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July 2009 Archive

COFI Cools
After shooting up in May, the cost of funds index eased in June.

Colonial Warns of Failure
Taylor, Bean & Whitaker Mortgage Corp. has walked away from an investment in struggling Colonial BancGroup. The institution is warning of its imminent failure.

Originations Soar at Citi
Quarterly home loan production jumped more than 40 percent at Citigroup Inc.

M.I. Volume Turns Higher
As delinquency deteriorated and new quarterly activity declined, monthly business at the nation's mortgage insurer's improved.

Brokers Lose RESPA Lawsuit
A legal attempt by the nation's mortgage brokers to force equal disclosure of yield spread premiums, overages and service released premiums by mortgage brokers and mortgage bankers ended in disappointment.

Delinquency Higher, Foreclosure Starts Lower
Delinquency and repossessions at U.S. mortgage servicers climbed during June, though new foreclosure filings eased.

Fannie Volume, Delinquency Surge
Monthly business volume at Fannie Mae improved to the highest level since 2003. But multifamily delinquency deteriorated to the worst level on record while residential delinquency climbed further into record territory.

Billion Dollar Producer Emerges
An Illinois institution has leveraged a recent acquisition to push its quarterly originations well past $1 billion.

ARM Share Up as 15-30 Year Spread Widens
The spread between the 15-year and the 30-year fixed rate climbed to its widest level in 16 months. Also rising was the share of adjustable-rate mortgage applications.

FHA HAMPered by Modifications
A loan modification program has been developed for mortgages insured by the Federal Housing Administration. The program includes a special no-interest second mortgage.

Quarterly Cashouts Climb
Despite a decline in the share of refinances involving cashout, U.S. borrowers extracted nearly $5 billion more in equity from their homes through refinance transactions during the latest quarter.

Judge Rules on FICO Vs. VantageScore
A federal judge has dismissed a claim that the one of the three credit agencies violated its contract with FICO by developing a competing credit scoring model. She also dismissed claims of antitrust violations and false advertising -- despite the possibility that the three might have tried to put FICO out of business. But FICO can proceed with its claim of trademark infringement tied to range of credit score values used in the VantageScore.

Jumbo Downgrades Exceed 5k Since May
Since late May, two ratings agencies have reported downgrades on more than 5,000 jumbo tranches because of deteriorating performance.

Fed Urges Borrowers to Shop Mortgages
A new set of tips issued by the Federal Reserve warns prospective borrowers to shop around for the best loan terms because their mortgage brokers and lenders aren't obligated to do so.

Flagstar Shrinking Mortgage Ops
The number of mortgage offices, account executives and loan originators have been cut at Flagstar Bancorp Inc. In line with the contraction, originations were off from the first quarter.

Subprime Will Return
Subprime mortgage lending will return to the U.S. housing market, according to economic panelists participating in a discussion today about the nation's mortgage crisis. Among the panelists was Dr. Robert Shiller.

Dr. Robert Shiller among online panelists

Mortgage Broker Wins Tournament By Knockout
A "spinning hook kick" by a Florida mortgage broker knocked out his opponent and earned him a world championship.

Eric Parker knocks out four in IKF championship

New Firm to Invest in Agency RMBS
An investment firm and a real estate investment trust announced plans to merge and invest in agency securities.

Foursome Duped Mortgage Investors
Four individuals -- including a school principal and a pharmacist -- have been charged with deceiving investors on loans originated by a mortgage banking firm that subsequently filed bankruptcy and saw the suicide of its chief. Nearly $200 million was involved.

Servicers to Speed Up Modifications
Following a meeting today with the Obama administration, U.S. servicers stepped up their commitment to moving mortgage modifications more quickly. In order to ensure full servicer participation, the administration has enlisted Freddie Mac as big brother.

The Credit Report
The impact of loan modifications on credit scores is minimal as long as other factors remain intact. In other credit reporting activity, all three credit agencies are on board with the latest version of FICO, the government won more than $40 million in judgments against credit repair firms and America's collective credit score is above 670.

FHA Automating Nontraditional Credit
The U.S. Department of Housing and Urban Development is automating non-traditional credit reporting on loans insured by the Federal Housing Administration.

