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April 2007 Archive


Earnings Upset Industry
As mortgage mergers and acquisitions maintained, deteriorating mortgage earnings overshadowed the latest corporate activity. Meanwhile, IndyMac Bancorp Inc. warned that increased competition will hurt earnings at its reverse mortgage subsidiary.

Record American Home Originations
American Home Mortgage Investment Corp. saw its residential production increase for the fourth consecutive quarter. Meanwhile, as earnings tumbled, the company noted an improvement in the secondary market.

Lender Abandons Recovery Plan
Following an attempt to downsize its operation, a Washington-based subprime mortgage banker is calling it quits.

Studies Scrutinize Subprime
The fallout in the subprime market is leading to a better understanding of the loans and, despite a growing number of foreclosures, an appreciation of their value in the marketplace, according to several recent studies.

National City Numbers Improve
Following the divestiture of its subprime lending subsidiary, National City Corp. saw a healthy gain in quarterly fundings and applications.

Mortgage Jobs Migrate Southwest
An analysis of mortgage layoffs and hirings since last year indicates California isn't the only state where production, servicing and executive personnel are migrating out of. Meanwhile, two southwest states showed a healthy gain in mortgage jobs.

States Stop Unlicensed Originations
Two Oregon mortgage providers have been ordered to pay nearly $60,000 in fines and stop "unlicensed activity", state regulators demanded in a stern order. Meanwhile, mortgage licensees in three other states faced fierce actions from state regulators.

Fannie Vs. Auditor
In response to a lawsuit filed by Fannie Mae against its former auditor, an answer to the complaint has been filed accusing the Washington, D.C.-based company of massive fraud.

Flagstar Fundings Rise
As its mortgage servicing portfolio fell, Flagstar Bancorp Inc.'s quarterly production rose.

Net Branch Acquired
A Washington-based net branch operation has been acquired by a California commercial mortgage company.

Wells Settles Class Action
The consumer finance arm of Wells Fargo & Co has agreed to provide subprime borrowers with nearly $7 million to settle a class action lawsuit.

$5 Billion Servicing Deal
A servicing portfolio in excess of $5 billion has been sold.

BoA to Acquire Reverse Business
Bank of America will acquire 40,000 reverse mortgages with its purchase of a reverse mortgage business.

Improved Mortgage Market
Mortgage applications improved as rates slipped for the second consecutive week.

Subprime Servicer Ratings Reduced
Three subprime servicers saw their residential ratings downgraded.

More Block Layoffs
More Florida workers at H&R Block Mortgage Corp. lost their jobs through a branch closing.

Net Branches Adopted
More branches of defunct Central Pacific have found a new home.

Why Borrowers Go Delinquent
An analysis of mortgages managed by Freddie Mac indicates family illness and excessive borrowing are playing a growing role in its delinquencies -- which have declined as the rest of the industry's has soared.

Solid Q1 at Freddie
Monthly secondary mortgage purchases jumped at Freddie Mac -- pushing quarterly volume to the highest level since 2005.

Trustee Role Vital in Failures
A new report looks at the process that follows when a subprime servicer defaults and servicing is transferred.

Mortgage Technology Help
Two technology companies touted their ability to help improve prospective borrower credit scores while another boasted about how its service helps reduce repurchases. And despite a weakening mortgage market, one mortgage lead company is reporting phenomenal growth.

Denver Foreclosure Nightmare
Hundreds of Denver foreclosures have been withdrawn and must be restarted -- leaving delinquent borrowers in the properties months beyond what lenders had expected. The clerk restarting the process is up for election.

MILA Closure Confirmed
MortgageDaily.com has confirmed Mortgage Investment Lending Associates is shutting down.

Fannie Business Strong
Fannie Mae saw its quarterly business soar to the highest level since 2005.

Servicer Options Often Inhibited
WASHINGTON, D.C. -- Credit rating agencies and law professors testified to Congress last week about the subprime meltdown, the secondary market's role in the fiasco and recommended servicer actions.

read news story
Outlook Determines Success
The real answer to success can be found in the attitude of the one who is looking for it, according to a new book written by a best-selling author.

