued by Countrywide Financial Corp., Option One Mortgage Corp. and First Franklin Financial. Higher default rates on these so-called 2/28 loans have made it more difficult for lenders to sell them as securities on the secondary market.

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

Countrywide Warns Defaults Rising

Countrywide Financial reports a 4-percent jump in loan volume in June. During the same month, the nation's biggest mortgage lender says its mortgage servicing operations grew 15 percent to $3.1 billion, while its banking assets climbed 7 percent to $90 billion. Despite hiring 5,800 workers since the start of the year and working to increase market share as competitors go out of business, Countrywide also reports higher default and delinquency rates.

Posted by S. Germain at 11:07 AM | Comments (0)

State Regulators Offer Guidance on Mortgages

The Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators and the National Association of Consumer Credit Administrators will jointly issue mortgage guidance similar to rules issued recently by federal banking regulators. The guidance calls for brokers and non-bank lenders to restrict prepayment penalties and stated-income loans, underwrite subprime mortgages at the fully indexed interest rate and help cash-strapped borrowers avoid foreclosure. At least 28 states plan to take up the guidance, and nearly three dozen states have already adopted the federal guidelines. However, "This does not eliminate the need for a uniform national standard for a strong anti-predatory lending law," says Mortgage Bankers Association Senior Vice President of Government Affairs Stephen O'Connor.

Posted by S. Germain at 11:04 AM | Comments (0)

July 13, 2007

Ginnie Setting Stage for Reverse Program

Ginnie Mae has set the stage for the launch of its reverse mortgage securitization program this September with the release of a guide for mortgage-backed securities issuers. The new guide for securitizing Federal Housing Administration-insured Home Equity Conversion Mortgages provides detailed issuer pooling and reporting specifications.

Posted by S. Germain at 08:44 AM | Comments (0)

RealtyTrac: Foreclosures Declined in June

Nearly 165,000 foreclosure filings were reported nationwide in June, down 7% from the level recorded in May but up 87% from that of a year earlier, according to RealtyTrac, an online foreclosure marketplace based in Irvine, Calif.

Posted by S. Germain at 08:43 AM | Comments (0)

General Electric to Sell WMC Mortgage

Problems in the flawed-credit mortgage lending market have prompted General Electric to put its subprime unit up for sale, just three years after entering the niche. WMC Mortgage made only $3.4 billion in new loans in the first quarter, compared to $9 billion in the previous quarter, and the company has cut its staff to about 700 workers from more than 1,200 employees over the past year.

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

NAR Cuts '07 Housing Forecast

The National Association of Realtors has revised its home-sales predictions for this year. After forecasting in June that 6.18 million existing residences would change hands this year, the trade group now believes volume will fall to a five-year low of 6.11 million. NAR also altered its forecast for the 2007 median resale price, currently predicting a 1.4-percent decline to $218,000. This marks the fifth revision in as many months, with NAR noting that buyers now have the upper hand.

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

Pipeline: Reverse Revolution?

The reverse mortgage business continues to grow, and there are now successful lenders in the niche other than Wells Fargo & Co. and IndyMac Bancorp Inc.'s Financial Freedom unit. Generation Mortgage Co. of Atlanta, for example, has jumped into the top 10 producers of government-insured reverse loans with its acquisition of Moodus, Conn.-based Amston Mortgage; and Chairman Jeff Lewis says the business is becoming more competitive. The reverse mortgage sector has expanded more than 50 percent over the past three years as baby boomers have planned for retirement, and Lewis believes it could get another boost from seniors who may be looking to refinance out of subprime loans. According to the Federal Housing Administration, 76,276 federally guaranteed reverse mortgages--which account for 90 percent of the ma! rket--were taken out last year.

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

Fed Chairman's Talk Further Dims Hope for a Rate Cut

Federal Reserve Chairman Ben Bernanke's latest remarks concerning inflation have convinced market watchers that the central bank likely will not lower interest rates at any point in the near future. In a speech to an economics conference in Massachusetts on Monday, Bernanke stated: "Although inflation expectations seem much better anchored today than they were a few decades ago, they appear to remain imperfectly anchored." He and his colleagues at the Fed have stated that Americans must be reassured about the stability of prices in the future if a slower rate of inflation is to be achieved. By going on record this week and reiterating that inflation remains too high, Bernanke hopes to send a message that the current trend of price gains will not be the norm under his watch.

Posted by S. Germain at 08:37 AM | Comments (0)

Foreclosures Turn Up Heat on MERS

Merscorp Inc., the Vienna, Va.-based provider of an electronic loan registry, has been hit with at least nine lawsuits since 2000 alleging that the company does not have the right to initiate foreclosure proceedings for its member lenders--even though its Mortgage Electronic Registration Systems Inc. is listed as the mortgage lien holder and noteholder in the county records of some 50 million loans. Consumer advocates have criticized Merscorp for failing to make its status as the mortgage's true owner clear to borrowers, which is an issued pushed to the forefront as foreclosures rise.

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

Why Applications' Value as Yardstick May Be Shifting

The large gap between the number of requests for adjustable-rate mortgages and the number of funded loans in the second half of the year is drawing greater scrutiny of the Mortgage Bankers Association's weekly application index. The organization attributes the disparity to an increase in denials among ARM applicants, technical issues or applicants' deciding against obtaining the loans; others believe stricter underwriting standards are finally taking a toll and that the gap will narrow as the number applications likely to be rejected declines.

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

July 06, 2007

Easley Approves Mortgage Oversight

North Carolina Gov. Mike Easley signed a bill into law on Wednesday to create a public record listing the name of the originator for every mortgage written and on Thursday enacted a measure that would make mortgage fraud a crime. However, the new laws may not do enough to curb rising foreclosures in the state, considering that homeowners are more likely to face problems keeping up with payments on a mortgage because they are unable to afford a legal home loan, rather than because they received a fraudulent loan. The state could move more toward addressing the root cause of foreclosures if the Senate passes a bill that would require lenders to consider whether the borrower can afford a loan. The mortgage industry has expressed concern that there could be a negative impact on the availability of financing if more laws are passed.

Posted by S. Germain at 10:18 AM | Comments (0)

U.S. Pending Home Sales Index Drops 3.5 Percent in May to a Near 6-Year Low

The National Association of Realtors' index of pending home sales is the latest sign that the housing market is still in a funk. The group reports that its index fell 3.5 percent in May to 97.7, compared to declines of 3.4 percent and 4.5 percent in April and March, respectively, leaving pending sales of existing homes at their lowest level since September 2001. The indicator of home sale performance in the coming weeks continues to be depressed by problems in the mortgage market, although borrowers looking for options to subprime financing are driving home-loan applications, says NAR senior economist Lawrence Yun. At the same time, lenders are reining in risky mortgages to borrowers with flawed credit histories, according to Yun.

Posted by S. Germain at 10:16 AM | Comments (0)

Debt Buries Mortgage Lender

Mortgage Investment Lending Associates (MILA) has joined numerous other subprime lenders that have filed for Chapter 11 bankruptcy protection. MILA distributed money from the nation's largest lenders to subprime borrowers through mortgage brokers. Much of the Mountlake Terrace, Wash.-based company's problems stem from the fact that Bear Stearns, GMAC/RFC, Goldman Sachs Mortgage, Wachovia Mortgage, Deutsche Bank, Countrywide Home Loans and Indymac Bank ordered it to buy back millions of dollars in mortgages they insist did not meet underwriting criteria. According to Washington State Department of Financial Institutions consumer services director Deborah Bortner, MILA "went out of business for the same reason as many, many other lenders have gone out of business: The market turned against them." With offices in more than two dozen states, The Everett Herald reports t! hat the lender funded $4.5 billion in home loans in 2005.

Posted by S. Germain at 10:13 AM | Comments (0)

U.S. Finance Firms Are Finding Themselves Major Real Estate Owners as Foreclosures Mount

Rising foreclosures have helped produce a 53-percent increase in the value of U.S. homes held by commercial banks to $2.3 billion at the end of March—which is the highest level since 1992 and is up from $1.5 billion a year ago, according to the Federal Deposit Insurance Corp. The Mortgage Bankers Association reports that the share of subprime loans entering foreclosure in the first quarter was 2.43 percent—the highest level in nearly five years—and subprime late payments increased to 13.77 percent, up from 11.5 percent a year ago. Banks could pay maintenance costs on the homes or sell them at deep discounts, says HSH Associates executive Keith Gumbinger, both of which could depress real estate values. National Association of Realtors economist Lawre! nce Yun says the national median price for a previously owned home could fall to 1.3 percent this year, which would be the first decline since the Great Depression.

Posted by S. Germain at 10:11 AM | Comments (0)

New Subprime Loan Rules Issued

U.S. financial watchdogs have released new guidelines meant to rein in the overly aggressive lending practices that triggered a mortgage default crisis, but while still preserving access to credit for responsible home buyers. As part of the new rules, the Federal Reserve and other regulators said lenders should confirm incomes and take into consideration possible rate increases when determining borrowers' repayment ability. Additionally, they declared, subprime borrowers should not face prepayment penalties when they refinance their loans.

Posted by S. Germain at 10:11 AM | Comments (0)

New Subprime Loan Rules Issued

U.S. financial watchdogs have released new guidelines meant to rein in the overly aggressive lending practices that triggered a mortgage default crisis, but while still preserving access to credit for responsible home buyers. As part of the new rules, the Federal Reserve and other regulators said lenders should confirm incomes and take into consideration possible rate increases when determining borrowers' repayment ability. Additionally, they declared, subprime borrowers should not face prepayment penalties when they refinance their loans.

Posted by S. Germain at 10:11 AM | Comments (0)

June 29, 2007

New Homes Realty Partners with Metrocities Mortgage, Launches New Homes Central Lending Services

New Homes Realty, Inc., a full-service online real estate company and the largest buyer's agency in the U.S., and Metrocities Mortgage, LLC, a leader in the residential mortgage lending market, announce the formation of New Homes Central Lending Services, a joint venture full service mortgage company offering a multitude of residential mortgage lending services.

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

Centerbridge to Buy Green Tree

Green Tree Servicing, St. Paul, Minn., has announced an agreement to be acquired by an investor group led by Centerbridge Partners LP and its affiliates. The terms of the agreement were not disclosed. The investor group, and the existing management, are buying 100% of Green Tree's equity from funds managed by affiliates of Fortress Investment Group and from affiliates of Cerberus Capital Management. Green Tree said it expects to use the investment to increase its loan servicing volume, develop new business initiatives, and expand its operations.

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

Mass., Mortgage Lenders Meet on Foreclosure Crisis

Massachusetts housing officials recently held the first of several planned meetings with nine mortgage lenders to talk about how they can work together to help residents avoid foreclosure. Executives from Washington Mutual, Wells Fargo, Option One Mortgage, JPMorgan Chase, HSBC Finance, Countrywide Financial, CitiBank, Bank of New York and GMAC Residential Capital were in attendance.

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

Fewer FHA-Backed Loans Foreclose

The loss-mitigation program of the Federal Housing Administration is the main reason why people with FHA-insured loans have been able to hold onto their homes, HUD official Brian D. Montgomery said. Montgomery noted that HUD had 247 FHA-insured mortgages foreclosed in Colorado in its portfolio in May, compared to more than 15,000 foreclosed homes in the late 1980s.

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

ABA, ACB Announce Intent to Merger

The American Bankers Association and America’s Community Bankers announced yesterday that they intend to merge into one organization this fall.

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

Sales of Existing Homes Fall to Lowest Level in 4 Years

The National Association of Realtors reports that sales of existing homes dipped 0.3 percent to 5.99 million units last month, the slowest sales pace since June 2003. Meanwhile, the median price of a residence sold during May fell 2.1 percent from a year earlier to $223,700, the 10th consecutive year-to-year price decline. NAR officials note that the sales decline reflected weakness in the West and South, where sales were down 0.8 percent and 3.4 percent, respectively. On the positive side, May home sales rose 0.7 percent in the Midwest and a solid 5.8 percent in the Northeast. Overall, though, the inventory of unsold single-family homes and condominiums increased 5 percent during the month to 4.43 million units--the highest supply in 15 years.

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

June 22, 2007

Chase to Expand Subprime Bulk Program

Chase has announced plans to expand its subprime bulk program later this year to include a flow process and has hired mortgage banker Rick Boyd to manage the new flow effort. Mr. Boyd has been named subprime flow manager at the company as part of its correspondent lending division, responsible for all program coordination, including risk and capital markets, operations, sales, and marketing. Chase originates $170 billion in residential mortgages and home equity annually -- including nearly $100 billion through the wholesale, correspondent, and correspondent-negotiated channels -- and services a portfolio of more than $500 billion.

Posted by S. Germain at 11:06 AM | Comments (0)

Ellie Mae Updates Encompass

Dublin, Calif.-based Ellie Mae has released Encompass 3.0, an upgrade of its Encompass Mortgage Management Solution that enables two-way communication with borrowers and vendors, handles more loan programs, and integrates with more third-party technology. In addition, Ellie Mae said the product is now fully integrated with Encompass WebCenter, a tool that provides users with a scalable and search-engine-friendly website and a secure online business center that originators can use to generate leads and to communicate and collaborate with borrowers and partners.

Posted by S. Germain at 11:03 AM | Comments (0)

H&R Block Reports $434 Million Loss Due to Irvine Unit

Option One Mortgage Corp. was largely responsible for the $434 million loss in fiscal 2007 for parent H&R Block Inc., which is set to sell the troubled Irvine, Calif.-based subprime lender to Cerberus Capital Management in October. For the fourth quarter, H&R said it lost $677 million from "discontinued operations," mostly from Option One, and added that the figure includes costs tied to the sale. The company has had to write down Option One assets to reflect rising subprime mortgage loan delinquencies, which the Mortgage Bankers Association reports are up 13.77 percent over the first three months of the year; set aside more reserves for the past due loans; and readjust as investors pay less for bonds backed by subprime mortgage loans. A year ago, H&R gained $490 million.

