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May 2008 Archive

The cost of funds index has fallen to its lowest level since 2005.

CitiMortgage President Departing
The president of CitiMortgage is leaving the company.

Technology Boosts Mortgage Lead Conversions
A new offering promises to help loan originators convert more mortgage leads by delivering prospect data to mobile phones and other wireless devices as soon as the customer makes an inquiry.

Bank Earnings, Originations Up from Q4
Earnings and production jumped from the fourth quarter at federally insured banks and thrifts.

M.I. Volume Tumbles as Defaults Reach Record
The volume of mortgage insurance policies written last month tumbled as new applications fell to a 14-month low and mortgage insurance defaults soared to an all-time high. But the sharp rise in defaults was attributed to a one-time adjustment at a major lender.

YSPs Don't Reduce Fees
A new study found that government-insured mortgages with higher rates due to yield-spread premiums didn't generally have lower closing costs. Other findings included a disparity in closing costs for identical borrowers.

Investor Lawsuits Filed, Dismissed
Two mortgage companies announced planned public offerings. And as an investor class-action lawsuit was dismissed against one mortgage lender, another investor lawsuit was filed against a different company. Meanwhile, an acquisition of The Bear Stearns Companies Inc. that was brokered by the Fed in emergency negotiations was approved by the beleaguered firm's shareholders.

OTS Proposes Bank Regulation for Lenders, Brokers
The nation's thrift regulator wants to regulate mortgage bankers and mortgage brokers. He suggested the credit crisis might not have been so severe if mortgage companies had been regulated like banks.

Lawsuit Targets Countrywide Execs, Directors
Institutional shareholders of Countrywide Financial Corp. are proceeding with litigation against current and former executives and directors who are accused of insider trading and turning a blind eye to blatant disregard for underwriting standards.

Rates Rising
Most mortgage rates rose and may be headed higher.

Best Home Equity Lenders
As home-equity lines-of-credit become harder to access, borrower satisfaction is climbing.

New FHA Forms
The Federal Housing Administration has developed a new transmittal form and updated a loan application addendum form.

Best Mortgage Web Sites
A recent study identified the most important aspects of the best mortgage Web sites.

Branch Operation Struggling to Survive
Accusations are flying at a financially troubled Pennsylvania-based mortgage company with 25 offices. The top executive has been ousted, creditors are being asked not to file litigation and the warehouse line is being closed. The company hopes to retain most of its branch managers, though some are defecting and others have closed shop.

BoA Names New Mortgage Chief (Again)
Bank of America Corp. has abandoned plans to let Countrywide Financial Corp.'s president run the combined mortgage unit following its planned acquisition of the lender and will instead appoint an insider to the post.

No Shortage of MBS Downgrades
Recent upgrades to mortgage-backed securities were scarce, but there was no shortage of downgrades. Deteriorating financials resulted in downgraded servicer ratings for Residential Capital LLC.

Thrift Activity Worse
Quarterly originations and delinquency worsened at thrifts. Troubled institutions were double the level a year ago.

Mortgage Fraud Stats
The Federal Bureau of Investigation touted more than $0.5 billion in mortgage fraud restitutions last year.

Foreclosure Procedures
Fannie Mae has expanded its HOPE NOW policies and enhanced the ability of servicers to handle bankruptcies and other legal proceedings.

Net Branch Secrets
Government originations have soared at a Utah-based branch operation this year. Another branch network has identified a New England office and its star originator as the best in the country.

Tough Broker Programs Still Exist
While mortgage brokering has become primarily limited to conforming programs and loans insured by the Federal Housing Administration, some regional and niche wholesale lenders still offer programs that don't fit mainstream guidelines.

Financial Sector Struggling With Financials
Two banks are facing litigation over their financial reporting, while the sale of nonprime residential mortgage-backed securities at a Swiss bank was done at a $7 billion discount. Other corporate activity includes a mortgage insurer that is struggling to regain its approval to insure conforming loans.

Freddie Activity Worse
Monthly purchases and delinquency soured at Freddie Mac.

