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April 2009 Archive


M.I. Volume Worse, Defaults Better
Monthly mortgage insurance activity fell, was less than half the prior year's level and is headed lower. But defaults improved.

COFI Reaches Record Low
Just when it appeared that the Cost of Funds Index couldn't go any lower, it sank to its lowest level on record.

Red Flags Rules Delayed
Mortgage companies will have more time to implement policies and procedures that help prevent identity theft.

Fannie Business Soars, Record Delinquency
Monthly business volume at Fannie Mae was higher than any month since 2003. But delinquency continued further into record territory.

National Wholesaler Closes
The national wholesale lending subsidiary of an 86-year-old bank has halted new business. The move is a blow to the 5,000 primarily small mortgage brokers that the unit served.

Fixed Rates Sit at Record Low
Fixed mortgage rates sit at the lowest point since Freddie Mac began tracking them. But trading in Treasuries suggests fixed rates may head higher.

Delinquency Improves, REOs Tumble
As residential delinquency declined 9 basis points last month, foreclosures completed on prime mortgages sank -- though new filings rose. Conforming, prime and government mortgages accounted for 84 percent of all delinquent mortgages. First-payment defaults were far higher on portfolio loans than on agency loans -- reflecting disparity in credit scores.

BoA Boots Chairman
Shareholders of Bank of America Corp. have stripped the company's chief executive officer of his chairman title. But up the coast from BoA, shareholders at another bank holding company voted to let their CEO continue to serve as chairman, while several senior executives were named at other mortgage-related companies.

HUD Cracks Down on Mortgagees
The U.S. Department of Housing and Urban Development disclosed actions it has taken against dozens of approved mortgagees -- including civil money settlements and the permanent loss of Federal Housing Administration approval. A couple of big names were on the lists.

The Mod Wire
A big mortgage insurer is warning investors that federal modification programs could have a negative impact on its business. Federally regulated banks were instructed on how to report suspicious modification activity as six companies faced legal actions by two states. A Florida firm claims it is still seeing new business as competing modification firms are struggling to stay in business, and two more modification businesses have been launched.

MGIC Warns About Business
MGIC Investment Corp. could be forced to stop writing new business by the end of the year.

NY Lender Banned from FHA
A New York lender has been accused of defrauding the government on $4 million in mortgages and has been banned for life from government originations.

Biggest Reverse Mortgage Lenders
Quarterly and monthly reverse mortgage volume increased, with some lenders capturing more of the growth than others. One player has seen its market share drop by more than 10 percent.

H4H Revived, 2nd Liens Addressed
With changes announced today, the Obama administration hopes to revive a government program that was designed to refinance underwater borrowers into FHA loans. In addition, the administration has addressed second liens that have been holding up many modifications.

American Home Execs Charged With Accounting Fraud
Former senior executives of failed American Home Mortgage Investment Corp. have been sued by the government over allegations they lied to investors and misled their auditor.

HVCC Deadline Friday
Services that help lenders comply with the Home Valuation Code of Conduct -- which goes into effect Friday -- are available on an outsourced basis or as a software application. Some services focus on cutting expenses, while others preserve existing relationships with appraisers. In other appraisal activity, a hybrid service utilizes technology and local inspections to provide lower cost valuations.

Lenders Meet to Discuss Reverse Issues
CHICAGO -- While Fannie Mae participation in the reverse mortgage market has been positive, more investors are needed, according to panelists and speakers at a reverse mortgage conference last week. But improving spreads are making the loans more attractive to investors, though further widening is needed. A new purchase product looks promising, but tax and insurance defaults are emerging as a problem.

NRMLA holds conference in Chicago

Countrywide, WaMu & Pulaski Brands Abandoned
Two formerly huge names in residential mortgage lending have been retired as several smaller firms also adopt new brands.

5 Financial Institutions Fail Friday
Including the seizure of three financial institutions already reported on Friday, banking regulators closed down a total of five firms Friday. The Federal Deposit Insurance Corporation expects to lose nearly $700 million from the failures.

Mortgage Fraud Index Doubles
The FraudBlogger Index, a measure of mortgage fraud case activity, has doubled from a year ago.