Posted by S. Germain at 11:02 AM | Comments (0)

Servicers Seek Nonprofits' Help as Go-Between

In response to a Freddie Mac study revealing that 50 percent of borrowers in foreclosure in 2005 failed to contact their lenders to discuss workout options, the nonprofit Neighborhood Reinvestment Corp. and the Homeownership Preservation Foundation have created English and Spanish television and radio ads encouraging cash-strapped borrowers to phone a toll-free number for help. Servicers believe nonprofit, third-party counselors are better able to get the information they need to help borrowers restructure their loans before problems occur. Colorado Division of Housing director Kathi Williams says, "We are convinced that when a market starts to go into the toilet, the sooner you can intervene in the situation, the better. And it's very difficult for lenders to be able to get that early intervention going, when a neutral third party can do a much better job of that." Washington Mutual Inc., meanwhile, says it is using phone calls and direct mail to reach upwards of 15,000 subprime borrowers six months prior to their interest-rate adjustments, letting them know that forbearance and other loss mitigation tools are available.

Posted by S. Germain at 11:01 AM | Comments (0)

Home Inspectors Must Now Be Licensed

Maryland has found enough money to fully fund a home inspector licensing program, enabling the state to launch the program this past April--six years after the General Assembly voted to strengthen regulation of the profession. The initiative requires all home inspectors in the state to be licensed by next year, an effort that entails 48 hours of an onsite training course but not an examination at this time; those who fail to do so face criminal charges of up to one year in jail and a $5,000 penalty. The program is designed to protect home buyers and residential inspectors, says Elwood Mosley, executive director of the state Real Estate Appraiser and Home Inspector Commission--which will offer a service that will enable prospective home buyers to search for licensed professionals in the state. Maryland Association of Realtors President Ilene Kessler supports the licensing initiative but is uncertain how it will impact the industry.

Posted by S. Germain at 11:00 AM | Comments (0)

Study: Conditions Ripe for Further Increase in Fraud

A recent study conducted by Mortgage Asset Research Institute Inc. on behalf of the Mortgage Bankers Association reveals a 30-percent jump in mortgage fraud cases in 2006, and study co-author D. James Croft expects the current problems in the subprime market to increase fraudulent activity. Florida had the highest score on the MARI Fraud Index, followed by California, Michigan and Georgia; but Croft insists the number of cases in Florida and Georgia "are not as high as we have seen in the past." The report attributes a drop in new fraud cases in Georgia to the state's Residential Mortgage Fraud Act--which puts first-time offenders in jail for as many as 20 years--and notes that lawmakers in New Jersey, Oklahoma, Florida, Nevada, Colorado and other states are pondering similar measures.

Posted by S. Germain at 10:59 AM | Comments (0)

Commercial Real Estate Hits Record

The first four months of 2007 was a record period for U.S. commercial real estate, as investment in the sector rose 62 percent from a year ago to $157 billion, the National Association of Realtors reported. While office deals accounted for much of the total at $95 billion, transactions involving apartment buildings declined 25 percent to $23.2 billion. Private investors had a hand in about half of the multifamily purchases, and only 5 percent of the acquisitions were condominium conversions. NAR senior economist Scott MacIntosh predicted the brisk pace of commercial real estate deals will continue for the rest of the year and that the total will surpass the record $306.8 billion in transactions that was reached in 2006.

Posted by S. Germain at 10:56 AM | Comments (0)

Fair Isaac to Pull the Plug on FICO Score Boosting Schemes for Mortgages

Fair Isaac Corp. says it will no longer take "authorized user" accounts into consideration when computing FICO scores, starting in September. The move to update the FICO scoring model comes as federal and state regulators have expressed concern to mortgage lenders and brokers about Web sites that allow borrowers with bad credit to "rent" the credit cards of people who have excellent credit histories, in a scheme that boosts their FICO scores by hundreds of points and enables them to qualify for lower financing rates. Although the Web sites are taking advantage of a loophole in the law permitting authorized user accounts, submitting mortgage applications with artificially inflated FICO scores is bank fraud and a violation of a number of other statutes. Fair Isaac believes the new scoring model will address "most of the problem," says public affairs manager Craig Watts.

Posted by S. Germain at 10:55 AM | Comments (0)

Bill to Simplify Mortgage Disclosures

A bill in the works by Reps. Patrick McHenry, R-N.C., and Al Green, D-Texas, both members of the House Financial Services Committee, would make changes to the Real Estate Settlement Procedures Act. Under the proposal, lenders would have to provide a one-page disclosure form to borrowers, replacing documents currently in use that McHenry deems "increasingly complex, convoluted, and cumbersome." Based on a form created by American Enterprises Institute resident fellow Alex Pollock, lenders would have to spell out the introductory interest rate, the fully indexed rate, the "maximum possible" rate, prepayment penalties and their triggers and balloon payment amounts and due dates. Due to borrowers three days prior to closing, McHenry believes the form is a suitable alternative to banning loan practices.

Posted by S. Germain at 10:52 AM | Comments (0)

June 15, 2007

TransUnion Opens Central American Data Center in Guatemala City

In its continuing effort to strengthen Guatemala's credit and financial infrastructure, TransUnion today announced the opening of its Central American data center in Guatemala City. The centralized data center will serve as the main hub for TransUnion's delivery of service offerings for financial institutions in Guatemala, Honduras, Nicaragua and Costa Rica.

Posted by S. Germain at 09:12 AM | Comments (0)

Access Business Technologies and Ellie Mae Announce Strategic Partnership

Access Business Technologies, the mortgage technology experts, and Ellie Mae, an award-winning provider of innovative software and services for the mortgage industry, announced today that they have formed a strategic partnership to provide hosting and managed services solutions to Ellie Mae customers, enabling them to outsource all software applications and IT functions.

By hosting Ellie Mae's Encompass products with ABT, mortgage professionals will benefit from ABT's best-in-class hosting and managed services including state-of-the-art physical and data security, access control, disaster recovery and business continuity. ABT is a SAS70 Level II organization providing premium-level managed services to the mortgage industry.

Posted by S. Germain at 09:01 AM | Comments (0)

First Franklin Enters 'Alt-A' Market

Subprime wholesaler First Franklin Financial Corp., San Jose, Calif., has entered the alternative-A market and plans to securitize the loans through its parent company, Merrill Lynch. In an interview with MortgageWire, FFFC president and chief executive Andrew Pollock said the nonprime lender had been planning the menu expansion for a year. It began accepting the loans on June 11. Mr. Pollock said he anticipates that alt-A loans could account for about 10% of the company's volume this year. (In 2006, FFFC funded $27.6 billion in subprime loans, ranking ninth nationwide, according to the Quarterly Data Report.) FFFC funds loans through a network of 20,000 approved brokers.

Posted by S. Germain at 08:55 AM | Comments (0)

Subprime Loan Defaults Jump

The U.S. foreclosure rate bumped up to 0.58 percent during the first three months of this year, according to the Mortgage Bankers Association, compared to 0.54 percent in the previous quarter. The increase was driven largely by greater foreclosure activity among subprime borrowers, particularly those carrying adjustable-rate mortgages. MBA's data shows that subprime loans entering the foreclosure process reached a five-year high of 2.43 percent, up from 2 percent in the fourth quarter of 2006. Prime loans, meanwhile, hit a foreclosure rate of 0.25 percent--the highest level ever--compared to 0.24 percent in the prior quarter.

Posted by S. Germain at 08:53 AM | Comments (0)

Foreclosure Rate Hits Historic High

The Mortgage Bankers Association's first-quarter foreclosure report reveals a jump in the number of new foreclosures to a level not seen in more than five decades. However, MBA chief economist Doug Duncan stresses that the foreclosure rate actually would have fallen had it not been for substantial increases in seven states: California, Florida, Nevada, Arizona, Ohio, Michigan and Indiana.

Posted by S. Germain at 08:52 AM | Comments (0)

Lehman to Combine Mortgage Units

Lehman Brothers Holdings Inc. recently announced that it will merge its home-finance units, BNC Mortgage and Aurora Loan Services, eliminating nearly a quarter of BNC's workforce in the process. BNC uses independent mortgage brokers to arrange subprime loans, while Aurora handles Alt-A loans for borrowers who have good credit but not enough documentation to prove their incomes and assets. Thomas Wind, director of U.S. residential lending for Lehman, said 400 BNC workers will be laid off.

Posted by S. Germain at 08:51 AM | Comments (0)

More ARM Borrowers Switching to Fixed-Rate Loans

The most recent U.S. Mortgage Payment Index from the University of Pennsylvania's Wharton School indicates that stricter underwriting guidelines are helping the mortgage market correct itself, says Wharton real estate and finance professor Susan Wachter. According to Wachter, prime loans accounted for more than 60 percent loans sold through brokers in January, reflecting a gain from 50 percent the prior year. Additionally, 89 percent of borrowers with one-year adjustable-rate mortgages and 84 percent with hybrid ARMs refinanced into fixed-rate products during the first quarter--up 4 percent and 8 percent, respectively, from a year ago.

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

Commercial/Multifamily Mortgage Debt Exceeds $3 Trillion, MBA Says

The level of commercial/multifamily mortgage debt outstanding grew by 2.5 percent in the first quarter, exceeding $3 trillion for the first time, according to Mortgage Bankers Association analysis of the Federal Reserve Board Flow of Funds data.
The $3.001 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve was an increase of $72.4 billion from the fourth quarter 2006. Multifamily mortgage debt outstanding grew to $741 billion, an increase of $11.8 billion or 1.6 percent from the second quarter.

Posted by S. Germain at 08:49 AM | Comments (0)

Countrywide May Loans Up 15 Percent

Countrywide reports a 15-percent jump in mortgage originations to $44.42 billion during the year-over-year period ended in May. However, the nation's No. 1 mortgage lender also reported an increase in its foreclosure rate to 0.90 percent, twice what it was in May 2006. The company expanded its workforce by 1,329 last month and hopes to boost market share at a time when many of its competitors are adjusting to the housing downturn by scaling back or going out of business.

Posted by S. Germain at 08:48 AM | Comments (0)

GE Unit Makes Change in Subprime Lending

Subprime lending guidelines proposed by federal banking regulators in March have been embraced by WMC Mortgage Corp., a subsidiary of General Electric Co. WMC is the first in the subprime sector to do so, while Countrywide Financial Corp. and others continue to express concern about the guidelines drying up credit. The guidelines target hybrid adjustable-rate mortgages and urge lenders to underwrite loans based on the fully indexed interest rate.

Posted by S. Germain at 08:47 AM | Comments (0)

Wall Street Tiff May Impact Mortgages

Problems in the subprime mortgage market have pitted Wall Street firms, banks and hedge funds against one another. Lenders insist that it is legal for them to extract struggling loans from mortgage bundles--even if the securitization involves default-risk swaps--in order to modify them and help homeowners avoid foreclosure. However, hedge funds contend that contracts prevent them from doing so and accuse them of wanting to get out of paying hedge funds for the boost in defaults; these contracts typically require hedge funds to pay lenders when defaults move under a specified level and lenders to pay hedge funds when defaults rise.

Posted by S. Germain at 08:46 AM | Comments (0)

Subprime Crash Squeezes First-Time Buyers Out of Housing Market

The National Association of Home Builders reports that subprime mortgage lenders have tightened their credit guidelines to such an extent that they are blocking 500,000 first-time buyers out of the housing market. Organization officials are concerned that a decrease of that magnitude could cause sales of new homes to tumble by 4 percent and sales of existing residences to slide 7 percent. The prospect has sent shares of several home builders tumbling in recent months, with Toll Brothers CEO Robert Toll lamenting that tightened lending "may have served to impede the glimmers of a rebound we started to see in early February." Washington Mutual Inc. reports that stricter credit rules and the closing or sale of more than 50 mortgage firm! s should reduce subprime lending to $350 billion in 2007, a 47-percent drop from 2005.

Posted by S. Germain at 08:45 AM | Comments (0)

Making SMART Docs Accessible

The Mortgage Industry Standards Maintenance Organization (MISMO) will roll out SMART Docs Version 2.0 in the near future in the hopes that more lenders will embrace eMortgages. MISMO eMortgage Workgroup Chairman Patrick Hartford says the new generation of software will make it easier for loans to be recorded, adding that the compound-document format--which has been applauded by investors--will make it easier to handle HUD-1 and other paperwork that require numerous edits. According to Hartford, "In normal terms, what that means is that it will look like a Zip file that includes multiple files within it. So, the new version will allow for multiple views, multiple signatures, multiple data elements, etc. You can basically look for just what you want and pull it out." Hartford notes that lenders using SMART Docs Version 1.2 can continue to do so.

Posted by S. Germain at 08:44 AM | Comments (0)

AIG to Aid Subprime Borrowers at Cost of $178 Million

Insurance behemoth American International Group has reached a settlement with the U.S. Office of Thrift Supervision over accusations that the company's banking arm extended mortgage credit that was "inappropriate" for the poor-credit borrowers who received the loans. Most of the mortgages in question are adjustable-rate products originated by AIG's Wilmington Finance unit between July 2003 and May 2006. AIG already had earmarked $128 million to refinance subprime borrowers into loans with more affordable terms, to refund fees and to hire a consultant to help it improve its mortgage policies; but OTS spokesman Kevin Petrasic said the insurer will add up to $50 million more to that effort during the current quarter. It also will contribute $15 million to nonprofit organizations that support financial literacy.!

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

June 08, 2007

Two Million Foreclosures predicted in the next 2 ½ years

Almost two million homes, condos, and townhouses are predicted to foreclose in the next two and a half years, according to Housing Predictor.com.

This information is based on an analysis of the nation's largest 100 metropolitan real estate markets by researchers during the month of May.

Michigan, Ohio and Colorado were among the highest number of states experiencing foreclosures. Close behind were California, Alabama, Indiana and Mississippi.

These foreclosures are due to an increase in adjustable rate mortgages and unethical lending practices on the part of some mortgage borrowers and lenders.

Posted by S. Germain at 09:12 AM | Comments (0)

GreenPoint Cites Market Woes in Cuts

Subprime mortgage concerns that have tightened underwriting standards and diminished secondary market appetite in the neighboring "near prime" market have forced originator GreenPoint here to cut 440 staff positions and close 12 of its 41 operational centers, according to a company spokesperson.

