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Mortgage Industry News Headlines
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Last Updated Thursday, July 03, 2008 06:19 PM CST
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NIMs, Alt-A RMBS Clobbered
Moody's Investors Service downgraded 60 net interest margin securities based on the performance of underlying transactions which has negatively impacted future residual payments to the NIM holders. More than 75 Alt-A option adjustable-rate mortgage, negative-amortization transactions saw classes downgraded by Moody's because of higher-than-anticipated rates of delinquency, foreclosure and real estate owned in the underlying collateral relative to credit enhancement levels. Standard & Poor's Ratings Services downgraded nine classes of ACE Securities Corp. Home Equity Loan Trust transactions issued from 2004 to 2006 as a result of adverse collateral performance.
Bank Shuts Down Mortgage Unit
AmericasBank Corp. will close its mortgage unit of its bank subsidiary, according to a filing with the Securities and Exchange Commission. The move is expected to be completed by the end of this month. "The board made this decision based primarily on recent market conditions, and the bank intends to cease its emphasis on originating mortgage loans for sale that are originated by commissioned salespeople," AmericasBank stated.
Radian Improves in Q2
Radian Group Inc. said that claims on first and second liens were less than $230 million during the second quarter, improving from previous estimates. The mortgage insurer said an increase in quarterly first-mortgage defaults was less than iduring the first quarter. Its market share reportedly increased by 1 percent from the beginning of the year.
Market Conditions Improve
The 30-year fixed-rate mortgage averaged 6.4 percent in Freddie Mac's survey of 125 thrifts, commercial banks and mortgage lending companies for the week ended July 3. This is the first time the 30-year has fallen in six weeks. Overall 1003 loan applications increased 4 percent during the latest week, the Mortgage Bankers Association reported in its weekly survey for the week ending June 27.
Mortgage Employment Improves
During May, 357,800 people were employed in mortgage-related jobs, data released from the Bureau of Labor Statistics indicate. Mortgage employment rose from April. Helping to boost May activity were recent hirings at Fortes Residential Mortgage Co., Mortgage Network Inc. and IBM Lender Business Process Services.
The Foreclosure Journal
HOPE NOW reported that mortgage servicers prevented 170,000 foreclosures during May. Bank of America Corp. said its mortgage unit will modify or workout about $40 billion in troubled mortgage loans during the next two years. California's senate bill SB 1137 passed the state's Assembly Monday with a two-thirds majority, ACORN announced. The Mortgage Bankers Association issued a recent statement applauding the New York legislature's passage of a bill aimed at addressing the subprime mortgage issue in the state.
Home-Equity Delinquency Mixed
Delinquency of at least 30 days on home-equity lines-of-credit was 1.10 percent during the first quarter, the American Bankers Association reported. HELOC late payments were up from the fourth quarter and higher than the first quarter 2007. Delinquency on home-equity loans, however, declined from the previous quarter to 2.34 percent.
MBS Volume Spirals
From January through June, the volume of U.S. MBS issued was $117 billion, according the Thomson Reuters Debt Capital Markets Review for the second quarter of 2008. MBS issuance fell from $622 billion during the same period last year. "US securitizations continued to spiral downward as the effects of the subprime mortgage crisis continued to linger," the authors wrote.
Wholesale Operation Re-Emerges
Fortes Residential Mortgage Co. has been launched as a national mortgage banker, the company's parent announced. The unit was created when Fortes acquired a significant portion of National City Bank's wholesale mortgage unit and a retail mortgage banking platform earlier this year, the statement said. The integrated operation includes five regional wholesale operations centers, three retail banking offices and eight reverse mortgage branches.
New CitiMortgage CEO
Sanjiv Das has been named chief executive office of CitiMortgage, according to a company memorandum. Das begins his new role on July 16, the statement said. He previously worked at Citigroup from 1991 to 1999.
Wholesaler Boosts Lending Capacity
Taylor, Bean & Whitaker Mortgage Corp. announced its subsidiary closed on a $1.75 billion facility. The lender and terms of the facility were not disclosed. The Florida-based company hopes the new line will help it expand its third-party originations.
