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July 2011 Archive


Founder of Former FHA Firm Faces Lawsuit
The owner of a former Federal Housing Administration correspondent that originated thousands of FHA mortgages has been sued over dozens of defaulted loans. The executive failed to disclose that he had been indicted.

NY Judge Threatens HSBC CEO Over Foreclosures
A State Supreme Court justice in Brooklyn, N.Y., is threatening sanctions against the chief executive officer of HSBC Bank USA -- blaming her personally as head of the bank for filing what he called false and misleading documents involving "robosigning" in a home foreclosure case. But HSBC is only the trustee on the loan.

$2 Billion Bank Among 3 to Fail
Three bank failures last week included a 161-year-old institution with more than $2 billion in assets. In all, losses tied to the closing of the banking trio are expected to exceed a quarter billion dollars.

MetLife Lifts Production
MetLife Inc.'s mortgage operation managed to increase originations even as most other firms have reported a decline from the first quarter. In addition, the company boosted its mortgage staff by hundreds of employees.

PHH Sees Improvement Ahead
PHH Corp.'s originations and market share were lower, though the company expects both to increase. As PHH reduced its mortgage staff, earnings deteriorated from the prior quarter.

16th Consecutive Month of Lower Delinquency for Fannie
Despite a bump in monthly secondary volume at Fannie Mae, quarterly business sank. The rate of late payments on residential loans, however, has improved each of the past 16 months, while apartment delinquency has fallen seven months in a row.

COFI Slips
Following brief blip in May, the Cost of Funds Index resumed its descent.

Business Strengthens as Rates to Plummet
Prospective borrowers ignored a slight bump in mortgage rates this week and pushed new loan activity higher. But mortgage rates could be nearly 20 basis points better in next week's report based on Treasury market activity. Interest in adjustable-rate mortgages surged, and government loan activity was stronger.

Mortgage Market Index 230 for week ended July 29

Fannie Suspends Mortgage Insurer
Failure to meet state capital has the Federal National Mortgage Association suspending a mortgage insurance company.

Hundreds of FHA Lenders Hit With Actions
Actions have been taken against more than 200 Federal Housing Administration mortgagees. Among the impacted mortgagees were the self-proclaimed "largest privately held lender and broker" and affiliates of Berkshire Hathaway and Goldman Sachs & Co.

Countrywide Catastrophe Continues
More than a dozen investors of residential mortgage-backed securities issued by Countrywide Financial Corp. have opted out of a $624 million settlement and filed their own lawsuit seeking hundreds of millions of dollars. The plaintiffs, including BlackRock Inc., claim that Countrywide increased its nonprime activity without telling them.

M.I. Business Picks Up
Mortgage insurers reported an uptick in business last month, and new applications rose to the highest level this year. But defaults also increased.

Burst of Mortgage Mergers
Two firms have been busy recently scooping up regional lenders, while banks have also been buying mortgage businesses.

$16 Texas Property: Suburban Myth?
Media reports have been circulating about a Texas man who paid $16 to file a document that could make him the owner of record of an abandoned $300,000 home. The scenario likely had more than a few people wondering if they could own a foreclosed or abandoned property for just the cost of a $16 filing. So we asked an expert about the probability he will eventually become the legal owner of record.

Jumbos and ARMs Improve as 15-Year Grows More Attractive
Despite a small uptick in the 30-year mortgage, fixed rates could ease by next week's reports. Adjustable-rate mortgages were lower, while jumbo mortgages and 15-year loans became less expensive relative to the conforming 30-year mortgage.

Thrifts Struggle to Find Place in New Economy
The nation's thrifts, which are required to maintain at least 60 percent of their holdings in consumer lending assets such as home loans, have seen their share of the residential lending market tumble from two-thirds to less than a quarter. As the sector adjusts to a new federal regulator, thrifts are struggling to find their place in the aftermath of the financial crisis.

Repurchase Losses at Biggest Banks Could Exceed $30 Billion
The country's largest financial institutions could wind up eating more than $30 billion in repurchase expense on private-label mortgage-backed securities.

FHA Claim Denials Prompt Downgrade Warning
Uncertainty about the payment of claims has led to a downgrade warning on $3.5 billion in residential mortgage-backed securities filled with government loans.