Firm Hiring Displaced LOs, AEs
A growing Nevada-based company is hiring laid off originators and account executives. Meanwhile, a Midwest bank is looking to unload more than $40 million in residential loans and restructure its balance sheet.

Fiduciary Fraud
Real estate lawyers in Georgia, New Hampshire and Brooklyn are facing charges they stole from clients and lenders.

Midwest Biggest Foreclosure Risk
The 10 markets most at risk of foreclosure because of mortgage fraud are all in the Midwest.

Wholesaler Cuts Outside AEs
A mortgage subsidiary of Fifth Third Bank is not shutting down, contrary to published reports. It has, however, eliminated outside account executives.

Regulator Endorses GSE Subprime Help
The regulator of Fannie Mae and Freddie Mac has endorsed their commitments to help subprime borrowers facing imminent foreclosure -- noting the two companies have more than $1 trillion in funding capacity available.

Senators Warn of Foreclosure Tsunami
A recent government report indicates that subprime foreclosures will increase dramatically as 1.8 million hybrid adjustable-rate mortgages reset within the next two years. But mortgage bankers, who say the report is flawed, blame local economic conditions -- and not subprime lending -- for a potential increase.

Lead Rating Service Launched
A new online service that rates the quality of mortgage lead companies is endorsed by at least one lead company and even a competitor.

Alt-A Job Cuts
An Arizona-based Alt-A wholesaler has scaled back operations and eliminated hundreds of employees.

FHA Proposals Get Attention
WASHINGTON, D.C. -- Mortgage bankers, mortgage brokers and the chief of the Federal Housing Administration testified to Congress about how the agency's programs should allow higher loan amounts and rates that match the borrower's credit history. One proposal called for the Internal Revenue Service to again allow some down payment assistance organizations to qualify for nonprofit status.

2nd Wave of WMC Layoffs
The latest round of job cuts at WMC Mortgage bring to more than a thousand the number of layoffs the subprime wholesaler has made this year.

Wholesaler Still Open
A California-based wholesale lender is denying reports it has closed down -- though it has stopped taking applications for certain types of loans and reduced staff by 20 percent as a result of volume fallout.

Irvine Firm Done
A simple message on a Southern California-based mortgage firm's Web site advises customers that it is done doing business.

IndyMac Originations Hold
IndyMac Bancorp Inc. has tightened its underwriting guidelines. The resulting loss of business, however, will be somewhat mitigated by alternative programs for displaced borrowers.

Opteum Shutters Wholesale, Correspondent
A Florida-based real estate investment trust is getting out of broker-originated lending. Among reasons cited for the exit was erratic behavior by secondary market investors.

Online Lender Calls it Quits
An Atlanta, Ga.-based lender has closed its doors.

Option One Acquired
Option One Mortgage Corp. has found a buyer. The deal will make the subprime lender cousins with Residential Capital LLC.

Capital One Fundings Tumble
Capital One Financial Corp. saw its quarterly mortgage originations tumble.

30-Year Down Nicely From 06
The yield on the 30-year fixed rate has fallen more than one-third percent over the past year.

ResCap Layoffs Accelerate
So far this year, Residential Capital LLC disclosed workforce reductions of 2,000 amid a continued subprime slowdown.

BK Trustee Sues Investment Banks
The trustee for a bankrupt subprime lender is seeking more than $50 million in compensatory damages from five investment bankers. A separate class action lawsuit against former executives of the defunct lender may seek to add the investment banks as defendants.

Mixed BoA Activity
Quarterly originations slipped at Bank of America Corp.

Lenders Win Supreme Court Case
Mortgage bankers scored a major victory in a Supreme Court case that determined whether states can regulate federally-regulated banks or their subsidiaries. The nation's Realtors were among those expressing disappointment over the decision.

Loan Losses to Reach Record
Losses on subprime mortgage loans securitized last year are expected to eclipse losses from the 2000 vintage -- which was the worst ever, according to congressional testimony by a major ratings agency.

First Horizon Fundings Off
First Horizon National Corp. managed to minimize falling fundings.