Acquisition, Collapse & Regulatory Actions
First Place Financial Corp. announced that it acquired OC Financial Inc. Sterlent Credit Union has been ordered to liquidate by the California Department of Financial Institutions and the National Credit Union Administration, an announcement said. The Federal Deposit Insurance Corporation announced it issued cease-and-desist orders against Family Bank and Trust Co., Palos Hills, Ill.; Oxford Bank, Oxford, Mich.; Pinnacle Bank, Beaverton, Ore.; and Earthstar Bank, Southampton, Penn. The Federal Reserve Board announced the termination of cease-and-desist orders issued in 2006 against Bank of York, York, Ala., and First BanCorp, Santurce, Puerto Rico.
Another Improvement for COFI
The cost of funds index was 2.92% in May, the Federal Home Loan Bank of San Francisco reported. The index dropped from April and from May 2007, FHLBank reported. The last time the index was this low was in August 2005.
Accredited Parent Acquires $9.3 Billion in Loans
Lone Star Funds has agreed to acquire $9.3 billion in home lending assets and related servicing operations from CIT Group Inc., CIT announced. Lone Star will reportedly pay $1.5 billion in cash and assume $4.4 billion in outstanding debt and other related liabilities. Lone Star is the parent of LSF5 Accredited Investments LLC, which in turn is the parent of Accredited Home Lenders Inc.
Countrywide No More
Countrywide Financial Corp. was acquired by Bank of America Corp. on Tuesday. The merger creates a bank with around $773 billion in deposits -- more than any other U.S. bank, according to recent data from the Federal Reserve Board. The combined entity will likely originate around $425 billion annually, making it the biggest residential lender in the country.
IndyMac Blasts Schumer
IndyMac Bancorp Inc. commented on a letter sent last week from Sen. Charles Schumer to bank regulators. The company acknowledged that depositors withdrew around $100 million on Friday and Saturday. "While branch traffic is somewhat elevated this morning, it is substantially lower than on Saturday, and we are hopeful that this issue appropriately abates soon," IndyMac said. The elevated withdrawals were attributed to Schumer's letter.
Wachovia Dumps Neg-Am Loans
Wachovia Corp. said it would immediately begin waiving prepayment penalties on pick-a-pay mortgages. In addition, the company said it would no longer offer loans with payment options that result in negative amortization. The steps are being taken "to help its mortgage customers deal with a challenging economy and declining home values."
New Ginnie President
Joseph Murin was confirmed as president of the Government National Mortgage Association by the U.S. Senate, according to an announcement. President Bush originally announced his intention to nominate Murin as Ginnie Mae's president in October 2007. Murin previously headed the Mortgage Settlement Network LLC.
WaMu Retail Chief Out
On Friday, James B. Corcoran left Washington Mutual Inc., according to a filing with the Securities and Exchange Commission. Corcoran was president of retail banking and responsible for overseeing the retail banking store network. He was also in charge of consumer lending and WM Financial Services, among other responsibilities.
Mortgage Insurance Volume Sinks
Mortgage insurers issued 89,365 policies for $15.5 billion during May, according to data released from the Mortgage Insurance Companies of America. Volume tumbled from April's level and was around half the level it was during May 2007. The number of certificates issued has not been this low since 2000, according to historical data from MICA.
FHA Lender Growing, Hiring
Lend America announced it has moved its headquarters to a substantially larger location. The lender attributes its success to a transformation from a subprime lender to an FHA lender 28 months ago. Lend America said is has hired over 100 new employees during 2008.
Acquisition Done, Merger On
Community Bankshares Inc. and First Citizens Bank and Trust Company Inc. announced a merger agreement Thursday. Both boards of directors have approved the deal, which is subject to regulatory approval and the approval of Community shareholders. Wells Fargo Home Mortgage has acquired Pride Mortgage, a press release Wednesday said.
Alt-A Issuances Annihilated Again
Chase Flex Trust, series 2007-1 and 2007-3, saw nine classes downgraded by Fitch because of expected default and loss from the underlying delinquentAlternative-A loans in addition to projected losses from the currently performing pool. Moody's downgraded more than classes from Alt-A transactions backed by a mix of fixed-rate, hybrid adjustable-rate, negatively amortizing and option-ARM mortgages. Moody's cited higher-than-anticipated rates of delinquency, foreclosure and REO in the underlying Alt-A collateral relative to credit enhancement levels.
