Builders Struggling With Credit
Residential home builders, who have seen the pool of new homebuyers diminish with the contraction in available credit, are now finding it more difficult to obtain or extend financing for new developments. The sector is looking to banking regulators and government-sponsored enterprises for help.
Mortgage Insurance Activity Better
The monthly volume of mortgage insurance policies increased as defaults continued to retreat from the recent record level.
Downgrades Continue on 2003, 2004 Issuances
During the past two days, upgrades were limited to classes of a single commercial mortgage-backed securities issuer as more than $2.5 billion in subprime classes, mostly from 2003 and 2004 residential MBS, were downgraded.
States With Highest Credit Scores
Average credit scores were highest in the New England region of the country, though it was a Midwest state that had a higher score than any other. The lowest average score was in a state where everything is bigger.
IBM Unit to Add 600 Mortgage Jobs
IBM's mortgage unit plans to expand its operations in North Carolina.
The Corporate Ledger
As a California company backed by Wells Fargo Home Mortgage launches, another company plans to use proceeds from an upcoming initial public offering to purchase mortgage securities. Meanwhile, regulators are busy with two other mortgage-related companies.
A new report based on credit bureau data forecasts that rising mortgage delinquency should ease next year. States identified as having the worst delinquency were the same states where foreclosures rates are highest.
California Foreclosures Worst in U.S.
California had more quarterly foreclosure filings than any state, while four metropolitan areas in the Golden State were among the five worst in the nation based on foreclosure rates.
ResCap Originations Rise
Residential Capital LLC's quarterly fundings improved. But maturing debt and ongoing losses are keeping its parent company busy managing debt and equity.
Mixed Results at Countrywide
Quarterly fundings improved at Countrywide Financial Corp., though delinquency and earnings worsened.
Reverse Warehouse Investors Wanted
Investors are being sought for a Florida company that is launching a warehouse line for small reverse mortgage lenders.
BoA Mortgage Unit to be Based in CA
The executive team of Bank of America's mortgage unit will operate from more than 2,000 miles away from the bank's headquarters in Charlotte, N.C., following its upcoming acquisition.
Downgrades Hit 2003, 2004 Vintages
Downgrades have spread to subprime residential mortgage-backed securities issued in 2003 and 2004, though there were still some downgrades on deals issued from 2005 through 2007. Other ratings activity included downgrades on the servicer ratings of affiliates of Residential Capital LLC and on collateralized-debt obligations backed by commercial MBS.
FHLB Advances, Earnings Up
Despite a loss at the Chicago Federal Home Loan Bank, combined earnings at all 12 regions increased.
Technology Alliances and Enhancements
Recent enhancements and alliances in mortgage technology promise to improve loan program searches, mortgage documents and appraisal ordering. One collaborative effort will help better identify mortgage fraud during due diligence.
New Breed of Wholesalers
Hard-money wholesale lenders have stepped in to fill the void left by failed subprime wholesalers. Among loan programs being marketed are those that allow stated incomes, no minimum credit scores and commercial properties.
Alt-A, 2nd Lien Ratings Hammered
More than $13 billion in classes of second lien residential mortgage-backed securities were downgraded during the past few days, while more than 400 tranches from Alt-A issuances also saw downgrades. Securities tied to commercial mortgages saw ratings on nearly $2 billion in classes lowered.
Weak Activity at Fannie
As the mortgages it manages climbed closer to $3 trillion, Fannie Mae saw mixed results on its secondary marketing purchases and deterioration in its delinquency. Fannie also saw its duration gap jump.
Freddie Performance Worse
Freddie Mac, which manages more than $2 trillion in mortgages, saw quarterly purchases fall and delinquency rise. The company's duration gap moved for the first time in more than three years.
Execs Move, Earnings Hurt
|Reverse Lender Adding Branches, Originators
A Colorado company is looking to hire as many as 70 new originators in a national expansion as it opens new branches and heads toward a top-10 reverse mortgage lender ranking this year.
Billions more in mortgage-related losses were reported, and a survey of bankers doesn't offer much hope for a positive change anytime soon. Meanwhile, senior executive were shuffled at a reverse lender and a Connecticut-based bank.
Chicago FHLB Stopping Secondary Purchases
A Chicago-based government-sponsored enterprise is discontinuing its secondary purchases while another GSE is beefing up its efforts in Chicago.
