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August 2012 Archive


FHA, Purchase Activity Tumbles
As prospective borrowers settled into a long weekend, inquiries for government-insured loans and purchase financing took the biggest hit. Not even low mortgage rates that are on a declining trajectory could halt the overall holiday slowdown. Jumbo mortgage inquiries, however, picked up.

Mortgage Market Index 208 for week ended Aug. 31

Membership Grows as Number of Credit Unions Shrinks
The nation's credit unions are expanding their collective base of members, and fewer institutions are servicing the new members. The sector has seen several quarters of lending growth as earnings and capital strength also improved.

FHA Delinquency Worse But Production Up
The origination of government-insured mortgages picked up last month but might have weakened in August thanks to a drop in new refinance applications. Federally insured reverse mortgage volume tumbled in July, though new applications have rebounded. The rate of seriously delinquent government mortgage inched up again.

G-Fee Increase Tackles Industry Concentration
Government data indicates that conventional agency originations are becoming too concentrated among a small group of mega-lenders. It also found that 15-year borrowers are subsidizing rates for 30-year borrowers. So higher guarantee fees are being implemented to tackle both of these issues.

Mortgage Insurers Expand Activity
New mortgage insurance business strengthened last month to the highest level since before the global financial crises erupted. Outstanding policies expanded for the second consecutive month. But defaults inched up.

Fannie's Business Up, Book Grows and Delinquency Down
Thanks to a brisk level of new secondary activity, the multi-trillion-dollar book of business at the Federal National Mortgage Association grew last month. Residential delinquency fell to its lowest level in more than three years, and late payments on apartment loans declined for the eighth consecutive month.

Hard Money Lender Denies Investor Fraud Charges
21st Century Financial Resources Inc. was a hard-money lender that depended on investors for lending capital. The former chief of the company has pleaded not guilty to allegations she deceived investors.

Mortgage Rates Hover Near Record Lows
Fixed mortgage rates fell this past week, and the 30-year loan sits just 10 basis points above its all-time low. The other good news is that there is no upward pressure on mortgage rates at the moment.

Servicer Earnings Off as Portfolios Grow
Independent mortgage servicers boosted their portfolios in the second quarter, though they are earning less per loan. The average mortgage servicing employee is able to handle more loans than in prior periods.

Performance Metrics Strong at Independent Lenders
Home loans originated by the average independent mortgage banker were stronger during the latest quarter, though same-store sales were little changed over the last three months and year. As the refinance storm has maintained strength, lenders are getting more out of production personnel and out of their wallets.

Mortgage Delinquency Declines
Residential loan delinquency improved from June and has tumbled more than a hundred basis points over the past 12 months. Improved performance has been less pronounced in the foreclosure category than the 30-day category.

High-Risk Mortgage Securities at Center of Citi Settlement
An investor lawsuit accusing Citigroup Inc. of hiding exposure to high-risk mortgage securities has been settled. The plaintiffs are Citi investors from 2007 and 2008.

NJ Loses Portfolio Lender With Hudson City Sale
M&T Bank Corp. disclosed Monday its intent to acquire Hudson City Bancorp. In addition to strengthening its foothold in the New Jersey market, the $3.7 billion deal will allow M&T to promote its commercial lending products to a wider audience. But the emphasis on commercial loans will come at the expense of home loans.

Servicer Settlement Progress Report Released
The first progress report has been issued by the monitor of the $25 billion mortgage servicer settlement reached earlier this year. The report looks at activity from March through June.

ResCap Execs Denied Incentives
A bankruptcy judge has denied more than two dozen executives of Residential Capital LLC millions of dollars in incentive plan payments. The ruling came one day after a government disclosure indicated that ResCap is being investigated over potential violations of federal securities laws in the issuance of residential mortgage-backed securities.

Career Moves Made in Mortgage Business
In addition to replacing departing executives, new management positions are being created and filled at several growing mortgage firms. Wholesale and reverse mortgage executives are being recruited, and executives of companies that are closing are landing at other organizations.

Employment and HEL Delinquency Up at Banks
Delinquency on home-equity loans owned by banks has been deteriorating, though other residential delinquency was lower. Despite a decline in the number of active financial institutions, staffing in the sector has expanded.

MBS Issuance Eases at Ginnie
The volume of mortgage securities guaranteed by Ginnie Mae last month slipped from June. But the level of issuance came in higher than the same month last year. Guarantees on securities backed by apartment loans surpassed $10 billion for the year.

PRMI Supports Growing Production With New Recruits
Dozens of employees have been recruited by Primary Residential Mortgage Inc. so far this year as annual originations are on track to jump more than 40 percent over last year's levels. The lender has taken advantage of the favorable mortgage environment to update its brand.