Wholesaler's Exit to Cost 70 Jobs
More than 70 employees are impacted by the closing of a wholesale lending operation.

Small Decline in Regions Production
Regions Financial Corp. funded less in home loans than the prior quarter -- though it saw a smaller decline than many of its competitors. Mortgage holdings, earnings and staff size all declined.

$4.5 Billion in Soured RMBS Investments at Issue in Lawsuit
The regulator in control of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. has filed a lawsuit claiming that the two government-controlled enterprises were deceived on more than $4 billion in non-agency residential mortgage-backed securities they acquired.

Flagstar Turns in Mixed Performance
Home-loan production and mortgage assets fell at Flagstar Bancorp Inc., while rate-lock commitments, warehouse assets and mortgage sales employees increased. The company unloaded some of its residential servicing assets, commercial mortgages and bank branches.

Biggest Lender Shakes Up Organization
The co-president of Wells Fargo & Co.'s mortgage unit is retiring. The move comes as the biggest residential lender in the country reorganizes.

Formal UAD and UCDP Policies Issued
Updated formal policies have been issued for the Uniform Appraisal Dataset and the Uniform Collateral Data Portal.

Lender Closes Wholesale Division
A mortgage banker out of North Carolina has closed its wholesale lending business.

New Mods Give Investors Equity in Properties
A new loan modification program cuts the outstanding loan principal in exchange for an equity interest given to investors.

Uptick in Freddie Purchases
Secondary activity moved higher at Freddie Mac, while residential delinquency was down for the seventh straight month.

MA AG Could Opt Out of Servicer Settlement
Massachusetts will opt out of any settlement with mortgage servicers that prevents the state from investigating the conduct of the Mortgage Electronic Registration Systems or from taking actions against responsible parties. The move, similar to one taken last month by New York, was cheered by one of the state's register of deeds.

FDIC IG Analyzes Bank's Failure
A government report on the failure of a New York bank found that the founder, who was also chairman and chief executive officer, had too little oversight. The bank's demise was largely the result of a departure from its original business plan.

Inside Jobs Net Prison Time
Several defendants in different cases have been accused of using their positions inside banks and mortgage companies to line their pockets with illicit profits -- and some are headed to prison. Victims include investors, employers and borrowers.

CT Firm Recruiting 50 LOs
Fifty loan officers are being recruited in 23 states by a Conn.-based mortgage banking firm.

Billion Dollar Bank Done
Two Florida banks failed last week, but the cost of taking over the two firms is expected to be only a small fraction of a third bank failure. Sixteen percent of this year's bank failures were in the Sunshine State. Two Colorado institutions made the obituaries.

TARP IG Probes Bank LO's Conflict of Interest
The same week he approved a $4 million loan, a former loan officer at a failed California bank allegedly received a $50,000 investment for a company he co-owned from the wife of the man whose company received the $4 million loan. The allegations have prompted a government investigation and a grand jury review in an episode that will likely deplete the Deposit Insurance Fund by around $14 million.

Purchase Volume Forecast Lowered
The outlook for purchase-money originations during the second half has been lowered by Fannie Mae, though the projection for refinances inched higher.

Extension for Distressed Borrower Funds
Distressed borrowers have been granted a few extra days to participate in a federal program that could provide them with as much as $50,000 towards mortgage payments.

BofA Mods, Short Sales at Brisk Pace
LOS ANGELES -- Bank of America Home Loans is completing modifications and short sales faster than it is receiving them, according to the chief executive officer of its Charlotte, N.C.-based parent. The company has 35,000 employees servicing distressed borrowers, and it is using distressed servicers as part of a settlement with mortgage-backed securities investors.

Big Improvement in Jumbo Spread as Refis Retreat
As fast as they rose, refinances responded to rising rates and retreated. But the good news is that jumbo loans became less expensive relative to their conforming counterparts.

Mortgage Market Index 209 for week ended July 22

Declining CMBS Delinquency Could Turn
The rate of delinquency on securitized commercial real estate loans improved last month. But the improvement might not last.