Mixed Activity at Fannie
Monthly business was better, but delinquency was worse at Fannie Mae.

Digital Delight
Two separate offerings promise to help lenders identify mortgages that loan applicants fail to disclose through new technology alliances. Other digital advances offer improvements to marketing and origination.

Regulators Recommend Subprime Disclosures
Banking regulators have released recommended disclosures that explain risky aspects of subprime loans and illustrate how hybrid adjustable-rate mortgages work.

Groups Oppose Provisions of RESPA Reform
Trade groups representing mortgage bankers and title insurers warned lawmakers about some provisions in proposed reforms to the Real Estate Settlement Procedures Act.

National City Settles With HUD
National City Mortgage Inc. has settled allegations that it certified delinquent government-insured mortgages were current. The settlement marks the third episode for the company since 2006 related to government originations.

Analysis of Conforming Jumbo Pricing
Pricing on conforming jumbo loans was slow to move lower following the passage of recent legislation designed to improve secondary market liquidity. But improvements have recently been noted.

Fixed Rates Improve, ARMs Worse
While fixed-mortgage rates fell, rates on adjustable-rate mortgages climbed -- though ARM activity was higher. A decline in refinance activity dragged down overall loan applications.

Former Delta Execs Launch New Firm
The founder and former chief of bankrupt Delta Financial Corp. told that a new mortgage company he is heading will utilize Delta's former management team. The firm plans to hire some of the former subprime lender's prior employees.

Inside Mortgage Leads
One of the biggest mortgage lead generation companies will be spun off by its parent company. Another not-so-big lead company has been labeled a "suspicious site" by an Internet research service. Meanwhile, one company is promising to enhance existing leads.

Impac Survival In Doubt
Impac Mortgage Holdings Inc. reported a massive loss, disclosed that hundreds of employees were laid off during the first quarter and raised doubt about its ability to stay in business.

ABX Reliability Questioned
All AAA classes of subprime residential mortgage-backed securities are not created equal, a new report suggests. But the ABX index does not necessarily reflect this.

MBS Ratings All Negative
The volume of ratings actions was down ahead of the holiday weekend, but it was all bad.

Foreclosure Army
Regulators, non-profit organizations and even the Internal Revenue Service are stepping up activity that will help reduce foreclosures. One banking regulator issued a warning advising delinquent borrowers of a number of foreclosure scams.

Housing Bill Passes Senate Committee
Legislation passed today by a Senate committee would utilize the Federal Housing Administration to help curb foreclosures and create a stronger regulator for Fannie Mae and Freddie Mac. While there was strong bipartisan support for the bill, one conservative group suggests it will cost U.S. borrowers $500 million.

Mortgage Bankers Highlight Broker Role
Mortgage bankers issued a new 33-page report suggesting that borrowers who use mortgage brokers do less research and comparison shopping, even though brokers don't necessarily look out for the customer's best interest. The paper recommended better yield-spread disclosures, more rigorous regulation and stronger oversight for brokers -- who have much less at stake in loan transactions.

Losses Lead to Lawsuit, Exec Changes
Reports of mortgage-related losses continued, as did legal actions against banks and mortgage companies. Two financial services companies announced changes at the top.

Borrowers Blame National City for Negative Equity
Litigation has been filed in Florida against National City Mortgage by 20 borrowers who claim the company turned a blind eye to overcharges and bad appraisals -- leaving them with loan balances that are higher than the values of the properties securing them. The attorney for the plaintiffs suggests thousands more borrowers may have been victimized.

Fannie Eases Jumbo Requirements
Fannie Mae announced an expansion to its jumbo-conforming program. The move follows the easing of loan-to-values on properties in declining markets.

WaMu Reduces Available Credit on HELOCs
Washington Mutual Inc. has reduced available credit for its home-equity line-of-credit borrowers by $6 billion as a result of slumping real estate markets.

Commercial Originations Maintain as Prices Fall
Falling commercial real estate prices have not stopped commercial loan originations. More than $1 billion in recent commercial mortgage transactions were tracked.

