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July 2010 Archive


7 Institutions Seized
Five banks with nearly $2 billion in assets failed Friday at an estimated cost of more than $300 million to the nation's fund for deposit insurance. Four of the failed banks previously faced cease-and-desist orders. In addition, two credit unions were seized by regulators last week.

Agency Issuance Increases 4th Consecutive Month
Agency issuance of mortgage-backed securities rose for the fourth month in a row. The Government National Mortgage Association was responsible for the lion's share of the latest improvement, while activity at the Federal Home Loan Mortgage Corp. declined.

COFI Edges Up
An increase in the Cost of Funds Index amounted to less than 1 basis point. But two other indices used on adjustable-rate products saw small declines during the same period.

U.S. Rep Takes on HUD
A U.S. congressman is taking steps to force U.S. Department of Housing and Urban Development Secretary Shaun Donovan to spend more time on U.S. housing problems and less time on international affairs. The California Democrat, whose district includes some of the worst housing markets in the country, considers the Obama administration's foreclosure prevention strategy a failure.

FHA Mortgagee Faces $3 Million Action
A Texas firm that specializes in financing for manufactured housing allegedly caused more than $1 million in losses on government -insured loans because of poor underwriting and loan processing. The company faces a potential civil enforcement action for more than $3 million.

New Century Execs Settle Accounting Fraud Allegations
Allegations of false and misleading financial statements have been settled by three of New Century Financial Corp.'s former senior executives. One of the defendants allegedly hid a flood of pending repurchases.

MetLife Raises Quarterly Originations
Reverse mortgage production picked up from the first quarter at MetLife Home Loans, as did the volume of traditional mortgage fundings. But overall business tumbled by more than half from a year ago.

Serious Late Payments Deteriorate
Serious delinquency took a turn for the worse last month, while the number of outstanding U.S. mortgages has declined by nearly a million over the past 13 months. When it comes to the foreclosure rate, no state can touch Florida.

Mixed Performance at M.I. Firms
For the fifth month in a row mortgage insurers issued a higher number of policies. But insurance in force continued to diminish -- falling below $800 billion -- and defaults rose 9 percent.

Fannie Volume Tumbles, Lates Continue Improvement
Secondary purchases at the Federal National Mortgage Association tumbled nearly a third last month and were down even more compared to a year ago. The secondary lender's massive book of business fell more than $31 billion. But residential delinquency improved for the third month in a row, while the multifamily rate was better for the second consecutive month.

Rates Better, But Not New Activity
Rates reached record lows but failed to push new mortgage activity higher this week. One indicator suggests rates will be higher in the next set of reports.

Business Deteriorates at LendingTree
Falling mortgage rates weren't enough to help LendingTree Loans match its "unprecedented" refinance production last year, while improving rates actually hurt the mortgage leads business.

Fifth Third Touts Refinance Ops
Fifth Third Bank today reported residential refinance originations from its mortgage unit and touted the operation's standing among its peers. Activity is likely to improve even further given new record-low interest rates.

WA Implements Licensing Requirements
Washington State has implemented new licensing requirements for loan originators and granted more than 2,000 licenses over the past few months under the new standards.

BNY Wins NM Case; Borrowers Appeal
A New Mexico couple is appealing a judgment in favor of Bank of New York. The lower court judge disagreed with the couple's claim that their original lender tricked them with deceptive marketing. The case challenges federal pre-emption for banks.

FBI Investigating Secondary Transactions
The Federal Bureau of Investigation is looking into whether former executives of a failed Wisconsin-based lender moved bad subprime mortgages off the books of a company they owned and onto the books of their employer. Losses from the failed firm are estimated at as much as $10 million, and its receiver is planning legal action tied to money that might have been illegally taken.

2nd Weekly Decline for Mortgage Activity
New loan activity declined for the second consecutive week based on the Mortech-MortgageDaily.com Mortgage Market Index. The lower activity was accompanied by a falling share of refinances. Fixed rates were mostly unmoved, though the jumbo spread improved.

Mortech-MortgageDaily.com Mortgage Market Index for the Week Ended July 28, 2010

NY Court Rules Against Lender in Foreclosure
Failure to prove mortgage note ownership at the time of filing in New York left the lender unable to complete a judicial foreclosure.

Closer Look at Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This 16-page summary looks at various provisions of the new law that will affect how the residential mortgage industry operates for the foreseeable future.