Chicago a No-Win for Servicers
As mortgage servicers seek to reduce the amount of time it takes to complete a foreclosure in Chicago, city officials are pushing legislation that would hold the servicers liable on abandoned homes that have not even been through a foreclosure.

MetLife to Maintain Reverse Business
MetLife Inc. plans to keep its reverse mortgage business after a potential sale of the bank.

Retail Share Up at SunTrust as Fundings Fall
SunTrust Banks Inc. cut its home-loan delinquency and grew its mortgage income. The origination of new loans was down 19 percent, and the company increased its reliance on the retail production channel.

5/3 Grows Portfolio Despite Falling Originations
Fifth Third Bancorp's home-loan production was down more than a quarter. But the servicing portfolio, residential assets and earnings all increased from the prior quarter.

Mortgage Earnings, Originations Down at BB&T
Mortgage production was down a third at BB&T Corp., while mortgage banking income fell 13 percent.

For Sale: Biggest Reverse Lender
After reaching the pinnacle of reverse mortgage lending, MetLife Bank, N.A., is now up for sale. The decision to unload the company was made as a result of the parent company's desire not to be subjected to bank regulation.

Rates Move Within Narrow Range
Mortgage rates moved within a narrow range this week and are likely to continue along the same path into the next set of reports.

Forecast for Refi Share Bumped
The share of the current quarter's originations expected to be for refinances has been increased by mortgage bankers -- helping to push overall quarterly production marginally higher. But the outlook for purchase activity was pulled back -- dragging down overall annual activity.

FHA Purchase Originations Leap
Fueled by a jump in purchase transactions, government-insured mortgage production was higher last month. Reverse mortgage volume was higher and is likely to surge this month based on new applications.

Weak Mortgage Performance at PNC
Residential production eased at The PNC Financial Services Group Inc., but an increase in new purchase-money applications might lead to an improvement for the current quarter. The company trimmed its servicing portfolio and mortgage assets, while delinquency rose and mortgage income fell.

Delinquency Takes Turn for Worse
Early-stage delinquency deteriorated last month.

Record Penalty Against Wells
Wells Fargo & Co. was hit with a cease-and-desist order and a record civil money penalty over allegations that employees at its former subprime unit committed mortgage fraud and unnecessarily put borrowers into more expensive loans. In addition, required compensation to impacted borrowers will likely cost between $4 million and $200 million.

U.S. Bank Production Down a Third
The quarterly origination of home loans at U.S. Bancorp was down by a third. But the servicing portfolio, mortgage investment portfolio and earnings inched higher as delinquency declined.

MetLife Takes Top Reverse Spot
It's official. MetLife Bank has become the biggest originator of federally insured reverse mortgages.

Multifamily, Hotel Delinquency Lead CMBS Delinquency Lower
A big drop in delinquency on hotel loans and multifamily mortgages helped to pull down the rate of late payments on securitized commercial real estate loans.

Wells Reports Falling Originations, Rising Delinquency & Record Earnings
Home-loan fundings took a hit at Wells Fargo & Co., though new applications suggest a bump in activity might be ahead. Delinquency was higher and the servicing portfolio was lower. But earnings reached an all-time high.

AMC Hiring Hundreds
An appraisal management company has opened a new facility in Florida where it plans to hire more than 200 new employees.

Defaults Down 125 BPS During Past Year
Late payments on home loans were lower and sit 125 basis points below the rate a year ago. Among major metropolitan areas tracked, Dallas had the lowest level of defaults.

NMLS Reports # of Lenders, Brokers & LOs
More than a hundred-thousand loan originators are registered in the Nationwide Mortgage Licensing System & Registry, according to a new report that also lists the number of servicers, mortgage brokers and branches. While California dominates the registrations, Texas ranks high among registered lenders and loan originators, and Ohio has a high branch count.

Massive Mortgage Loss as Originations Sink at BofA
Driven by a huge repurchase charge, Bank of America Corp.'s mortgage unit had a huge loss. Quarterly mortgage production, meanwhile, was down nearly 30 percent, and the servicing portfolio fell below $2 trillion.

Carrington Evolves from Whole Loan Seller to Issuer
Until now, Carrington Mortgage Services LLC has sold all of its originations on a whole-loan basis. But that has changed -- enabling Carrington to enhance its wholesale offerings.