Foreclosure Surge Relentless
Monthly foreclosure filings in Nevada increased more than in any other state. Meanwhile, six out of the 10 cities with the worst foreclosure rates were in California.

NC Subprime Wholesaler Finished
One of the fastest-growing private companies has stopped funding subprime loans for mortgage brokers.

Downey Business Softens Further
Downey Financial Corp.'s quarterly loan originations continued to slide. The company touted its capital position despite its subprime business.

Option One Subsidiary Closes
An Option One Mortgage Corp. subsidiary is shutting down -- resulting in dozens of layoffs by summer.

Production Climbs at Chase
Quarterly business was better at JPMorgan Chase & Co.

WaMu Manages Subprime Fallout
The dynamics of the subprime market pushed down mortgage fundings, left the servicing portfolio lower and jolted earnings at Washington Mutual Inc. -- which announced it would offer discounted rates for $2 billion of its loans facing increased payments.

Fannie, Freddie Target Subprime Refis
WASHINGTON, D.C. -- Fannie Mae and Freddie Mac are rolling out subprime programs for borrowers facing foreclosure. Chief executive officers of the two government sponsored housing enterprises joined regulators and consumer groups in testimony to Congress Tuesday on rising foreclosures.

read news story

Mortgage Technology Update
Mortgage lead innovations and an excellent technology review of the U.S. Department of Housing and Urban Development topped the latest mortgage technology headlines. One recent offering promises to help mortgage bankers avoid repurchases.

Credit Suisse Buys Subprime Wholesaler
Another investment banker has acquired a subprime origination channel.

New Chief at ResCap
Residential Capital LLC has appointed two former chief executive officers of another mortgage lender as president and CEO.

FDIC Subprime Summit
In an attempt to control rising foreclosures, federal regulators hosted a subprime summit with Wall Street executives and other mortgage industry leaders yesterday.

Wells Restates Production
Wells Fargo & Co. restated last year's mortgage fundings -- revising its annual origination numbers lower by $100 billion. The bulk of the restatement occured from its correspondent-wholesale channel.

SunTrust Sustains
Quarterly business held at SunTrust Banks Inc., though mortgage earnings soured.

Earnings Devastated by Subprime
A rash of mortgage-related companies announced subprime hits to their earnings -- with some exiting mortgage lending altogether. Meanwhile, some banks and net branch operations are still growing.

FICO Score Value Diminished
A new ratings agency report indicates that credit scores don't necessarily help predict whether subprime borrowers with layered risk attributes will default early in the loan life.

Dismal Foreclosure Outlook
Foreclosures soared during the first quarter and are projected to continue higher.

Wachovia Fundings Off
Wachovia Corp. mitigated a loss in residential production by cross marketing to customers of recently-acquired World Savings.

Citi Business Stronger
Helped by the acquisition of ABN AMRO Mortgage Group Inc., Citigroup Inc.'s mortgage servicing portfolio pushed past a half trillion dollars while its loan production climbed higher.

WMC Fundings Free Fall
WMC Mortgage has stopped underwriting subprime loans based on what Wall Street wants. But the move has had a pronounced impact on production.

Wholesale Operation Shuttered
An Inc. 500 company has abandoned mortgage broker business.

Massive ABN AMRO Layoffs
Thousands of ABN AMRO Mortgage Group employees will be laid off as a result of the merger with Citigroup. The job cuts are unrelated to the 17,000 layoffs announced by Citigroup earlier this week.

Wholesaler Closes Shop
An Irvine, Calif.-based nonprime wholesaler that originated more than $1 billion during its first two years in business is shutting down.

Hard Money Investors Sue
Two mortgage lenders are facing a lawsuit from an Oregon couple because of advice allegedly given by a former loan officer. The couple claim the companies did not adequately train and supervise the originator who helped them invest in risky, hard money loans.

First Horizon Closes Nonprime Unit
First Horizon National Corp. has exited the subprime wholesale lending market.

