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July 2007 Archive


COFI Better
Interest expenses for West Coast banks dropped -- bringing lower a popular index for adjustable-rate mortgages.

Some Alt-A Similar to Subprime
The performance of the lowest grade of Alt-A loans made last year closely resembles the performance of 2006 vintage subprime loans, according to new ratings agency report. As a result, Alt-A loss assumptions have been elevated.

Nonprime Defaults Continue Ascent
Defaults on securitized subprime and Alt-A mortgages continued to worsen and are at the highest level in almost a decade. But prime mortgage defaults improved.

American Home Pondering Liquidation
American Home Mortgage Investment Corp. has stopped funding loans and is on the brink of collapse.

ResCap Volume, Losses Down
Residential loan production fell at Residential Capital LLC.

C-BASS Facing Liquidity Crisis
A rapid deterioration this month in the credit markets have investors in Credit-Based Asset Servicing and Securitization LLC warning that they could lose more than $1 billion invested in the company. The cash crisis has emerged just as the company completed the acquisition of another ailing subprime company.

Big Deal Finds Financing
A $200 million commercial mortgage will enable a building in the heart of New York's Soho district to provide more than 200,000 square feet in space to prospective office and retail tenants. A host of multifamily deals also found financing.

Recent commercial mortgage transactions
Foreclosure Science
Semi-annual foreclosure data indicate foreclosures have risen nationwide, led by three Western states. One Eastern state, with a $100 million grant from Fannie Mae, has come up with a plan to help adjustable-rate borrowers.

Fannie Business Perks up
Secondary market purchases rose at Fannie Mae.

Hard Money Lender Acquires Subprime Operation
While mortgage-related casualties showed no sign of abating in the latest week of mergers and corporate activity, a hard money lender expanded with its acquisition of a subprime lender.

Liquidity Crisis, Layoffs at American Home
American Home Mortgage Investment Corp., which let go of hundreds more employees, disclosed it has been hit with margin calls and will suspend dividend payments.

Avoid Excuse Makers
One of the keys to making it in sales is a focus on a successful outcome, according to a new book reviewed by MortgageDaily.com. This includes avoiding non achieving excuse makers like the plague.

$1.5 Mil Judgment Over Unfunded Loan
A jury has ordered Ameriquest Mortgage Co. to pay more than $1.5 million to an Arizona couple who lost their home to foreclosure by another lender because, they claim, Ameriquest didn't fund a loan that was already closed. But the borrower forgot to disclose outstanding judgments and unpaid child support on his application -- which were subsequently uncovered.

Foreclosure Solutions Proliferate
As foreclosures continue to plague communities, more legislation and funds have arrived or are on their way to help mitigate the fallout.

Regulator Reveals Ongoing Investigations
Two federal banking regulators testified before members of Congress about mortgage discrimination and what they are doing about. One agency disclosed it is currently investigating several lenders.

Study Warns of Negative Mortgage Cycle
Mortgage delinquency will peak next summer, according to a new study that also projects foreclosures on variable-rate subprime loans made late last year won't peak for at least four years -- when one-in-five of these loans are expected to be in foreclosure. The report warned of a negative mortgage cycle that could spin out of control.

Treasuries Rally on Stock Selloff
Heavy selling on Wall Street, boosted by the worsening performance of mortgage loans and mortgage companies, has improved the outlook for mortgage rates. Despite the oncoming decline, originators completed fewer 1003 loan applications.

Wells Exits Subprime Wholesale
Wells Fargo Home Mortgage will no longer accept subprime business from mortgage brokers.

National City Numbers Jump
National City Corp. saw second quarter business jump.

First NLC Sold
Friedman, Billings, Ramsey Group Inc. is getting out of mortgage originations.

FirstPlus Is Back
A new team of managers has joined FirstPlus Financial Group Inc. -- which has begun an acquisition campaign.

No More Paper
Mortgage lending, traditionally known for the pounds of paperwork generated with each transaction, is eliminating pulp from the point of prospecting through the servicing cycle. Among the latest processes to go paperless are underwriting, signature verification and guideline updating.

Customer Retention Services
Staying in the minds of customers is essential in generating repeat business, according to two companies that manage the process for salespeople.

