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June 2008 Archive

IndyMac Blasts Schumer
IndyMac Bancorp Inc. said a run on its deposits over the weekend has abated and blamed a U.S. senator for sparking the panic.

Wachovia Dumps Neg-Am Loans
Wachovia Corp. is steering away from mortgage programs that result in negative amortization and waiving prepayment penalties for borrowers who want out of some risky programs.

New Ginnie President
The Government National Mortgage Association has a new president.

WaMu Retail Chief Out
The head of consumer lending at Washington Mutual Inc. has abruptly departed.

Mortgage Insurance Volume Sinks
Mortgage insurance companies issued fewer policies last month than they have at any point since 2000. New applications fell to the lowest point in more than two years.

FHA Lender Growing, Hiring
Fueled by growth in government originations, a New York company has added more than 100 employees this year and forecasts continued growth.

Acquisition Done, Merger On
A small mortgage company has been acquired by a big bank, while two small banks have agreed to merge. Other corporate activity includes a New York-based lender that said it has been approved to issue securities backed by loans insured by the Federal Housing Administration.

Alt-A Issuances Annihilated Again
Classes of Alternative-A residential mortgage-backed securities continued to be downgraded in light of deteriorating conditions. But some classes of commercial MBS saw positive ratings actions.

How to Improve Operations With Technology
The latest technological innovations in real estate finance will help improve loan program searches, decrease mortgage fraud and increase credit scores.

BoA, Countrywide Merger to Result in Massive Layoffs
Bank of America Corp.'s acquisition of Countrywide Financial Corp. will result in more than 7,000 layoffs. But even after the reduction, the combined company will employ more than 250,000 people.

HSBC Reports Layoffs
Nearly 50 mortgage jobs will be eliminated at HSBC Mortgage Services.

M.I. Co. Aggressively Sues Failed Subprime Lender
A lawsuit has been filed against a failed subprime lender and its parent by a major mortgage insurance company. The insurer is not only seeking the repurchase of defective mortgages, but it is asking for contract and tort damages, as well as punitive damages.

Commercial Lender Bankrupt
Following the apparent suicide of its chairman and chief executive officer, an Arizona firm has filed for bankruptcy protection.

Fannie Tightens Guidelines on Prior Foreclosures, Bankruptcies
Fannie Mae has notified its sellers about tougher requirements for borrowers with prior bankruptcies or foreclosures. The company has also tightened its policies for borrowers who purchase a new residence and convert their existing residence to a second home or investor property.

Fifth Third Halts Residential Development Loans
Fifth Third Bancorp has stopped financing residential property developments.

Rates Continue Higher
Fixed mortgage rates rose for the fifth consecutive week to the highest level in 10 months as 1003 loan applications worsened.

2 States Sue Countrywide
As Countrywide Financial Corp. shareholders voted on whether to approved Bank of America Corp.'s proposed acquisition of the company, attorneys general in California and Illinois sued the lender. Meanwhile, Washington's governor also announced actions against the lender.

Best Reverse Markets
A new report identifies the best U.S. markets for home-equity conversion mortgage originations.

National City Loses Mortgage Fraud Case
A bankruptcy judge recently ruled against National City Bank even though the borrowers committed mortgage fraud.

Freddie Purchases Soar
Secondary mortgage volume climbed to the highest level in almost five years at Freddie Mac. But delinquency reached a four-year high.

Fannie Loans Exceed $3 Trillion
Fannie Mae's book of business broke the $3 trillion barrier as monthly secondary purchases rose.

Morgan Stanley Mortgage Unit Cuts Jobs
Morgan Stanley & Co. Inc.'s mortgage unit laid off employees in Texas.

Alt-A Avalanche
Residential mortgage-backed securities backed by Alternative-A loans were the target of a series of downgrades, though a number of commercial MBS saw upgrades.

IndyMac Ratings Lowered
Concerns about capital led to the downgrade of IndyMac Bank FSB's servicer ratings.

National Registry Sees Rapid Growth
The number of states going live with the national licensing registry for mortgage loan originators will double by next month, while the number of registered entities and individuals is expected to triple by yearend.