BK Judge Rules Against Ameriquest
A bankruptcy judge has suggested his ruling against Ameriquest Mortgage Co. could open the door for a class action lawsuit on behalf of all the company's borrowers who are operating under Chapter VIII bankruptcy. At issue is how the lender reported and applied payments.

Rising Rates Forecasted to Hold
As stronger-than-expected job growth pushed rates up again, mortgage demand was stagnant.

Strong March at Countrywide
Quarterly business sank, but monthly business increased and appears headed higher at Countrywide Financial Corp. As delinquency improved from the prior month, foreclosures rose.

Countrywide Settles With CT
The State of Connecticut has settled with Countrywide Home Loans Inc. allegations of overcharging.

Foreclosure Solutions
A Washington, D.C.-based non-profit organization has assembled $1 billion to help borrowers avoid foreclosure. Plans include personal campaigns against chief executive officers. Meanwhile, individual states and at least one mortgage servicer have taken steps in anticipation of rising foreclosures.

Moratorium Would Be Disaster
The temporary ban on subprime loan foreclosures proposed by civil rights and consumer advocacy groups would be a disaster for the mortgage market. Instead, government sponsored enterprises, the Federal Housing Administration and individual states should step in.

$1.7 Billion Portfolio Trades
A Texas-based servicer hopes to cut costs by 16 percent with its acquisition of servicing rights to more than 18,000 residential mortgages.

Rising Delinquency to Worsen
The rate of mortgage delinquencies and defaults rose to a record high in the first quarter -- and all indications are that conditions will only worsen, according to a ratings agency publication.

2 Wholesalers Close
Two niche wholesalers have ceased operations.

Subprime Blowup Boosts FHA Backers
ROSEMONT, Ill. -- Faced with a much more supportive environment, Federal Housing Administration officials say the agency is looking at simplifying down payment calculations, revamping its condo program, again permitting investors to participate in its 203K program and examining seller-assisted down payments.

Mortgage License Actions
Mortgage companies in Georgia, Massachusetts and Michigan were punished for lending violations including deceptive business practices, illegal loan charges and mortgage fraud.

Net Branches Rescued
Former employees of failed Central Pacific Mortgage have found a new home.

Best Web Sites
Despite tough times in real estate finance, the most savvy lenders are spending heavily on their Web sites, according to a new study. But plenty of mortgage sites could use some big improvements.

How to Survive Subprime Storm
Struggling subprime mortgage bankers are being courted by consultants about how to make the best out of today's market.

IMF Analyzes US Subprime Impact
A report released by the International Monetary Fund today analyzes problems in the U.S. subprime mortgage market, who is at risk and the impact to the rest of the world.

2nds, Stated Drive Delinquency
The performance of subprime loans backing 2006 vintage residential mortgage-backed securities has deteriorated with striking speed, according to a recent ratings agency conference call. Dominant among the worst performers are limited documentation loans and loans with junior liens.

HSBC Cutbacks
HSBC is consolidating some of its mortgage operations.

FHA Reduces Foreclosures
The Department of Housing and Urban Development reported mitigation practices at the Federal Housing Administration have helped prevent more than 36,000 foreclosures.

Bank Ordered to Stop Risky Lending
A New Mexico community bank has been ordered to overhaul its practices, management and board of directors. The bank is accused of risky lending.

Hardest Hit Subprime Markets
Rising foreclosures on top of curtailed subprime lending will disproportionately hurt markets including Memphis, Tenn., Miami and Merced, Calif.

Disputed Foreclosure Litigated
First Franklin Financial Corp. is being sued for denying a couple a loan because of a prior foreclosure. But the couple claim they never were foreclosed on -- just discriminated against.

Fieldstone Cuts 14% of Workforce
Fieldstone Investment Corp. announced it is consolidating operations and trimming staff.

Escrow Funds Diverted
UBS Real Estate Securities has filed a lawsuit against five New Century Financial Corp. subsidiaries, alleging they "misappropriated UBS's money and escrow money being held for borrowers." On the upside, a bankruptcy trustee approved the use of financing that will help the real estate investment trust position itself for a sale.