Subprime 2nd Performance Sinks
Faced with declining performance on junior subprime liens, Standard & Poor's has updated its surveillance assumptions for residential mortgage-backed securities backed by closed-end second liens after finding purchase money loans, higher combined loan-to-values and lower credit score borrowers highly correlate with poor performance.

Brokers May Lose Licenses
Poor business management and outright fraud have regulators in Arizona and California trying to revoke the licenses of mortgage brokers operating in their states.

Alt-A Wholesaler Exits
An Alt-A wholesaler has left the mortgage market.

Subprime Performance Analyzed
A new ratings agency report drilled down to identify subprime issuers with the worst performing transactions. The report, which cited new attributes that will now be analyzed, also discussed the differences in performance by lien position.

Brokers Migrate Back to Prime
Mortgage brokers are doing less subprime business in favor of traditional loans, according to a new survey. The trend highlights the increased level of difficulty subprime borrowers face in finding home financing.

CA Foreclosures Jump
Driven by flat or falling property values, California foreclosures rose to the highest level in more than a decade.

Countrywide Subprime Performance Worsens
Nearly one-in-four subprime mortgage loans at Countrywide Financial Corp. was delinquent last month.

Investor Attempting to Obstruct Accredited Acquisition
A lawsuit has been filed against Accredited Home Lenders in an effort to block the company's sale to an affiliate of Lone Star Fund. The plaintiff alleges the share price undervalues the true value of the subprime lender.

N.Y. Deals Get Done
Commercial mortgages were recently secured for three New York properties and an Illinois multifamily.

Recent commercial mortgage activity
e-Activity Advances
The latest mortgage technology advancements included fraud prevention tools for originators and fraud detection tools for wholesalers. Among other innovations were two digitally closed loans which were sold to Fannie Mae.

Mortgage Lobbying Big Business
Access in Washington cost money -- and the mortgage industry is a big spender.

Foreclosure Prevention Alliances Grow
Politicians, political organizations and private companies are teaming up to help borrowers who will potentially face foreclosure.

Freddie's Secondary Purchases Increase
Quarterly business strengthened at Freddie Mac.

Lenders Defend Subprime Practices
Allegations made in lawsuits recently filed against some of the country's largest mortgage companies are just plain wrong -- according to the defendants. The lenders, who say their subprime programs have helped minorities get into homes, are accused of discriminating against African-American borrowers by subjecting them to loans with high interest rates and fees.

Banks, Lenders Do Deals
The banking sector saw several executive appointments in the latest week of corporate activity. And one of a number of pending mergers was kept alive -- though a hiccup in the deal could send a major subprime lender crashing.

FHA LIBOR Coming
The London Interbank Offered Rate will soon be an eligible index for adjustable-rate and reverse mortgages insured by the Federal Housing Administration. While the move is a step toward modernizing the FHA program, mortgage brokers and bankers say further action is necessary to boost the program's effectiveness.

Jumbo Delinquency Rises
Delinquency on jumbo loans rose for the third consecutive quarter. But two ratings agencies say there is no need to worry.

NovaStar Outlook Grim
A recent capital infusion at NovaStar Financial Inc. will not be enough for the company's survival, according to analysts.

Abandoned Commitments Litigated
Under pressure from borrowers, shareholders and regulators, a Florida bank has filed a federal lawsuit against a company that allegedly reneged on a deal to purchase $20 million in mortgage loans.

Wachovia Up
Wachovia Corp. pushed residential lending volume higher.

IndyMac Lays Off Hundreds
Hundreds of employees were laid off at IndyMac Bancorp this week. The move was the result of falling production and an attempt to lower the cost per loan.

Citi Sees Strong 2nd Quarter
Citigroup Inc. posted higher second quarter mortgage originations.

Capital One Production Falls
While the second quarter saw higher originations at most major mortgage bankers, fundings fell at Capital One Financial Corp.

First Horizon Up
Quarterly residential fundings climbed at First Horizon National Corp. -- though the company plans to eliminate or sell more than 30 of its full-service banking branches.

Downgrades Don't Diminish
Standard & Poor's downgraded hundreds of second-lien residential mortgage-backed securities as well as numerous collateralized debt obligation deals with subprime exposure.

