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February 2011 Archive

ARM Share to Soar
The latest forecast has adjustable-rate share more than doubling in the second quarter.

Freddie's Purchases, Delinquency Down
Secondary marketing activity and multifamily delinquency were worse at Freddie Mac. But residential defaults improved.

Wisconsin Bank Boasts Big Production
The company that claims to be the biggest mortgage lender based in Wisconsin said it has captured the title three years in a row.

M.I. Business Sinks & Headed Lower
It's been nearly a year since mortgage insurance volume has been this low.

New Refis Marginally Higher
Refinance activity edged up last week as purchase business slipped.

Mortgage Market Index 203 for the week ended Feb. 25

2 Institutions Seized
It was a relatively mild week -- with two financial institutions that had less than $200 million in assets between them facing the reaper.

BofA Faces Roadblock in $0.6 Billion Settlement
LOS ANGELES -- Bank of America Corp., already besieged with litigation tied to its 2008 acquisition of Countrywide Financial Corp., is facing resistance in a more than $0.6 billion class-action settlement from a group of investors who claim the amount is only a fraction of what they will accept. The level of litigation tied to the Countrywide purchase has far exceeded the bank's original expectations -- though much of that is due to unanticipated fallout from the deep housing market downturn.

SunTrust Acknowledges Problems on Thousands of Foreclosures
An internal review of SunTrust Banks Inc.'s foreclosure practices found that thousands of cases in judicial states had documents signed by employees who hadn't personally reviewed the documentation. The bank hopes to have the issues corrected and the foreclosures documents resubmitted within a month.

Wells Wins Investor Lawsuit
Two investor lawsuits inherited by Wells Fargo & Co. when it acquired Wachovia Corp. have been dismissed.

Fannie's Business, Delinquency Down
New business was worse at the Federal National Mortgage Association. But delinquency was better.

Lender Loses Brokering Case
A California mortgage lender claims it had no fiduciary responsibility to the borrower on a loan it brokered because it funds its own loans. But a trial court and appellate court disagreed and awarded nearly $100,000 to the borrower.

Firm's President Sentenced for $136 mil in Secondary Fraud
The February 2009 collapse of CU National Mortgage LLC was followed one week later by the collapse of its parent company -- a net branch operator. The former president of the parent has been sentenced for his role in the failure -- allegedly selling $136 million in mortgages that were owned by other institutions to Fannie Mae.

Guilty Plea in $1.4 Billion Secondary Fraud Case
In August 2009, Taylor Bean and Whitaker Mortgage Corp. began a downward spiral that ended in its collapse. This week, one of the company's former executives admitted to her role in the scheme.

Texas Banks are M&A Targets
The Federal Reserve banks have received more than three dozen mergers-and-acquisitions applications over the last two months -- with many acquisition targets located in the Midwest. In addition, a Japanese bank holding company is seeking to acquire a New York holding company, an asset management corporation and an investment firm. And the sale of one Texas bank to another could open up the flood gates to additional Texas mergers and acquisitions.

Mortgage Rates Improve, Further Retreat Possible
Mortgage rates fell and signs point to a further decline. But prospective jumbo borrowers aren't participating in the rally.

New Servicing Firm Going Public
An initial public offering is planned for a newly created firm that acquires servicing rights.

FHA Refinance Requirements Clarified
Federal Housing Administration mortgagees have been advised of new refinance requirements. Some of the changes are already in force, while others take effect in two months.

Scorecard Launched to Measure Servicer Performance
A new scorecard from the Federal National Mortgage Association promises to promote transparency, accountability and excellence among its mortgage servicers.

Wells Refi Layoffs Top 500
Fewer refinance transactions have more than 500 interim mortgage jobs at Wells Fargo & Co. being eliminated.

FHA Turns In Poor Performance
Delinquency was worse, originations were lower and upcoming business will decline even further at the Federal Housing Administration. The poor performance even spilled over into reverse mortgage activity. But FHA loans that include financing for improvements saw a healthy 10 percent month-over-month improvement.

Origination Deterioration Ahead
After reaching nearly a half trillion dollars in the fourth quarter, quarterly mortgage production is projected to plummet to less than $0.2 trillion by the beginning of next year.

Bank Earnings Up, But So are Failures & Problem Banks
It was the second-best quarter for bank earnings in nearly four years as institutions increased their mortgage portfolios. Last year's bank failures were the most in 19 years, and the growing number of "problem institutions" suggests a new milestone could be set this year.