Mergers Dissolve
While there are plenty of mortgage mergers going down, two deals recently fell apart. Meanwhile, a Connecticut-based bank has shut down its mortgage subsidiary.

Brokers Boost Employment
Led by an increase in brokers, monthly mortgage employment improved -- though more than 13,000 people have exited the industry during the past year.

Warehouse Lender Exits
The warehouse lending subsidiary of NovaStar Financial Inc. is getting out of the business.

LowerMyPayment Closing
Mortgage lead generation company LowerMyPayment.com is shutting down.

Rates Drift Higher, Apps Lower
Requests for mortgages edged down while rates slowly headed higher again.

Nonprime 30-Days Improve
While delinquency of at least 60 days on subprime loans continued to climb during the latest month -- 30-day delinquency on securitized nonprime loans improved.

3 Second Sale
Four questions cross the minds of potential buyers every time a salesperson approaches. And how the salesperson responds determines whether or not the prospect will buy.

New Pres at National City Mortgage
National City Mortgage has found a new president from within its own ranks.

Delayed Loan Purchases Litigated
A Bear Stearns subsidiary has been sued over claims it delayed the purchase of subprime mortgages -- driving down the value of the loans.

Florida Layoffs at Block
A restructuring at H&R Block Inc.'s prime retail mortgage origination group will result in hundreds of layoffs.

Option One Sued for Overtime
Option One Mortgage Corp. is denying allegations that it failed to pay loan originators overtime for a number of years.

SEC Order Against Former CEO
The Securities and Exchange Commission has issued a cease-and-desist order against the former chief of a defunct mortgage lender for cooking the books.

The Mortgage Graveyard
A new journal chronicles mortgage lenders that have failed, been acquired or are currently struggling.

Auditor Sued Over Embezzlement
A Georgia mortgage company has sued its former auditing company for failing to detect the embezzlement of almost $4 million. But the auditor, who said the allegations are completely untrue, may not have to face trial.

ARM Indexes Diverge
The Monthly Treasury Average continued to climb, while the 6-month London Interbank Offered Rate kept going downhill.

The Perfect Niche
Expert mortgage originators are able to identify, analyze and exploit market niches.

Quicken Soaring
Quicken Loans is hiring hundreds of people every month -- helping its mortgage production reach an all-time record.

Repurchase Lawsuits Pile Up
A lawsuit has been filed by Morgan Stanley Mortgage Capital Inc. against a Maryland mortgage banker over unresolved early payment defaults. The Wall Street firm is seeking indemnification for losses and expenses, including foreclosure costs, it incurred when the lender failed to cure or repurchase 32 loans.

Bleak Market Outlook
A 101-page report from the University of California Los Angeles indicates the impact from the subprime fallout will get worse before it gets better.

Accredited Originations Crash
Quarterly residential loan production fell by more than half at Accredited Home Lenders Holding Co. -- which said its auditor abandoned it. On the upside, however, the company announced several financing deals.

SouthStar Shuts Down
Two years ago, SouthStar Funding touted Simple Score, a loan program for "borrowers with credit scores 540 and higher, on all property types up to $1 million and for up to 100 percent loan-to-value." The aggressive program helped it become one of the fastest growing private companies in the country.

Repurchase Lawsuits
A unit of Credit Suisse has joined other Wall Street firms in using the courts to enforce loan repurchase agreements with subprime lenders.

Bankruptcy, Layoffs at New Century
New Century Financial Corp. has filed for bankruptcy protection, laid off thousands of employees and begun dismantling the business.

Delinquent Jumbos Jump
As 30-day delinquency improved on residential jumbo loans, 60-day delinquents, foreclosures and real estate owned continued to increase, according to an analysis of jumbo loans backing residential mortgage-backed securities.

World Hiring
Wachovia Corp., acting on plans to expand origination of option adjustable-rate mortgages, is seeking to fill hundreds of Texas positions.

Podcasts

Week Ending April 27

Week Ending April 20

How to Survive the Subprime Meltdown Presentation given by Sam Garcia to the Dallas Association of Mortgage Brokers on April 19

Week Ending April 13

Week Ending April 6

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