NCUA Files Another MBS Lawsuit, More to Come
The federal regulator of credit unions has filed another lawsuit alleging that misrepresentations in the sale of mortgage-backed securities led to the failure of a corporate credit union. Damages sought in three cases filed so far exceed $1.5 billion, while as many as seven additional cases could be filed.

2012/2013 Origination Outlook Eases
Expectations for next year's originations have been trimmed, as have 2013's.

34 Events Scheduled for September
While compliance continues to be a key topic of discussion at mortgage industry events, some conferences are tackling business plans for loan originations, technology-related issues and client development. September is shaping up to be a busy month, with nearly three dozen events scheduled so far.

Realtors Exempted from Mod Rule
A rule enacted to protect consumers from unscrupulous loan modification firms won't be enforced against real estate agents and brokers in short-sale transactions.

NY's Closing Costs Highest, Foreclosure Process Longest
A recent report indicated that New York foreclosures take longer to complete than in any other state. A new study found that the Empire State has the highest closing costs of any state. Nationwide, costs were up 9 percent from 2010.

Week's Bank Failures to Cost Over $120 million
Four banks with nearly $700 million in assets failed Friday, potentially costing the nation's Deposit Insurance Fund more than $120 million.

Obama Picks CFPB Chief
President Barack Obama's choice to be director of the Consumer Financial Protection Bureau.

Quicken Unit to Issue HMBS
Quicken Loans Inc.'s reverse mortgage business will begin securitizing government-insured reverse mortgages.

2-State MBS Probe Could Expand to 3
REPORTING FROM NEW YORK AND LOS ANGELES -- An investigation by two states into the process of originating, marketing and issuing mortgage-backed securities could gain strength with the possible addition of California to the probe.

CA Law Prohibits Short-Sale Deficiency Judgments by Secondary Lenders
Legislation that prevents secondary lenders from collecting deficiency judgments in California short-sale transactions has been signed by the state's governor.

Head of Mortgage Firm Might See Shorter Sentence
TAMPA, Fla. -- The former chief of a mortgage firm might spend less time behind bars because of the help he provided to prosecutors in their case against an executive at a Florida bank who has already been sentenced to a year and a half in prison.

Bill Would Extend Temporary Jumbo Limit
New legislation would extend higher loan limits temporarily raised by the George W. Bush administration and subsequently extended under the Barack Obama administration. The temporary limits are set to expire in less than three months.

CFPB to Open Leaderless
WASHINGTON -- The Consumer Financial Protection Bureau won't have a director appointed by the time it opens in six days. Without a chief, the regulator can't regulate mortgage brokers, as well as other types of entities.

Refis Surge as Rates Relent
New refinance activity leapt this week as interest rates were down around 10 basis points.

Mortgage Market Index 234 for week ended July 15

Mixed Performance at Citi
Earnings and employee count increased at Citigroup Inc. But residential operations turned in higher losses and lower production.

Gov Report Calls for National AMC Standards
A new government report recommends that minimum standards be established on a national basis for states to use in registering appraisal management companies.

Chase to Eliminate Mortgage Portfolio
JPMorgan Chase & Co. plans to let its portfolio of mortgages runoff. But the firm's leader does see improvement ahead for the mortgage business.

Wachovia Lobbied to Include Whole Loans in TARP
At the height of the financial crisis, a lobbyist for Wachovia Corp. sought help from a U.S. senator to add whole loans to the mortgage assets that were expected to be acquired under the Troubled Asset Relief Program.

Rates Improve
A weak employment report helped drive down mortgage rates this past week, though a volatile market makes it unclear where rates are heading. Meanwhile, the index on a popular adjustable-rate mortgage sank.

Originations Off at Chase
Driven by a decline in correspondent business, quarterly originations were off at JPMorgan Chase & Co. Earnings were also marginally lower -- though the retail financial services unit saw an improvement. The company managed to reduce delinquency and increase staffing.

Judge Denies Request by Former Mortgage Chief
The former chief of an alleged $100 million Ponzi scheme involving mortgage investments lost his bid to leave prison so that he can use a more powerful computer to prepare for his trial.