Reverse Lender Closing
Less than two years after being acquired, an Illinois-based reverse mortgage lender is being closed down by its parent.

Billion Dollar Producer Expands Staff by Half
A Missouri firm expects become a billion dollar producer this year -- doubling last year's residential originations. So far during 2009, the company has boosted its staff by more than half.

Merger Fest
In addition to two mortgage company deals that recently went down, the Federal Reserve reported 15 applications to acquire, increase or retain interest in federally regulated financial institutions.

Chase Beefs Up Servicing Staff
Hundreds of mortgage jobs are being added by JPMorgan Chase & Co. in Louisiana.

Mortgage Leads Conference
One of the country's biggest lead providers is hosting a Las Vegas conference for its customers.

7 Banks, 3 Wholesalers, 1 Net Branch Close
Six of seven banks shut down by bank regulators Friday were owned by the same holding company, and all six were heavy in construction-and-land-development loans. The seventh was the first bank failure in New York in five years. Other recent casualties include three wholesale operations and a net branch network.

Massive Bust Predicted for Australian Housing Market
First-time homebuyer programs have helped prop up Australia's housing market. But an Australian economist -- who more than a decade ago predicted that the residential securitization model would flop for investors and insurers -- sees home prices tanking over the next decade. And his outlook for the United States is no better.

The Modification Report Card
U.S. mortgage servicers have recently reported hundreds-of-thousands of modifications that have either been solicited, approved or completed. At the center of the modification universe is the Home Affordable Modification program.

PNC Consolidating Underwriting
The PNC Financial Services Group Inc. announced a major consolidation of mortgage underwriting functions. But the company isn't talking about how many employees are impacted.

Big TX Bank Warns of Imminent Failure
A $16 billion Texas-based bank has disclosed that it was unable to obtain critically needed capital and will likely fail. As the institution awaits seizure, the board of directors has ceded control to its federal banking regulator.

Business Better, Delinquency Worse at Freddie
New business and multifamily delinquency improved at Freddie Mac. But residential delinquency climbed further into record territory.

Record 5th/3rd Originations
Residential loan production reached a record at Fifth Third Bancorp. Income soared, employment increased and the servicing portfolio grew.

PNC Delinquency is Sky High
Residential delinquency at The PNC Financial Services Group Inc. jumped and is more than twice as high as the industry rate. Earnings and originations also deteriorated. But one bright spot was an increase in the number of mortgage employees.

Fed Proposes Sweeping Changes
In its attempt to clean up the mortgage business, the Federal Reserve Board has proposed sweeping disclosure changes -- including a new one-page form at application, final Truth in Lending Act disclosures three days before closing and special new notices required after the closing on adjustable-rate loans. The fed is also proposing restrictions on lenders that provide home-equity lines-of-credit and calling for a ban on yield spread premiums paid to mortgage brokers and originators who upsell interest rates.

Apps, Rates Rise
Except for a hybrid adjustable-rate loan program, mortgage rates rose. Reacting to last week's decline in rates, 1003 application volume inched higher.

Mixed Results at Regions
Home-loan delinquency edged higher as earnings tanked at Regions Financial Corp. But an improvement was reported in residential originations, home-equity delinquency and commercial mortgage delinquency -- which still sits well below 1 percent.

Record Production, Worse Delinquency at US Bank
Residential originations peaked, but delinquency deteriorated at the holding company for U.S. Bank Home Mortgage. Buried deep in the company's earnings report was a note indicating that some subprime mortgages have been funded.

Quicken Business Booming
Residential originations have nearly tripled over the past year at retail mortgage lender Quicken Loans Inc.

SunTrust Residential Delinquency Tumbles
SunTrust Banks Inc. cut its quarterly losses, increased home loan production and brought delinquency down.

Higher Production, Record Earnings at Wells
A 40 percent surge in retail originations pushed quarterly activity at Wells Fargo & Co. to the third-highest on record, though volume might be headed lower. The period included the sale of two portfolios for $800 million. Meanwhile, income at the West Coast giant climbed to the highest level on record.

Mortgage Insurance Wire
At least one mortgage insurer is tracking the performance of third-party originators and denying coverage on loans originated by some of them. Another has made several updates tied to declining markets, while a third insurer is improving its contract underwriting operations.