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

10 Mortgage Lenders Sued

Ohio Attorney General Marc Dann filed suit against 10 mortgage lenders for violating the state Consumer Sales Practices Act by pressuring appraisers for inflated valuations to push deals through. Dunn accused the lenders of "knowingly compensating, instructing, inducing, coercing, or intimidating appraisers" to pad property values; and he blamed such predatory lending practices for the state's "shameful home foreclosure rate." Dunn wants each company to provide reimbursements and pay $25,000 in civil penalties and also is asking for permanent injunctions that would keep them from participating in illegal lending activities. Apex Mortgage Services LLC--which denies the allegations--is among the seven Ohio lenders being sued; the others are located in California and Arizona.

Posted by S. Germain at 09:07 AM | Comments (0)

Retiring Boomers Key Reverse Mortgages

Big lenders such as Bank of America, Countrywide Financial and Wells Fargo are looking to target reverse mortgages as a potential growth industry, with 78 million baby boomers set to retire in the near future. There was a 77-percent surge in the number of such loans issued last year from 2005, and half of all reverse mortgages ever issued were made over the past two years; yet the product still accounts for only 1 percent of all mortgages. As reverse loans become a mainstream product, industry observers expect the cap on how much homeowners can borrow to be raised, fees to be reduced and interest rates to come down. "Eventually reverse mortgages will be like conventional mortgages. But we're still in the infancy of changes," says Dennis Haber of Senior Funding Group in Hicksville, N.Y., which specializes in the niche.

Posted by S. Germain at 09:05 AM | Comments (0)

Bernanke's Sense for Now: Hands Off

In a speech at the American Bankers Association's International Monetary Conference, Federal Reserve Chairman Ben Bernanke said he remains concerned that inflation could rise, but he believes the continued housing downturn makes it unlikely that the economy will overheat. Thus, Bernanke does not expect the central bank to boost interest rates when it meets June 27-28.

Posted by S. Germain at 09:04 AM | Comments (0)

Loss Mitigation May Not Work for Some ARMs: Fitch

Repayment plans, forbearances and loan modifications were never meant to serve as workout strategies for adjustable-rate borrowers who have loans they cannot afford, according to Fitch Inc. In a new survey of subprime mortgage services, the ratings agency found that repayment and forbearance plans were not having as much of an impact in resolving loan defaults during the first quarter. With the interest on more than 30 percent of subprime ARMs scheduled to adjust in 2007 and about another 25 percent scheduled to do so next year, the report says such loan-mitigation strategies "are not expected to work for some borrowers facing ARM resets, because they will not be able to afford the new monthly payment." More homeowners are seeking assistance from servicers, and political pressure is mounting on servicers to help bail out bor! rowers.

Posted by S. Germain at 09:03 AM | Comments (0)

Accredited to Be Sold for $400 Million

Private equity firm Lone Star has agreed to pay $400 million in cash for the troubled subprime mortgage firm Accredited Home Lenders. After losing $37.8 million in the fourth quarter of last year, San Diego-based Accredited said in April that it suffered "significant losses" during the first three months of the year. Dallas-based Lone Star will take Accredited private, allow senior management to stay on but continuing to trim the company--which already has slashed its workforce by a third to 2,900 employees. "While there is some liquidity returning to the subprime market, the operation is going to have to shrink so they're only originating loans that the bond markets will buy at a price that exceeds the cost of origination," noted Richard Eckert, an analyst with Roth Capital Partners.

Posted by S. Germain at 09:02 AM | Comments (0)

June 01, 2007

Fair Isaac and TransUnion Enhance FICO Risk Score in Canada

TransUnion and Fair Isaac Corporation (NYSE:FIC - News), the leading provider of analytics and decision management technology, today announced the availability to Canadian lenders of the newest FICO(R) Risk Score (formerly known as Empirica) for precise management of consumer credit risk. The FICO Risk Score analyzes TransUnion credit reports to rank-order consumers according to the likelihood that their credit obligations will be paid as expected.

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

BNY Mortgage and EverBank Gather Industry's Top Leaders to Build Reverse Mortgage Business

With the popularity of reverse mortgages on the rise, BNY Mortgage, An EverBank® Company, is assembling the best and brightest in the industry to create a world-class reverse mortgage business catering to older Americans looking to leverage their home equity and establish financial well-being, independence, and peace of mind. Members of this extensive management team include: Craig Corn, co-president; Robert V. Sivori, co-president; Richard A. Peters, senior vice president; Sarah Hulbert, senior vice president; Joseph P. DeMarkey, vice president; Mark A. Burton, vice president, wholesale sales; and Michael S. Mooney, vice president, wholesale sales

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

Bair: Servicers Have Latitude to Restructure Deals

Federal Deposit Insurance Corp. Chairman Sheila Bair says accounting firms and industry groups have concluded that there is latitude in the accounting rules governing securitizations that allow servicers to actively restructure subprime loans facing foreclosure. She noted that the industry groups are committed to working with borrowers to prevent foreclosures and with community activists to reach borrowers that need to restructure their loans.

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

Pipeline: Reverses Advance

Nationwide, a number of lenders have begun offering fixed rates on reverse mortgages--which enable homeowners 62 and older to convert some of their home equity into a cash payment. Florida-based Value Financial Mortgage Services Inc. last week announced that its fixed-rate product would be set under 7 percent, while Borba Investments Inc. of California's MLS Reverse Mortgage is allowing eligible homeowners to lock in at a rate of 6.5 percent. While most reverse loans carry an adjustable rate of about 5.86 percent, Borba President and CEO Mike Borba says borrowers who take out fixed products will have access to the money in a lump sum, whereas adjustable borrowers usually receive monthly payments. Additionally, Borba describes the reverse mortgage market as evolving "tremendously" and "so qui! ckly" that lower rates may be possible in the future. The National Reverse Mortgage Lenders Association reports that 90,000 reverse mortgages were originated in 2006, roughly twice the volume of the previous year.

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

Standards, Regulation in Place for Electronic Closings (FA Quote)

Though electronic mortgage closing standards are being formulated and technology platforms rolled out to allow every party in the real estate transaction to conduct business paperlessly, adoption remains fairly low. More than 7 million residential properties changed hands last year, but just slightly more than 2,400 eNotes have been recorded on the MERS e-Registry, which transfers electronic control of mortgages to investors who purchase them on the secondary market. The Mortgage Bankers Association has spearheaded the effort to increase e-servings and spur adoption among investors and warehouse lenders with its eMortgage Adoption Task Force, which also is hoping to boost electronic recording by lenders through a partnership with the Property Recorders Industry Association. Harry Gardner, MBA's senior director of industry technology, says a ! growing number of states are embracing e-recording and developing Web portals for this purpose. According to Peggy Baker of First American Corp.'s Enterprise Technology Group, "You don't have to have every single player on board to improve the process. The key player is the investor, and the lender."

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

May 25, 2007

EverBank Acquires NetBank Businesses

EverBank, one of the nation's largest privately-held financial services firms, announced today it has reached an agreement that will increase its assets to approximately $7 billion, its deposits to approximately $6 billion, and its customer base to over 550,000 through the acquisition of NetBank's direct banking and small business financing divisions and mortgage servicing portfolio. EverBank expects to complete the acquisition by early summer with full integration expected by the third quarter of this year.

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

MortgageHub Acquires Dynatek

In an attempt to expand further into the mid-tier, MortgageHub Inc., Conshohocken, Pa., has acquired loan origination vendor Dynatek, Livonia, Mich. The terms of the transaction were not disclosed. The acquisition comes on the heels of MortgageHub's acquisition of the London Bridge properties owned by Fair Isaac. With the Dynatek acquisition, MortgageHub says it now has 550 lender clients.

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

Ellie Mae Touts 1st Loan Matching System

Ellie Mae, a Dublin, Calif.-based provider of software and services for the mortgage industry, has released Dynamic Loan Screening, which it touts as the industry's first virtual inter-operable platform that matches loan applications with the products and services of lenders, investors, and settlement service providers. The platform automatically identifies matches between borrower data and products, services, and promotions of participating lenders, investors, and service providers as an originator enters data into Encompass, Ellie Mae's mortgage management system.

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

Lydian Boosting Electronic Loan Delivery

Lydian Technology Group, a mortgage technology provider based in Jacksonville, Fla., has enhanced its Mortgage Connectivity Hub to enable investors to accept loans from sellers electronically regardless of how the sellers submit the loan data. The system, which targets mid- to large-size lenders, now makes it far easier for investors to embrace electronic loan delivery, the company said.

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

New-Home Sales Surge -- but Don't Celebrate Yet

New-home sales jumped 16% in April -- the biggest percentage increase since 1993 -- but despite the positive news, sales and construction activity may not have hit bottom yet. The U.S. Census Bureau reported new single-family home sales rose from a seasonally adjusted annual rate of 844,000 in March to 981,000 in April. The April sales pace is off by 10.6% since April 2006. The rebound represents the first increase in new-home sales this year, and it "definitely is a very positive number," said Adam York, an economic analyst at Wachovia Corp. But the economist said he would not be surprised to see a downward revision in the April number or a decline in sales in May.

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

Fremont Sells Commercial Loan Unit for $1.9 Billion

Fremont General Corp.'s stock skyrocketed more than 40 percent on May 22 after the company announced that it sold its commercial real estate lending business and a 30-percent stake in its commercial loan portfolio to iStar Financial Inc. The deal was valued at $1.9 billion. Fremont has also confirmed that a consortium led by billionaire Gerald Ford has agreed to assume a minority interest in the company in return for $80 million in preferred shares and warrants to purchase 7.1 million additional shares. Last month, Fremont divested itself of its business lending to home buyers with subprime credit. A company statement has been issued, noting: "The sale of the residential and commercial lending assets frees up the company's balance sheet and provides the new management a clean slate and a premier deposit-gath! ering platform to support future growth opportunities."

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

OOMC Plans Closures, Cuts

Option One Mortgage Corp. is considering closing a dozen mortgage processing offices and eliminating 600 workers by early September, and it also is planning to pull out of the bulk acquisition and flow correspondent market. The moves are designed "to better align our cost structure to current revenues," according to the wholesale subprime giant. Investors in the secondary market have been requesting that Option One Mortgage buy back troubled loans, and the subprime shop has sought to address early payment defaults by auctioning off these products in the "scratch and dent" market. Parent company H&R Block has already reached an agreement to sell Option One Mortgage to hedge fund Cerberus Capital, which owns other subprime lenders, in a deal that is slated to close this fall.

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

Carrington to Buy Loan-Servicing Unit

New Century Financial Corp. will sell its loan-servicing unit to Carrington Capital Management, a Connecticut investment fund that the one-time lending heavyweight helped found. U.S. Bankruptcy Judge Kevin Carey approved the sale of the remaining business of the Irvine, Calif.-based subprime mortgage lender for $184 million, which is about $50 million more than Carrington initially offered. New Century is liquidating, after having filed for Chapter 11 protection in April. The lender is expected to net about $150 million, according to a company lawyer.

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

Impac to Buy Lender in Florida

Impac Mortgage Holdings Inc. has agreed to purchase the lending divisions of Pinnacle Financial Corp., a Florida-based lender with branches in more than two dozen states. The deal, terms of which were not disclosed, entails Impac taking over the leases of Pinnacle's offices. Impac is a California-based REIT that specializes in making "Alternative-A" loans, which is a category between low-risk prime and high-risk subprime. For its part, Pinnacle makes prime and Alt-A loans directly to consumers and operates a wholesale unit.

Posted by S. Germain at 07:45 AM | Comments (0)

Mortgage Servicers Add Fees as Costs Increase

A growing number of mortgage servicers are imposing fees on delinquent, foreclosed or bankrupt loans so that they can remain profitable as the number of non-performing mortgages rises. Servicers say the additional costs are necessary because their regular fees cease when loans enter the foreclosure process and because orchestrating foreclosure sales and other loss mitigation efforts cost more money. Lender Support Systems Inc. CEO Cary Burch says costs also are increasing because investors are calling for electronic tools that will allow them to monitor the performance of particular loans within a pool.

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

May 18, 2007

Campus Federal Credit Union Implements FICS' Commercial Servicer(R)

Financial Industry Computer Systems, Inc. (FICS), a mortgage technology specialist that provides in-house commercial servicing technology to the mortgage industry, announced at the MBA's CREF/Multifamily Asset Administration and Technology Conference the successful implementation of Commercial Servicer® at Baton Rouge, La.-based Campus Federal Credit Union, one of the nation's oldest credit unions.

Posted by S. Germain at 09:02 AM | Comments (0)

MBA: No Residential Growth Till Late '07 or '08

Inventory in the residential housing market will not grow until the end of 2007 (after two years of decline), and tightened credit could delay the growth to the first quarter of 2008, according to Jamie Woodwell, senior director of commercial/multifamily research with the Mortgage Bankers Association. Speaking at the MBA's commercial real estate/multifamily finance asset administration conference in San Antonio, Mr. Woodwell said the MBA expects economic growth to pick up at the end of 2007 and interest rates to remain at about current levels through 2008. The MBA forecast also calls for home prices to decline 1% in 2007 and resales to decline 6%.

Posted by S. Germain at 08:55 AM | Comments (0)

New Century Financial Corp.: Carrington Capital Wins Loan-Servicing Asset

New Century Financial Corp.'s loan-servicing business was snapped up in a bankruptcy auction by Carrington Capital Management LLC and an affiliate for $188 million. The private-investment firm submitted its original offer of $139 million--35 percent less than what it ultimately agreed to pay--when the subprime lender filed bankruptcy in April.

Posted by S. Germain at 08:54 AM | Comments (0)

OceanFirst Shutting Down Subprime Unit

After failing to secure a buyer, OceanFirst Financial Corp. has opted to shutter its Columbia Home Loans LLC unit, which made millions of dollars of subprime mortgage loans that ultimately became delinquent.

Posted by S. Germain at 08:54 AM | Comments (0)

Changes Planned for FICO Method

Fair Isaac Corp. says it is revising the method it uses to compute FICO credit scores but adds that the move is not in response to the increase in defaults on subprime loans. The new calculation strategy for the scores, which lenders use to assess the ability of a borrower to repay a loan, is expected to be introduced in September. The revamped formula should be more effective in gauging the risk profile of first-time home buyers, people with little credit history, and borrowers who have had past credit problems.