Rates, Apps Worsen
Rising rates pushed mortgage applications lower.
Tsunami of Subprime Litigation
More than 400 subprime-related lawsuits have been filed since last year, and half of this year's activity is concentrated in two states, according to a new report -- which referred to the current level of litigation as a "tsunami."
Mortgage Leads Litigation
LendingTree filed a fraud lawsuit against several individuals and companies over stolen lead data.
No End In Sight for Subprime Downgrades
Classes of subprime residential mortgage-backed securities continued to take a beating by Moody's Investors Service. Fitch Ratings was busy, meanwhile, upgrading and downgrading commercial MBS.
New ResCap Chairman
Residential Capital LLC has appointed a former senior executive of Bear Stearns & Co. Inc. as its new chairman of the board.
Foreclosures Overwhelm Servicers
A new report found that rising delinquency is offsetting increasing efforts by overwhelmed servicers to prevent foreclosures.
Fatter Fundings at Flagstar
Flagstar Bancorp Inc.'s residential quarterly volume climbed, while earnings rose from the prior period but tumbled from the prior year.
Strength In Numbers
With more than $40 billion in mortgage originations last year, a national alliance of mortgage bankers has the clout of a top-10 lender.
Freddie Tightens Up Again
Freddie Mac has tightened its guidelines on mortgages for cashout refinances, second homes and investor properties. This is the second set of program updates since February.
Falling Fundings, Mixed Earnings at SunTrust
Quarterly mortgage fundings fell from the prior quarter and prior year at SunTrust Banks Inc. Net earnings improved over the fourth quarter but tumbled from a year earlier.
Countrywide to Eliminate Some Programs
Countrywide Financial Corp. will eliminate option-ARM, subprime and low-documentation programs following its upcoming merger.
Digital Expansion in Lending, Servicing
A mid-sized mortgage banker will spend 16 months developing an end-to-end software system. Other mortgage technology activity includes PDF loan closing documents that can now be ordered from a popular loan origination system and new services to ensure compliance with loan modification requirements and new appraisal rules.
Motivation to Merge
Senior executives of a Minneapolis-based mortgage banker with $1 billion in annual originations and the smaller cross-town rival it acquired talk about the logic and motivation to do the merger. Along with two more similar deals in the works, headcount is likely to increase by more than 50.
Nothing But Downgrades
Ratings news was all about downgrades today.
Merrill Disputes FF Repurchase Losses
National City Bank has been hit with an indemnification notice from Merrill Lynch.
1,000 Q1 Job Cuts at National City
Quarterly originations were worse at National City Corp., but earnings improved from the fourth quarter. The company cut more than 1,000 mortgage banking jobs during the period.
Companies Manage Losses, Capital
Merrill Lynch's quarterly losses improved nearly $8 billion over the fourth quarter, National City Corp. has raised $7 billion, and a default at a subsidiary of Thornburg Mortgage Inc. won't leave the parent company liable. Meanwhile, a federal regulator warned banks to acknowledge and deal with losses sooner than later.
Weak 1st Quarter at BoA
Quarterly fundings fell and home equity loss reserves jumped at Bank of America Corp. Earnings were up from the fourth quarter but tumbled from a year ago.
Q1 2008 Mortgage Litigation Report
First quarter mortgage litigation was concentrated in foreclosures, investors and secondary marketing this year -- though bankruptcy and servicing lawsuits grew. Mortgage fraud civil actions eased.
Moody's Investors Service continued to assault ratings on subprime residential mortgage-backed securities, though Alt-A and second-lien deals also saw downgrades.
Former Fannie Execs Settle for $31 Million
Former senior executives of Fannie Mae will pay more than $30 million to settle charges that they manipulated financial reports to boost their bonuses.
Secondary Marketing Report
|HUD Chief Nominated
The president has made his choice about who should replace outgoing Secretary Alphonso Jackson.
As the secondary market for jumbo loans is revived, the sale of mortgage securities continues to generate losses for sellers. Meanwhile, nearly $600 million in loans are up for bid and a California broker of REO portfolios is guaranteeing results.
Originations Improve as Citi Reports Massive Loss
Citigroup Inc. reported a massive quarterly loss -- though it was an improvement over the prior quarter. Mortgage loan fundings also improved from the fourth quarter.