Recent commercial mortgage activity
LOS Enhancements
Improvements to loan origination systems dominated the latest round of mortgage technology advancements. Meanwhile, two U.S. banking giants have teamed up to form a new venture.

Anatomy of a Meltdown
Thornburg Mortgage Inc., which has faced insolvency and bankruptcy, detailed a timeline of its demise in a recent securities filing. While a rescue deal has been worked out, the company is still not out of the woods.

Fannie Eases LTV Restrictions
Fannie Mae reversed a recent decision to cut loan-to-values in declining markets.

Mitigating Foreclosure Losses
The number of borrowers utilizing a government program to refinance into more manageable mortgages has recently reached a milestone. Other foreclosure-prevention activity included a fast-track loan modification implemented by a mortgage insurer.

Chase Dumps Broker Subprime, HEL
JPMorgan Chase & Co.'s mortgage broker unit has closed the door on subprime and home-equity lending. While a number of employees are impacted by the move, the figure is well below the more than 1,300 job cuts already made in the units since October.

Net Branches Boost FHA Programs
The self-proclaimed biggest U.S. mortgage broker recently grew by four branches. Other net branch companies are migrating toward government programs.

ARMs Drop, Fixed Rates Headed Higher
Fixed rates barely budged but may head higher, while variable rates tumbled. Refinance activity boosted overall new loan applications.

First Horizon Mortgage Unit to Either Be Sold or Closed
Executives of First Horizon National Corp. told investors they were committed to either selling or shutting down the mortgage unit this year.

Subprime 2nds Downgraded, CMBS Volume Collapses
Nearly $30 billion in classes of subprime second-lien securitizations were downgraded this week. Issuance of commercial mortgage-backed securities is projected to collapse in 2008, with years passing before volume reaches even half of last year's record level.

1 Dead, 1 Acquired & Several Hurting
As mortgage earnings continued to be pounded, an online lender was shut down, another mortgage company was acquired and an investment firm reiterated its commitment to make several mortgage acquisitions.

Prime Wholesalers Cut Back as Commercial Gets Aggressive
Several large prime wholesale lenders notified mortgage brokers or correspondents that they have cut back on programs and tightened guidelines. But a number of commercial and hard-money lenders are promoting aggressive broker programs.

Best, Worst Mortgage Markets
While lenders face the highest risk of delinquency from mortgages on properties in California markets, the risk was lowest on loans in Texas markets.

April Foreclosures Higher
A widely tracked foreclosure index contradicts findings from a competing index that indicated foreclosures fell in April.

Alt-A Fraud Worse than Nonprime
Mortgage fraud is far more common in Alt-A loans than in nonprime or conforming loans, according to a new report from the Federal Bureau of Investigation. Annual losses from mortgage fraud could be in excess of $10 billion.

Fannie Will Buy Negative Equity Loans
Fannie Mae has outlined a program for borrowers whose mortgage balance exceeds the value of their properties.

HUD Provides Details on Expanded FHASecure
The Department of Housing and Urban Development released details on enhancements to FHASecure.

8 Lose FHA Approval
Several lenders lost their approval to originate loans insured by the Federal Housing Administration -- including a branch of a rapidly growing Colorado-based company that has thrived on FHA-related activity. The terminations were prompted by excessive defaults.

Foreclosures Ease
Monthly foreclosure activity eased.

Technology Improves Originations
A number of electronic offerings promise to improve the marketing and origination of conventional and government loans. Other advancements in mortgage technology include the integration of digital documents and signatures, easy compliance with upcoming appraisal changes and the adoption of browser-based loan document preparation.

Secondary Gyrations
A deal has been reached for a first-mortgage portfolio to trade at a 45 percent discount, while a $12 billion servicing portfolio has found a buyer. And two new ventures aim to help secondary market participants better manage operations with improved technology.