Posted by S. Germain at 08:52 AM | Comments (0)

Mortgage Fraud Climbs 30 Percent

A new report from the Mortgage Asset Research Institute reveals a 30-percent jump in fraudulent mortgages last year, with the increase likely related to a surge in delinquencies and defaults that has helped to uncover instances of fraud. Falsified job histories and inflated income were most common in loans written last year under false pretenses; but fraudulent tax statements, appraisals, closing documents and credit reports were also recorded. Leading the pack for the most fraudulent mortgages are Florida, California, Michigan, Georgia, Utah, New York, Illinois, Minnesota, Colorado and Nevada. In response, the Mortgage Bankers Association is urging Congress to earmark $31.25 million over five years to hire 30 FBI investigators and two prosecutors and $750,000 to create task forces to examine conditions in markets with high levels of fraud.

Posted by S. Germain at 08:51 AM | Comments (0)

Countrywide to Add 2,000 Staffers

As more of its competitors in the mortgage lending sector lay off workers, Countrywide Financial Corp. sees an opportunity to boost its own payroll. The California-based firm, which saw its share of the home-finance market rise to 18.2 percent in the first three months of the year from 17.5 percent in the previous quarter, plans to hire about 2,000 sales associates this year. It also expects to open 100 new retail locations.

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

Big Lender Enters Mortgage Niche

Countrywide Financial Corp. is dipping its toe into the reverse mortgage business, which allows senior homeowners to receive equity payments that do not come due until after their death or the sale of the property. The lender plans, according to one company official, to eventually "dominate" the niche; but for now, the nation's biggest conventional home lender will have to play catch up to established market leaders IndyMac Bancorp. Inc., Wells Fargo & Co., Seattle Mortgage Co. and BNY Mortgage Co. as well as the growing number of new entrants into the reverse loan sector. The intensifying competition is lowering overall costs for borrowers, and Countrywide's proprietary SimpleEquity product will waive the origination fee--normally about 2 percent or less of the property value--and/or closing costs for transactions that meet certain conditions.

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

Lenders Get Tougher

Trouble in the subprime mortgage market prompted lenders to take a closer look at loan applications, making the process of buying a home more cumbersome for borrowers with good credit. Mortgage Bankers Association chief economist Doug Duncan notes, "There's no question that [lenders] are digging deeper. The pendulum is swinging a little farther to the conservative side." Not only are lenders boosting required down payment amounts; but they also increasingly are mandating more than one appraisal, requesting the opinion of real estate brokers about home prices, forcing self-employed borrowers to provide business licenses and fully disclose income and assets and undertaking investigations to see whether a transaction involves an investment property.

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

Mortgage Woes Force Banks to Take Hits to Sell Homes

Mortgage lenders are increasingly turning to large-scale auctions instead of real estate agents to unload foreclosed properties; but in exchange for speedy sales, they are forced to take substantial losses. Though 90 percent of the lender-owned homes recently auctioned off in San Diego by Real Estate Disposition Corp. were sold, their sales prices were between 30 percent and 50 percent less than their previous sales prices or appraised values.

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

AIG, Despite $128M Hit, to Seek Subprime Growth

American International Group (AIG) reports that first-quarter results for its mortgage business could have been worse if it had chased the market down over the past 12 to 18 months. The company took a $128 million pretax charge against its quarterly earnings due to its nonprime mortgage business, but says it is considering expanding its subprime mortgage lending business. AIG notes that its credit quality remains strong, lenders are leaving the business and some of the nontraditional products will be scaled back.

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

May 11, 2007

ComplianceEase and Zementis Announce Strategic Partnership and Launch DecisionEase Brand

ComplianceEase®, a leading provider of mortgage industry automated compliance and risk management solutions, announced at Mortgage Bankers Association's Legal Issues and Regulatory Compliance 2007, an exclusive partnership with Zementis, Inc., a provider of state-of-the-art statistical and analytical solutions, to deploy the mortgage lending industry's first web-enabled, enterprise-wide loan product suitability and eligibility management system with embedded regulatory compliance controls.

The Zementis' Adaptive Decision and Predictive Analytics (ADAPA®) intelligent risk management decisioning technology was selected to integrate into the ComplianceEase platform, and solutions built on this combination of unique technology will be marketed under the DecisionEase(TM) brand. The new offering features a multi-purpose business rules management system that employs XML and leverages Mortgage Industry Standards Maintenance Organization (MISMO) standards. The first customer deployment of this new offering is scheduled for launch in early May.

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

LFC Integrates Into Calyx Point

Lenders First Choice, Simi Valley, Calif., and Calyx Software, San Jose, Calif., have announced the integration of LFC's title insurance and settlement services application into Calyx Point, which connects loan officers and processors to lenders and service providers. LFC is using the Calyx WebConnect technology, which the companies said ensures compatibility with Point and Point Data Server.

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

NAR Lowers Home Sales Forecast

The National Association of Realtors has lowered its forecast for home sales this year, citing the effects of stricter lending standards and a decline in subprime mortgage origination. The NAR, which was predicting 2007 existing-home sales of 6.42 million earlier this year, is now forecasting resales of 6.29 million. (Resales totaled 6.48 million in 2006.) NAR senior economist Lawrence Yun said new-home sales are now projected to reach a level of 864,000, down from the 1.06 million recorded last year. Housing starts are forecast to total 1.46 million, down from 1.80 million in 2006.

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

Countrywide Expands Amid Mortgage Industry Turmoil

Countrywide Financial Corp. reports that it funded $40 billion in mortgages last month, up 11 percent from a year ago. The Calabasas, Calif.-based mortgage lender also says that loans to borrowers with problems in their credit histories were down 49 percent and that payment-option mortgages also were down 60 percent, which reflects a tightening of underwriting standards. The increase in lending volume benefited from refinancings, which also helped boost industrywide volume 4.3 percent to $653 billion during the first quarter. The expansion in the industry is unlikely to continue, with the Mortgage Bankers Association set to release a report on Thursday that forecasts a decline in lending volume through the third quarter of next year.

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

PNC to Buy Mortgage Lender ARCS

Pittsburgh-based PNC Financial Services Group Inc. on Wednesday announced its planned acquisition of a California mortgage lender. Pending regulatory and agency approval, the deal to buy ARCS Commercial Mortgage is slated to close in this year's third quarter. The takeover target operates out of Calabasas Hills but has a total of 10 origination offices across the country. ARCS has excelled as an agency lender for the past decade, cranking out more than $2.1 billion in origination volume last year and servicing some $13 billion in loans.

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

More Lenders Seen Using Offshoring

Lenders increasingly will turn to offshoring as a strategy to lower costs and maximize efficiency, according to a new report by Deloitte & Touche USA. About half of the top 40 lenders in the United States have relocated some of their business to foreign countries, and the remaining major lenders are expected to join them in offshoring their operations over the next three to five years, says the report from the New York auditor. "Like a storm feeding on itself, vendor abilities are encouraging more mortgage lenders to join the fray and increased offshore business can help vendors to further improve," writes lead author Elizabeth Roberts, a director at the auditor's consulting unit. While offshoring has the potential to lower operations and other costs by 35 percent to 40 percent, Roberts warned that half-hearted efforts often lead to failure.

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

More Wachovia Funding for NovaStar

Wachovia confirms that it will provide an additional $1.9 billion of warehouse financing to struggling subprime mortgage lender NovaStar Financial Inc. According to a filing with the Securities and Exchange Commission, the funding is an expansion of a deal involving whole loan and securities repurchase agreements that Wachovia reached with the Kansas City, Mo., company for one year. NovaStar plans to use the $100 million credit line it closed on last month to boost liquidity and flexibility. In April, NovaStar also said it was exploring the idea of selling itself, in addition to other "strategic alternatives."

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

Bank of America Eliminates Closing Costs on New No-Fee Mortgage

Bank of America Corp. has announced that it will be eliminating collection of borrower, lender and third-party fees that crank up the price of purchasing a home by a few thousand dollars. Floyd Robinson, head of Bank of America's consumer real estate and insurance services, reports that the new loan will eliminate an average of $3,350 in closing costs on a $200,000 loan. The no-fee mortgage, which is not available to subprime borrowers, requires a down payment of at least 5 percent. The loan also cuts out private mortgage insurance--a premium that usually is paid by borrowers whose down payment on a residence is less than 20 percent. Bank of America first offered the no-fee loan in Washington state last September and has since expanded nationally.

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

May 04, 2007

MBA: Commercial/MF Originations Rose 10%

Commercial and multifamily mortgage originations were up 10% in 2006, with mortgage bankers closing a record high $406.1 billion in commercial and multifamily loans, according to the MBA. The trade group said loans backed by office properties and loans for commercial bank and savings institution portfolios led the increase. The increase in originations in 2006 was driven both by higher loan amounts -- the average loan size rose to $11.5 million -- and by the closing of a greater number of loans. Among major investor groups, real estate investment trusts saw the greatest percentage increase in volume in 2006, followed by commercial banks/thrifts.

Posted by S. Germain at 09:28 AM | Comments (0)

Companies Agree to Dodd Subprime Principles

Citigroup, JPMorgan Chase, Litton Loan Servicing, and HSBC have agreed to a set of principles espoused by Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., to take early action to help subprime borrowers through loan modifications to avoid foreclosure. Under the principles, lenders and servicers should contact subprime borrowers with adjustable-rate mortgage loans to make sure they can afford the payments once the loan resets. If not, loan modifications should be explored, including switching the loan to a fixed rate or making the introductory rate permanent.

Posted by S. Germain at 09:28 AM | Comments (0)

Ellington Wins New Century's Loans With a $58 Million Bid in Auction

New Century Financial Corp. recently auctioned off a portfolio of $170 million in subprime mortgages to Ellington Management Group LLC, an Old Greenwich, Conn.-based hedge-fund operator that snapped up the loans with a winning $58 million bid. Ellington also won the rights to payments from certain previously sold mortgages. New Century, a subprime lender based in Irvine, Calif., filed bankruptcy in April and has been unloading its assets to repay creditors. While it was unable to sell off its core loan-origination operations, Carrington Capital Management says it will make a starting bid of $131.9 million for New Century's loan-servicing business.

Posted by S. Germain at 09:26 AM | Comments (0)

Mortgage Unit Produces Loss for GMAC

GMAC recorded a net loss of $305 million in the first quarter, after registering a profit of $495 million during the corresponding period of 2006, due to troubles at its subprime lending division. ResCap reported a $910 million loss for the January-through-March period, prompting lowered outlooks by Moody's and Fitch Ratings even though GMAC has made strides in minimizing the unit's risks. Among other steps, GMAC discounted subprime mortgages to get them off its books and scaled back underwriting for high-risk borrowers. General Motors--which has a 49-percent interest in GMAC--financed a $1 billion infusion of capital for ResCap, the second half of which was given to the lender in April.

Posted by S. Germain at 09:25 AM | Comments (0)

Title Insurance Regulator Considers Rate-Cap Alternatives

Citing the need for increased competition and better disclosure in the title insurance industry, California Insurance Commissioner Steve Poizner is moving forward with a plan formulated by his predecessor, John Garamond, to roll back and cap title insurance rates. Poizner, however, wishes to balance the need for enhanced consumer protection with the desire for a free market and hopes the plan will prompt industry professionals to develop alternatives.

Posted by S. Germain at 09:24 AM | Comments (0)

An Evergreen: RESPA Reform

The backlash against subprime lending practices could lead to revival of HUD's much-anticipated efforts to overhaul the mortgage disclosure rules under the Real Estate Settlement and Procedures Act (RESPA). HUD deputy secretary Roy Bernardi said the agency intends to issue a rule proposal by Sept. 30--and possibly as early as the summer--with an eye on culling feedback from the mortgage sector and affiliated industries. The on-again, off-again focus on RESPA reform over the past 15 years or so is back on again now that the subprime turmoil is demonstrating how the legislation, as well as the Truth in Lending Act, has failed to help borrowers understand nonprime adjustable-rate financing.

Posted by S. Germain at 09:22 AM | Comments (0)

Vacation-Home Sales Hit Record in '06

Secondary residences accounted for 36 percent of all existing- and new-home sales last year, down from 40 percent of all residential sales in 2005, according to the National Association of Realtors. Investment-home sales, meanwhile, tumbled 28.9 percent to 1.65 million properties last year, compared with 2.32 million in 2005. The decline in investment-home sale activity pulled down the overall number of second-home sales from 2006--which saw a record 1.07 million vacation properties change hands, up 4.7 percent from 1.02 million the previous year. The median price of an investment home and a vacation home fell 18.3 percent to $150,000 and 2 percent to $200,000, respectively, last year.

Posted by S. Germain at 09:22 AM | Comments (0)

Fannie Mae Settlement Is Set to Be Paid Out

The Securities and Exchange Commission will soon hand out $357 million to shareholders hurt by Fannie Mae's improper accounting practices, with Rust Consulting Inc.'s Jeffrey Dahl acting as the distribution agent. Investors who purchased common stock from Jan. 14, 1999, to Dec. 22, 2004, could lay claim to a portion of the settlement. Also eligible are investors who purchased Class N preferred shares from Sept. 25, 2003, to Dec. 22, 2004.

Posted by S. Germain at 09:21 AM | Comments (0)

Washington Mutual Tightens Its Standards

To boost profitability by the end of 2007 following a $113 million first-quarter loss tied to its home-loan operations, Washington Mutual Inc. has reduced the number of no-documentation mortgages it extends to subprime borrowers and is preventing high-risk borrowers from obtaining second mortgages. Additionally, the company expects to beef up alternative-A lending and turn away from "layering" qualification terms to facilitate approvals. According to CFO Thomas Casey, "The issue we see really affecting the subprime market isn't really one of individual underwriting standards. It's the layering of risk."

Posted by S. Germain at 09:20 AM | Comments (0)

Empty Homes on Market Increase

The Census Bureau reports that 2.8 percent of homes on the selling block were vacant in the first quarter, marking the 10th consecutive quarterly gain and underscoring the extent of speculative activity during the housing boom. The report reveals a total of 3.74 million homes up for sale during the January-through-March period.