How to Improve Operations With Technology
SearchMyLoan.com issued a press release indicating its loan pricing and search engine has been enhanced to include product enhancement alerts, lender status and messaging. Score Optimization System interprets prospective borrowers' credit files, identifies factors that impact their credit scores and determines how to best increase their credit ratings, i3Solutions.net claimed in an announcement. Data from the Mortgage Electronic Registration Systems Inc. has been integrated into FraudGUARD to help prevent "shotgunning," Interthinx Inc. announced this week.
BoA, Countrywide Merger to Result in Massive Layoffs
Bank of America Corp. announced that shareholders of Countrywide Financial Corp. have approved the merger between the two companies. The acquisition will result in the elimination of an estimated 7,500 positions, BoA said. The layoffs will occur during the next two years.
HSBC Reports Layoffs
HSBC Mortgage Services notified the Commonwealth of Virginia of layoffs on Tuesday. HSBC noted the move was a "permanent reduction." The layoffs impact 48 employees, according to data from a Workers Adjustment and Retraining Notification.
M.I. Co. Aggressively Sues Failed Subprime Lender
PMI Mortgage Insurance Co. and its subsidiary have sued WMC Mortgage Co., according to a case summary written by Weiner Brodsky Sidman Kider PC. The insurer seek not only the repurchase of defective mortgages by the defendants, but also contract and tort damages, as well as punitive damages. WMC has moved to dismiss the complaint.
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Copyright © 2007 MortgageDaily.com
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Brokers Being Paid for Foreclosure Referrals
One company is hoping to help more delinquent borrowers by paying mortgage brokers $1,000 referral fees. Meanwhile, New York is attempting to stave of foreclosures by lengthening the amount of time required to complete the process.
Mortgage brokers are being offered $1,000 for referring delinquent borrowers who obtain a loan modification or short sale through NW Foreclosure Advisors LLC.
The Portland, Ore.-based firm also provides servicers with standard short sale and loan modification documents that are customizable and provide secure electronic delivery of completed packages to all related parties.
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Groups Reject RESPA Reform
Opposition to proposed Real Estate Settlement Procedures Act reforms is almost universal. Among concerns outlined by mortgage, banking and real estate groups are the lack of calibration between RESPA and the Truth in Lending Act, perceived bias against mortgage brokers and the implementation of a lengthy closing script.
Several groups are asking that implementation of RESPA reforms be delayed by the U.S. Department of Housing and Urban Development at least until they can be implemented in conjunction with the recently proposed TILA revisions by the Federal Reserve Board. In addition, they are asking that once finalized, the transition period be lengthened to at least 24 months rather than the 12 months now called for because of necessary software revisions and other costly and time consuming systems changes.
Some, including the Mortgage Bankers Association and the Consumer Mortgage Coalition, even question whether consumers would benefit from the proposal as currently written because of implementation costs, a potential failure to obtain volume discounts and an information overload that will discourage consumers from reading all the material. The quality of services to consumers, warns the National Association of Realtors, could suffer because of the emphasis on cost reductions.
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Mortgage Firms Accused of Fraud in 3 Lawsuits
New Jersey has filed three lawsuits accusing 15 corporations and 21 individuals of conspiring to defraud borrowers and mortgage lenders out of more than $5 million. Each case involves at least one mortgage broker that played a key role.
The lawsuits were filed by the state's Attorney General Anne Milgram in state superior court, a press release today said. All three complaints allege violations of both the New Jersey Consumer Fraud Act and the New Jersey Racketeer Influenced and Corrupt Organizations Act.
Milgram said more than 25 properties were involved, with fraudulent loans exceeding $5 million.
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Mass. Originators, Brokers Exit Industry
Massachusetts has seen a significant decline in the number of mortgage brokers and originators. One trade group executive speculates that rising regulations and evaporating originations are to blame.
Non-bank loan originators in Massachusetts were required to apply for a grand-fathered license by May 27.
The state received 5,726 grand-fathered mortgage loan originator applications as of the deadline, David J. Cotney, chief operating officer for the state's Division of Banks told MortgageDaily.com in a statement.
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Broker Employment Inches Higher
More people continued to exit the mortgage industry, though the number mortgage broker employees increased slightly, according to a new government report. Overall U.S. unemployment surged, but the health care industry maintained growth.
In April, 356,800 people worked in mortgage-related positions, the Bureau of Labor Statistics reported today.
Mortgage jobs dropped from 360,700 during March and were down from 454,000 a year earlier.
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