Regulations Would Impact Non-Bank Originators, Lenders
Proposed new regulations would require non-bank mortgage lenders and originators to file reports on suspected mortgage fraud and other criminal activity. Such reporting is already required of financial institutions.

Harvard MBA to Head Freddie
Freddie Mac has hired a Harvard M.B.A. as its new chief executive officer.

New Mexico Lenders Face Big Changes
Sweeping changes to mortgage lending laws in New Mexico that take effect at the end of this month are expected to impact lending in the state. Among the changes are restrictions on adjustable-rate loans, prepayment penalties and income verification.

FHA '09 Endorsements Exceed $0.25 Trillion
The origination of loans insured by the Federal Housing Administration during the current fiscal year, including reverse mortgages, has exceeded a quarter-trillion dollars.

Dozens of Banks Hit With Regulatory Actions
More than 30 regulatory actions were recently taken against U.S. financial institutions. The majority of the actions were formal agreements requiring banks to clean up their bad loans, increase capital and overhaul management.

Mortgage Regulations Evolving
Upcoming changes to the mortgage disclosure process have community bankers concerned and compliance auditing firms chomping at the bit. But several service providers are promoting solutions that will help mortgage lenders maintain compliance and avoid exploitation over errors.

Friday's Failures to Cost Over $1 billion
Government losses on the failure of four financial institutions Friday are projected at more than $1 billion. The two biggest failures had a heavy concentration of commercial and construction-and-land-development loans.

Lender Failures 101
So far this year, the closing of 101 mortgage-related operations has been tracked. A rash of bank failures are fueling the activity.

Citi Earnings Better, Delinquency Worse
Income improved at Citigroup Inc., though delinquency has doubled over the past year. The company has ceased reporting residential origination data in its earnings report -- though government data analyzed by indicates business improved.

Reverse Wholesalers Help Brokers
Five of the biggest reverse mortgage wholesale lenders have joined an effort to educate mortgage brokers who are new to the business.

BoA Originations Jump
Residential mortgage production leapt by more than a quarter at Bank of America Corp.

ARM Share Jumps
An increasing share of loan applicants are choosing adjustable-rate mortgages. And with rates possibly rising, the share is likely to continue growing.

CA Jumbo Activity Migrating South
Two mortgage lenders dominate the California market, according to a new report. Jumbo loan activity appears to be easing in the Bay Area while increasing in Southern California.

MGIC Plan Approved
Mortgage Guaranty Insurance Corp. has obtained approval to reactivate a dormant subsidiary so that it can keep writing new business.

Higher U.S. Foreclosures Led by CA
Quarterly repossessions improved from a year earlier, but monthly activity was worse. California continues to dominate foreclosure activity.

Chase Correspondent Channel Purchases Surge
Mortgage production was up from the prior quarter at JPMorgan Chase & Co., while delinquency leveled off and earnings increased. The improvement in originations was driven by a 16 percent surge in correspondent business. Headcount at the retail financial services unit jumped by more than 3,000 during the latest quarter.

FHA Commissioner Sworn In
President Obama's nominee to head the Federal Housing Administration has been sworn in.

David Stevens sworn in
Mod Firms Targeted in 'Operation Loan Lies'
State and federal officials have launched '"Operation Loan Lies" -- an effort targeting nearly 200 loan modifications firms for a number of alleged illegal practices including promising services they can't deliver, charging more than $5,000 in advance fees and misrepresenting their affiliations with mortgage servicers.

The FHA Insider
One of the few areas with consistent growth recently has been the origination of loans insured by the Federal Housing Administration. As government and industry call for more FHA resources, lenders and service providers are capitalizing on the boom in FHA business.

Lenders, Banks Oppose Powerful New Regulator
Proponents and opponents of the Obama administration's proposal to create a powerful a new consumer regulator have recently been making their respective cases before lawmakers. Bankers and mortgage bankers oppose the proposed regulator.

AIG Unit to Issue $1.6 Billion in Private MBS
A subsidiary of American International Group Inc. has agreed to privately securitize $1.6 billion in mortgages -- keeping some of the riskiest slices itself.

Executive Promotions
U.S. mortgage brokers have chosen new leaders for their trade group, several small banks hired or promoted senior executives and a new chief has reportedly been selected for Freddie Mac. Meanwhile, appointments were announced by two federal agencies tied to the mortgage activity.