Financial Regulatory Reform Update
On July 21 President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The House of Representatives and the Senate had approved the Conference Report of this legislation on June 30 and July 15, respectively. This 20-page report summarizes the new law.

Commercial Originations Show Signs of Strength
Driven by big quarterly gains in hotel loan production and mortgages funded by conduits, the origination of commercial real estate loans jumped more than a third. While the year-over-year gain was much more moderate, industrial property lending nearly tripled from a year ago.

Flagstar Performance Better, Warehouse Assets Up
Quarterly loan originations at Flagstar Bancorp Inc. jumped 28 percent and delinquency improved 220 basis points, though both metrics are worse when compared to the same time last year. Warehouse lending assets, however, have grown on a linked and year-over-year basis.

GSEs Then, Now and Tomorrow
WASHINGTON -- Advocates of privatizing Fannie Mae and Freddie Mac can count on one thing; the two government-controlled enterprises will not continue in their current form. Here's a glimpse at how it all got started in 1938, how they operate and what happened along the way.

Hawaii Mulls Change to Non-Judicial Foreclosures
Studies, authors and experts indicate a law in Hawaii that is more than a century old needs to be changed -- and a broad group of interested parties is meeting to discuss it. At issue are foreclosures outside of the court system.

Administration to Hold Conference on GSE's Future
Events announced by the Barack Obama administration will include addressing the future of Fannie Mae and Freddie Mac. The activities will likely influence the rulemaking process for the new consumer financial regulator.

Uptick in Fannie's Multifamily Commitments
Nearly $6 billion in apartment lending activity has been generated this year at the Federal National Mortgage Association. An executive for the company noted that multifamily loan commitments recently strengthened.

Over $50 Billion in Subprime Downgrades
The past two weeks have seen downgrades on more than a thousand tranches for more than $50 billion. The lowered ratings impacted over 200 subprime transactions.

Servicer Rating Cut at MetLife
Poor servicing performance compared to its peers prompted a downgrade to MetLife Home Loan's servicer rating.

Brisk Pace of MBS Litigation
Business is bristling for attorneys who handle mortgage-backed securities cases. Parties to the latest round of litigation include defunct mortgage bankers and some venerable investment bankers.

New Credit Chief at Freddie's Multifamily Unit
An executive at the Federal Home Loan Mortgage Corp. has been promoted to head underwriting and credit at the company's apartment lending operation.

$700k Citi Settlement Among Hundreds of HUD Actions
More that a thousand actions reported against Federal Housing Administration mortgagees included the loss of FHA approval by more than 900 approved lenders. One of the actions was a $700,000 settlement with Citigroup Inc.'s mortgage unit. Several other actions were tied to the improper use of government logos on the mortgagees' Web sites.

2010 Bank Failures Jump Past 100
Friday was a deadly day for the U.S. banking sector as regulators in seven states seized seven financial institutions and pushed this year's tally above the century mark. More than $400 million in losses are expected from the failure of the banks, which collectively held more than $2 billion in assets.

Mortgage Fraud Helps Topple MN Bank
Mortgage fraud by a builder of upscale homes helped bring down a Minnesota bank on Friday.

$1 Billion Bank in GA Fails
This week's failure of a $1 billion bank brought to 10 the number of banks that have failed this year in Georgia.

FHFA's PACE Position Criticized by County
One county in New Mexico sees no good reason for the Federal Housing Finance Agency's stand on the Property Assessed Clean Energy program, and a lawmaker in the state is calling the FHFA's decision "bone-headed." But homeowners who were planning to retrofit their homes with renewable-energy systems using loans from a ready-to-launch county program will just have to wait.

Freddie's Secondary Purchases, Delinquency Improve
Freddie Mac saw its month-over-month secondary purchases and delinquency improve, though year-over-year performance deteriorated. The secondary lender's massive portfolio declined nearly $2 billion.

PNC Performance Mostly Improved
Residential delinquency at The PNC Financial Services Group Inc. has improved substantially, though the same cannot be said for home-equity delinquency. Quarterly earnings improved, and home-loan fundings moved higher on a quarterly basis but deteriorated substantially from a year ago. The bank plans a big sale of distressed assets.

Investors Pressure RMBS Trustees to Increase Repurchase Demands
A Dallas-based law firm that claims to represent investors on more than $500 billion in residential mortgage-backed securities is pressuring trustees to step up repurchase demands. In a letter to the trustees, the firm claims that a conflict of interest exists for servicers whose firms also originated the loans.