Servicer Hiring
A massive servicing portfolio acquisition has created job opportunities.

Secondary Market for Distressed Loans Expands
The number of buyers and sellers in the secondary market for distressed mortgages is growing, with four players announcing new activity. A recent acquisition of a residential servicing portfolio has created the country's fifth biggest servicer of government mortgages.

Brokers Being Paid for Foreclosure Referrals
One company is hoping to help more delinquent borrowers by paying mortgage brokers $1,000 referral fees. Meanwhile, New York is attempting to stave of foreclosures by lengthening the amount of time required to complete the process.

Bankruptcy Judge Rules on Repo Agreements
A bankruptcy judge recently ruled that an investment banking firm acted properly when it foreclosed on lower-rated subordinated notes that were part of a repurchase transaction where the principal filed for bankruptcy.

Banks In Play
As the bankruptcy of a bank-holding company enables the sale of its subsidiary, another bank is being acquired by a financial behemoth. A third bank is hoping a successful public offering will boost its capital.

Credit, Pricing and Underwriting Technology
A new offering for loan officers helps them show prospective borrowers how to manage their credit scores while building a relationship. Other recent technology solutions focus on pricing and automated underwriting, among other things.

Groups Reject RESPA Reform
Opposition to proposed Real Estate Settlement Procedures Act reforms is almost universal. Among concerns outlined by mortgage, banking and real estate groups are the lack of calibration between RESPA and the Truth in Lending Act, perceived bias against mortgage brokers and the implementation of a lengthy closing script.

Office Closings, Layoffs at ResCap
Residential Capital LLC is closing three offices and laying off employees. More than 5,000 employees have been impacted by cutbacks at the company since last year.

Quicken Reduces Headcount
Quicken Loans Inc. has cut hundreds of mortgage jobs.

Mortgage Meltdown Permanently Changes Calif.
A new study from the University of California Los Angeles indicates mortgage employment in Orange County -- ground zero of the mortgage meltdown -- will never fully recover.

Citi Warns of Q2 Charges
Citigroup Inc. warned that nonprime U.S. mortgage investments will negatively impact second-quarter earnings, though writedowns will likely decline from the first quarter. But earnings will continue to be hampered through the rest of this year.

Another Wave of WaMu Layoffs
Washington Mutual Inc. is eliminating more than a thousand jobs -- including mortgage positions.

Mortgage, Foreclosure and Investor Fraud
More than 400 defendants have been charged with mortgage fraud, investor fraud or foreclosure fraud since March, the government announced today. But the spotlight was on two former hedge fund managers who allegedly cost investors $1.8 billion in losses on mortgage securities.

M.I. Company Calls it Quits
A mortgage insurer is ending operations and will lay off 100 employees.

Rates, Apps Deteriorate
As mortgage rates headed higher, the average 30-year fixed-rate mortgage climbed for the fourth consecutive week. The pace of 1003 loan applications reversed from an increase the prior week and fell.

1 Merging, 1 Unloading Assets, 1 May Fold
The current economic environment continues to take a toll on financial firms, with some raising capital to offset losses, others merging with healthier organizations and still others warning that they may not survive.

OCC Touts Legal Bank Actions
The Comptroller of the Currency released a report touting orders and penalties issued against mortgage banking subsidiaries of national banks and their employees for mortgage fraud and false certifications on government-insured loans. The regulator also boasted about its success in prohibiting state regulation of federally regulated national banks.

WaMu Boosts Subprime Aid, Cuts Programs
Washington Mutual Inc. is providing $1 billion in financing for subprime borrowers and eliminating two loan programs.

Lenders Eat Costs on Foreclosure Scam
Several mortgage lenders and servicers have agreed to a settlement with Massachusetts' attorney general in a case involving a foreclosure rescue scam orchestrated by an attorney.

Selling, Servicing Updates to Freddie
Freddie Mac announced updates to its policies for sellers and servicers.