Owner of CA Mortgage Firm Arrested
The owner of a defunct California mortgage company has been arrested over accusations that he deceived elderly investors and committed mortgage fraud. Millions of dollars were allegedly lost in the apparent Ponzi scheme.

Secondary Marketing Update
Nearly $50 million in residential mortgage-backed securities were traded at a 99 percent discount. Other secondary activity included the sale of nearly $200 million in commercial loans, several agency updates and the promotion of services that help sell or value mortgage assets.

Record Quarter at Ginnie
Quarterly issuance reached the highest ever at the Government National Mortgage Corporation.

CMBS Delinquency Jumps
Monthly delinquency on securitized commercial mortgages jumped and is expected to more than double by the end of this year. Although apartment delinquency was higher than any other category, the most deterioration occurred with hotel loans.

Distressed Comps Killing New Home Sales
Many of the nation's home builders claim faulty appraisals that use distressed comparables are killing new business. Regulators are being prodded to issue guidance about how distressed comparables should be used.

Let the Lender Suffer the Loss
Borrowers have become much more comfortable walking away from mortgage payment obligations on their homes and letting their lenders suffer property-value losses, a recent study suggests.

GMAC Portfolio Trades at 82% Discount
A pool of residential loans originated by GMAC has been acquired at a huge discount.

Wyoming Bank Seized
State regulators closed a small Wyoming bank Friday. Last year, the institution faced a federal cease-and-desist order.

New FHA Commissioner Confirmed
The U.S. Senate has confirmed President Barack Obama's choice to head the Federal Housing Administration.

Senate confirms David Stevens

Freddie Revises Income Requirements
Freddie Mac is taking steps to address underwriting deficiencies on loans it acquires -- including tightening income requirements. The secondary lender also introduced new forms and stopped purchasing loans on certain types of condominiums.

Origination Projection Slashed by $400 Billion
Driven by a decline in the forecast for conventional production, estimates for this year's residential originations have been slashed by $400 billion.

Lender Seeks $0.5 Billion in Loans
A commercial mortgage lender is looking for $500 million in commercial properties to finance.

Servicers Told to Improve Modification Results
The Obama administration is calling on mortgage servicers to devote more resources to its Home Affordable Modification Program.

Wholesalers Defrauded on $100 Million
AFG Financial was a wholesale customer of New Century Mortgage, Countrywide Home Loans and Wells Fargo Bank. Loans originated by the mortgage broker had no problems with first-payment defaults, and it wasn't facing repurchase demands.

Big Shakeup at Citi
Citigroup Inc. has replaced its chief financial officer and vice chairman, while the head of its banking unit has also been replaced. In addition, the chairman of Citi Holdings is stepping down.

Big Reverse Lender Halts Business
A reverse mortgage lender that recently ranked as the third biggest reverse mortgage originator has stopped accepting new business and might wind down altogether.

Foreclosures Improve
Foreclosure filings fell from the first quarter and from the prior year.

Rates, Apps Improve
The one-year adjustable-rate mortgage and 30-year fixed-rate mortgage tumbled more than 10 basis points over the past week as refinance applications jumped.

BoA is Biggest Reverse Wholesaler
As wholesale reverse mortgage originations tumbled at one lender, a unit of Bank of America Corp. stepped in to grab top the monthly ranking.

Government Share at 19-Year High
The share of mortgage applications that were for loans either insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs has risen to the highest level since 1990.

Reverse Fundings Lower
Quarterly reverse mortgage originations fell, though monthly volume and the number of active lenders rose.

Final Payment on Original 'Biggest Settlement'
Long before the Ameriquest and Countrywide settlements, there was the settlement with First Alliance Mortgage Co. -- which was touted as the biggest ever at the time by the government. With a huge recent payment to 15,000 of its borrowers, the defunct subprime lender has completed its obligations under the settlement.

The Loan Modification Expert
The number of U.S. modifications fell in May as a federal modification program kicked in. Recent legal, regulatory and legislative actions by state and federal agencies focus on huge up-front modification fees.

Citi Correspondent Re-Activated
After re-engineering its quality control procedures, CitiMortgage Inc. has resumed limited correspondent operations.