Subprime Ratings Slaughtered
All three ratings agencies participated in downgrades of residential mortgage-backed securities classes that likely exceeded $100 billion. But ratings actions on classes of commercial MBS were far more favorable.
Major Lenders Agree to Sell Jumbos to Freddie
Freddie Mac said it launched the first large-scale effort to jumpstart the ailing jumbo mortgage market.
Top Chase Producer
The top originator at JPMorgan Chase & Co.'s mortgage unit generated nearly $200 million in loans last year.
Refis, ARMs Improve
Adjustable-rate loans improved, as did refinance applications. But purchase applications were lower.
First Horizon Fundings, Earnings Improve
First Horizon National Corp. pushed quarterly production and earnings higher. But delinquency deteriorated.
Best, Worst Foreclosure Prevention States
A new report projects that out of every 33 U.S. homeowners, one will face foreclosure during the next two years. North Carolina was cited as one state aggressively tackling the problem, while California was noted as doing too little.
World Among Hardest Hit CA Lenders
A large financial services firm claims that it has had fewer than 25 foreclosures in its mortgage business. A projection that Northern California foreclosures have hit their peak was contradicted by another report that also indicated three prominent California lenders are being hit the hardest.
Wells Fargo & Co.'s quarterly fundings, pipeline of new business and earnings improved from the prior period.
GSE Report Card: Improvement Needed
While Fannie Mae and Freddie Mac, which together oversee more than $5 trillion in mortgages, have made progress on their financial controls, their regulator said more work is needed.
Sharp Drop in WaMu Originations
Washington Mutual Inc., which reached more than $100 billion in quarterly production during 2003, is likely to see quarterly residential volume fall to around $8 billion this year.
Solid Production Gains at JPMorgan
First quarter results were strong at JPMorgan Chase & Co. Residential originations climbed and earnings maintained.
Fla. Firm Bankrupt
Millions of dollars in litigation have apparently driven a Florida-based lender into bankruptcy liquidation.
U.S. Bancorp Posts Solid Results
U.S. Bancorp's chairman and chief touted the company's survival as it reported solid earnings and production gains.
More Judges Hold Up Ohio Foreclosures
Ohio judges are putting the brakes on foreclosure actions. Foreclosures in two counties have been placed on hold as judges have issued stays until counterclaims and third party complaints alleging predatory lending and violations of RESPA and various state laws are resolved.
Foreclosure Problem Grows
Foreclosure activity continues to be concentrated in California and Florida, though Nevada still has a serious problem. Meanwhile, filings continued to climb nationally.
Subprime Downgrades Persist
They may be gone, but their legacy lives on. New Century, First Franklin and Ownit were just a few of the names associated with subprime residential mortgage-backed securities that saw classes downgraded this week.
Mortgage Fraud Index Jumps
Mortgage fraud surged in several states -- lifting the first quarter FraudBlogger Index higher.
Wachovia Originations Off, Earnings Tumble
Quarterly earnings sank, but production declines were milder at Wachovia Corp.
The first quarter foreclosure rate jumped from the prior period and is nearly double the level a year earlier.
Global Pain for Banks
Wachovia Corp. announced a massive plan to raise capital, while a much smaller California-based bank said it would unload all of its assets. A Japanese bank warned that its earnings will be more than $1.5 billion worse than previously projected as a result of U.S. subprime losses.
Net Branch Activity Big in Texas
Two Texas-based net branch companies boosted their branch counts, while a Utah-based branch operation enhanced its presence in the Lone Star State. Meanwhile, a North Carolina-based net branch sees a rising share of FHA business sustaining its activity.
McCain Lays Out Mortgage Plan
Among four primary areas of concern for Americans is the threat of foreclosure, according to U.S. presidential hopeful Sen. John McCain.
Wachovia Tightens Guidelines
Wachovia Corp. has made changes to its residential underwriting guidelines that will impact asset and employment verifications, loan-to-values and minimum credit scores on portfolio loans. Weak real estate markets will be affected the most.
Brokers, Appraisers and Securitizers Blamed for Meltdown
The former owner of a failed wholesale lender has authored a book that discusses his take on the causes of the mortgage meltdown. Among the culprits: mortgage brokers, appraisers, investment bankers and ratings agencies. Wholesalers, he wrote, were caught in the middle -- though they deserve a share of the blame.