Broker Wins Repurchase Appeal
A California appellate court has thrown out a lower court's decision in favor of a wholesale lender who had sought to hold a mortgage broker liable for a defaulted loan because the income was not verified. The fraudulent income was discovered during the approval process for a loan modification.

Default Services Sector Buzzing
The annual mortgage banker servicing conference has a rush of default servicing announcements hitting the wire. If new offerings are any indication, business is booming for default service providers.

Technology Targets Default Servicing
Many of the latest advancements in mortgage servicing technology focus on firms that specialize in defaulted loans. Both default and primary servicers are turning to technology for help growing.

Quick Turnaround in Real Estate Market Possible
While national real estate prices declined, some of California's coastal cities have been holding up. One real estate expert says that it is possible the mood could shift and a quick turnaround could occur.

Fannie Issues NMLS Requirements
Fannie Mae issued a bulletin about new originator registration requirements.

FHA Program Great for REO Purchases
A government-insured program is ideal for buyers who are targeting foreclosed properties in disrepair at bargain prices. One mortgage executive says that two big players dominate the market for the program.

The Criminal Reporter
Bank executives have recently been busted for an array of alleged crimes including mortgage fraud, embezzlement and bribery. At non-bank organizations, it's investors who are getting the shaft. Other recent mortgage-related crimes to land defendants in prison involve short-sale fraud by a mortgage servicing employee and a scam that tricked borrowers into believing that their mortgages had been transferred.

iPhone App Available for Small Servicers
A new technology offering enables even the smallest mortgage servicers to provide borrowers with online access to their accounts through iPhone and iPad applications.

Costly Bank Closings
A quartet of bank closings will cost the country's Deposit Insurance Fund over a quarter-billion dollars. In all, six financial institutions failed this past week.

Former Countrywide Chief Escapes Criminal Prosecution
LOS ANGELES -- The criminal cloud hanging over the founder and former chief of Countrywide Financial Corp. has been lifted -- though that could change if ongoing civil litigation reveals new facts. Behind the decision not to prosecute was his culpability given all the other players in the game.

Dead Mortgage Insurer Still Generating Profits
A mortgage insurance company that decided to liquidate nearly three years ago has generated another quarter of positive earnings. The positive performance is helping to keep more than 80 people employed.

Purchases Off, Spreads Deteriorate
A drop in purchase-money mortgage activity helped pull overall new activity lower this week. Prospective borrowers shopping for 15-year loans and jumbo mortgages found less competitive pricing in the market.

Mortgage Market Index 201 for the week ended Feb. 18

Regulators Recruit
Financial regulators are weaving in and out of the public and private sector. A former state attorney general has been called to work at the new federal financial regulator for consumers, while bank regulators shuffle their management teams.

MBS Litigation is Busy
Mortgage-backed securities litigation, already a fast-growing sector, has gotten even busier during the past several months.

Mortgage Fraud Risk Trends
The risk of mortgage fraud in Sin City helped land the Silver State at the top of a list states where the risk is greatest. But the Windy City is fast approaching the lofty levels listed for Las Vegas. Outside these problem areas, though, lenders mostly kept a lid on fraud risk -- with valuation fraud showing a consistent improvement.

Early Defaults Rise
One-month delinquency on home loans got worse last month even as serious delinquency was less serious.

Government Rescues CRE Balloon Loans
Businesses with a balloon commercial mortgage coming due might find relief through a new government program.

Earthquakes a Problem on New RMBS
The proximately of the properties backing a new residential mortgage-backed securities transaction has warnings being issued about earthquake risk.

Delinquency Down Despite Deteriorating Foreclosures
An increase in foreclosure activity was more than offset by an improvement in residential delinquency. Florida may have the worst foreclosure problem, but it was another state in the South that has the highest default rate excluding foreclosures.

Fixed Rates Fall, Could Improve Further
It was a mixed bag for mortgage rates this week as fixed rates and the hybrid adjustable-rate mortgage moved lower and the one-year ARM ascended. Some signs point to even lower fixed rates next week.

AMCs Blamed for Lower FMVs
Fair market values that come in lower than the sales price can indicate that the buyer is overpaying for the property. But some say that appraisal management companies are responsible for the lower appraisals. Most agree, however, that less fraud is occurring nowadays.

CA Firm Touts $6 Billion in HECM Issuance
A company with its headquarters in Southern California reported that it has issued more than $6 billion in reverse mortgage-backed securities since its inception.

Banks Recruit Executives
More than a dozen notable executive appointments have recently been made at U.S. financial institutions.