Posted by S. Germain at 09:18 AM | Comments (0)

April 27, 2007

Hostile bid planned in ABN bank takeover

The consortium of banks led by Royal Bank of Scotland said Friday it would go ahead with a hostile bid for ABN Amro.

In a move stepping up pressure in the already heated case, the RBS group indicated a $98.1 billion offer for the Dutch bank, which already was tied in with a merger with Barclays PLC. The banks' offer would top the Barclays offer of $91.13 billion, The Wall Street Journal said.

But, the offer was conditional on the Dutch bank abandoning the $21 billion sale of its Chicago-based LaSalle Bank to Bank of America, a key point in its previous agreement with Barclays, the British giant.

Posted by S. Germain at 09:20 AM | Comments (0)

Friedman, Billings, Ramsey Loses in Nonprime

Arlington, Virginia-based Friedman, Billings, Ramsey Group Inc. said challenges at one of its nonprime lending subsidiaries caused the company to experience $185.9 million in after-tax losses during the first quarter of 2007.

In the company's official 2007 first quarter report, it attributes most of the recent losses to its wholly-owned nonprime origination platform, First NLC Financial Services (FNLC). According to the company's first quarter report, FNLC experienced a net after-tax loss of $124.2 million.

Posted by S. Germain at 08:55 AM | Comments (0)

Countrywide Links Earnings Dive to B&C Ops

Countrywide Financial Corp., Calabasas, Calif., has reported net earnings of $434.0 million ($0.72 per share) for the first quarter, a 37% decline from $683.5 million ($1.10 per share) in the first quarter of 2006 that the company attributed largely to its subprime operations. Mortgage banking revenues from subprime operations plummeted approximately $400 million in the first quarter from those of the fourth quarter, $245 million of the total from production revenues and $155 million from investments, the company reported. Pretax earnings by the company's mortgage production sector overall were off by more than 50% from those of a year earlier, falling from $284 million to $139 million. The loan servicing sector recorded a pretax loss of $69 million, compared with net income of $249 million a year earlier, the company said.

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

7% of Mortgagors Have Negative Equity

Roughly 7% of U.S. homeowners have negative home equity, and the housing industry is currently in the throes of a "deep recession," according to the chief economist for Global Insight Inc., a forecasting firm. But Global Insight's Nariman Behravesh also said Thursday that the subprime mortgage crisis "is now off the front pages, but more firms could go belly up." Speaking at a forecast conference sponsored by the National Association of Home Builders, Mr. Behravesh added that "housing demand is beginning to recover." Even though 7% of mortgages are under water, 60% of homeowners have equity of 30% or more, he said. Outstanding subprime loans account for just 13% to 14% of the total market, according to Global Insight.

Posted by S. Germain at 08:49 AM | Comments (0)

Bellevue's Seattle Mortgage to Sell Reverse-Mortgage Unit

Bank of America plans to acquire the reverse-mortgage business of Seattle Mortgage Co. in a deal that is expected to close in June. In taking on the operations of the Bellevue, Wash.-based lender, which has 40,000 reverse mortgages with balances totaling more than $4 billion, Bank of America would trail only IndyMac and Wells Fargo in providing the niche financing product. The Charlotte, N.C.-based banking giant has been testing reverse loans in Arizona since 2006. The market continues to grow, with the National Reverse Mortgage Lenders Association reporting a second-straight record month of reverse mortgages insured by the Federal Housing Administration; volume reached 9,349 in February, compared to 5,841 a year ago.

Posted by S. Germain at 08:47 AM | Comments (0)

Home Equity Stalls

Rising interest rates and the slowdown of the housing market have made homeowners cautious about cashing in on their equity. New data from Equifax Inc. and Moody's Economy.com reveals that total home-equity borrowing rose 9 percent over the 12 months ended in March, compared to an average annual growth of 21 percent over the past five years; and that borrowers owed $561 billion on their home-equity lines of credit last month, marking a decline over the last six months that represents the first decrease since 1999. "People are feeling uncertain about the value of their home and are feeling tapped out," confirms Doreen Woo Ho, president of Wells Fargo's consumer-credit group. The average rate on home-equity lines of credit has risen to 8.7 percent, up from 4.64 percent in Apri! l 2004; and rates on home-equity loans now average 8.1 percent, compared with 6.75 percent three years ago, reports HSH Associates.

Posted by S. Germain at 08:46 AM | Comments (0)

Judge OKs Auction of New Century's Loan Origination Business

After giving New Century Financial Corp. the nod last week to sell off its mortgage-servicing operation, U.S. Bankruptcy Judge Kevin Carey now has approved the process under which New Century can auction its loan origination business. The judge set a May 2 deadline for interested parties to submit their offers to New Century, which once boasted a claim as the No. 2 provider of home loans to risky borrowers. With Carey's blessing, the company is able to proceed with the sale of its Access Lending Corp. unit

Posted by S. Germain at 08:45 AM | Comments (0)

Sales of Previously Owned Homes Plunge to 1989 Level

The National Association of Realtors reports that sales of previously owned homes declined 8.4 percent in March, which is the biggest drop since January 1989. Economists believe the winter weather and tighter lending standards for borrowers with shaky credit are largely responsible for the tumble in existing-home sales, which follows two months of sales growth. "The January, February figures were certainly higher than many analysts had anticipated, and that was due to the sort of artificial elevation from the warm weather," explain NAR senior economist Lawrence Yun. Also, the inventory of unsold properties rose to a 7.3-month supply, and the median price fell 0.9 percent to $215,300.

Posted by S. Germain at 08:43 AM | Comments (0)

April 20, 2007

JPMorgan's Mortgage Profits Rise

JPMorgan Chase & Co., New York, has reported net income from its mortgage banking operations of $84 million for the first quarter, up from $39 million a year earlier. The company said mortgage production revenue totaled $400 million in the first quarter, up $181 million from a year earlier, reflecting higher gain-on-sale income and "the reclassification of certain loan origination costs to expense (previously netted against revenue) due to the adoption of" Statement of Financial Accounting Standards 159. Mortgage originations totaled $34.1 billion, up 21% from those of a year earlier and 10% from those of the previous quarter. Overall, JPMorgan reported record net income of $4.8 billion ($1.34 per share) for the first quarter, up from $3.1 billion ($0.86 per share) a year earlier.

Posted by S. Germain at 08:56 AM | Comments (0)

BoA Reports Mortgage-Related Rise in Profits

Bank of America Corp., Charlotte, N.C., has reported net income of $5.26 billion ($1.16 per share) for the first quarter, an increase of 5% from $4.99 billion ($1.07 per share) a year earlier that it attributed partly to a rise in mortgage banking income. BoA said the net income from its Consumer Real Estate segment, including its home equity and mortgage businesses, rose 33% to $227 million. Revenues for the segment totaled $840 million, a 21% increase derived "partly from increased home equity balances," the company said.

Posted by S. Germain at 08:55 AM | Comments (0)

RealtyTrac: New Foreclosures Up 47% From '06

RealtyTrac, an online foreclosure marketplace based in Irvine, Calif., has reported that new foreclosure filings rose 7% in March and were 47% higher than the level recorded a year earlier. The company's U.S. Foreclosure Market Report indicates that 149,150 new foreclosure properties were added to the rolls in March. "Foreclosure activity shifted into a higher gear in the first two months of 2007, and March's numbers continued that trend," said James J. Saccacio, RealtyTrac's chief executive officer. "While foreclosures are causing a major disruption in the subprime sector of the lending industry and saturating pockets of some local markets, it's important to note that U.S. foreclosure activity overall is not far above historical norms." The company said Nevada, Colorado, and California recorded the highest foreclosure rates in March.

Posted by S. Germain at 08:54 AM | Comments (0)

Freddie Makes $20B Subprime Commitment

Freddie Mac has announced that it will purchase $20 billion in fixed-rate and hybrid adjustable-rate mortgage products that will provide more options for lenders to offer subprime borrowers. The products, which are under development and slated to be introduced by midsummer, will limit payment shock by offering reduced adjustable-rate margins, longer fixed-rate terms, and longer reset periods, the government-sponsored enterprise said.

Posted by S. Germain at 08:54 AM | Comments (0)

H&R Block Agrees to Sell Option One Mortgage to Cerberus

Cerberus Capital Management LP has agreed to acquire Option One Mortgage Corp., the unprofitable subprime mortgage business of H&R Block. The accord calls for Cerberus to pay $300 million less than the value of Option One's tangible net assets, which were worth $1.27 billion as of Jan. 31. CEO Mark Ernst had hoped to sell Option One for $1.3 billion; but investors have urged him not to haggle over the sale price, considering that the value of subprime mortgage loans and lenders is plummeting.

Posted by S. Germain at 08:52 AM | Comments (0)

Appraisers Seek Curbs on Lender Pressure

The four biggest trade groups representing appraisers believe that inflated property valuations have been one of the main driving factors behind the surge in foreclosures by financially strapped borrowers. Led by the Appraisal Institute, the organizations also argue that inflated appraisals are at the center of many mortgage fraud schemes and have called on federal regulators to come down harder on lenders that pressure appraisers to boost valuations in order to permit overpriced deals to proceed. In many instances, such lenders failed to require "firewalls" separating loan officers working on commission from appraisers tasked with assigning a value to the property being financed. In a 2006 poll conducted by October Research Corp., 90 percent of the appraisers reported having been the victims of such forms of coercion as nonpayment o! f fees and outright threats, with many having lost business when they opted not to go along with the plan.

Posted by S. Germain at 08:51 AM | Comments (0)

Wamu: $2B Subprime Refis Would 'Get Ahead' of Risk

During the next six months, borrowers who obtained subprime adjustable-rate mortgages from Washington Mutual Inc. will have a chance to refinance into 30-year, fixed loans with rates 50 basis points lower than their interest. The $2 billion refi program--which could be expanded to accommodate demand--aims to help borrowers who may encounter difficulty making their monthly payments after rates reset in the future. David Schneider of Washington Mutual says, "What we're trying to do is get ahead of what we see as a potential risk." A similar $1 billion refinancing program was launched earlier in the month by Bank of America Corp. and Citigroup Inc., in conjunction with the nonprofit Neighborhood Assistance Corp. of America.

Posted by S. Germain at 08:49 AM | Comments (0)

Housing Picture Improves in March

The U.S. Commerce Department reports that housing starts rose 0.8 percent from February to a seasonally adjusted annual rate of 1.52 million in March and that applications for building permits also rose 0.8 percent last month. The second straight monthly increase in housing starts and the modest rise in building permits are early signs that the slowdown in the housing market may be coming to an end. Single-family starts accounted for all of the increase in residential construction in March, rising 2 percent from February, as construction of multihousing units declined 6.8 percent last month. Meanwhile, the National Association of Home Builders/Wells Fargo index shows that many home builders have concerns about demand and order cancellations, as their confidence in April reached its lowest level of the year.

Posted by S. Germain at 08:48 AM | Comments (0)

Mortgage Lenders' Foreclosure Divisions Criticized

Mortgage lenders with in-house foreclosure operations are coming under fire by consumer groups, which insist that foreclosures should be handled by objective third parties without financial ties to the case. National Community Reinvestment Coalition Executive Vice President David Berenbaum singles out "foreclosure mills," where law firms aggressively pursue foreclosures. However, Alexandria, Va.-based banking industry consultant Bert Ely says in-house foreclosure operations enable lenders to reduce the costs and length of foreclosures; but he adds that, because of the losses they incur, legitimate mortgage shops only seek to foreclose when absolutely necessary. There are 20 states that allow nonjudicial foreclosures, and some permit foreclosure companies to act as the trustees overseeing the! foreclosures.

Posted by S. Germain at 08:47 AM | Comments (0)

Wachovia First-Quarter Profit Rises 33 Pct

Wachovia credits improvements in consumer and commercial lending as well as the acquisition of Golden West Financial for its 33-percent increase in profit during the first quarter. The fourth-largest bank in the United States posted net income of $2.3 billion, or $1.20 per share--up from $1.73 billion, or $1.09 per share, a year ago. The Charlotte, N.C.-based company acquired the adjustable-rate mortgage lender with 285 branches on Oct. 1 for $24.2 billion. Golden West has reported a decline in mortgage originations and an increase in delinquencies during the housing market downturn.

Posted by S. Germain at 08:45 AM | Comments (0)

1Q Earnings: Subprime Woes Hit GE Unit

WMC, the Burbank, Calif.-based subprime mortgage subsidiary of General Electric Co., reports a decline in originations to $3.4 billion in the first three months of 2007 from $9 billion in the final three months of 2006. Year-over-year, the company watched delinquencies rise to 5.48 percent from 5.14 percent. Weakness in the subprime market contributed to a $373 million loss for the January-through-March period, with $330 million in loan-loss reserves to be used to repurchase loans as requested by investors; GE has earmarked $700 million to cover the current loan losses as well as losses yet to come. The company, which no longer offers stated-income or no-documentation mortgages, anticipates a $50 million loss in the second quarter. WMC has already downsized its workforce by ! 40 percent since January and will continue efforts to reduce operating costs.

Posted by S. Germain at 08:45 AM | Comments (0)

April 13, 2007

Ellie Mae Partners With ReallyGreatRate to Provide More Lead Sources to Encompass Loan Origination Software Users

Ellie Mae, an award-winning provider of innovative software and services for the mortgage industry, has partnered with ReallyGreatRate, Inc., an online lead provider for mortgage professionals. The partnership was formed to give Encompass subscribers a convenient, fast and easy way to augment their lead sources in this cooling, transitional mortgage market.

The leads from ReallyGreatRate are purchased by Encompass subscribers on a per-lead basis. Subscribers simply go into the Encompass Lead Center, select the leads they would like to purchase based on information like loan amount, location, loan to value and type of dwelling, and those leads download directly into Encompass

Posted by S. Germain at 09:33 AM | Comments (0)

Colonial Savings Buys $1.7B MSR Package

Colonial Savings, Fort Worth, Texas, has purchased the servicing rights on 18,431 home loans with a combined principal balance of approximately $1.7 billion from a Midwestern bank. Colonial Savings said the acquisition increases its servicing portfolio by 15% on a dollar-volume basis to $12.7 billion. The effective date of the transfer will be June 1. James DuBose, president and chief executive officer of Colonial Savings, said the company estimates that the addition of the new loans will reduce its per-loan average cost of servicing by 16%.