500-Day Foreclosure Process
During June, foreclosure filings rose, completed foreclosures climbed and the foreclosure rate deteriorated. From the point that the first filing is made on a property to the date that the property is repossessed and sold, U.S. servicers are spending nearly 500 days on the foreclosure process.

Nonconforming Programs Hit Market
A host of mortgage programs for borrowers who don't qualify for agency loans has been launched by New Penn Financial LLC. The company, which originates through direct and third-party channels, hopes to reach $1 billion in annual portfolio originations next year.

New Credit Rule Take Effect Next Week
A new rule that takes effect in a little more than a week will require additional documents to be sent to loan applicants who are either turned down or given loan terms that are not the best available.

Leadership Changes at Mortgage Firms
Several former Countrywide Home Loans executives have landed at PennyMac. Other firms to recently appoint new mortgage executives include a mortgage insurance firm, two government-sponsored enterprises and a mortgage cooperative. Even commercial mortgage firms and distressed-loan servicers have been busy recruiting.

Ginnie Ekes Out a Monthly Gain
It wasn't a big increase, but the Government National Mortgage Association managed to boost its monthly issuance. Residential activity was better, but commercial issuance was softer.

Top-10 FHA Lender Settles Allegations of Sham JVs
A mortgage banker that claims to be among the 10 biggest originators of Federal Housing Administration loans agreed to a more than $3 million settlement with the Department of Housing and Urban Development. At issue are "sham" joint ventures that allegedly allowed non-approved branch offices to originate FHA-insured loans.

Wells' Master Servicer Rating Lowered a Notch
Wells Fargo & Co.'s master servicing unit has been hit with a downgrade. One factor impacting the lowered rating was inadequate oversight of the underwriting of loan modifications.

Brokers Blast Unnecessary Regulations
Mortgage brokers plan to tell Congress that new regulations are raising costs for prospective borrowers while placing mortgage bankers in a much more competitive position than mortgage brokers. Also on the list of grievances are the loan originator compensation rule and the appraisal code, which has reportedly led to higher appraisal costs, lower quality reports and underpaid appraisers.

BofA Settlement Relieves 1 of Many Issues
Bank of America Corp. has rid itself of one of many headaches inherited with its acquisitions during the financial crisis.

Bank Regulators Expand
Like the financial institutions they oversee, bank regulators have been criticized for not doing more to prevent the financial crisis and are feeling the pressure to scrutinize institutions more closely. Examiners employed by federal regulators often work in close proximity to the supervised bank executives -- a setting that can sometimes raise the level of tension. But even as regulators expand their staffs, some examiners find that a move from the government to a bank can triple their earnings.

Regions Mortgage Chief Departs
Following the exit of the top Regions Mortgage executive, the lender will become part of an expanded consumer lending unit at the bank.

Weak Delinquency Outlook
Nearly half of bank risk managers surveyed for a quarterly report expect residential delinquency to increase.

Real Estate Broker to Head FHA
The Federal Housing Administration has its third chief in as many months. The newest appointee is a licensed real estate broker with a background in affordable and multifamily housing.

Servicers Get Help Complying With Consent Orders
A day ahead of a critical deadline for the nation's biggest servicers to respond to consent orders signed three months ago, an enhanced service was announced to help the mortgage firms meet the conditions of the orders.

$1 Billion Lawsuit Over Bad FHA Loans from MortgageIT
NEW YORK -- Out of 39,000 government-insured mortgages originated by MortgageIT Inc., 12,500 went into default. So the government is suing MortgageIT-parent Deutsche Bank AG for $1 billion.

The U.S. Foreclosure Fiasco
Sloppy foreclosure documentation prevented two servicers from completing foreclosures on delinquent loans in Florida and Mississippi. In a Nevada case, the court forced the servicer to mediate with a borrower who didn't even sign the note.

Refis Back In Play as 10-Year Yield Sinks
As stocks sank in trading today, Treasury yields were also lower -- increasing the likelihood of lower mortgage rates and higher refinance activity.

PMI Paying Upside-Down Borrowers to Stay Current
Borrowers with negative equity are being paid by The PMI Group Inc. to keep their loans current.