Delinquency Better But Might Deteriorate
Despite several quarters in a row of falling residential delinquency, the outlook for the current period suggests the streak might end. The forecast has deteriorated significantly from just two months ago.

Commercial Delinquency Worse
Commercial delinquency turned in a mixed performance last month. Overall delinquency on loans in commercial mortgage-backed securities climbed to a record high and defaults on industrial properties were more than 250 basis points worse. But loans secured by office and retail properties saw an improvement.

Fannie's Action Leads to Hundreds of Layoffs
Fannie Mae's decision last week to terminate a Florida law firm that has handled more than 18,000 foreclosures has left hundreds of employees out of work. Including another law firm that was recently terminated, nearly a thousand Florida employees have been laid off.

Further Improvement in Mortgage Defaults
It was another monthly improvement for late payments on residential loans.

Firms Boost Production
A handful of small residential and commercial mortgage bankers have reported an increase in business this past year, while some firms that saw a decline in closings still managed to grow their servicing portfolios.

Distressed Loan Investor Cutting Staff
The supply of nonperforming mortgages for sale has dried up, leading a Florida-based investment firm to cut its staff by more than a 150 positions.

3 Biggest Lenders Close Over Half of U.S. Mortgages
More than half of last year's originations were generated by just three lenders, according to the Fourth Quarter 2010 Mortgage Lender Ranking from The share of government-insured loans was higher.

2 Years of Falling FHA Fundings
After falling 9 percent this year, Federal Housing Administration originations are expected to fall another quarter next year. Meanwhile, the agency hopes to raise revenues by increasing mortgage insurance premiums.

MetLife Expands Mortgage Staff
Between the end of September and the end of December, MetLife Bank, N.A., expanded its mortgage staff by more than 500 people. The company also expanded its quarterly originations, though the same couldn't be said for annual activity or for the servicing portfolio.

Outlook is for Less
The outlook is for fundings to fall and refinances to retreat. But the share of adjustable-rate activity is anticipated to rise.

4 Bank Failures to Cost Over $100 Million
At less than $200 million in expected losses from four bank failures, it was a mild week for regulators.

CT CU's CEO Claims Success
The chief of a Connecticut credit union claims his organization originated "more mortgages than any other financial institution in eastern Connecticut" last year.

Wells Laying Off in St. Louis
ST. LOUIS -- Low demand for the government's special refinance program has hundreds of St. Louis employees on notice at Wells Fargo & Co.'s mortgage unit.

Modification to Mortgage Market Index
A change was made to the way the Mortech-Mortgage Daily Mortgage Market Index is reported. In addition, the share of adjustable-rate mortgages has been added to the weekly report.

Mortgage Market Index 203 for the week ended Feb. 11, 2011

March is Busy Month for Mortgage Conferences
During the next three months, 70 mortgage and banking events and conferences are on the calendar, and more than half are happening next month. Listed on the schedule are a hard-money conference, a mortgage litigation forum and a pair of technology conventions. Las Vegas will play host city to two shin digs as will the nation's capitol. Several annual gatherings for state and regional groups are complemented by a smattering of regulatory agency workshops and educational summits.

Wells Unit Sued Over Defunct Loan Mod Firm
A subsidiary of Wells Fargo & Co. could be on the hook for millions of dollars lost by borrowers who sent money to a loan modification company that the Florida attorney general shut down in 2009.

Former IndyMac Chief Charged With Fraud
The former chief executive officer IndyMac Bancorp was among three former executives of the failed firm charged with lying to investors.

Wells Cutting 20% of Refi Staff
A drop in refinance originations has Wells Fargo & Co. cutting 20 percent of the mortgage staff it temporarily hired to handle increased refinance volume.

Mortgage Management Shakeup at JPMorgan
The chief administrative officer at JPMorgan Chase & Co. has been placed in charge of the home lending business.

Administration Lays Out GSE Exit Plan
Under a plan outlined by the Barack Obama Administration, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. would lose their advantage over fully private firms and liquidate their huge investment portfolios. The plan calls for lower loan limits, higher fees and bigger down payments.

Rates Could Improve
Despite a surge in mortgage rates this week, one barometer points to a decline by next week.

Growth Prompts 160 FL Hirings
TAMPA, Fla. -- Strong growth at a Texas-based institution has 160 new mortgage jobs being filled in Florida.

Institution Expands Wholesale Business
A California-based credit union more than doubled its mortgage production last year, plans to double it home-loan staff this year and is expanding its wholesale lending operation. Among programs at the wholesaler are piggyback seconds.