Posted by S. Germain at 09:21 AM | Comments (0)

Turkey Bank 1st in Europe to Use Anti-Fraud Tool

Turkey's AkBank has become the first lender on the European continent to deploy Fair Isaac's Falcon ID anti-fraud tool, according to the Minneapolis-based company. With Turkey now an aggressive adopter of technology, AkBank takes applications over mobile phones and is initially using the solution to protect its credit card portfolios before using Falcon ID with mortgage loan applications, a Fair Isaac representative said.

Posted by S. Germain at 09:19 AM | Comments (0)

Countrywide Reports Hefty Boost in Refis

Of the $43 billion in mortgage loans originated in March by Countrywide Financial Corp., Calabasas, Calif., $26 billion were for refinancings, a $3.4 billion increase from the refi level recorded the previous March, according to the company. This contributed to an overall increase of 5% in volume, Countrywide reported. Purchase loans fell from $19 billion in March 2006 to $17 billion last month. Home equity fundings were down 5%, nonprime fundings were down 29%, and originations of option adjustable-rate mortgages totaled $3.5 billion, down from $8.8 billion a year ago. Countrywide's pipeline at the end of March totaled $69 billion, up $5 billion from that of March 2006. The servicing portfolio totaled $1.4 trillion, compared with $1.2 trillion a year earlier, and delinquencies on the portfolio stood at 4.29% for March, compared with 5.02% for December 2006 and 3.68% for March 2006.

Posted by S. Germain at 09:17 AM | Comments (0)

NovaStar May Put Itself Up for Sale

Embattled subprime mortgage lender NovaStar Financial is weighing the idea of putting itself up for sale, among other strategic alternatives. A filing with the Securities and Exchange Commission reveals that the company's nonconforming loan volume reached $314.8 million in March and $1.44 billion during the first quarter, down 58 percent and 21 percent from a year ago, respectively. Also last month, the Kansas City, Mo.-based lender handed out pink slips to 17 percent of its workers. NovaStar adds that Wachovia Capital Markets has arranged a $100 million financing commitment that will replace and may even expand existing financing from Wachovia.

Posted by S. Germain at 09:15 AM | Comments (0)

$1 Billion Pledged to Help Fend Off Foreclosures

In order to keep them from losing their homes to foreclosure, Neighborhood Assistance Corporation of America (NACA) says it will offer $1 billion in refinancing assistance to lower-income homeowners struggling with subprime mortgage payments. Citigroup and Bank of America, which have lent money for years to borrowers screened by NACA, will provide the financing for the mortgage assistance initiative. "If we put people in the front door and they're being forced out the back door, then we're not stabilizing neighborhoods, which is part of our mission," says Bruce Marks, chief executive of the Boston-based housing advocacy group. Homeowners continue to struggle with making payments on their mortgages, and the most recent survey from the Mortgage Bankers Association indicates that more than 13 percent of subprime mortgages were at least 30 days delinquent.

Posted by S. Germain at 09:15 AM | Comments (0)

Defaults Rise in Next Level of Mortgages

Companies such as IndyMac and Countrywide Financial lent nearly $400 billion to borrowers with between prime and subprime credit ratings, known as Alternative-A, for mortgages in 2006; and now delinquency rates for these types of loans are on the rise. With the decline of the subprime mortgage market that started in last year's fourth quarter, analysts and investors have been keeping an eye on Alt-A loans, which are proving to be particularly vulnerable to the deterioration in formerly overheated residential property markets in the Southwest and along both coasts. Now, Wall Street reportedly is becoming increasingly wary of Alt-A and is putting loans back to lenders or bidding less for them, which could result in default rates getting even worse before they get better. Until recently, Alt-A loans were considered by many to be only slightly more risky than prime mortgages, while losses in bonds backed by such mortgages were typically rare and quite small. Center for Financial Research and Analysis analyst Zach Gast remarks, "This is a definite sign that at least in the secondary market, the subprime issues are spilling over."

Posted by S. Germain at 09:11 AM | Comments (0)

New Century Unloads Slate of Unfunded Mortgage Loans

New Century Financial Corp. has disposed of all of the unfunded mortgages in its inventory, according to a regulatory filing submitted on Friday to the Securities and Exchange Commission. The troubled subprime mortgage lender based in Irvine, Calif., said the loans were ready for funding, or were in other phases of the underwriting process. State regulators helped New Century return the loans to the mortgage brokers who originally provided the loan applications so that borrowers could find new financing deals with other lenders; and the company also worked with other lenders to transfer loans sold through its retail mortgage unit. New Century, which filed for Chapter 11 bankruptcy protection last week, stopped making loans in March.

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

April 06, 2007

BayRock Mortgage Corporation Deploys ComplianceEase Automated Compliance

ComplianceEase®, a leading provider of compliance and risk management solutions, has announced that BayRock Mortgage Corporation (BMC) has deployed ComplianceEase's ComplianceAnalyzer® after completing a two-week beta test. According to BayRock, the results have been beneficial.

BayRock Mortgage is the first Mortgage Builder Software, Inc. user to leverage ComplianceAnalyzer since it was integrated into the Mortgage Builder processing, underwriting and closing solution.

ComplianceAnalyzer is a web-based compliance solution that automates the compliance auditing process. It is easy to use, requiring only a few simple clicks, and powerful enough to examine each loan within seconds.

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

Quicken Loans Crosses $2 Billion Milestone in Monthly Closing Volume

Quicken Loans announced today that for the first time in its nearly 22-year history, the company has surpassed closing $2 billion in home loan volume in a single month -- closing $2.1 billion in home loans for the month of March, 2007. Not only is this an all-time company record for Quicken Loans, it's also the largest amount ever closed by an online lender in a single month in U.S. history.

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

Dallas Fed Chief: B&C Problems 'Contained'

Problems in the subprime market are "largely contained" and the economy will "weather this storm," Dallas Federal Reserve Bank president Richard Fisher says, but the outlook for the housing market isn't as clear. Last year, 40% of homebuyers were subprime or alternative-A borrowers, Mr. Fisher told the Austin Mortgage Bankers Association. With the contraction in nonprime lending, "housing markets may feel some short-term pain, making it less clear whether housing construction has bottomed and how long the housing downturn may last," he said. The Dallas Fed president also said the regulators are being very careful in setting credit standards because they don't want to compound the problems in the subprime sector or stifle innovation. "I think the recent subprime mortgage statement put out by the Fed and four other regulators gets the notion of sensible risk-taking just about right," Mr. Fisher said.

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

Lenders Lighten Up on Borrowers

A growing number of lenders are helping cash-strapped subprime borrowers avoid foreclosure by modifying their loans. EMC Mortgage Corp. President and CEO John Vella says his company has made an effort to "be run like a counseling center," assigning 50 workers to the phones to calculate a new monthly payment that fits each borrower's budget. Vella notes that these employees are prepared to spend as much time on the phone with each borrower as necessary, even if it means they can speak to only a few people per day. Larry Litton Jr., whose Houston-based Litton Loan Servicing has boosted monthly loan modifications to 1,000 from about 400 over the last six months, says the ball is in the servicer's court. "If the servicers aren't flexible, then we're going to see credit losses like we've never seen before," he remarks.

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

Jumbo Loan Delinquencies Jump 18 Percent

Moody's Investors Service Inc. reports that 0.35 percent of jumbo mortgages packaged into securities were delinquent in January, rising 18 percent from the same month in 2006. The 30- to 59-day delinquency rate slipped to 0.55 percent from 0.62 percent in the fourth quarter. Year-over-year, jumbo-loan foreclosure and real-estate-owned rates jumped to 0.11 percent and 0.037 percent, respectively, which are "still low in relative terms," according to Moody's Investors Service analyst Peter McNally.

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

New Century Is Seeking Bankruptcy

New Century Financial Corp.'s run as one of the country's biggest mortgage lenders to borrowers with flawed credit ended on Monday when it officially filed for Chapter 11 bankruptcy protection. The filing is part of a larger shakeout that is narrowing the subprime sector, which had become saturated with fast-growing young firms. New Century has outlined plans to axe more than 50 percent of its payroll and liquidate itself during the next 45 days in auctions for its three main assets: a mortgage-servicing business, its loan-underwriting platform and the stake it held in pools of loans sold to investors. Greenwich Capital Financial Products will purchase certain New Century loans and residual interests for $50 million, while Carrington Capital Management has agreed to acquire the firm's servicing assets and platform for $139 million.

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

Credit Suisse Sues Several Lenders

DLJ Mortgage Capital--a subsidiary of Credit Suisse--is suing Sunset Direct Lending, Infinity Home and Netbank for more than $30 million. The subprime lenders allegedly failed to meet their loan obligations.

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

March 30, 2007

Ellie Mae Chooses Wave Systems to Add Trusted Electronic Signature Solutions for Mortgage Industry

Wave Systems Corp. announced today that it has licensed its eSign Transaction Management Suite (eTMS) for integration into the eFolder of the Encompass® Mortgage Automation System, Ellie Mae Inc.'s first electronically-signed mortgage document solution. Wave's trusted electronic signature solution can be used to automate thousands of eFolder transactions monthly by eliminating the ink signatures and document transportation costs of faxes or other types of delivery service.

Posted by S. Germain at 08:30 AM | Comments (0)

MortgageHub Expands Suite of Products with Addition of Fair Isaac Mortgage Banking Offerings

Fair Isaac Corporation and ISGN, the parent company of MortgageHub, announced today that ISGN has acquired key assets and products associated with Fair Isaac's mortgage banking division, with plans to integrate them with MortgageHub.

The company is adding Fair Isaac products and services including the Diamond(TM) loan origination solution, the BridgeLink(TM) e-Services network for the mortgage industry, the LSAMS(TM) servicing system, the TCL(TM) construction lending system, the LenStar(TM) default management communications network, the FORTRACS(TM) default management system, and other technologies.

Posted by S. Germain at 08:26 AM | Comments (0)

New PDF eSignature Guidelines for Mortgages

Adobe Systems Inc. and MISMO® Inc. today announced the release of guidelines for the standardization of electronically signed PDF documents in the mortgage process. The guidelines are intended to help standardize the implementation of PDF and electronically signed PDF documents across the mortgage banking industry, moving the industry to a new level of interoperability with PDF for end-to-end electronic mortgage workflows.

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

Vendors Partner to Allow for Straight-Through Processing

Ellie Mae and Advectis have partnered to enable mortgage originators to transmit their electronic loan documents via Ellie Mae¹s LenderConnect solution to lenders using Advectis' BlitzDocs. Originators gather and store their loan documents in the Encompass eFolder and the integration to BlitzDocs allows for quick and easy uploading of eFolder contents directly to the lender¹s BlitzDocs site. As a result of this partnership, lenders using BlitzDocs can sign up with Ellie Mae to effortlessly receive loan documents straight from a broker¹s Encompass system to the BlitzDocs network.

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

ResCap to 'Sharply' Reduce Subprime Lending

Residential Capital LLC, the Minneapolis-based mortgage arm of GMAC Financial Services, cut its subprime originations last year and expects to "sharply" lower its subprime volume again this year. ResCap CEO Bruce Paradis acknowledges that the company "should have run through the door, as opposed to stay in the room" when the housing market went south. The $30.56 billion in subprime loans it wrote last year accounted for 19 percent of its nationwide production, marking a year-over-year decline of 15 percent. However, the company had to boost its bad-loan reserves, considering that three-quarters of its portfolio remained in subprime loans.

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

Bernanke Open to Limiting Lending

In testimony before the Joint Economic Committee, Federal Reserve Chairman Ben Bernanke attributed rising subprime mortgage defaults to the failure of lenders to measure a borrower's repayment ability when interest rates adjust. According to Bernanke, "A large increase in early defaults on recently originated subprime variable-rate mortgages casts serious doubt on the adequacy of the underwriting standards for these products." The economist also said federal legislation to more strictly regulate lending practices may be a good idea, but he noted that the central bank can only enforce standards for federally regulated banks. Sen. Charles Schumer, D-N.Y., the committee's chairman, called Bernanke's testimony "further indication that we must respond on the federal level" to curtail predatory lending.

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

Lender Said to Be Weighing a Bankruptcy Filing Soon

New Century Financial is considering filing for bankruptcy protection soon but also is looking to secure financing that would allow the Irvine, Calif.-based company to reorganize or sell itself through a prepackaged bankruptcy. The embattled subprime mortgage lender still wants to find a buyer but has little time, considering it had less than $60 million in cash in early March and banks have begun to foreclose on its credit lines. "The one reason they haven't filed for bankruptcy yet is that they believe they can still pull off a transaction with someone coming in and acquiring them," says Jeffrey Garfinkle, a partner with Buchalter Nemer, an Irvine law firm that has represented New Century in the past. New Century trailed only HSBC in subprime mortgage lending last year, totaling $51.6 billion in loans, acc! ording to Inside Mortgage Finance.

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

Morgan Stanley to Sell Subprime Lender's Loans

Morgan Stanley has announced plans to auction off $2.48 billion of residential mortgages from New Century Financial. The subprime lender's loans are collateral pledged to Morgan Stanley for a $2.5 billion credit line. The auction announcement comes on the heels of Accredited Home Lenders and Fremont General--two other major subprime lenders--opting to sell subprime mortgages at a significant discount in an effort to raise funds. New Century, which could be headed into bankruptcy, ceased making new loans earlier this month.

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

New-Home Sales Dropped 3.9 Percent in February

The Commerce Department reports a 3.9-percent decline in new-home sales to an annual pace of 848,000 in February from 882,000 in January, marking a nearly seven-year low and failing to meet economists' expectations of an annual pace of 985,000. The median new-home price of $250,000, meanwhile, was 2.8 percent higher than January but still down 0.3 percent from February 2006. Regionally, new-home sales surged 24.6 percent in the West but plummeted 26.8 percent in the Northeast, 20 percent in the Midwest and 7 percent in the South. The report--which also reveals a boost in new-home inventory to an 8.1-month supply from 7.3 months in January--indicates "that ho! me construction will remain a drag on the economy for much of the year," according to A.G. Edwards & Sons chief economist Gary Thayer.