IndyMac Volume Continues Free Fall
Production fell for the fifth consecutive quarter at IndyMac Bancorp Inc. and stands at less than half the level it was a year earlier. And the pipeline of pending business suggests business will decline further.
Brokers, Wholesalers Go Digital
One recent offering enables wholesale lenders to determine the level of risk of its mortgage brokers, while two other offerings enable brokers to determine the best available wholesale programs. Other mortgage technology activity includes improvements to credit reporting, digital loan delivery and appraising.
Converting Mortgage Leads to Loans
As a growing number of mortgage lead services target prospects for loans insured by the Federal Housing Administration, several companies are touting how they can help mortgage originators turn more leads into loans.
Uptick in Apps
Loan applications edged higher, while mortgage rates were little changed.
Broker Licenses Tumble
A sharp decline in the number of licensed mortgage brokers has been fueled by the loss of subprime programs, a decline in broker market share and the collapse of many wholesale lenders. Among states with the biggest declines were Florida, Minnesota and Ohio.
Subprime RMBS Pounded by Downgrades
Downgrades on billions of dollars in classes of subprime residential mortgage-backed securities issued since 2005 continued to pile up -- with no end in sight. The sole upgrade during the past few days was a commercial deal from 2002.
Acquisitions, Losses and Meltdowns
The latest week of boardroom activity included three mortgage company acquisitions, the launch of a special servicer and a warning about a possible collapse. Meanwhile, losses continued as three mortgage insurers saw their ratings downgraded.
Subprime Lawsuits Spread Beyond Lenders
A new report indicates companies with no direct ties to subprime lending are facing a growing number of lawsuits.
Proposed HOEPA Changes Would Include More Prime Loans
Bankers and lenders are calling for a narrower definition of high-cost loans and outlined a number of other changes they support to government amendments currently being proposed. Both groups also support clear distinctions between mortgage brokers and lenders.
FHA Aid Expanded
The Federal Housing commissioner testified today that expanded guidelines at the Federal Housing Administration will benefit about 500,000 subprime borrowers.
Study Suggests Subprime Borrowers Fare Worse With Brokers
Mortgage brokers blasted a study that claimed subprime borrowers wind up paying more than $5,000 in additional costs if they use a broker. But the report also found that borrowers with excellent credit get a better deal by using a broker.
Near $1 Trillion in Losses Projected
A report from the International Monetary Fund suggests losses triggered by the subprime meltdown could near $1 trillion. The losses will likely be more than double the losses suffered from the Asian crisis and more than three times the losses generated from the savings and loan crisis.
Mortgage Bankers to Face Protests
Mortgage bankers are prepared for a protest by consumer groups at an upcoming conference being held in the nation's capitol.
Collapse Tied to Fraud
A $15 million mortgage fraud judgment has driven a Virginia-based mortgage company into bankruptcy liquidation. Among creditors listed in the bankruptcy filing are a number of failed wholesale mortgage lenders.
MTA Improves Again
The monthly Treasury average continued its descent.
WaMu Moves Likely to Impact 3,000
Washington Mutual Inc. announced plans to strengthen its capital position, eliminate the mortgage broker channel and close home loan offices. Around 3,000 employees are expected to be impacted.
Mitigating Foreclosure Losses
Maryland is extending the amount of time involved in the foreclosure process, and Ohio is calling for more modifications. A new mortgage insurance program pays partial claims on modified loans, while a California firm is guaranteeing results on the sale of bulk Southern California REO pools.
WaMu Closing Wholesale Unit, Retail Centers
Washington Mutual Inc. is shutting down its wholesale lending unit as well as its home loan centers. The move could potentially impact more than 10,000 employees.
Tech Partnerships Expand
A number of mortgage technology companies are forming alliances and partnerships to boost the value of their offerings. Meanwhile, two vendors are boasting about landing Wells Fargo as a customer.
RMBS Ratings Hammered
While downgrades on residential mortgage-backed securities were dominated by subprime transactions, second lien, Alt-A and jumbo RMBS also saw plenty of negative activity. The only positive activity occurred on commercial MBS.