Sweeping Underwriting Changes at Chase
Chase has advised its correspondent lending customers of sweeping changes to income verifications, credit verifications and appraisal requirements. The company also outlined a number of red flags for potential mortgage fraud.

HOPE NOW Announces New Agreement
U.S. mortgage servicers have agreed to a set of guidelines they say will reduce the number of foreclosures.

Mortgage Firms Accused of Fraud in 3 Lawsuits
New Jersey has filed three lawsuits accusing 15 corporations and 21 individuals of conspiring to defraud borrowers and mortgage lenders out of more than $5 million. Each case involves at least one mortgage broker that played a key role.

AIG Wholesale Lending Operation Done
The wholesale lending arm of American General Finance Inc. is calling it quits.

Unsecured Loans for Delinquent Fannie Mortgages
Delinquent borrowers on mortgages owned or guaranteed by Fannie Mae can now obtain an unsecured loan for their delinquent payments.

Corporate Ladders & Slides
IndyMac Bancorp Inc. is facing its third investor lawsuit in one week, while several other banks are facing orders from a federal banking regulator. Other recent corporate activity includes a name change for a wholesale reverse mortgage lender.

Chase Cuts PA Jobs
Chase Home Lending will eliminate hundreds of Pennsylvania originators next month. The latest layoffs come on top of more than 1,000 layoffs already reported for this year.

Commercial Broker Programs Accelerate
While nonprime wholesale lenders have become scarce, several commercial mortgage companies are touting programs for virtually any type of property with loan amounts ranging from $150,000 to $100 million. One commercial mortgage product is being touted with loan-to-values as high as 90 percent, and another program is available for land financing.

Digital Mortgage Universe Expands
A reverse loan origination system has been launched, while an LOS for standard mortgages has integrated hazard insurance functionality. Other mortgage technology advancements include the addition of an Alt-A wholesale lender to a loan search engine, the implementation of automated underwriting for commercial mortgages and a legal truce between two credit reporting companies that has led to a credit scoring collaboration.

Fannie Updates 1008, I.O. Rules & FHASecure Purchases
Fannie Mae issued new coding for government-insured refinances of delinquent loans, updated transmittal summaries and revised interest-only debt-ratio calculations.

Private & Public Solutions to Foreclosure Crisis
A number of organizations are offering advice for delinquent borrowers, while one has provided $2 million to help prevent foreclosures. Government lending is also having a positive impact on the foreclosures crisis. One mortgage company is hoping to boost revenues by millions of dollars by jumping in the foreclosure prevention game.

Mergers On, Off & Pending
Shareholders of a troubled real estate investment trust have authorized the issuance of 3.5 billion additional shares, while shareholders of the nation's biggest mortgage lender are being advised to approve the acquisition of the company. Other recent corporate activity in the mortgage sector included a government-sponsored enterprise downgrade, a new REIT president and a delay in a series of planned mortgage acquisitions.

Settlement Agent Steals $13 Million in Refi Proceeds
The former president of a national settlement agent has admitted to duping mortgage lenders out of $13 million in proceeds from refinance loans.

Foreclosure Increase Continues
Monthly foreclosures worsened in every category, a widely watched report said.

Widespread Tightening of Underwriting Standards
A new banking report has confirmed the obvious: Few banks, if any, are easing underwriting guidelines on home-equity, residential or commercial mortgages while plenty are tightening.

Further Changes Proposed for MBS Ratings Process
The Securities and Exchange Commission is proposing reforms to the process of rating mortgage-backed securities. But mortgage bankers object to one aspect of the proposal.

Mass. Originators, Brokers Exit Industry
Massachusetts has seen a significant decline in the number of mortgage brokers and originators. One trade group executive speculates that rising regulations and evaporating originations are to blame.

Apps, Fixed Rates Soar
Fixed mortgage rates shot up to their highest level in eight months. But purchase mortgage activity also jumped.

Wachovia Advises Brokers of Phone Audits
Wachovia has notified mortgage brokers that it will contact prospective borrowers when packages are submitted for portfolio programs.