Mortgage Market Hesitates
A lull in mortgage rates and applications followed expectations of contained inflation.

SunTrust Sees Solid Second Quarter
SunTrust Banks Inc. saw solid gains in residential loan production.

Better Business at BoA
Bank of America Corp. boosted business by launching a successful no-cost mortgage.

WaMu Improves Residential Results
Washington Mutual Inc. saw higher quarterly volume and lower quarterly losses for its residential operations.

Banks Dominate Mergers
Amid a sea of recent merger agreements and closed deals dominated by banks, a transaction that would combine thrift and banking regulators is being challenged.

Best HEL Lenders
Wachovia Bank is the top ranked home equity lender, according to a study released today which also indicated overall satisfaction has increased considerably across the industry.

Digital Innovations
The latest digital advancements included innovations in secondary marketing, commercial mortgages and pricing technology.

CIT Dumping Mortgage Ops
Following a charge of more than three-quarters of a billion dollars, CIT Group Inc. is getting out of residential mortgage lending.

Downey Dips
Downey Financial Corp. reported another drop in quarterly mortgage production. Meanwhile, delinquency has increased more than five-fold from a year earlier.

Business Boosted at JPMorgan
Quarterly mortgage fundings leapt at Chase Home Finance and its sister businesses.

Alt-A Tremors
A ratings agency warning was issued late yesterday on Alt-A transactions issued in 2005 and 2006. But the news was better for a host of pre-2006 jumbo transactions.

Multifamily Mortgage Mania
Multifamily deals dominated a fairly busy week in commercial mortgage lending.

States Step up Subprime Supervision
State regulators have adopted federal subprime guidance and will use it to weed out bad lenders that are not federally regulated. The move paves the way for examinations and coordinated oversight between federal and state regulators.

U.S. Bank Volume Soars
Quarterly residential mortgage production soared at U.S. Bank Home Mortgage.

Wells Boosts Production
Subprime originations sank and prime production surged during the latest quarter at Wells Fargo & Co. -- which reported another record servicing portfolio.

$1 Billion Fraud
Mortgage lenders and 800 investors may have been defrauded by two individuals who took in nearly $1 billion in what may wind up as the biggest fraud case in California history. The pair, who promised to invest the funds in real estate, allegedly used the money to pay for personal activities and fund offshore accounts.

Wholesaler Bankrupt, Closing
Alliance Bancorp has filed bankruptcy and closed its doors.

NovaStar Lands $150 Million Investment
Two investors have agreed to pay $150 million for a piece of NovaStar Financial Inc.

AZ Company Calling it Quits
An Arizona-based mortgage banker will soon cease operations.

AHM Lays Off Hundreds
With earnings expected to be stung by loan repurchases, American Home Mortgage Investment Corp. recently laid off hundreds of employees for more efficient operations.

Low Credibility for Mortgage Ads
The majority of Americans don't trust mortgage advertisements, according to a new survey.

Countrywide Fundings Surge
Quarterly residential production surged at Countrywide Financial Corp., though nonprime numbers dropped. Delinquency was up for the third consecutive month.

Bank Accused of Flipping Scam
A Florida bank, which has already been sued by shareholders and ordered by regulators to abandon an unsafe construction loan program, is now facing a lawsuit from 175 borrowers who claim the bank was operating a flipping scam. Denying that it engaged in fraud, a bank spokesman said the borrowers will be expected to repay the loans.

Subprime Debacle Still Claiming Victims
Subprime market conditions have prompted the liquidation of one hedge fund and big redemptions at another. And as one subprime lender filed for bankruptcy protection, another may have found a white knight.

Mortgage Licenses Diminish
Nearly 90 Minnesota mortgage brokers have given up their licenses so far this year, and if New Hampshire's banking commissioner gets his way -- that state will see a drop in the number of mortgage originators.

WMC On the Block
Subprime losses at WMC Mortgage Corp. have prompted its parent to put the unit up for sale. But, despite WMC's woes, earnings at its parent company reached a record.

Fitch Joins Downgrade Party
Just days following similar moves by the other two ratings agencies, Fitch Ratings warned investors it may lower the ratings of 170 subprime residential mortgage-backed securities. Meanwhile, another agency acted on its warnings.