19-Month High for Retail HECM Originations
Monthly production of reverse mortgages insured by the Federal Housing Administration was mixed. Wholesale lenders lost ground, while retail originators closed more business than during any month since the summer of 2009.

Foreclosure Activity Clouded
Closely watched statistics on foreclosure activity showed a slight deterioration last month, though year-over-year performance strengthened and total filings have fallen below 300,000 each of the past three months. But the lower recent volume is just a mirage, according to the provider of the data -- which also reported that repossessions surged in non-judicial states. Half of the country's foreclosures are concentrated in just five states.

261,333 properties face foreclosure filing in January

Purchase Financing Inquiries Leap
A 23 percent surge in new purchase mortgage inquiries led overall mortgage activity higher this week. Meanwhile, the jumbo-conforming spread fell to the lowest level on record since the Mortech-Mortgage Daily Mortgage Market Index was launched.

Mortgage Market Index 201 for the week ended Feb. 9, 2011

Lending Lower at Navy FCU
Business wasn't as good last year as previously planned at Navy Federal Credit Union. Still, the financial institution managed a quarterly record.

CFO's Exit Prompts Decline in Wells' Shares
The sudden resignation of Wells Fargo & Co.'s chief financial officer had its stock price lower.

Bankers Call for Higher G Fees
U.S. banks have a solution to getting the government out of the mortgage market: Higher guarantee fees.

Power Player Playing it Easy
One of the country's most successful mortgage entrepreneurs has stepped back from the operation to spend more time with his family. But that didn't stop his company from originating more than $5 billion last year. This year the lender is looking to hire a hundred new salespeople.

$5.5 billion in 2010 production at Mortgage Masters

$44 Billion in Alt-A Downgrades
Since mid-December, more than $44 billion in Alt-A residential mortgage-backed securities had their ratings lowered by a single ratings agency. The latest downgrades were on top of $80 billion in downgrades from the last two-month report. An ailing economy, ongoing unemployment and weak home prices are still being blamed for the most recent round of negative actions.

MTA Could Break 0.3% Floor
The streak of record lows for the Monthly Treasury Average has been extended. The index is poised to fall below 0.30 percent.

2 VA Foreclosure Bills Die, 2 Advance
A Virginia bill that would have required a court order before a foreclosure sale was killed, as was another piece of legislation that would have lengthened the time between a foreclosure notice and sale. But two other prospective laws made it through a state senate committee.

Sweeping Updates at UG
Several bulletins released by United Guaranty discuss improvements to underwriting requirements and the elimination of restrictions on some third-party, multi-unit and coop transactions.

ABCs of GSEs
WASHINGTON -- As lawmakers on both sides of the isle prepare to debate this week the future of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp., McClatchy Newspapers has answered some questions about how the government-controlled enterprises operate.

Commercial Originations Revived in 2010
Mortgage bankers delivered good news about commercial mortgage originations during 2010. A huge increase in the volume of commercial mortgage-backed securities led the revival -- though CMBS activity was still just one-tenth of the peak level it reached three years ago.

Shadow Inventory Threatens Housing Recovery
A yearend report on securitized loans suggests recent signs of strength in the housing market are only temporary. At the heart of the concern is a supply of distressed properties that have yet to hit the market.

Originations Increase 200% at Growing Firm
Last year's originations shot up 200 percent at a company operated by the former chief of the National Association of Mortgage Brokers. Nearly two-thirds of the activity was government -- though that figure is forecasted to fall. With overall fundings expected to increase another quarter this year, the firm is recruiting production personnel.

Lenders Move to Ratify Florida Foreclosures
Lenders in Florida are taking the unusual step of asking judges to ratify foreclosure judgments -- a move that helps clear title for subsequent sales. But some experts say the legal maneuver doesn't even exist.

Biggest Commercial Servicers
The second-biggest residential servicer was the largest commercial mortgage servicer last year. A list of the top U.S. commercial servicers was released as mortgage bankers converge in California for a commercial real estate lending conference.

Firm Grows Through Acquisitions
It was the sixth mortgage-related acquisition for an Illinois-based bank-holding company that originates around $4 billion annually. The latest acquisition is likely to boost that number by another $0.2 billion.

Four Failed Financial Institutions
Four financial institutions in three states fell last week as the Great Recession proved too much for them. Between them, the institutions had around a half billion dollars in assets.

