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Mortgage Industry News Headlines
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Last Updated Thursday, December 04, 2008 06:28 PM CST
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GMAC Servicer Ratings Lowered
Moody's Investors Service said it downgraded GMAC Mortgage LLC's primary servicer rating. The downgrades impacted prime and nonprime servicing. Moody's said the downgrades reflect increasingly difficult market conditions the are stressing GMAC's servicing operations.
SC Home Counseling Firm to Add 300 Jobs
Titanium Holdings Inc. announced today that it has leased office space in South Carolina. The company provides home counseling services for borrowers who face foreclosure. The move will enable the firm to hire 300 news employees.
NC Settlement to Cost Countrywide Over $15 Million
Countrywide Home Loans and Countrywide Mortgage Ventures have agreed to a settlement with the North Carolina Office of the Commissioner of Banks. The settlement includes refunds to borrowers, reimbursement of investigation expenses and contributions to non-profit agencies. In all, Countrywide will spend more than $15 million in the settlement.
Servicing Portfolio Analysis
BasePoint Analytics's DefaultRisk score helps assess default risk within loan portfolios, an announcement said. Nomis Solutions said its Navigator provides cautionary guidance and profit opportunities in the existing portfolio. A new reverse mortgage score announced by the First American Corp. helps servicers identify foreclosure-prone borrowers who qualify for government-insured home equity conversion mortgages.
Falling Rates Spark Rally
The average 30-year fixed-rate mortgage fell 46 basis points from the prior week in Freddie Mac's most recent rate survey. The 30-year has fallen each week since Oct. 30. Overall 1003 applications more than doubled from the prior week on a seasonally adjusted basis, the Mortgage Bankers Association reported in its most recent application survey.
Treasury Plan Creates 4.5% Rates
The U.S. Department of the Treasury is floating a plan to bring mortgage rates down, the Wall Street Journal reported. The strategy utilizes Fannie Mae and Freddie Mac. Under the plan, mortgage rates would be pushed down to 4.5 percent.
Ratings Agencies Face More Oversight
The Securities and Exchange Commission announced it approved a series of measures that impose additional requirements on ratings agencies. The new measures will increase transparency and accountability, the SEC said. In addition, they will ensure investors receive greater disclosure and more meaningful ratings.
Wilshire Servicer Rating Lowered
Moody's Investors Service downgraded Wilshire Credit Corp.'s subprime primary servicer rating, a statement said. Wilshire's performance-to-date remains solid. However, Moody's is concerned about credit markets as well as strategic deficiencies and portfolio runoff.
Bankruptcies Ease
The American Bankruptcy Institute reported that nearly 100,000 consumer bankruptcies were filed during November. Filings eased around 6 percent from October. However, consumer bankruptcies were nearly 40 percent higher than November 2007.
Refinances Triple
In its latest weekly mortgage survey, the Mortgage Bankers Association reported that refinance applications increased more than 200 percent from the prior week. The increased activity pushed the Refinance Index to 3802.8. MBA explained that the surge was the result of drop in mortgage rates following the Federal Reserve's announcement that it would acquire up to $0.5 trillion in mortgage-backed securities issued by the government sponsored housing enterprises.
Ratings Agency Requiring Due Diligence
Fitch Ratings said that it will require third-party loan-level reviews on all residential mortgage pools that it rates. The reviews will include an inspection of the loan file and data tape. The ratings agency explained that poor underwriting at origination was primarily responsible for the severe under-performance of loans behind residential mortgage-backed securities.
The Compliance Ledger
DocuTech Corp.'s compliant closing document system has been integrated into the Del Mar loan management system, a news release said. Qvault Inc. said that it builds compliance tools directly in its Web-based add-on to Calyx loan origination system. SunTrust has become a customer of Orchestria, an announcement said.
Growing Wholesaler Halts Business
Mortgage Network Inc. issued a bulletin to its mortgage brokers and loan correspondents indicating it will immediately halt third-party originations. In June, the company had announced an expansion of its wholesale lending business. A company executive told MortgageDaily.com that a recent surge in refinance business caused originations to exceed its warehouse lending capacity.
Few Mortgage Jobs Impacted by Massive WaMu Layoffs
JPMorgan Chase & Co. advised 4,000 Washington Mutual Bank employees that their positions would be eliminated by January, a JPMorgan spokesman told MortgageDaily.com. Another 5,200 employees were told that they would be laid off at some point next year. The spokesman noted that very few of the affected employees work in mortgage lending.