3 Fail, Big Commercial Lender on the Rocks
Three federally insured financial institutions failed today, and the third largest commercial mortgage servicer is on the verge of failing.

Fundings Double at Fifth Third
Quarterly loan originations were up more than 100 percent at Fifth Third Bancorp.

Reverse Mortgage Newsletter
A fast-growing Florida-based firm is enticing some reverse mortgage recruits with signing bonuses, while a reverse mortgage trade group wants to recognize well qualified originators with a new designation. A reverse mortgage lender in Delaware claims it is the biggest in the state, and two reverse originators are among the nation's best mortgage brokers.

Purchases, Delinquency Higher at Freddie
Monthly secondary purchases have not been this high at Freddie Mac in more than five years -- though the same could be said about residential delinquency. Even multifamily delinquency, which had been immune to increases, was up for the third consecutive month.

Regulatory Insight
The failure of Fannie Mae and Freddie Mac was called the biggest regulatory blunder of all time. Meanwhile, calls for greater mortgage regulation are growing, and a dozen institutions have already faced new regulatory orders this month.

SunTrust Delinquency, Originations Improve
Soaring retail refinances pushed mortgage originations higher at SunTrust Banks Inc., and the second quarter is shaping of to be better than the first. The company also saw an improvement in early delinquency. But losses more than doubled.

ARMs Higher Than Fixed Rates
Although weekly yields on adjustable-rate mortgages fell more than on fixed-rate loans, ARM rates were higher than fixed rates for only the second time in a quarter century. But rising fixed rates could alter those dynamics.

PNC Now Residential Player
PNC Financial Services Group Inc. has gone from zero to player in the world of residential finance.

Flagstar Fundings Up, Losses Down
Earnings and originations improved at Flagstar Bancorp Inc. -- though the company cut back on mortgage salespeople.

PNC Closing Commercial Unit
PNC Financial Services Group Inc. is shutting down a commercial mortgage unit.

Un-S.A.F.E. States
CHICAGO -- Three states that are likely to see more defaults than any others are also the only three states not yet slated to join a national license registry, according to a HUD official.

Warehouse Lenders Cautiously Lending
CHICAGO -- Liquidity is beginning to return to warehouse lending, though many who seek warehouse lines are being turned down because they fail to meet new stricter guidelines, according to warehouse lenders speaking at a secondary marketing conference this week. Priority is being given to applicants who had lines but lost their warehouse lenders.

Strong Originations Drive Wells Hirings
A surge in residential originations at Wells Fargo & Co. was driven by retail activity. An increase in new applications last month suggests business will only get better. Thousands of employees have been hired to handle the rising business.

Freddie CFO Dead in Apparent Suicide
The chief financial officer of Freddie Mac was found dead this morning.

David Kellermann found dead at home
Metros With Highest Foreclosures
Four of the 10 worst metropolitan areas for foreclosures are in California. But the highest foreclosure rate is in a Nevada town.

Loan Modification Times
The number of modification services and the volume of loan modifications continues to increase as the federal government forks out nearly $10 billion for seven servicers to perform modifications. But the rapid growth in the industry is dogged by warnings of shady operators.

Biggest Commercial Originators
The biggest U.S. commercial mortgage lender last year saw volume drop off by nearly half from 2007. The third biggest lender didn't even rank among the top-ten last year, while the previous leader was forced into a merger.

U.S. Bancorp Originations Better, Delinquency Worse
Residential loan production and new loan applications reached a record at U.S. Bancorp. But the story wasn't so good for delinquency.

Firms Sued Over Direct Mail Ads
Two Missouri mortgage brokerages have been sued by the state over allegations of misleading advertising. One of the firms is accused of sending letters that appeared to be from the borrowers' existing lenders, while the other is accused of trying to deceive borrowers into believing that it was related to the U.S. Department of Housing and Urban Development.

Firms' Failures Force Lawsuits
Several failed and struggling mortgage companies are the subject of a rash of recent lawsuits. Accountants and auditors are defendants in two of the cases.