Favorable Foreclosure Figures
As monthly foreclosures fell, Nevada still had the worst foreclosure rate of any state while California still had the highest number of filings and six of the metropolitan areas with the highest rate. Individual states are still actively pursuing foreclosure prevention programs -- with Massachusetts halting for three months all of one lender's pending foreclosures.

Subprime Share by Lender
HSBC Finance topped a ranking of subprime mortgage lenders by market share, according to a new report. But two of the top 10 companies are now out of the business.

Northeast Worst for Borrowers
Long-term mortgage rates as well as loan closing costs are highest in the Northeast, according to data released today. But, as mortgage rates soared in response to positive economic data, borrowers in all regions saw higher fixed rates during the last week.

OCC Lawyer on Supreme Court Ruling
A recent decision by the U.S. Supreme Court clarified the roles and responsibilities of federal and state regulators -- who are now working together to identify bad players.

New HUD Unit to Step Up Enforcement
A new division at the U.S. Department of Housing and Urban Development will step up investigations of mortgage lending discrimination.

System Curbs Use of Piggyback Credit
One of the three major credit bureaus has found a way to help lenders sniff out piggyback credit abusers.

Technology Alliances Jump
The latest mortgage technology innovations included alliances and partnerships that boosted the value of existing offerings. Web site enhancements dominated digital advancements.

Lying Lawyers
The lure of easy money was enough to convince three attorneys in two states to break the law and avoid financial obligations to their real estate and mortgage clients.

Commercial Mortgages Top $3 Trillion
Quarterly originations in the commercial mortgage sector were off, according to an 84-page trade group report. But activity, including growth in issuance and debt outstanding, was still strong overall. Commercial banks continued to hold the most mortgages, while government-sponsored and government-owned organizations continued to hold the most debt.

Lawsuits Tackle Fraud 203(k) Loans
M&T Mortgage Corp. is involved in litigation over its alleged participation in a scheme that defrauded the U.S. Department of Housing and Urban Development out of millions of dollars. But in court documents, M&T says it was a victim -- and not a perpetrator.

Wholesale Programs Launched
A new commercial program enables mortgage brokers to fund multifamily properties up to $5 million, while a nonprime wholesaler claims its new pricing technology will help save brokers time and money. And a net branch operation says its brokers have reduced their reliance on wholesalers by funding through an in-house warehouse line.

Net Branch Collapses
The abrupt closing of a Michigan company, which had mortgage branches from Alaska to Florida, has one former manager wondering what happened to branch reserves he deposited three years ago.

Avalanche of Downgrades
Residential mortgage-backed securities backed by second mortgages have been swept up in an avalanche of negative subprime ratings actions today. The majority of the actions occurred on transactions originated by just four companies.

Fundings Forecast to Fall 9%
Freddie Mac has lowered its projection for residential mortgage production this year -- leaving anticipated originations 9 percent below last years' subprime-inflated numbers.

Servicer Hiring
A Texas-based loan servicer will boost its Georgia staff.

Flood of Subprime RMBS Downgrades
More than $12 billion subprime residential mortgage-backed securities may see their ratings cut by Standard & Poor's -- which is revising its methodology.

Foreclosure Derivatives
A Corona, Calif-based company has come up with a solution to rising foreclosures. Under its concept, delinquent and struggling borrowers would get financial help from investors who receive, in return, all or a portion of any property appreciation.

Commercial Loan Activity
Several East Coast office properties found financing, though Texas boasted two pairs of multifamily and industrial mortgage transactions.

Office, multifamily and industrial deals arranged
The Foreclosure Wire
In an attempt to minimize future foreclosures, three states have warned adjustable-rate borrowers about preparing for upcoming payment adjustments.

Licenses Legislated, Lost
An Oregon trade group defeated a bill that would have increased mortgage regulation in the state. But bills in other states passed, including one restricting trigger leads, one requiring mortgage brokers to have at least three years' experience and another criminalizing mortgage fraud.

Former Aegis Chief Sues Cerberus
A hedge fund with a growing position in nonprime mortgage lending has been sued by the former chief of one of its mortgage subsidiaries.