$200k Settlement Requires Changes to Lender's Funding Process
Under a proposed settlement with Nevada regulators, a hard-money lender operating in the state will overhaul its funding procedures, improve its investor reporting and fork over $200,000.

Mixed Results at Fifth Third
Fifth Third Bancorp swung to a quarterly profit as originations increased on a quarterly basis. But mortgage banking revenue fell as agency repurchases of securitized loans put a dent in income.

Record Rates Fail to Lift Activity
Fixed rates again reached a new low, though that wasn't enough to prompt more borrowers to take action.

SunTrust Performance Improves
SunTrust Banks Inc. saw originations rise, delinquency decline and earnings improve. Repurchases, however, are a growing problem.

Great Month for FHA
Government-insured originations improved last month, though volume is likely to turn lower this month. Reverse mortgage activity improved for the first time in six months, and overall delinquency continued lower.

Quarterly Performance Improves at BB&T
Mortgage production moved higher and earnings improved from the first quarter at Branch Banking and Trust Co. -- though performance was not as impressive when compared to last year. The company's chief said the secondary market for problem assets improved.

Hard Money Lender Agrees to Settlement
A struggling hard-money lender with $400 million in managed assets, around 100 employees and as many as 4,000 investors has tentatively agreed to a settlement with Nevada regulators.

Rates Fall, Activity Eases
Falling mortgages rates weren't enough to push the Mortech-MortgageDaily.com Mortgage Market Index, higher. Meanwhile, the jumbo-conventional spread declined.

Mortech-MortgageDaily.com Mortgage Market Index for the Week Ended July 21, 2010

SAFE Issues Addressed
State delays in implementing the Secure And Fair Enforcement for Mortgage Licensing Act as well as who is covered by the act have been addressed by the U.S. Department of Housing and Urban Development.

More Guidance on RESPA Rule
A new publication from the U.S. Department of Housing and Urban Development promises to regularly address the most pressing issues related to the Real Estate Settlement Procedures Act rule.

Obama Signs Financial Reform Bill
Legislation that has been called the most sweeping reform of financial regulation since the Great Depression has been signed into law by President Barack Obama.

Video of president signing Dodd-Frank Wall Street Reform and Consumer Protection Act

2 Years of Falling Fundings Forecasted
While U.S. home-loan production is expected to tumble by more than a quarter this year, next year's outlook is even more grim. Apparent delays in quarterly closings ended up causing some business to be shifted to a subsequent period.

Production, Pipeline and People Increase at Wells
Home-loan volume, applications in the pipeline and the number of employees all increased at Wells Fargo & Co. Also higher were the residential servicing portfolio and commercial mortgage fundings.

FL Firm Adding Nearly 100 Employees
A Florida mortgage company is adding nearly a dozen retail branches and nearly 100 employees -- half of who are being hired as loan originators.

VIP Program Extended to GSE Employees
REPORTING FROM WASHINGTON AND ORANGE COUNTY, Calif. -- As Countrywide Financial Corp. sought to improve the terms of its loan sales to the Federal National Mortgage Corp., it gave some employees and executives of the firm below-market interest rates on their mortgages, according to a report from Congress. Employees of the Federal Home Loan Mortgage Corp. were also given preferential pricing treatment.

Updates to State Licensing Requirements
Several states have recently updated their licensing requirements in line with the Nationwide Mortgage Licensing System. Some states are also requiring that servicers obtain licensing.

Unlicensed Originations Lead to Actions Against 3 Firms
Three firms recently faced actions by two states over unlicensed origination activity -- with one of the companies being required to fork out nearly $600,000.

Wholesaler Helps Pay for NMLS Training
In addition to several education firms that offer training required under the Secure And Fair Enforcement for Mortgage Licensing Act, a wholesale lender is offering subsidized courses for its mortgage broker customers.

OCC Actions Dive
Regulatory actions reported by the Office of the Comptroller of the Currency this month fell by more than half from last month. Regulatory activity by other financial institution regulators was also soft.

Defaults Improve for 6 Straight Months
A new report indicates first-lien defaults have fallen each of the past six months.

Production Profits Sink
Mortgage bankers saw their profit per loan slide nearly a third as originations were down by nearly a quarter. But lenders are seeing better pricing execution in the secondary market.