Mortgage Fraud Headed Higher
A new government report indicates mortgage fraud increased last and is headed even higher.

South Central L.A. Institution Seized
California regulators closed a small credit union in South Central Los Angeles. Meantime, a Texas financial institution warned that it might wind up insolvent if the government doesn't approve a rescue plan.

HEL Delinquency Reaches Another Record
Rising unemployment is driving consumer loan delinquency higher.

Repos Improve from 2008
Monthly delinquency and foreclosure activity increased. But repossessions fell from last year.

Fundings For First Timers Might Spike
First-time homebuyers are projected to account for more than $100 billion of this year's residential originations, according to new report that warns of a possible year-end spike in production.

Coop Member Doubles as Investor
Wintrust Mortgage Corp. is not just an investor for Lenders One Mortgage Cooperative -- it's a member. The dual role has created opportunities for other members.

Subprime Securities Downgraded
Ratings continued to be pounded on subprime residential mortgage-backed securities.

MTA Sinks Further
After falling to its lowest point in more than a half century, the Monthly Treasury Average fell further.

Orders Fly as New Regulator Proposed
The response from at least one mortgage-related group to the Obama administration's proposal for a powerful new consumer regulator is 'no thanks.' Meanwhile, nearly two dozen cease-and-desist orders were among more than 50 orders recently lobbed by federal regulators at noncompliant financial institutions.

Tighter M.I. Requirements Effective Today
Tougher credit and income requirements become effective today on new mortgage insurance applications submitted to United Guaranty Corp.

Fed Receives 25 Apps to Acquire Banks
The Federal Reserve has recently received 25 applications for individuals and entities to acquire interest or control in more than two dozen U.S. financial institutions. Among recent nonbank merger deals was the acquisition of a California-based reverse mortgage lender.

Monthly BK Filings Down
Monthly bankruptcy filings by consumers dipped. But by all other measures -- bankruptcies continued to increase at an unrelenting pace.

7 Banks Seized
Six small Illinois financial institutions owned by one family were among seven banks seized by bank regulators today. Banks assuming the deposits of the failed institutions paid some hefty premiums.

Millions Released for Displaced CA Mortgage Workers
The federal government has released its second multi-million dollar installment from a fund established for mortgage and banking employees laid off in California.

GMAC Restructured, Renamed
GMAC LLC has changed its name and restructured how it is organized.

Mass. Crackdown on Mortgage Licensees
The Commonwealth of Massachusetts has made it tougher to qualify for a mortgage license and handed out hundreds of orders to those who don't comply. Out of nearly 8,000 license applications received by the state since July 1, 2008, nearly 2,000 of the applicants either gave up or were turned down.

Big 10-Year Improvement
Mortgage rates appear to be headed lower as the 10-year Treasury yield deflates.

Mortgage Broker Jobs Contract
The number of people employed by mortgage bankers and servicers increased in the latest monthly employment report from the government. But the increase was not enough to offset mortgage broker job losses.

Appraisers Ask HUD to Lift AMC Fee Restrictions
Four appraiser trade groups are calling for the U.S. Department of Housing and Urban Development to lighten up on its fee restrictions for appraisal management companies. The groups claim that AMCs are sacrificing quality on FHA loans for price.

Agency MBS Volume Roaring
Monthly issuance of mortgage-backed securities at the two government sponsored housing enterprises has roughly doubled during the past year, while June volume at the Government National Mortgage Association reached another high.

Huge FHA Fraud Settlement
The parent of Beazer Mortgage Corp. has settled allegations of mortgage fraud at the unit. The agreement could end up costing more than $50 million.

Refi LTVs Boosted
The maximum loan-to-value on conforming mortgages originated under the Home Affordable Refinance Program has increased 20 percent. In addition, borrowers are being given incentives to pay their loans down faster.

Best Mid-Sized Employers
Few mortgage-related entities ranked among a new list of the best medium-sized companies to work for. One that did, however, is hiring new employees at a healthy clip.

LoanCare Servicer Rating Upgraded
For the second time in less than 30 days, Moody's Investors Service upgraded the servicer rating of LoanCare Servicing Center Inc.

Wells Unloads Subprime Loans
A big portfolio of subprime mortgages has been sold by Wells Fargo & Co.

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