2 Wholesalers Done, 1 Scales Back
Two wholesale lenders are done, while a third has significantly scaled back operations -- leaving a number of workers unemployed.
Over 14,000 1st Quarter Mortgage Layoffs
More than 14,000 mortgage industry job losses were tracked during the first quarter of this year by MortgageDaily.com. California continues to bear the brunt of the layoffs.
2nd Appraisal Required on Some FHA Jumbos
High-balance loans insured by the Federal Housing Administration under the recently passed economic stimulus package will require a second appraisal when the property securing the transaction is in a declining market.
Judge Rules Against Countrywide on BK Examination
Countrywide Home Loans Inc. failed in its efforts to block an examination by the U.S. Trustee to determine whether the company inflated expenses and other costs in bankruptcy claims.
$2.2 Million Judgment Against Chase
Chase Manhattan Mortgage Corp. has lost a lawsuit filed by a former employee who claimed he was terminated because of his medical condition.
Avoiding Rising Mortgage Fraud
Mortgage brokers originated more than half of the loans where a report of mortgage fraud was filed, according to a new government report. A number of recommended steps lenders can take to avoid fraud appear to be working.
Commercial Wholesaler Cuts Jobs
A Pennsylvania-based wholesale commercial mortgage lender has cut jobs in Florida.
Employment Edges Lower
Monthly mortgage employment numbers eased, though jobs in real estate finance have tumbled more than 100,000 during the past year.
Bank Delinquency Rises
Quarterly loan delinquency at U.S. banks jumped, though delinquency on credit lines secured by residential properties was lower than any other loan type. Delinquency is unlikely to abate anytime soon.
Fannie Business Soars
Secondary purchases by Fannie Mae reached the highest level since the height of the refinance boom. But delinquency also climbed.
4 More Confirmed Dead
Mortgage lending operations continue to close from Colorado to New Jersey. Two of the latest victims were wholesale lenders.
2nd Lien Performance Erodes
The latest round of downgrades to classes of residential mortgage-backed securities was concentrated in deals backed by subprime loans and second liens.
Apps Give Back Gains, Rates Mixed
Loan applications erased all of the prior week's gains, while fixed rates and adjustable rates moved in opposite directions.
Mergers On Despite Losses
Despite billions of dollars in global losses related to U.S. mortgages, a number of mergers are proceeding. Meanwhile, as market liquidity eased slightly, a de-REIT-ization was announced.
Biggest Commercial Lenders
The biggest commercial mortgage lenders and mortgage brokers have been ranked by activity last year.
Local, National Foreclosure Relief
Among foreclosure prevention plans on the table are a local foreclosure assistance center in one Florida city, a special Michigan refinancing program and an additional 60 days for delinquent conforming borrowers to work with servicers to find alternatives to foreclosure. One group is calling on Congress to focus more on mortgage market liquidity and less on the oversupply of properties.
NovaStar Facing Several Federal Investigations
NovaStar Financial Inc. is being investigated by a number of federal government agencies.
Fannie Revises Min Credit Scores, Max LTVs
Fannie Mae this week tightened its credit score requirements and made it harder for borrowers with prior foreclosures to qualify for conforming mortgages.
Firm With 800 LOs Closes Only 40 Loans Monthly
Reverse mortgage activity is fueling hiring at a California-based mortgage company, which said it has grown to 800 loan officers nationally and is headed higher. But the growth is deceiving -- as the company is closing fewer than 50 reverse loans monthly.
Mortgage Meltdown Cools
The pace of collapsing mortgage companies has slowed this year, according to data from the Mortgage Graveyard.
Mortgage Technology Activity
Mortgage technology continues to expand as innovators launch new offerings. Among the latest activity are new services that help prevent mortgage fraud, predatory lending and bad appraisals.
Many Subprime RMBS Classes Downgraded
Changes to Fitch Ratings' subprime loss forecasting assumptions led to negative activity on billions of dollars of residential mortgage-backed securities classes, though another ratings agency also took negative actions. But commercial MBS saw some positive activity.
FHLBs Earnings, Assets Increase
Annual earnings improved and assets increased at the Federal Home Loan Bank system.
A government mortgage program for rural properties offers 100 percent financing, flexible credit scores and no restrictions on down payment sources. In addition, originators can earn premiums.