Fannie, Other Firms Make Changes at Top
An 18-year veteran has been tapped to run Fannie Mae as the current chief joins the Obama administration. Executives at one wholesale lender are resigning over litigation tied to the failed company they previously worked for, and two executives who previously worked at financial firms have died.

BoA Hiring as Production Soars
Quarterly residential originations nearly doubled at Bank of America Corp., which said it is hiring thousands of employees to handle the increase in its mortgage business. Quarterly earnings, meanwhile, jumped $6 billion.

2 Failed, 2 Dying
The nation's bankers don't want to get stuck with the insurance tab for nonbanks considered too big to fail. Two companies raised doubt about their ability to continue in business, with one having been given less than three weeks by its bank regulator to find a white knight. But two other financial institutions ran out of time.

AIG Unit Files Lawsuit Over Repurchases
An AIG unit and a Well Fargo & Co. subsidiary are battling in court over $1 million in repurchase demands on home-equity lines-of-credit.

BB&T Business Doubles
Quarterly residential production at Branch Banking and Trust Co. doubled. The latest activity was an all-time record.

ResCap Expanding Warehouse & Jumbo
Residential Capital LLC's warehouse unit has hired a new chief to oversee an expansion of the business. In addition, the lender plans to step up its jumbo offerings. A healthy pace of bank deposit growth will fund much of the expansion.

Dramatic Earnings Swing at Citi
Quarterly earnings at Citigroup Inc. improved by nearly $19 billion. The improvement in originations, however, was less pronounced. Residential holdings declined and delinquency increased.

FHA Supermart
Appraisals on mortgages insured by the Federal Housing Administration now require a new form. In other FHA news, a number of services claim to help FHA lenders reduce loan defaults, maintain compliance with FHA guidelines and digitally deliver FHA packages. One service provider claims it can help save lenders more than $3.8 billion in losses tied to mortgage fraud this year.

Mixed Foreclosure Activity
The bad new is that foreclosure activity is much worse than it was a year ago and new monthly filings are on the rise. The good news: repossessions have recently declined.

Mortgage Originations to Peak in Q3
Mortgage rates fell though 1003s waned. But even as rates are expected to rise, applications should pick up steam based on one projection that has production peaking next quarter.

Chase Earnings Improve, Originations Weak
More than half of JPMorgan Chase & Co.'s residential originations are being aquired through its correspondent channel. Even with its massive acquisition last year, Chase is on track to see its lowest annual production in at least six years. Earnings, meantime, shot up.

Biggest U.S. Mortgage Lenders
Participants in the Troubled Asset Relief Program have seen monthly residential originations double since December, though home-equity lending has fallen. The biggest U.S. lender extended its lead during the latest month.

Free Mortgage Leads
Two businesses are offering mortgage leads for free, while several other companies are touting services that improve conversions and productivity.

Record Foreclosures
Foreclosures filed and completed reached a quarterly record.

Record Originations at Reverse Lender
A Georgia-based reverse mortgage lender saw quarterly volume more than triple -- propelling it to the No. 6 spot among the biggest reverse lenders.

Hiring Surge at ResCap
Headcount is projected to rise as much as 40 percent this year at Residential Capital LLC's servicing unit. Positions in production are also being added.

HVCC, Red Flag Deadlines Loom
Mortgage brokers are up in arms and appraisal management companies are in the spotlight over the upcoming deadline to comply with the Home Valuation Code of Conduct. Another looming deadline that will require mortgage companies to establish mortgage fraud prevention procedures has at least one service provider giving away toolkits for mortgage brokers. Meanwhile, Pennsylvania originators are now required to provide a new dislcosure.

Origination Outlook Improves Again
The latest projection for this year's residential production was a quarter-trillion dollars better than last month's forecast. ARM share, meantime, is expected to double by the end of the year.

M&A Journal
Three acquisitions were recently completed, five new transactions are in the works and one merger fell apart.

Loan Modifications Daily
A Virginia firm is helping delinquent borrowers avoid mortgage fraud prosecution while extorting rate and principal reductions from their lenders. Another company says some borrowers should just walk away from their mortgages. Most loan modification firms, however, are defending their fees as the government advises modification prospects to avoid shady firms and utilize free services.