1 Fails, 1 Teeters and 1 Acquired
An Arkansas bank has made its way to the Mortgage Graveyard, US Bancorp was forced to shell out $600 million for an off-balance sheet conduit and IndyMac Bancorp Inc. reported a giant loss. Other recent corporate activity included more international write-downs, an acquisition of a $1 billion originator and the likely bankruptcy of Fremont Investment & Loan.

Mortgage Sales Jobs Grow at Chase
Even as it cuts nonprime positions, JPMorgan Chase & Co. continues to add mortgage originators.

First Step in Commercial Mortgage Origination
An important part of the commercial mortgage brokering process is the fee agreement.

Outlook Varies for CMBS and Nonconforming RMBS
As the performance of Alt-A residential mortgage-backed securities -- especially where second liens were simultaneously closed -- has seen rapid deterioration, commercial MBS are expected to see a more modest decline in performance. One new report looked at the impact of falling residential values and foreclosure costs on expected losses.

New FHA Premiums Slated for Summer
Risk-based premiums on subprime loans insured by the Federal Housing Administration will be implemented within two months.

Freddie Cutting IL Jobs
Freddie Mac is laying off more than 100 Chicago-area technology employees.

Executives Shuffled as Mortgage Woes Continue
Wachovia Corp. has a new chairman, Regions Financial Corp. is hiring a new mortgage chief and Residential Capital LLC is still scrambling for liquidity. And as American International Group reported a massive mortgage-related loss, some of Fannie Mae's and Freddie Mac's ratings were placed on watch.

PHH Improves From Q4
PHH Mortgage saw quarterly originations rise, earnings improve and delinquency drop compared to the prior period.

MGIC Cuts, Restricts Eligible Loans
MGIC said it will halt mortgage insurance on some properties, no longer insure a number of loan programs and significantly restrict several other programs.

Mortgage Legislation Passes House
The U.S. House of Representatives approved sweeping legislation that would modernize the Federal Housing Administration, provide $300 billion in FHA guarantees for borrowers facing foreclosure and increase oversight of government-sponsored enterprises.

Pair Accused of Secondary Fraud
A pair of former executives of a New York-based mortgage banker have been charged with duping secondary market lenders on mortgage purchases exceeding $40 million.

Commercial Loan Liquidity Still OK
Despite growing concern that a major wave of balloon payments on commercial mortgages coming due would have difficulty refinancing, a new report indicates these borrowers are finding lenders. But that hasn't stopped delinquency from rising.

Activity on ARMs, Refis Rise
A slight increase in fixed rates along with a slight decrease in adjustable-mortgage rates helped push ARM share higher. But refinance applications surged -- pushing overall applications higher.

Mortgage Leads Research & Technology
Research and technology are increasingly being used to boost mortgage lead generation results and conversions. One report found the best results from trigger leads can be obtained between one and two weeks after the trigger date.

Foreclosure Drama
Politicians in three states have recently proposed or implemented foreclosure moratoriums ranging from one month to two years, while a Chicago-based group is recommending a plan that would turn foreclosed borrowers into renters then back in to borrowers. Meanwhile, a new report analyzed the impact of foreclosures on children.

N.Y. Assembly Approves 1-Year Moratorium
One of New York's state legislative bodies has declared a public emergency and passed a bill that would give judges the power to delay subprime foreclosures for up to one year. Another bill that passed requires mortgage brokers to have an agency relationship with loan prospects.

Warehouse Lender Cuts Jobs
Citigroup's warehouse lending subsidiary will cut nearly 150 California jobs this year.

Downgrades Hit RMBS, CDOs & Scratch-and-Dent Deals
Since yesterday, downgrades have hit another 82 classes of Alt-A residential mortgage-backed securities, another half billion dollars in classes of scratch-and-dent deals and $2.4 billion more in classes of collateralized-debt obligations. But commercial MBS saw nine classes upgraded.

Another $13 Billion in Losses
Mortgage-related losses announced during the past two days topped $13 billion. Meanwhile, a government-sponsored enterprise has a new chief and a New York-based financial services company on an apparent acquisition binge said it has taken a bigger position in mortgage lending than originally planned.