FDIC Unloads Portfolio at Big Discount
Close to $1 billion in nonperforming residential loans were acquired from the Federal Deposit Insurance Corp. at a significant discount.

Appraisal Services Offered, Expanded
Warranties offered with some appraisals promise to shield lenders from the liability of bad valuations and from repurchases. One recent offering enables lenders to apply the cost of a desktop appraisal to a full appraisal, and a recently launched valuation service reportedly costs less than a full appraisal but is more comprehensive than a broker price opinion.

Appraisal Industry Evolves
As states step up their regulation of appraisal management companies, a federal regulator is stepping up the quality of required appraisal data. One mega-lender has reportedly abandoned outside AMCs in favor of in-house services, two firms have initiated an alliance and several AMCs touted new customers.

New SEC Unit to Focus on ABS
A new unit at the Securities and Exchange Commission will focus on mortgage-backed securities and other asset-backed securities.

Bill Addresses AMC Appraisal Costs
The Home Valuation Code of Conduct has pushed the share of appraisals handled by appraisal management companies to more than half from less than 10 percent and, in the process, pushed the cost of the reports up by as much as half. But federal legislation passed last week addresses appraisal costs as well as other appraisal quality issues.

Wholesaler Investigated for Not Disclosing Litigation
While the Nationwide Mortgage Licensing System has aided states in their regulation of the mortgage industry, some states still lack adequate resources to thoroughly investigate license applications. One example is a New Jersey wholesale lender that was able to obtain a Connecticut license without disclosing that it was facing mortgage fraud litigation -- even though such disclosures are required in that state.

Over $300 Million in Losses from Friday's Failures
On Friday, six banks and thrifts -- including three in Florida -- failed. The failed firms had more than $2 billion in assets. As a result, the nation's Deposit Insurance Fund is expected to be depleted by more than $300 million.

Borrowers Win Discrimination Lawsuit
A judgment has been entered against employees and executives of a Colorado mortgage firm who are accused of targeting borrowers who spoke little or no English in a scheme where home values were allegedly inflated.

Citi Fundings Down by Half from 2009
Over the past year, home-loan production at Citigroup Inc. has plummeted by more than half. But originations improved on a quarter-over-quarter basis.

Originations Up, Non-FHA Delinquency Down at BofA
Quarterly home-loan fundings moved higher at Bank of America Corp. Late payments on mortgages deteriorated -- though delinquency was lower excluding government-insured loans.

Legislation's Impact on Mortgage Lending
New legislation is expected to drive up the cost of mortgage lending. In addition to a new suitability requirement, the bill impacts features that were common on subprime mortgages.

Brokers Warn of Job Losses
Mortgage brokers warn that they will be laying off employees as a result of new requirements under financial regulatory reform legislation passed by Congress this week. At issue is dual compensation -- where the borrower pays some of the loan fees and the wholesale lender pays some of the fees. But brokers and lenders will have another chance to impact the regulation through the rulemaking process.

New Requirements to Improve Appraisal Quality
New requirements on real estate appraisals mean more work for lenders and appraisers. But the requirements are also expected to improve appraisal quality.

Subprime Borrowers Face Lower FHA LTVs
Lower loan-to-values are being proposed for subprime borrowers on mortgages insured by the Federal Housing Administration.

Record 30-Year Lifts Mortgage Activity
As the 30-year mortgage hung on to its record low rate and the one-year adjustable-rate mortgage fell to a new low, loan activity jumped 17 percent. Meanwhile, the spread between jumbo and conventional mortgages widened for the sixth week in a row.

Chase Originations Strengthen
Quarterly residential production moved higher at JPMorgan Chase & Co. and is likely to continue expanding during the current quarter. The improvement was even more pronounced for earnings.

Financial Regulatory Bill Headed to President's Desk
WASHINGTON -- Broad legislation that will overhaul regulation of the nation's financial services firms is on its way to becoming law.

Mortgage Activity Jumps
The see-saw activity continued for the Mortech-MortgageDaily.com Mortgage Market Index, which jumped 17 percent this week after tumbling last week and soaring the week before.

Mortech-MortgageDaily.com Mortgage Market Index for the Week Ended July 14, 2010

California v. GSEs
A lawsuit filed by the State of California seeks to force the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. to purchase loans where junior liens used for clean energy loans can have priority over the first mortgages being acquired.