Ivory Tower Activity
Some of the nation's small financial institutions are making big changes at the top. And in the public sector, the Obama administration is considering tapping Fannie Mae's chief to head the Troubled Asset Relief Program, while one executive was brought in by a federal regulator to oversee huge financial institutions and another exited over his concern with the balance sheets of the U.S. institutions he oversaw.

Alt-A Ratings Pummeled
The latest downgrades on tranches of Alternative-A residential mortgage-backed securities were spread between securitizations closed between 2002 and 2007 -- though the 2004 vintage was hit especially hard at one ratings agency.

Troubled U.S. Banks
More than 50 recent regulatory actions against U.S. financial institutions provide some insight into which banks are struggling.

$2 Billion Bank Belly Up
In an unusual move, the federal government will liquidate the latest failed bank instead of selling off deposits and assets. One-third of the Colorado institution's $2 billion in assets are expected to be written off by the federal bank insurance fund.

Cape Fear Bank Seized
North Carolina's banking regulator has shut down Cape Fear Bank.

Servicers Seek Systems
One important feature of mortgage servicing technology is the ability to manage multiple loan types for multiple investors. Several technology providers are promising to do just that and more for prospective customers.

Future of Servicing Ops at Accredited Uncertain
An uncertain future for Accredited Home Lenders Inc.'s mortgage servicing platform was among the reasons behind a downgrade to the lender's subprime servicer rating.

Inside a Bank Failure
The process of seizing a bank covertly begins for regulators well before the actual closing. A look inside the recent failure of one small bank provides a glimpse into a highly efficient process.

BoA Wholesale Cleaning House
Bank of America Corp., which dropped its mortgage broker operation in 2007 then re-entered the business with last year's acquisition of Countrywide Financial Corp., is cleaning house at the unit.

Quicken Adding Mortgage Bankers
Mortgage bankers in three states are being recruited by Quicken Loans Inc., while employees at an FHA firm can boast that their employer among the best in its area. But some Texas employees aren't happy with IndyMac Federal Bank FSB.

Biggest Retail Reverse Lenders
Retail reverse mortgage production reached a record last month and is projected to continue increasing. The biggest retail reverse lender was also last year's biggest residential lender.

FHA Apps Jump
Rates rose and refinance share waned, but home purchases and government business helped fuel an increase in loan applications.

Business Doubles at Wells
Quarterly mortgage originations doubled at Wells Fargo & Co., while quarterly earnings were the highest ever. The company expects exceptional mortgage banking results to continue.

Investor Class Action Journal
Employees and investors of Citigroup Inc. are suing the company over claims the company lied about its financial condition. Investors of two failed institutions are hoping to mitigate their losses in separate class actions, while two big issuers of mortgage-backed securities are fighting two new class actions.

Loan Pricing Players
Mortgage brokers and wholesale lenders alike are being courted by loan pricing services. Two loan program search engines have added lender guidelines to their offerings, while another service incorporated recent changes to the Real Estate Settlement Procedures Act.

Record Ginnie Issuance
Issuance of mortgage-backed securities guaranteed by the Government National Mortgage Association was the highest ever last month.

Best Mortgage Brokers
A consumer market research firm has released a list of 10 leading mortgage brokers in America. The report indicated that the number of U.S. mortgage brokers has declined by more than half during the past two years.

Flurry of Foreclosure Rescue Litigation
Delinquent borrowers across the country are being rescued from foreclosure rescue companies. Among the most recent federal and state efforts, legal action was taken against firms in Florida, Missouri and Virginia.

The Secondary Scoop
The secondary market for mortgages is unthawing -- with agency activity increasing, buyers' appetite for non-performing loans growing and marketplace technology improving.

Dark Side of Modification Business
As a national crackdown was launched on loan modification companies, several federal and state lawsuits were filed. Meanwhile, faced with bad press over predatory practices, modification companies have resorted to name calling.

40,000 Mortgage Jobs Open
Mortgage lenders are currently looking to fill nearly 40,000 U.S. mortgage jobs.