Massive Loss at Thornburg
Thornburg Mortgage Inc. reported a massive quarterly loss and disclosed that it temporarily halted new loan originations recently. Shareholder equity has been wiped out.

Firms Fight Rumors, Leaks and Investor Lawsuits
Two major banks did their best to contain rumors and leaks, while three other financial firms faced investor class action lawsuits.

Q1 Bank Delinquency Eases
A new government survey of most major U.S. banks found late payments improved from the end of the year to the end of the first quarter. While nonprime mortgages accounted for less than one-fifth of loans outstanding, they represented more than half of bank foreclosures in process.

Commercial Mortgage Performance Strong
Quarterly delinquency on commercial mortgages rose only slightly and remains near all-time lows, according to a new mortgage banking report. Commercial loan performance contrasts rising late payments on residential loans.

RMBS Ratings Actions
Subprime residential mortgage-backed securities continued to face ratings downgrades, while Alt-A RMBS were also impacted. A servicer of loans backing commercial MBS, however, saw its ratings upgraded.

Tech Strategies and Mobile Innovations
Former executives of a failed top-15 lender are hoping a different technological strategy will increase the chances of success at a new wholesale lender they've launched. Other digital innovations include the integration of mortgage fraud prevention technology with automated underwriting systems and an expansion of banking services on wireless devices.

Bogus Bi-Weekly Business Busted
Ohio's attorney general has filed a lawsuit against a company that allegedly collected bi-weekly payments from borrowers but only paid their mortgage lenders monthly.

Growing Wholesaler Hiring
A wholesale lender based in New England has added more than 80 employees over the past year and plans to add another 100 over the next year.

Delinquency Rise Seen Easing
Quarterly delinquency continued to rise but is expected to taper off, a new analysis of credit records indicated.

100 Originators Wanted
An Ohio-based mortgage company plans to add as many as 100 new loan originators in its home state and in Florida by September.

FHA Takes Big Hit on DPA Loans
The Federal Housing Administration reported that it has taken a massive loss on loans tied to seller-funded downpayment assistance and warned these loans could put the agency out of business.

Republicans Blast Obama for Advisor's Ties to Countrywide
Republicans blasted Sen. Barack Obama for the special treatment a campaign advisor received from Countrywide Financial Corp.

Science of Mortgage Leads
A reverse mortgage lead generation company is now demanding that its customers to sign an agreement requiring them to follow a strict set of sales practices. A new offering from another loan lead firm enables originators to identify competitors who close loans on leads that they purchased but didn't close.

Foreclosure Decline Reported
A new report indicates foreclosure filings fell for the second consecutive month.

Biggest Gets Bigger, Others Struggle
Federal regulators recently announced a number of actions, including approval of a merger that will create a financial institution with more deposits and residential originations than any other U.S. firm. Meanwhile, a formerly high-flying subprime lender is on the verge of bankruptcy.

New Accredited CEO
The former chief executive officer of Bear Stearns Residential Mortgage Corp. has been tapped to head Accredited Home Lenders Holding Co.

Freddie Sees Earnings Improvement Ahead
Freddie Mac's top executive told investors that he expects earnings this year to be better than last year.

Decade Old Deals Downgraded
Recent ratings downgrades impacted subprime residential mortgage-backed securities dating back to 1997. Meanwhile, $27 billion in Alt-A RMBS were downgraded and one commercial MBS saw classes upgraded.

Mortgage Market Liquidity Proposals
A banking regulator has warned Congress that the mortgage market will get worse before it gets better and offered proposals that can help improve the situation.

Secondary Market Business
Recent secondary marketing activity included the sale of $15 billion in non-agency securities, a $12 billion servicing portfolio sale and relaxed loan-to-value restrictions at Freddie Mac.

Broker Employment Inches Higher
More people continued to exit the mortgage industry, though the number mortgage broker employees increased slightly, according to a new government report. Overall U.S. unemployment surged, but the health care industry maintained growth.

Foreclosure Prevention Strategies
States and cities continue to pursue more stringent foreclosure legislation -- though mortgage bankers oppose some of the measures. But both sides, as well as non-profit groups, are increasing activity to reduce foreclosures.