Foreclosures Decline, But Not in Florida
Foreclosures declined for the third straight month, while repossessions broke a three-month losing streak. As conditions worsened in Florida, neighboring state Georgia saw a big improvement.

Origination Forecast Slashed
This month's forecast for quarterly home-loan originations was reduced by $100 billion from last month's outlook. Adjustable-rate loans are predicted to make up a growing share of fundings, and government business is on a roller coaster.

Appraisers Keep Most of Fees With AMC Alternative
An appraisal service out of Oklahoma City helps mortgage lenders maintain compliance with appraisal regulations while letting appraisers keep most of the fee.

FHA Fraud Twice as Bad as Conventional
Mortgage fraud is more than twice as high on government-insured loans than on conventional mortgages, according to a new report that also indicated fraud is playing a big role in repurchase demands. The study highlighted a single street in Florida with the highest risk of fraud where prices have tumbled from more than $200,000 to less than $30,000.

Wholesaler Expands
Just seven months after launching a new wholesale division in the Northeast, a Connecticut lender is now operating in 17 states.

Training Materials Developed to Reduce Repurchases
A new educational appraisal program is being developed for lenders to help them avoid repurchase demands.

CA Faces Resistance on Principal Reduction Program
California hopes to prevent 40,000 foreclosures in the state using $700 million in federal funding. But activists are blasting the plan as a lender bailout, and it's not even clear that lenders will participate.

IBM Changes Plans on Mortgage Hirings
IBM has abandoned plans to add 600 mortgage employees in Charlotte, N.C., though it still expects to add the jobs at another location.

IndyMac Executives Sued for $300 Million
LOS ANGELES -- Former executives of IndyMac Bank's construction-and-development lending unit have been sued for $300 million as federal regulators try to recover losses from the failure of the Alt-A lender. The lawsuit is part of a new strategy against senior managers of failed financial institutions and will likely be followed by more litigation.

Commercial Mortgages Dominate Secondary Transactions
Most of the loans among more than $1 billion in recently marketed or closed secondary transactions were commercial mortgages.

Co-ops Boost Secondary Marketing Profits
A growing trend in secondary marketing is the use of cooperatives to garner better deals for smaller players. Several firms are promoting a host of services to secondary market players, with one law firm promising to help lenders with repurchase demands. Also, applications are being accepted for issuers of government-insured manufactured housing loans.

Secondary Guidelines Updated
Several updates were made to agency requirements for residential loans. Meanwhile, the value of commercial mortgages recently strengthened.

Delinquency Higher, Outlook Negative
It's been more than three years since overall monthly delinquency has improved on securitized loans, according to a new report. Signs of improvement in the nonprime sector might only be a mirage as Alt-A and subprime securities continue to be pounded by downgrades.

Rapid Deterioration in Alt-A Performance Pauses
When it comes to downgrades on Alt-A issuances, 2005 wasn't a very good year. Including other vintages, more than $40 billion in Alt-A residential mortgage-backed securities were recently downgraded because of "rapidly deteriorating performance." But last month, Alt-A delinquency improved.

Wells Giving Price Break to Some Bankers
A unit of Wells Fargo & Co. is giving some financial insitutions a price advantage on secondary mortgage sales.

Allied Appoints Compliance Exec
On the heals of a scathing news story about alleged questionable practices, Allied Home Mortgage Capital Corp. -- which claims to be the country's biggest mortgage broker -- has hired a mortgage compliance manager.

Modest Rise in CMBS Delinquency
The rate of increase on commercial delinquency eased last month. But the reprieve is only seen as temporary. The worst performing sector was hotels, and the worst performing state was Nevada -- a combination that doesn't bode well for Las Vegas.

Several Sources for Mortgage Leads
Loan originators can generate mortgage leads through e-mail marketing, their own Web sites and paid lead generation services. One lead provider only charges for leads after an application is generated, while another is training loan officers how to get more out of the leads it sells. A Minnesota firm said it helps mortgage Web sites land on the first page of search engine results, and a reverse mortgage lead provider is touting a recent move that increased the quality of its leads.

Generating Mortgage Leads
Lead generation companies lure prospective borrowers using online calculators, smart phone applications and better disclosures. But firms that generate new business through trigger leads are subject to a new law in Vermont.