Mortgage Fraud Worsens
Mortgage fraud activity jumped 45 percent during the second quarter from a year earlier, according to the Mortgage Asset Research Institute. About two-thirds of mortgage fraud activity included general application misrepresentation. Exaggerated income was involved in around 36 percent of incidences.
Firms Restructure to Tap TARP Funds
CIT Group Inc. reported last month that it has applied to become a bank holding company and has also received preliminary approval to receive Troubled Asset Relief Program funds. Ocwen Financial Corp. has applied with the fed to become a bank holding company. Genworth Financial recently announced that it has filed a savings and loan holding company application with the Office of Thrift Supervision and agreed to acquire a Minnesota bank.
Ginnie Volume Tops Fannie, Freddie
Fannie Mae issued $23 billion in mortgage-backed securities during November, according to data reported by eMBS. Over at Freddie Mac, last month's securitizations totaled $14 billion. Ginnie Mae's securitizations were $26 billion during November.
MBS Investors Sue Countrywide for $80 Billion
A lawsuit was filed in New York's state supreme court on behalf of investors of mortgage-backed securities issued by Countrywide Financial Corp. The case revolves around an $8 billion predatory lending settlement with several states that calls for the company to systematically modify loans for nearly 400,000 borrowers. The plaintiffs are demanding that Countrywide repurchase each of the modified loans -- an amount that could cost as much as $80 billion.
Yields on MTA, 10-Year Treasury Sink
The monthly Treasury average fell 20 basis points in November from October, according to data published by the Federal Reserve. MTA has not been this low since January 2005. The 10-year Treasury yield has fallen more than 135 BPS since October.
Firms Fail, File Bankruptcy
Downey Financial Corp. filed for Chapter 7 bankruptcy liquidation last week in U.S. Bankruptcy Court. Ace Mortgage Funding LLC filed for a voluntary petition for Chapter 7 bankruptcy liquidation on Nov. 5. LandAmerica Financial Group Inc. announced last week that it filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court.
Business Bad at Mortgage Insurers
During October, nearly $8 billion in mortgage insurance policies were written, the Mortgage Insurance Companies of America reported. Volume fell to the lowest level on record. New application for mortgage insurance policies fell to the lowest level in 12 months.
Mortgage Attorneys See Surge in Cases
Lawsuits and regulatory actions tied to compliance violations totaled 18 in the third quarter, according to the Third Quarter Mortgage Litigation Report from MortgageDaily.com. Cases involving mortgage fraud totaled 18 during the latest period, up from seven during the second quarter. The number of regulatory actions against financial institutions and mortgage licensees actions tracked was 126.
COFI Jumps, 10-Year Yield Sinks
The cost of funds index increased around 36 basis points in October from September, the Federal Home Loan Bank of San Francisco reported. Compared to a year earlier, COFI was 111 BPS lower. The 10-year Treasury yield, however, tumbled below 3 percent.
Subprime Ratings Journal
All three ratings agencies have been busy downgrading subprime mortgage-backed securities. Updated loss projections led Moody's Investors Service to downgrade tranches of the several subprime securitizations. In addition, Standard & Poor's Ratings Services and Fitch Ratings announced downgrades to dozens of deals.
The Business of Mortgage Leads
Smaller mortgage firms and lead purchasers are the target of Leadmark, a new offering from Mortech. A new sector of mortgage leads that has developed this year is loan modification leads, SalesProspects.com said in an announcement last month. Mortgage lead broker LeadPoint reported this month that it has seen a significant increase in the number of businesses turning to lead generation.
Mod Squad Returns
Pangea3 LLC has launched a unit to help mortgage lenders with loan modifications. The Federal Housing Finance Agency issued a letter to more than 40 mortgage servicers of private-label mortgage-backed securities calling for the adoption of a streamlined modification program for agency loans. The Federal Deposit Insurance Corporation announced last week that its streamlined modification program in effect at IndyMac Federal Bank is now available to all servicers and financial institutions.
Banks Hammered With Regulatory Orders
The Office of the Comptroller of the Currency reported that cease-and-desist orders were recently issued against three financial institutions. The OCC reached formal agreements with another 12 banks. Removal-and-prohibition orders were issued against six individuals.
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