Dozens of East Coast LOs Wanted
A bank based in New Jersey is growing its East Coast originations and has initiated a recruiting campaign to hire loan officers all along the Eastern Seaboard.

Nevada Courts Block 3 Foreclosures
Nevada's Supreme Court has ruled that three foreclosures didn't meet state requirements and sent them back to the lower courts to determine sanctions against the servicers. At issue were missing or inadequate assignments and the servicers' failure to have someone at mediation with authority to approve a loan modification.

Big Texas Plans for BB&T
Inheriting nearly two dozen Texas branches when it took over failed Colonial Bank two years ago has motivated North Carolina-based Branch Banking and Trust Co. to expand even further in the Lone Star State. But the cost of opening new branches doesn't make business sense, so the bank is instead likely to meet its objective by making an acquisition -- though it is in no rush to do so.

Broad Opposition to QRM's Required 20% Down
Opposition is widespread to a proposed 20 percent down payment for non-agency loans to be considered qualified residential mortgages. While lenders oppose the 5 percent skin-in-the-game provision for loans that don't qualify as QRMs, other groups warn about the impact of higher down payments on a faltering housing recovery.

From Blue Chip to Problem Bank
For decades before diving head-first into sand-state investments, Marshall & Ilsley Corp. had a solid lending history. But following the death of a key M&I figure, the lure of growth in Arizona and Florida proved too inviting for a new generation of managers and ultimately led to the downfall of the company -- which was acquired last week by Bank of Montreal.

FDIC Chairman Exits With a Bang
The same day that the Republican-appointed chairman of the Federal Deposit Insurance Corp. stepped down, the agency announced that three bank failures that same day would cost the Deposit Insurance Fund nearly $600 million.

Business Bounces off Bad Week
After plunging ahead of the holiday weekend, new mortgage inquiries had a small rebound.



Valuation Insights
The valuation industry faces a growing wave of regulation, and service providers have geared up to help lenders and appraisers comply. Technology is at the heart of many recent offerings, while others were enhanced through integrations.

MBS Settlement to Cost Wells $125 Million
LOS ANGELES -- A proposed settlement north of $100 million between Wells Fargo & Co. and mortgage-backed securities investors excludes claims by Charles Schwab Corp. and two of the Federal Home Loan Banks.

Surprise Jump in Mortgage Jobs
Despite a drop in the number of mortgage broker employees, the mortgage industry managed to hire more people than it laid off. But overall U.S. unemployment has been worse for three months in a row.

Servicer Settlement Could Cost $60 Billion
A potential settlement between state attorneys general and the biggest U.S. mortgage servicers could possibly reach $60 million.

photo of Rep. Randy Neugebauer

Bankers Report Higher Delinquency
Late payments on bank's home-equity products during the first three months of this year worsened with the economy.

FHA Servicer Wanted
An originator of up to $80 million a month in Federal Housing Administration mortgages is looking for a servicer to handle some or all of its loans.

HUD Extends Required Forbearance
Servicers who utilize a program for unemployed borrowers on Federal Housing Administration loans have been told to give borrowers much more time before requiring them to resume payments.

Chase Servicer Rating Downgraded
Deteriorating performance at JPMorgan Chase & Co.'s mortgage servicing unit prompted a servicer rating downgrade.

Rates Jump
A run-up in mortgage rates this past week is likely relent during the next week, though no improvement is likely.

Agency MBS Investments by Treasury Prove Profitable
WASHINGTON -- Three years ago, Congress authorized the Department of the Treasury to invest in agency mortgage-backed securities. After investing more than $0.2 billion in such securities, the Treasury Department has unloaded nearly two-thirds of the assets and expects to make a profit from the venture.

Bank Exec Given 18-Month Sentence
A former bank executive was remorseful as the judge handed down a one-and-one-half-year sentence for a construction loan scheme.

LOs Indicted in Reverse Fraud Scheme
Genworth Financial was defrauded by three loan originators who, the government claims, inflated appraisals to generate $2.6 million in proceeds on 14 reverse mortgages.

Lower FHA Limits Won't Hurt Low End Market
A new university study found that the upcoming expiration of temporarily higher loan limits on government-insured mortgages won't have a negative impact on low- and moderate-income borrowers.