BofA Shakes Up Mortgage Unit
Problem assets will be pulled from Bank of America Home Loans and placed in a newly created unit. The head of the new operation will also be responsible for resolving repurchases. The move is similar to one made by Citigroup Inc. in 2009.

BofA Exiting Reverse Business
Bank of America Home Loans is getting out of the reverse mortgage business.

Banks Battle Orders
There was no relenting for struggling banks trying to fend off regulators. Recent regulatory actions against financial institutions or their employees numbered around a hundred.

Brokers Drag Down Mortgage Employment
The number of people working in the mortgage industry eased in December thanks to a drop in the number of mortgage brokers. Meanwhile, a data revision by the government has 15,000 more people now working in the business.

Weak Week for Originators
Mortgage rates inched up and could surge by the time next week's reports are delivered. As new activity softened, more borrowers opted for an adjustable rate.

Former Countrywide Chief Settles With Calif
LOS ANGELES -- Two former senior executives at Countrywide Financial Corp. have settled for more than $6 million a predatory lending lawsuit filed by the State of California in 2008.

NJ Case Outlines Blueprints for Affidavits
In a foreclosure case filed by Wells Fargo Bank, N.A., the New Jersey Superior Court, Appellate Division, articulated stringent standing requirements for residential foreclosure plaintiffs that did not originate the loans, but obtained them after origination. The court held that such lenders must authenticate the note and mortgage based on personal knowledge, and that the particulars of the transfer of those documents must also be set forth by someone with personal knowledge.

Apartment Business Off at Freddie
Multifamily business at the Federal Home Loan Mortgage Corp. fell last year, though a surge was reported in the second half.

Case Could Reshape Florida Law
Thousands of foreclosures could be impacted by a Florida appeals court's decision to send a foreclosure case to the state's supreme court.

Slow Start for Reverse Volume
The new year was off to a slow start for reverse mortgage originators -- whose numbers have dwindled.

Mortgage Market Steps Back
New purchase activity led a decline in overall mortgage activity this week as the 30-year edged up and the jumbo spread improved.

Mortgage Market Index 182 for the week ended Feb. 2, 2011

Bankruptcies Sink
It's been two years since consumer bankruptcy filings were this low. But the share of Chapter 13 filings was higher.

Wells Trims Wholesale Staff
A decline in anticipated originations has Wells Fargo & Co. trimming its California wholesale lending staff.

Chase Adding Servicing Jobs
Planned growth this year at Chase is likely to result in more than a hundred mortgage-related hirings.

Fed Abandons Proposed TILA Rules
Finalization of new Truth-in-Lending-Act rules by the Federal Reserve will likely be abandoned -- a move mortgage bankers have been lobbying for.

Best Mortgage Brand
An international ranking of bank brands includes the most valuable mortgage brand.

BofA Unit Gets Green Light for NV Foreclosures
A restraining order against a Bank of America Corp. subsidiary has been dissolved by a federal judge, allowing the company to resume work on thousands of foreclosures in Nevada.

Judge Rules for Borrower in Refi Case
A federal judge has ruled that a borrower whose loan was foreclosed in 2005 can sue the lender over a faulty refinance. The borrower, who owned a taxi cab business, claims he never missed a payment.

Ally Originations Improve
Mortgage originations at Ally Financial Inc. were better on a quarterly and annual basis. The company trimmed its repurchase liabilities.

No Short-Term Changes Likely With GSEs
The still-fragile state of the U.S. housing market is a powerful incentive for lawmakers to avoid tampering with Fannie Mae's and Freddie Mac's role in the mortgage market -- though that might be different if Republicans had their way. The two government-controlled firms own or manage more than half of the country's mortgages.

Reverse Lender Growing
Growth at an Oklahoma-based reverse mortgage lender has enabled it to double its staff. More recruiting is planned at the company, which just moved its headquarters to a larger location.

Agency Issuance Mixed
New securitizations backed by government-insured mortgages were down last month and were also lower than the same month last year. While issuance of conforming-conventional loans was down from December, it was an improvement from the same month last year.

COFI, 1-yr Treasury Improve in 2010
The Cost of Funds Index ended 2010 more than 30 basis points better than it started. A more moderate 18-basis-point improvement was recorded for the one-year Treasury yield during the same period, while LIBOR was slightly worse.

Banks Increase Portfolio Mortgage Holdings
As banks improve their outlook for delinquency, some have increased their investments in residential loans that don't qualify for government or agency programs.

Bank LOs Begin Registering for NMLS
With the close of January came the opening of registration for originators who are employed by financial institutions.

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