Over 2,500 Subprime Downgrades
Moody's Investors Service reached as far back as the 2001 vintage in the downgrading of more than 2,500 tranches from subprime residential mortgage-backed securities.

MTA Lower Again
It's been nearly five years since the monthly Treasury average has been this low.

Fed Finds Minorities Saw Better Subprime Terms
A staff report from the Federal Reserve indicated that minorities often received lower mortgage rates than whites. The study suggested that the net impact from subprime lending in areas with high concentrations of minorities and high unemployment was positive.

Record Pace of Mortgage Failures
The mortgage sector is on pace to see a record number of failures this year as regulators seize banks at an accelerating rate, according to data tracked at the Mortgage Graveyard -- a journal of failed, ailing and acquired lenders. A lack of government loans programs and lost warehouse financing played a role in some of the closings.

M.I. Firm Ordered to Pay Claims
Concerned over a mortgage insurer's ability to keep paying claims, insurance regulators in Illinois are forcing the firm to make cash payments now and deferred payments later.

Chase Closing Construction Unit, Adding Servicing Jobs
As JPMorgan Chase & Co. recruits hundreds of servicing employees, it is cutting jobs and ending operations at its construction unit.

Over 100 Laid Off at Thornburg
More than 100 employees were laid off as Thornburg Mortgage Inc. winds down operations.

Fannie Refis Skyrocket
After nearly tripling in February, refinances nearly doubled in March at Fannie Mae.

Bankruptcy Filings Leap
Bankruptcy filings by individuals jumped by nearly one-quarter in just one month.

REOs Plummet as Prime Delinquency Surges
A quarterly analysis of mortgages serviced by the largest U.S. banks indicated that as U.S. repossessions have tumbled, delinquency on prime mortgages has surged.

Mortgage Jobs Hold Up
As U.S. jobs continued to tumble, mortgage employment held steady.

HUD Chief Lays Out FHA Strategy
Loans insured by the Federal Housing Administration account for ten times more market share today than they did just three years ago -- and hundreds of hirings are planned to keep pace with the growth. As the secretary of the Department of Housing and Urban Development prepared lawmakers for increased spending at the agency, he said FHA will bolster its mortgage fraud resources. But he offered no hope for proponents of seller-paid down payment assistance.

Donovan testifies before Senate committee

Wells Launching Warehouse Unit
Wells Fargo & Co. is launching a warehouse lending unit.

Record HELOC, HEL Delinquency
Banks reported record delinquency on home-equity products.

Record Rates Recur
Conditions continued to improve for mortgage origination firms.

Compliance Made Easy
Two U.S. representatives have introduced separate bills that would subject lenders to community lending requirements and high-cost loan restrictions. Meanwhile, mortgage companies hoping to maintain compliance with government-insured lending guidelines, loan workout requirements and other laws already on the books can find help from several new offerings.

Brokers Drop HVCC Lawsuit
As service providers rush to help mortgage lenders comply with the requirements of a new appraisal code that goes into effect next month, mortgage brokers have dropped a lawsuit against the regulator of Fannie Mae and Freddie Mac.

Reverse Servicer's Rating Lowered
The servicing operation at Financial Freedom Senior Funding Corp. has yet to establish its performance capabilities, prompting one ratings agency to downgrade its servicer rating.

Thornburg to Liquidate
Thornburg Mortgage Inc. said today that it planned to file for bankruptcy and liquidate its assets.

Bank Seizes $0.5 Billion in Loans
The seizure of nearly $0.5 billion in mortgages has resulted in a tidy gain for one institution and a servicing opportunity for another.

Investors Sink $300 Million in Struggling Warehouse Lender
Taylor, Bean & Whitaker is leading a $300 million investment in a struggling financial institution that operates a warehouse lending business.

GSE Issuance Doubles in March
Issuance of mortgage-backed securities by Fannie Mae and Freddie Mac reached the highest level in at least four years.

COFI Sinks
It's been four-and-one-half years since the Cost of Funds Index has been this low. The index is out of step with other indices used on adjustable-rate loans.

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