Agencies Agree to Major RMBS Ratings Reforms
The three major ratings agencies have agreed to change how they are paid in a move intended to eliminate conflicts of interest in their analysis of subprime residential mortgage-backed securities and restore investor confidence.

Delinquency, Foreclosure Rates Soar
Nearly 9 percent of U.S. residential mortgages were either delinquent or in foreclosure at the end of the first quarter. Florida, Indiana and Michigan were among the states with the worst rates. But the rate of late payments on loans insured by the Federal Housing Administration actually fell.

Loan Apps Fall
A decline in variable mortgage rates wasn't enough to slow a decline in new loan applications.

ResCap Liquidity Secured
A consortium of international financial institutions has agreed to a massive and comprehensive financing package for Residential Capital LLC.

HUD Secretary Confirmed
President Bush's nominee to oversee the troubled U.S. housing market has been confirmed.

Senate confirms Steven Preston
Preparing to Defend Against Lawsuits
A new report discusses steps mortgage bankers can take to defend themselves against mortgage litigation.

Accredited Reorganizes
Some employees of Accredited Home Lenders Inc. are telling mortgage brokers that the company has shut down. But a company spokesman said that is not the case.

New Tech Alliances, Clients Touted
Appraisal, compliance and originator services were among the areas to see new mortgage technology offerings this past week. Three companies touted new clients, three new alliances were announced and two companies promoted free services to draw in potential customers.

Mass. AG Sues Option One
The state of Massachusetts is suing defunct Option One Mortgage Corp. and its parent over allegations it placed minority borrowers in high-cost loans and contributed to the state's foreclosure crisis. The company was criticized for encouraging networking among minority groups, paying yield-spread premiums and paying volume bonuses.

First Horizon to Sell Mortgage Unit
First Horizon National Corp. has found a buyer for its mortgage unit.

States Step Up Mortgage Legislation
From Oregon to New York, states are stepping up legislation to reign in mortgage lending practices. But some experts are warning that some of the states are going too far.

Commercial Mortgage Production Tumbles
Led by a massive decline in securitizations, quarterly commercial mortgage originations tumbled. But government-sponsored enterprise activity was up on an annual basis.

3 Acquired, 1 Collapses
Three financial firms were acquired during the past week, while regulators shut down a Minnesota bank. Other recent mortgage-related corporate activity included the appointment of a former regulator to a senior executive position at a reverse lender, another investor class action and a dividend declaration by a subprime real estate investment trust.

LendingTree Faces Class Action Over Data Breach
LendingTree LLC, which recently disclosed that former employees helped a number of mortgage companies steal the personal information of loan prospects, is now facing a class-action lawsuit over the data breach.

ResCap Outlines Liquidity Measures
Residential Capital LLC has outlined in a regulatory filing a number of transactions with its owners that it hopes will keep it in business.

MTA Continues Lower
Even though the average 1-year Treasury yield rose for the third straight month, the monthly Treasury average index continued to decline.

REOs Double from 2007
The monthly rate of real estate owned doubled from 2007, and the rate of serious delinquency and foreclosure filings was up by nearly the same level, a new report indicated. While Florida and California continued to rank among the five states with the highest rates of delinquency and foreclosure, five other states had worse REO rankings.

NIM Classes Dominate Latest Ratings Actions
Some upgrades emerged among a number of ratings agency actions, though more than 100 net interest margin notes saw classes downgraded.

Baltimore Blames Wells for Foreclosure Woes
A lawsuit filed against Wells Fargo Bank, N.A., by the City of Baltimore alleges the lender is responsible for "tens of millions of dollars" in lost tax revenues to the city because of a few hundred foreclosures during the past seven years. In its request for a dismissal, Wells countered that the city itself was responsible for nearly 20,000 foreclosures during that same period.

New Chairman at WaMu
Washington Mutual Inc. has stripped its chief executive officer of his chairman title.

Wachovia CEO Out
Wachovia Corp.'s board of director has ousted the company's top executive.

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