GSE Regulator Subpoenas Non-Agency Issuers
The regulator of Fannie Mae and Freddie Mac is conducting a financial inquiry into private-label mortgage-backed securities that the government-controlled enterprises invested in. Depending on what is uncovered, the issuers could be forced to repurchase defaulted loans.

Mortgage Related Casualties Rise from 2009
During the first half of 2010, the number of mortgage-related firms to close or fail jumped by more than a quarter from the same time last year, according to the Mortgage Graveyard from MortgageDaily.com. The increase was driven by financial institution failures as the number of non-bank lenders to close has dwindled.

CEO Grew Institution to $1.5B from Under $0.1B
The retiring chief executive of a Wisconsin credit union, who has spent almost three decades in the top post, has seen the institution grow from less than $15 million in assets to $1.5 billion. At the same time, he says the number of U.S. credit unions has dwindled to 8,000 from 25,000 when he started.

Small Banks Win Big Concessions in Bill
As a result of their collective lobbying efforts on proposed regulatory legislation, community banks won't be subjected to higher deposit insurance premiums until well after their behemoth brethren. Another concession is different treatment than big banks for trust preferred securities.

ABCs of Regulatory Bill
Proposed legislation to overhaul the nation's financial regulatory system impacts mortgage brokers, mortgage bankers and financial institutions. But it's more than the nation's real estate finance sector that will feel the effects.

Bank Toll Reaches 90
The number of federally insured banks to fail during 2010 has reach 90 institutions. In addition, 13 non-bank firms and 11 credit unions have been shuttered. The Federal Deposit Insurance Corp. recently defended its use of loss-sharing agreements, while former directors and officers of one failed institution are being targeted for loss recovery.

Two Maryland Banks Fail
One of two banks to fail today in Maryland will be liquidated.

Employer v. Employee
Two mortgage firms recently prevailed in court over former employees, while two more firms face new court battles with former employees.

Subprime Lates Rise, $100 Billion Downgraded
As subprime delinquency took a turn for the worse, more than $100 billion in subprime residential mortgage-backed securities have been downgraded during the past three months.

Brokering, Lending Legislated
As lawmakers in two states have rejected bills that would have imposed stiffer requirements on mortgage brokers, Wisconsin's government passed a new broker law. Two broker groups have voiced their support for different federal bills, and legislation introduced in South Carolina could force borrowers into shorter term loans.

Guarantee Fees Fall at Fannie, Freddie
A report from their regulator indicates guarantee fees have declined at Fannie Mae and Freddie Mac.

Comptroller Gives Notice
The 29th Comptroller of the Currency has given President Obama notice that he will be leaving.

John Dugan to end term next month

Secondary Marketing Legal Insider
One criminal defendant in a huge secondary marketing case pleaded guilty while another chose to face a jury. A Texas loan correspondent had no luck convincing an appeals court to reverse a judgment enforcing a repurchase demand.

Bankers Concerned CA Bill Will be Retroactive
California bankers are concerned about a bill making its way through the state's legislature that could retroactively impact refinance loans already on the books.

Refis Resist Record Rates
A new record low for the 30-year mortgage wasn't enough to spark an increase in new loan activity, with refinances retreating.

Banks Warned of Mortgage Elimination Scam
Banks are being warned about a principal reduction scam that falsely claims endorsement by the administrator of national banks.

Home Equity Late Payments Decline
The rate of delinquency on home-equity loans fell, as did late payments on home-equity lines-of-credit. Loans secured by mobile homes, however, saw no improvement in delinquency.

Mortgage See Saw
As quickly as it rose last week, the Mortech-MortgageDaily.com Mortgage Market Index retreated in the report for the week ended July 7. Also lower was the share of activity represented by refinances. But fixed rates managed an improvement.

Mortech-MortgageDaily.com Mortgage Market Index for the Week Ended July 7, 2010

Closing Impacts 3,800 Wells Employees
The closing of a Wells Fargo & Co. unit will result in nearly 4,000 layoffs and the elimination of nonprime residential originations.

FHA Updates Apartment Lending Guidelines, Process
The Federal Housing Administration has issued new multifamily guidelines that standardize the lending process, adjust loan-to-values based on risk and provide more transparency for a property's financial performance. It is also establishing a loan committee system that will impact most loans.

FHA Multifamily Mortgagees Face Stiffer Requirements
Apartment lenders who originate loans insured by the Federal Housing Administration face tougher approval requirements based on their experience. The housing agency also plans to suspend or terminate approval for lenders whose originations perform badly.