Foreclosures Fall
Monthly foreclosure filings tumbled -- though a big chunk of them were in the Southwest.

Net Branch files Bankruptcy
Frivolous lawsuits have driven a company that claims to be the largest U.S. branch operation into bankruptcy.

Alt-A Wholesaler Defunct
MortgageDaily.com has confirmed the collapse of a California mortgage wholesaler and retailer best known for its Alt A products.

Riding Tech Wave
A bankruptcy auction yielded the acquisition of loan origination technology at a fire sale price for one wholesale lender. A major closing services firm acquired a mortgage analytics company. And an Internet company is unloading more than 30 domain names -- hoping to capitalize on state-specific mortgage names it owns.

Mortgage Insurers Healthy
The mortgage insurance industry is prepared to weather the current subprime storm, according to a report from one of the three major ratings agencies.

Mortgage Brokers Decline
A decline in the number of mortgage brokers pushed down overall mortgage employment.

Mortgage Sector Still Reorganizing
The mortgage industry shakeout continued this week, with one company completing the sale of its mortgage operations, another receiving regulatory approval to acquire a struggling subprime lender and yet another announcing a formal government investigation.

Portfolio Trades at 60% Discount
A portfolio of nonperforming mortgages has traded hands for 40 cents on the dollar.

Commercial Mortgage Universe
Commercial mortgage activity was topped by a financing package in excess of $400 million that will allow development of a luxury hotel and residential property.

Option One Warehouse Line Cut
Option One Mortgage Corp. lost a $2 billion warehouse line.

Rates May Rise
While fixed mortgage rates fell during the latest week, they may be headed higher. Meanwhile, purchase activity heated up as refinances waned.

Visualize Successful Outcome
Selling is simple when the sales process is centered on the client, according to a sales and marketing book reviewed by MortgageDaily.com.

Borrowers Abandoned FHA for Subprime
Outdated products, inadequate technology and an inefficient process have helped push down the share of purchase mortgages insured by the Federal Housing Administration over the past decade, according to a new government report. During that same period, borrowers flocked to subprime programs -- increasing their use of adjustable-rates, interest-only programs and mortgage brokers. But recent events my lead borrowers back to FHA programs.

What's Hot and What's Not
The share of fixed-rate mortgages, the volume of reverse mortgages and the share of interest-only loans has risen, according to a new trade group analysis. Meanwhile, second mortgage originations and the share of variable-rate loans has declined.

Bank Delinquency Rises
Late payments rose on home equity loans, mobile home loans and home equity lines-of-credit during the most recent quarter, according to a banking trade group. But, compared to a year earlier, mobile home delinquency improved.

Fitch: Investors Didn't Listen
Insufficient understanding of the ratings of subprime securities have been a problem for the rating agencies and the investment community, according to a managing director at one of the agencies who noted, "The whole subprime thing is going to get a lot more messy." The comments contrast recent claims that suggest ratings provide little value for investors.

Wells Closing Wholesale Offices
Consolidation is spreading from nonprime business to prime lending operations at Wells Fargo Home Mortgage.

Ratings Quality Questioned
A recent study slammed the three major credit ratings agencies, noting their evaluation of risk in residential mortgage-backed securities and collateralized debt obligations has been skewed because of conflicts of interest and the misapplication of inappropriate bond rating methods. Among the criticisms outlined in the report was the primary reliance on issuers for data, the low frequency with which tranches are re-rated and inadequate prepayment modeling.

Yields on MTA, 10-Year Slide
The Monthly Treasury Average continued heading downhill, while the 10-year Treasury yield fell below five percent.

Subprime Layoffs Continue at WaMu
More mortgage layoffs were disclosed by Washington Mutual Inc. -- which is consolidating its subprime processing operations as a result sinking volume.

Public Filing Contained Private Data
Credit Suisse First Boston Mortgage Securities Corp. has paid $500,000 in penalties for disclosing the personal information of more than 1,000 borrowers in a public filing.

Fed: Subprime Problems Contained
A recent report from the Federal Reserve indicates that subprime mortgage problems are limited to less than 8 percent of the total mortgage market -- reducing the likelihood that problems will spill over into the rest of the mortgage market.

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