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

Sub-Prime Risk Is Less for Big Banks

Wells Fargo & Co. has managed to offset losses in its subprime mortgage business with its sizable portfolio of other loans and business units. Company executives say this broader base should allow it and other sufficiently diversified lenders to continue offering subprime loans even as other companies falter in the niche. "We believe it is very important to offer non-prime loans and are committed to doing so in a responsible way," Wells Fargo spokeswoman Theresa Schrettenbrunner remarked. "Some borrowers simply need a non-prime loan to get started." According to her and other Wells Fargo officials, only 8 percent of the company's mortgage originations left Wells exposed to credit losses on subprime loans in 2006.

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

March 23, 2007

Wells Fargo Claims No. 1 Position as Nation's Retail Mortgage Lender and Servicer

In 2006, Wells Fargo ranked as both the nation's No. 1 retail mortgage originator and No. 1 mortgage servicer for the full year, according to Inside Mortgage Finance.

This marks the 15th year in a row that Wells Fargo was the top retail
mortgage lender, originating $158.48 billion in loans through its retail channel and earning an industry market share of 14.2 percent. In addition, Wells Fargo grew its servicing portfolio to $1.34 trillion and, with the top ranking in this category, now has 13.2 percent of the nation's home mortgage servicing market share, up from 11 percent in 2005. That represents a 12-month increase in portfolio value of $336 billion, or growth of nearly 34 percent.

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

N.Y. Suit Could Test Loans' 'Suitability'

Attorney Jacob Zamansky of Zamansky & Associates has filed a lawsuit in New York claiming that mortgages granted to two dozen elderly borrowers who cannot afford their payments are "legally void and unenforceable" because the lenders failed to consider repayment ability when granting the credit. The litigation against Countrywide Home Loans Inc., IndyMac Bank, Homecomings Financial LLC, PHH Mortgage Corp., Washington Mutual Inc. and First National Bank of Long Island--which seeks to stop collections and foreclosure proceedings--could be an early test of mortgage suitability standards.

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

Applied Business Software, Inc. and Ellie Mae(R) Announce Strategic Partnership

Applied Business Software Inc. (ABS), developer of The Mortgage Office(TM), the leading loan servicing software solution for the lending industry, and Ellie Mae Inc., an award-winning provider of innovative software and services for the mortgage industry, announced today that they have formed a strategic partnership to provide full product integration between The Mortgage Office(TM) and Encompass® mortgage automation system.

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

California, Fannie Mae Sever Ties With New Century

Fannie Mae, the largest U.S. mortgage loan provider, yesterday informed New Century Financial Corp. that it will no longer buy or sell NEWC mortgage loans. Also, California yesterday joined a dozen other states in ordering NEWC to stop making new mortgage originations... FNM's move may be a death blow-- NEWC cannot provide mortgages without the partially government-backed Fannie Mae's business. While Accredited Home Lenders' received a $200 million lifeline from the Farralon Capital Management hedge fund, NEWC looks increasingly likely to join the privately-held People's Choice Home Loan Co., the latest of more than 20 bankrupted subprime lenders.

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

Mortgage Cadence Fulfills Commitment to Support Oracle

Demonstrating its vision to provide an ever-expanding lending platform, Mortgage Cadence announces that the Oracle Database 10g port has been completed - and that their lending platform now supports Oracle, as well as Microsoft SQL Server. The Oracle version of Mortgage Cadence operates against Sun Solaris and will also operate on Red Hat Enterprise Linux 4 in the next version.

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

Fremont Unloading Mortgages

Fremont General, a California-based subprime lender, will post a $140 million pretax loss related to the discount sale of $4 billion in home loans. The company--which was told to halt its subprime operations by federal regulators--completed the first phase of the sale to an unnamed buyer that paid $950 million.

Posted by S. Germain at 07:57 AM | Comments (0)

Fed Hints That Rate Hike Is Unlikely

The Federal Reserve left interest rates unchanged at 5.25 percent on Wednesday, as central bank policymakers generally saw the overall economy as being healthy. While investors welcomed the Fed's statement suggesting rates were unlikely to increase in the near future, analysts say the change in language could mean that officials are ready to lower rates if the economy falters. Lehman Brothers chief U.S. economist Ethan Harris believes the central bank is concerned about how mortgage delinquencies, home foreclosures and tighter lending standards will impact the economy. "It's something the Fed has to be nervous about," he says.

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

Wells Fargo to Cut 500 Jobs in Subprime Division

In response to scaled-back subprime lending standards, Wells Fargo & Co. is shrinking the number of employees working in its subprime lending unit. About 514 workers in South Carolina, Arizona and California will be laid off in April, following a previous announcement of 70 layoffs in Tempe, Ariz. A total of 158,000 people work for Wells Fargo, but it is unknown how many employees make up its subprime division. Although the lender is one of the top players in the U.S. subprime business, it so far has managed to dodge any major losses.

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

Homeowners, Lenders Skirt Default, May Curb U.S. Housing Slump

Mortgage Bankers Association chief economist Doug Duncan says a growing number of lenders are approving short sales as an alternative to foreclosure, mainly because they are not in the business of managing real estate. "The way banks see it, it's better than if the house goes into foreclosure, stands empty and sees its value spiral downward before it's auctioned on the courthouse steps," explains Duncan, who expects rising delinquencies to spark an increase in pre-foreclosure sales. Though short sales put additional downward pressure on the national median home price, Fannie Mae chief economist David Berson says they also lower the number of foreclosures and can help ease the housing downturn. However, short! sales are not counted, making it impossible to know exactly how many occur.

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

Home Builders Dour on '07 Prospects

Concern about the potential impact of rising subprime mortgage defaults on the ability of borrowers to obtain home loans has resulted in the first decline in the National Association of Home Builders/Wells Fargo index since September. The index of industry sentiment fell to 36 for March, down from a revised 39 in February--with any reading of less than 50 signifying that most home builders consider the business environment to be unfavorable. "Builders are uncertain about the consequences of tightening mortgage-lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout," says NAHB chief economist David Seiders. Last week, the Mortgage Bankers Association reported that subprime delinquencies rose to a four-year high during the fourth quarter of 2006 and that foreclosures on all loans reac! hed a record.

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

Top Five Subprime Lenders Asked to Testify: Dodd

Senate Banking Committee Chairman Christopher Dodd, D-Conn., said executives from five subprime mortgage heavyweights--New Century Mortgage Corp., Countrywide Financial Corp., HSBC Holdings Plc, First Franklin Mortgage and WMC Mortgage--have been invited to testify at a hearing on Capitol Hill this Thursday. The hearing, which will be followed by a second one by the House Financial Services Committee next week, affords an opportunity for subprime players to explain their lending practices. "At the very least," Dodd said, "homeowners facing foreclosure deserve to know what factors contributed to their dire financial straits, and what steps are needed to fix this pressing problem." Also asked to speak at this week's hearing were officials representing the Federal Reserve, the Federal Deposit Insurance ! Corp., the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors.

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

March 16, 2007

Ocwen Announces $300M Venture to Acquire Residential MBS Lower Tranches and Mortgage Servicing

Ocwen Financial Corporation (NYSE:OCN - News) today announced that it has obtained definitive commitments from affiliates of Angelo, Gordon & Co., Metalmark Capital, LLC and other lead investors to form and capitalize a new business, Ocwen Structured Investments, LLC (``OSI''). OSI will invest in the lower tranches and residuals of residential mortgage-backed securities, related mortgage servicing rights, ABX Index Protection and other similar assets.

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

FBR Announces Share Buyback Initiation and Comments on First NLC Unit

Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR - News; "FBR" or "the Company") today announced that it intends to begin buying back its shares under an existing 14 million share buyback authorization. The Company also announced today that it will explore strategic alternatives to maximize the value of First NLC ("FNLC"), its non- conforming mortgage origination business.

The Company stated that FNLC continues to have more than sufficient liquidity to meet all margin calls and is in compliance with all warehouse agreements. FNLC has recently undertaken significant additional cost restructuring initiatives and has substantially modified its loan guidelines. These guideline changes will result in meaningfully lower origination volumes in the near-term in addition to greater loan values.

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

Wachovia Touts New Mortgage Brand

Wachovia Securities, Charlotte, N.C., has created a new brand called Vertice for the combined entities of American Mortgage Network and Wachovia Mortgage Third Party Lending. Combined production from both entities totaled $18 billion in 2006, Wachovia reported. The continued integration of the wholesale businesses will capitalize on the strong competitive advantages the company has in the marketplace, he added. "While our branding and structure may be new, our values and our mission remain the same: provide the highest-quality service, a broad product range, and a local business presence that links us closely to our client base, ensuring efficient underwriting and closing for our broker customers," Mr. Robertson said.

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

GE Cap to Buy PHH, Sell Mortgage Ops

PHH Corp., Mt. Laurel, N.J., has agreed to be acquired by GE Capital Solutions, the business-to-business leasing, financing, and asset management unit of General Electric Co., in an all-cash transaction valued at approximately $1.8 billion. In connection with the transaction, GE has entered into an agreement to sell the mortgage operations of PHH, a prime mortgage originator and servicer, to an affiliate of The Blackstone Group, a global private investment and advisory firm. Under the terms of the merger agreement, PHH stockholders would receive $31.50 per share in cash at closing, representing a premium of 13.3% over the March 14 PHH stock closing price of $27.81 on the New York Stock Exchange. "We are attracted to [PHH's] platform and business model and look forward to working with the PHH Mortgage team to accelerate and enhance their strategic objectives and growth potential," said Chinh Chu, senior managing director at Blackstone. According to the Quarterly Data Report, PHH ranks 11th among mortgage servicers, with $160 billion in servicing.

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

New Century's Troubles Grow

The shadow looming over the U.S. subprime lending sector cast itself over Wall Street on Tuesday, sparking the second-worst stock selloff so far this year. California's New Century Financial--once the No. 2 subprime company in the nation--may have been hit the hardest, having lost an estimated $1.6 billion in market value over just the past month. The New York Stock Exchange has suspended its shares and indicated yesterday that the stock would be dropped completely from its listings. The latest news only worsens the situation at New Century, which has been forsaken by its creditors and also is now the target of a criminal probe into its trading activity and accounting practices.

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

Novastar Financial Feb. Production Volume Falls

Novastar Financial Inc. watched its stock price rise on Monday after announcing stronger-than-anticipated originations of subprime mortgages last month. The lender reported a 26-percent decline in nonconforming loan production to $386.25 million from $521.82 million during the year-over-year period ended in February, but the results were much better than analysts had expected. While Novastar has managed to stay operational amid trouble in the subprime mortgage market, New Century Financial Corp. announced early this week that it would no longer underwrite mortgages. In related news, Countrywide Financial Corp. is expecting weaker earnings as a result of rising subprime foreclosures.

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

Banks Go on Subprime Offensive

Big banks and investors that purchased subprime mortgages originated by small lenders over the last couple years are responding to an increase in defaults on the products by ordering the lenders to buy them backs. Many subprime originators are now facing bankruptcy because they lack the money necessary to comply, and some experts argue that the subprime mortgage market is weakening at a faster pace due to these repurchase demands. New Century Financial Corp., for instance, is among the lenders on the brink of bankruptcy, fielding repurchase orders from Morgan Stanley, Citigroup Inc., Goldman Sachs Group Inc., Credit Suisse Group Inc., IXIS Real Estate Capital Inc. and Bank of America Corp. The company reportedly owes a total of $8.4 billion to these creditors, and Piper Jaffray analyst Robert Napoli says that repurchasing the loans at a 20-percent loss would eliminate New Century shareholders' equity.

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

Countrywide Ends No-Money-Down Loans

Countrywide Financial Corp. has instructed its brokers to no longer offer zero-down mortgages as an option for borrowers. That is because such loans are among the biggest reasons for a recent and sharp increase in the level of delinquencies at U.S. home lenders. Countrywide joins such other companies as General Electric Co.'s WMC Mortgage and Washington Mutual Inc. in requiring that loan applicants have at least a 5-percent stake in their residences.

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

Foreclosures May Hit 1.5 Million as U.S. Housing Bust Deepens

Economy.com chief economist Mark Zandi believes the housing market will continue to record declines for at least one more year. During this period, economists predict that upwards of 1.5 million homes could be lost to foreclosure; and job losses tied to the housing industry could total 100,000. Additionally, Mortgage Bankers Association chief economist Doug Duncan estimates that another 100 mortgage lenders could leave the business in 2007. Rising inventories, higher new-home cancellations and mortgage fraud are among the chief concerns, leading some to believe that a recession like the one following the 1991 housing downturn is on the horizon. "The fallout in the early 1990s was much worse than what we've seen so far, but this downturn is not over," explains Raymond James & Associates managing! director Paul Puryear, adding, "The full impact hasn't hit yet."

Posted by S. Germain at 07:45 AM | Comments (0)

March 09, 2007

Bank of America Commits $20 Billion to Finance Green Buildings, Mortgages and More

Bank of America Corporation announced a $20 billion initiative to support the growth of environmentally sustainable business activity to address global climate change. Bank of America's ten-year initiative encourages development of environmentally sustainable business practices through lending, investing, philanthropy and the creation of new products and services.

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

Beige Book Finds Weak Housing Markets

Housing markets are "weak" and house prices are generally "flat or declining," according to the Federal Reserve's Beige Book. "Almost all districts reported that housing markets remained weak," the Beige Book says, although a few Federal Reserve district banks reported some signs of stabilization in February. The Cleveland and Atlanta district banks noted that construction has "flattened out." The Richmond bank reported signs of a "firming" housing market. However, inventories of unsold homes in the Dallas-Fort Worth areas hit "new highs due to slowing sales and cancellations." The San Francisco bank reported "noticeable" recent price declines in some areas, while "[c]ontacts in the Boston district saw no signs that the weakness in housing was nearing an end," according to the Beige Book. Meanwhile, commercial real estate markets "continued to firm or remained solid" the Fed publication says.