MTA Borrowers Benefit Big
For borrowers whose adjustable-rate mortgages use the Monthly Treasury Average as the index, times have been very good. And despite record-low fixed rates, the overall share of ARM borrowers edged higher.

Top Reverse Wholesaler Spot Changes Frequently
Wholesale reverse mortgage production has fallen by more than half over the past year, while retail fundings are down 40 percent. During just the past six months that ended in May, four reverse mortgage firms have held the title of biggest wholesale lender. On the retail side, however, the title has never changed.

Fewer Monthly FDIC Orders
Banks faced fewer actions by the Federal Deposit Insurance Corp. for the second consecutive month, though orders exceeded activity a year earlier.

Spike in Subprime Defaults Pushes Overall Lates Higher
A spike in the rate of subprime loans that were three months past due helped reverse an overall monthly improvement in delinquency. The deterioration was concentrated in early-stage delinquencies as the foreclosure rate for all types of loans held steady.

Some AZ LOs in License Limbo
While Arizona loan originators are now subject to the Secure and Fair Enforcement of Mortgage Licensing Act, more than a thousand license applications have yet to be reviewed by the state -- leaving some unable to conduct business.

HVCC's Impact Still Evolving
More than a year after the appraisal code went into effect independent appraisers say their fees have been squeezed, real estate agents and brokers complain values are coming in low because of out-of-area appraisers, and legislation is pending to abolish it. But appraisal management companies have thrived as a result of the rules, and at least one group of appraisers sees opportunity in using a local AMC model.

Mortgage Executive Chronicle
The founder of a defunct subprime wholesaler has found a new home providing mortgage services to small financial institutions. A recruiter for a huge branch operation has moved across town to help build a retail branch network for another firm. An executive vice president of the Federal Home Loan Mortgage Corp. has been dismissed.

Support Services Shuffle Execs
A team was assembled for a new fixed-income unit in New York, a mortgage technology firm picked up the founder of another company and the former commissioner of the Federal Housing Administration found a spot on one corporation's board of directors.

Realignment of Bank Leaders
Some big banks saw some big changes among their top ranks, including an immediate medical leave for one chief. Management changes at smaller institutions impacted several banks from Hawaii to New York. An executive who is leaving one $20 billion bank is looking at a $765,000 exit package.

Associations Appoint Executives
Trade groups tied to reverse mortgage lenders, U.S. financial institutions and bank leaders in Mississippi all recently announced executive appointments.

The Bankruptcy Litigator
Among issues recently litigated in bankruptcy cases were arbitration and bankruptcy fees. A recent report addressed privacy issues and attorneys' fees arising from the filing of contracts with personal information.

Bankruptcy Courts Less Busy
U.S. consumers filed 7 percent fewer bankruptcies last month. It was the third consecutive month that filings declined. But the forecast for the rest of the year is for filings to turn higher.

Reverse Lenders Reverse Downward Spiral
Following five consecutive months of declines, reverse mortgage lenders eaked out a monthly gain.

Mortgage Jobs Contract Despite Broker Increase
An increase in the number of people working for mortgage brokers was not enough to offset a decline in the rest of the mortgage industry.

Flood Barriers Lifted
Borrowers whose properties are in federally designated flood zones again have access to flood insurance now that Congress has extended a federal program. In addition, lawmakers extended the homebuyer tax credit.

500 Servicing Jobs Coming to Kentucky
Lured by city and state tax incentives as well as below-market leasing rates, a growing servicer is bringing 500 new mortgage servicing jobs to Kentucky.

Former Employees Accused of Taking Customer Leads
A New Jersey appeals court has overturned a lower court ruling against an upstart company and its owners who are accused of stealing customer information from the lender that they previously worked for.

Agency Issuance Increases
Although agency issuance of mortgage-backed securities has fallen by more than half over the past year, activity improved last month. But activity at the Government National Mortgage Association was lower.

Record Rates Spark Burst of Mortgage Activity
It was another record-low for fixed mortgage rates this week. Faced with such attractive interest rates, droves of prospective borrowers began mortgage shopping.

Servicers Refund Prepayment Penalties
The mortgage servicing subsidiaries of Morgan Stanley and Goldman Sachs & Co. were among three firms that agreed to refund prepayment penalties collected from Maryland borrowers.

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