Varied Actions in MBS Litigation
Lawsuits involving mortgage-backed securities have been certified as class actions, made their way to appeals courts and been lost by the plaintiffs. But defendants have also had their fair share of unfavorable rulings.

CMBS Delinquency Lower
With delinquency on hotel loans leading the way, commercial mortgage-backed securities saw loan defaults retreat. But it wasn't improved performance that was behind the lower numbers.

HAMP Activity Increases
Mortgage servicers strengthened monthly loan modification activity. After falling to No. 3 in April, Bank of America, N.A., leapt ahead of the pack to become the biggest closer of federal loan modifications.

HAMP activity by month

Monthly HECM Volume Up Thanks to Wells
The impact from the loss of Bank of America, N.A., on the reverse mortgage sector was felt last month as reverse production at the company virtually disappeared. But volume at Wells Fargo Bank, N.A., shot up by half -- pushing overall origination of home-equity conversion mortgages higher and leaving a gaping hole when the company completes its exit from the reverse lending business.

FDIC v. WaMu Settlement Comes Undone
Discussions between former executives of Washington Mutual Inc. and the Federal Deposit Insurance Corp. have broken down -- sending the two parties back to court and prompting a motion for dismissal by the defendants.

Managing Branch Options
Whether it is through the acquisition of local mortgage firms or from the development of new locations, mortgage bankers are adding branches. Three new branches are in Texas, while a Missouri firm is promoting the virtues of a franchise model over net branching.

Bankruptcies Climb
Following a retreat in May, the number of consumer bankruptcy filings was higher last month.

US Mortgage Corporation Retains Rubenstein Public Relations as Agency of Record
US Mortgage Corporation (www.usmortgage.com), a mortgage banking company specializing in the origination, underwriting, and servicing of residential mortgages, has retained Rubenstein Public Relations (www.rubensteinpr.com) to generate media exposure for the company's services in home mortgage financing.

MTA Sets Another Record
Borrowers with adjustable-rate mortgages tied to the Monthly Treasury Average saw their ARM index fall to another record-low.

Servicer Acquired
A mortgage servicer with a $38 billion portfolio has been acquired by an asset manager.

New Business Plunges Ahead of Holiday
Mortgage rates jumped around 10 basis points last week, quashing new activity ahead of the holiday weekend.

MMI 162 for the week ended July 1, 2011

Reverse Lenders Prominent Among Mortgage Exits
Reverse mortgage businesses accounted for a bigger share of mortgage-related casualties tracked during the first-half 2011 in the Mortgage Graveyard from MortgageDaily.com. Fewer banks have failed compared to last year at this time, but the same can't be said for credit unions.

$1 Billion in Distressed Borrower Funds
Delinquent borrowers who didn't benefit from a more than $7 billion fund established for hard-hit states have less than four weeks to take advantage another $1 billion program.

Critics Pummel Servicers
Mortgage servicers' staffs have been overwhelmed with a rare housing and economic crisis, and the list of their critics is long and growing. As servicers manage to resolve some disputes, other cases land in litigation. Some critics are targeting profits in the sector.

HUD Grapples With HECM T&I Defaults
A government study of home-equity conversion mortgages serviced by four firms has identified around 20,000 loans that could end up in foreclosure because borrowers haven't paid their taxes or insurance -- leaving the Federal Housing Administration on the hook for at least $1.5 billion. Earlier this year, FHA told HECM servicers to notify borrowers if they are delinquent on taxes or insurance and work with them to avoid foreclosure.

Huge WaMu Settlement Possible
A settlement of more than $200 million is in the works between former top executives of Washington Mutual Inc. and shareholders of the bankrupt company. But the cost of the agreement would be borne by insurance firms.

M.I. Requirements Revised by Fannie
A number of changes to mortgage insurance requirements were outlined by the Federal National Mortgage Association.

Fannie Triples Repurchase Response Time
Fannie Mae has tripled the amount of time that sellers have to appeal repurchase demands.

Agencies Lift Volume from 2.5 Year Low
The issuance of agency mortgage-backed securities rebounded from a two-and-a-half year low. The improvement was across-the-board.

COFI Rally Over?
It was the first time in nearly a year that the 11th District Cost of Funds Index increased.

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