Another MTA Improvement
Despite an increase in April's average 1-year Treasury yield, the monthly treasury average fell for the 12th consecutive month.

Technically Compliant
Improvements to compliance services dominated mortgage technology enhancements during the past week. Other innovations included alliances, integrations and implementation of electronic imaging.

Record Commercial Originations
Commercial mortgage originations hit another record last year. Activity was again dominated by loans for office properties.

Secondary Conference, Transactions
As mortgage bankers hold their annual secondary marketing conference, banking associations are strengthening secondary alliances and enhancing rural financing programs. A $14 billion servicing portfolio of government loans is on the market, as is a portfolio of loans backed by apartments, condominiums and land, and another closing of a smaller transaction helped the seller clear out an expiring warehouse line.

Alt-A, Subprime & Prime RMBS Downgraded
The past five days have seen ratings downgrades to nearly $10 billion in classes of collateralized-debt obligations, nearly 200 tranches of Alt-A RMBS and more than $3 billion in classes of subprime residential mortgage-backed securities issued in 2003 and 2004. Even prime RMBS from 2003 and 2004 saw classes downgraded, though just a single commercial MBS class was downgraded.

Banks Continue to Tighten Mortgage Guidelines
As banks continued to tighten their lending standards on prime mortgages and home equity lines-of-credit, demand for those products was down, according to a new Federal Reserve report.

Mergers Progress as Industry Struggles with Liquidity
The financial sector continued to scramble in an effort to shore up capital, with two public offerings raising more than $7 billion and two major mortgage lenders facing mounting pressure to complete a number of transactions. In other corporate activity, several acquisitions made their way through the merger pipeline.

Freddie Eases Some LTV Restrictions
Freddie Mac has eased loan-to-value restrictions on some programs.

Biggest U.S. Mortgage Lenders
First quarter mortgage originations tumbled from a year earlier but were better than the fourth quarter, according to an analysis of earnings data by

Foreclosure Fight Flourishes
Public and private institutions and organizations have been busy in the growing business of foreclosure prevention.

Cashouts Diminish
The share of refinances that included cashout fell to the lowest level in nearly four years.

Bankruptcies Increase
The number bankruptcies filed by individual borrowers has increased for five consecutive months and is expected to exceed 1 million this year.

Committee Passes $300 Billion Bailout Bill
A bill passed yesterday by a congressional committee would provide up to $300 billion in loans for delinquent borrowers. Under the proposal, existing lenders would have to accept substantial write-downs, while the government would acquire an equity interest in the properties.

Nontraditional Credit on FHA Borrowers
The U.S. Department of Housing and Urban Development has spelled out guidelines for qualifying borrowers using nontraditional credit.

Mortgage Jobs Fall
Jobs in the mortgage sector, which are down more than 175,000 from their peak, continued to decline in the latest government report. Employment in the sector has contracted for 13 consecutive months.

Loan Prospecting Saves Life
Persistent phone prospecting for reverse mortgages by a Michigan originator paid off in a big way for an elderly Texas woman. While he didn't make a sale -- he did help save her life.

Reverse originator calls for emergency help for Texas senior

IndyMac Issues Bright Outlook
As earnings improved, the top executive at IndyMac Bancorp Inc. says the company has turned a corner.

COFI at 28-Month Low
The cost of funds index reached its lowest level in 28 months.

Ratings Halted on 2nd Liens
The performance of closed-end second liens has deteriorated so much that one major ratings agency has altogether abandoned ratings on securities backed the loans.

New ARM Index
Activity was mixed on mortgage rates during the latest week as applications worsened. A new index for variable-rate loans is expected to launch by next week.

Lenders Call for Changes to New Appraisal Code
Mortgage bankers are concerned about the recent code that was established for appraisals on conforming loans and are calling for either elimination of the code or more industry input, further clarifications and other changes before it is implemented. Of concern is the additional cost to implement provisions of the code and the liability of lenders for activities outside their control.

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