Posted by S. Germain at 07:42 AM | Comments (0)

Countrywide to Become Savings and Loan

The Office of Thrift Supervision has okayed Countrywide Financial's application to become a savings-and-loan holding company. This means that the federal agency will have oversight of all the mortgage lender's operations. Additionally, its Alexandria, Va.-based subsidiary, Countrywide Bank, will become a federal savings bank.

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

HSBC to Halt Acquisitions in the U.S.

London-based HSBC Holdings PLC has stated that it will not pursue any U.S. acquisitions in the near future, despite having considered a number of big-ticket possibilities in recent months. The world's No. 3 bank in terms of market capitalization, HSBC has been stung by acquisitions of risky mortgage loans that have subsequently gone bad in the past couple of years. Impairment charges for its North American personal-financial-services unit soared 34 percent to $6.68 billion last year from $5 billion in 2005. While HSBC still managed to squeeze out 4.7-percent growth in net income for 2006, poor performance in the company's mortgage operations held back the results.

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

Citadel to Acquire Mortgage Company

Citadel Investment Group LLC has managed to trump rival Credit Suisse Group by inking a $180 million deal to acquire ResMae Mortgage Corp. In securing the deal, Citadel's offer amounted to about $20 million for ResMae's lending operation and 98.5 cents on the dollar for the firm's $160 million loan portfolio.

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

Subprime Wreckage Entices Bargain Hunters

Wall Street heavyweights from Credit Suisse Group to Bear Stearns Co. have stepped up their investments in the nonprime lending market in the past year, running their own loan businesses, bundling and selling bonds backed by risky loans and providing subprime lenders with credit. With the sector now in the midst of a crisis, many see an bargain-rate opportunity to delve even further into the market. Despite the forced closure of at least two dozen subprime outfits in recent months, some investors and analysts are betting that the biggest mortgage companies--such as Countrywide Financial Corp.--will come out of the storm stronger than before as their weaker competitors fold.

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

March 02, 2007

Ivanhoe Mortgage Closes Doors

Ivanhoe Mortgage, a $2 billion-a-year conventional/government lender based in Orlando, Fla., has closed its doors, according to industry officials familiar with the company. As of MortgageWire's deadline, company executives could not be reached for comment. A year ago Ivanhoe merged with nondepository Central Pacific Mortgage, Folsom, Calif., which recently agreed to sell its wholesale division to TMSF Holdings, Los Angeles. It is not known whether Ivanhoe is part of that transaction. (It does not appear to be.) CPM is headed by former Mortgage Bankers Association chief John Courson. Officials at CPM and TMSF could not be reached for comment. On Ivanhoe's website there was no notice of its closure.

Posted by S. Germain at 09:14 AM | Comments (0)

Citi Has Option to Buy Argent

Citigroup has signed a deal that gives it an "option" to buy subprime wholesale giant Argent Mortgage, Orange, Calif., and the $65 billion servicing platform of its sister company, Ameriquest Mortgage. Both units are owned by ACC Capital Holdings, a company controlled by mortgage industry veteran Roland Arnall, who is currently serving as U.S. ambassador to the Netherlands. In a statement issued after the market closed Wednesday, ACC revealed that Citigroup not only has an option to buy Argent and the receivables, but is providing "additional working capital" to ACC's subprime units, becoming their primary warehouse lender. The option to buy does not include the retail division of Ameriquest and is subject to "certain requirements, including achieving business milestones and satisfaction of regulatory filings and approvals."

Posted by S. Germain at 09:13 AM | Comments (0)

19% of Countrywide's B&C Servicing Overdue?

Countrywide Financial Corp., Calabasas, Calif., reported Thursday that $22 billion, or 19%, of its subprime receivables are in some form of delinquency. The nation's largest mortgage banker -- and subprime servicer -- said in a filing with the Securities and Exchange Commission that late payments on its A-minus to D servicing portfolio spiked by 25% from the third to the fourth quarter. At year-end, Countrywide serviced $116 billion in subprime or "nonprime" loans. Countrywide said in the filing that 3.53% of the loans in its nonprime servicing portfolio are pending foreclosure. A year ago its B&C foreclosure rate stood at 2.93%. As of MortgageWire's deadline, the company had not returned several telephone calls. In trading Thursday, its stock fell 2.61% to $37.34.

Posted by S. Germain at 09:12 AM | Comments (0)

Mortgage Defaults Start to Spread

Inside Mortgage Finance reports that 16 percent of mortgages originated in 2006 were midlevel, or "Alt-A," loans given to borrowers whose credit scores fall between prime and subprime, including low- and no-documentation loans and option adjustable-rate mortgages. Some lenders are seeing an increase in the number of Alt-A borrowers--many with credit scores above 700--who are encountering difficulty making their monthly payments, although the 2.4-percent delinquency rate reported by USB AG is substantially less than the current subprime delinquency rate of 10.5 percent. According to UBS mortgage analyst David Liu, "The credit deterioration has been almost parallel to what's been happening in the subprime market." IndyMac Bancorp Inc., Lehman ! Brothers Holdings Inc. and Impact Mortgage Holdings Inc. are among the Alt-A lenders currently tightening their underwriting standards by hiking minimum credit scores and lowering maximum amounts for low-documentation loans, among other changes.

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

Fannie Sketches Plans for Growth in Subprime Field

Fannie Mae CEO Daniel Mudd says the government-sponsored enterprise will expand its participation in the subprime mortgage market. Mudd says the GSE will continue to purchase bonds backed by subprime mortgages--which presently account for 2.2 percent of its mortgage assets--and move toward internal production. Fannie Mae is presently examining its lender partners' origination standards and notes that it will focus more on multiple layers of risk than particular characteristics of these mortgages. Additionally, the GSE says growth in the subprime sector will be based on the performance of subprime products.

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

Mortgage Delinquencies Increase

The mortgage delinquency rate rose to 2.11 percent last quarter from 1.72 percent during the previous quarter, according to the Federal Reserve, and the increase is its highest level since the fourth quarter of 2002. Weak underwriting standards appear to be the culprit, considering there has been recent improvement in employment and incomes. According to the Fed, most of the losses involve subprime mortgages. The Mortgage Bankers Association reports that subprime mortgage loan delinquencies increased to 12.6 percent during the third quarter, up from 11.7 percent in the previous quarter, and that subprime mortgages accounted for about 20 percent of all new home loans in 2006.

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

Existing-Home Sales Up, Prices Down

The National Association of Realtors reports a 3-percent jump in existing-home sales to a seven-month high in January from the previous month, though resales were down 4.3 percent year-over-year. Meanwhile, the median price slipped 3.1 percent to $210,600 from $217,400 in January 2006, and the trade group believes the decline helped push buyers back into the market. NAR also reports a 2.9-percent increase in resale inventory to 3.55 million, equivalent to a 6.6-month supply. Regionally, existing-home sales surged 5.6 percent in the West and a more modest 2 percent in the South.

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

February 26, 2007

Lender Lead Solutions Introduces Flex-Margin Advantage(TM) Pricing

Lender Lead Solutions, a comprehensive reverse mortgage services company, has added pricing options to the Home Equity Conversion Mortgage (HECM) through its new Flex-Margin Advantage(TM) program. Flex-Margin Advantage provides brokers with the ability to structure rates and loan terms on monthly HECM reverse mortgage loans in order to better fit the needs of their customers.

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

Ellie Mae's ePASS Network Transmits Record 8,000 Mortgage Loans Per Hour

Ellie Mae, an award-winning provider of innovative software and services for the mortgage industry, has experienced record usage of the ePASS Network, the mortgage industry's most- widely used online business transaction platform. On the average workday in January 2007, the ePASS Network was used to electronically transmit data on over 40,000 mortgage loans, and reached a peak of 8,000 loans transmitted in just one hour. One third of the nation's $3 trillion in mortgage loans go through the ePASS Network, which virtually eliminates the need for the 500 pages of printed documentation that normally constitute each mortgage loan file.

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

Computer Sciences Corp. Integrates Loss Mitigation Software with eMason Inc.'s Clarifire Application

El Segundo, California-based Computer Sciences Corp. announced a strategic merger with e-Mason Inc., which will effectively integrate eMason's Clarifire Web-based process application with CSC's EarlyResolution collections and loss mitigation fulfillment product.

CSC's EarlyResolution is a default management solution that is known for helping mortgage servicers reduce their credit risks by addressing loan issues early in the process. Meanwhile, eMason's Clarifire application allows executives, business analysts, and other authorized users to create and change business processes in real time without programmers.

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

Federal Thrift Profits Fall

The downturn in the housing market took its toll on federally chartered thrifts in the fourth quarter as originations declined, profits dropped and provisions for loan losses doubled. Thrift originations of single-family loans totaled $112.1 billion in the fourth quarter, down 25% from the third quarter, according to the Office of Thrift Supervision. Mainly due to rising delinquencies on single-family and construction loans, thrifts increased their loss provisions by 23 basis points 0.46% in the fourth quarter as charge-offs jumped 17 basis points to 0.39%. Thrift loan loss allowances stood at 50 bps at the end of the fourth quarter and OTS director John Reich told reporters he would be more comfortable if the allowance was higher. Meanwhile, thrift earnings totaled $3.2 billion in the fourth quarter, down nearly 20% from the same period in 2005.

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

Property Valuation Focus Seen as Increased

Servicers are focusing more on valuations in this challenging market, according to speakers at the MBA's National Mortgage Servicing Conference & Expo. Employees in loss mitigation are contacting those in the real-estate owned department to see if they can predict how much a property will sell for if it goes into REO. The end list price at REO is typically very different from early valuation, depending on what happens in local markets, the speakers said. Some companies have their own appraisers or another third-party appraiser who can reconcile values. Panel members said the industry can expect to see the deployment of artificial intelligence to report values, create offers and automated counter offers.

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

OOMC Takes Loss as Reserves Increase

Subprime giant Option One Mortgage Corp., Irvine, Calif., lost $69.7 million in its fiscal third quarter ending Jan. 31, reflecting a large increase in loan loss reserves. The loss figure was released late Thursday when OOMC's parent, H&R Block, reported its earnings. H&R Block officials also revealed that OOMC sold $670 million in delinquent loans during the quarter. H&RB chairman and CEO Mark Ernst noted there "is a weak secondary market" for early payment default loans. The company still expects to sell OOMC for at least $1.3 billion and is continuing to talk to potential investors.

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

30-Year Mortgage Rates Dip to Lowest Level in Six Weeks

Freddie Mac reports a decline in the 30-year fixed mortgage rate to a six-week low of 6.22 percent this week from 6.30 percent last week. Continued weakness in the housing market is believed to be responsible. Freddie Mac chief economist Frank Nothaft explains, "Market participants were concerned over how much drag the slowing housing market may have on economic growth." The 15-year fixed mortgage rate was down as well, falling to 5.97 percent from 6.03 percent. Meanwhile, the one-year adjustable rate slipped to 5.49 percent from 5.52 percent, and the five-year adjustable rate decreased to 5.96 percent from 6.01 percent.

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

Building Slump? Not on the Commercial Side

While residential building activity declined 2 percent in 2006, the U.S. Census Bureau reports that private commercial projects soared 16 percent and public construction rose 10 percent. The commercial sector is enjoying a boom as investment pools seek new places to invest; as increasing U.S. imports triggers a need for new warehouse space; and as developers create new communities that offer abbreviated commutes, environmentally friendly work spaces and an array of nightlife and restaurant components. The U.S. Commerce Department notes that certain property sectors performed better than others, as witnessed by new-hotel construction skyrocketing 52 percent over 2005 and office jumping 18 percent. With so much money in play and activity continuing to rise, some industry executives are worried that overdevelopment may occur in some markets.

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

C-Bass Entering Originations With Fieldstone Deal

C-Bass LLC is entering the subprime mortgage market as an originator via its $259 billion acquisition of Fieldstone Investment Corp., a Columbia, Md.-based lender. Mark Krebs of Fieldstone notes that C-Bass is purchasing all of the company's stock, rather than buying only its assets. According to Stifel, Nicolaus & Co. Inc. analyst Matthew Roswell, "This is what C-Bass does for a living--they buy distressed assets at pennies on the dollar, they service them, clean up the portfolio and securitize them." The New York-based company is owned by the mortgage insurers MGIC Investment Corp. and Radian Group Inc.

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

February 16, 2007

Nevada Lender Shuts Wholesale Unit

Silver State Mortgage, Henderson, Nev., late Wednesday closed its wholesale division, which funded $1.1 billion loans in the fourth quarter, a 52% increase from the volume in the same quarter last year. The wholesale unit is based in California, a state whose mortgage community has been hammered by the current meltdown in the subprime market.

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

Wamu to Eliminate Subprime Lending Jobs

Washington Mutual Inc. has announced plans to lay off 2 percent of its residential mortgage unit staff, with the cuts coming entirely in its Long Beach Mortgage subprime lending subsidiary. Wamu spokeswoman Olivia Riley noted that the 250 or so planned layoffs are due mainly to "weakening subprime market conditions."

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

Bill to Penalize False Home Appraisals Gains Momentum

In Colorado, the state Senate has moved a measure along that would make it a criminal offense to falsify a home appraisal or coerce a property appraiser. The measure, SB07-85, was unanimously approved by the Senate Business, Labor and Technology Committee and will now be reviewed by Senate Appropriations for cost considerations. Under the legislation, falsifying an appraisal or coercing an appraiser would be a misdemeanor; and repeat offenses would be felonies. Current rules punish appraisers who make false valuations by taking away their licenses or fining them; but prison time is rare for fraudulent appraisers, and those who bribe or intimidate these professionals face little consequences, says Colorado Department ! of Regulatory Affairs representative Geoff Hier. The bill applies not only to mortgage practitioners but realty agents, buyers and sellers as well.

Posted by S. Germain at 07:57 AM | Comments (0)

FHA Expects to See Loss Next Year

The Bush administration's fiscal 2008 budget proposal for the Federal Housing Administration (FHA) predicts that a drop in originations to $39.7 billion from $44.4 billion in fiscal 2007 and an increase in the agency's mortgage default rate to 12 percent last year will result in its first-ever loss. Rather than raise the budget to help the