Judicial Foreclosure States Have Worst Foreclosure Rates
Foreclosures were completed on fewer properties in July than during the month-earlier and year-earlier periods. Even the biggest foreclosure state slowed its activity. Non-judicial foreclosure states were dominant among states with the greatest number of filings, but the worst rates of foreclosure were in judicial foreclosure states.

New York Lender Reaches Disparate Impact Settlement
A New York firm that was sued earlier this year by the government over practices that allegedly produced higher mortgage rates for minority borrowers has admitted that its practices had a disparate impact and agreed to pay more than $3 million to settle the charges.

M&T Deal Capitalizes on Hudson City's NJ Presence
A deal for M&T Bank Corp. to acquire Hudson City Bancorp will enhance M&T's presence in one of the most affluent U.S. markets. The agreement was an alternative to a Hudson City strategy that wouldn't yield profits for a couple years.

County Supervisor Opposes Eminent Domain
When the idea of using the power of eminent domain to seize loans included in private-label mortgage-backed securities was being discussed by three local governments in California earlier this summer, one of the officials vowed she "will be an incredibly outspoken opponent" if eminent domain is implemented.

BofA Giving Away Homes
Injured military veterans are among the recipients of as many as a thousand properties being donated by Bank of American Home Loans.

The Latest in Mortgage License Requirements
National regulatory associations have been busy implementing mortgage licensing requirements and appointing individuals and other organizations to new roles in the sector. Guidance has been issued about transitional licenses for originators who move from one state to another or move from a financial institution to a non-bank lender.

Regulatory Actions Taken Over Unlicensed Originations
Regulators in Nevada and Pennsylvania have recently taken actions against mortgage firms that allowed originators to do business without being properly licensed. A Northeast lender recently touted its new license in Arkansas.

Servicer Settlement Trickles Down to NH
A small share of the mortgage servicer settlement went to New Hampshire. As required in the terms of the agreement, borrowers are being evaluated for modifications through the settlement and through other government programs. A hotline established to field calls from affected borrowers has already received thousands of complaints.

California Legislators Pass Hard-Money Bill
California lawmakers have unanimously passed legislation that would strengthen laws protecting investors and borrowers in hard-money transactions. Hard-money lenders support the bill, which still needs the governor's signature.

Mortgage Recruiting is Brisk
A strong pace of office expansion has been accompanied by elevated recruiting activity at the nation's residential lenders and mortgage service providers. While demand appears concentrated in production positions -- hundreds of other mortgage-related job openings include positions in appraisals and servicing. At one Northeast firm with an active recruiting campaign, nearly half of its more than 500 total employees are loan originators.

ARM Business Sinks, Rates Could Ease
This week's mortgage market maintained a little more momentum than last week. All categories but one -- adjustable-rate mortgage activity -- saw a modest increase. Overall business slowed by more than a quarter compared to this time last year, and ARMs saw the most deterioration.

5 percent decline in Mortgage Market Index for week ended Aug. 24

County in MN Sues GSEs for $10 Million
Following the lead of other local governments across the country, a county in Minnesota has filed a federal lawsuit against Fannie Mae and Freddie Mac over lost transfer fees. More than $10 million is sought from the government-sponsored enterprises.

Fannie Recognizes Best Performing Servicers
The results are in, and the best-performing mortgage servicers have been recognized by the Federal National Mortgage Association. The secondary lender said that servicer performance has measurably improved since it implemented the program to identify superior servicers.

CMBS Lates Lower, But Outlook Dim
The share of securitized commercial real estate loans that were past due at least one month was lower in July. Lodging loans saw the biggest improvement. But the overall outlook is dim given the large number of mortgages expected to mature soon.

Freddie Mac's Mortgage Portfolio Slips Below $2 Trillion
Secondary marketing activity at the Federal Home Loan Mortgage Corp. dropped by more than a quarter last month. While the government-controlled enterprise reduced home-loan delinquency again, past-due payments on apartment loans were up for the fifth consecutive month. The housing finance agency's total mortgage portfolio fell below $2 trillion for the first time in five years.

MA AG Warns FHFA About Principal Reductions
Massachusetts' attorney general has issued a warning to the regulator of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. about complying with a new state law.

Mortgage Rates Rise But Could Head Lower
Interest rates on residential loans have been up each of the past four weeks but could be significantly lower in next week's report. The one-year adjustable-rate mortgage fell just shy of its all-time low.

Biggest Commercial Mortgage Servicers
The biggest servicer of commercial real estate loans is losing ground to its rivals. The top-five ranking for securitized commercial mortgage servicers was identical to the overall ranking. One company has the agency market locked up.

AMC is Fastest-Growing Mortgage-Related Firm
The latest list of America's fastest-growing companies is in, and an appraisal management company ranked highest among mortgage related firms. In all, three appraisal firms held top-10 positions among mortgage-related companies. Default service providers also had a strong presence.

Mortgage Bankers Boost Refi Projection
Thanks to another improvement in expected refinance originations, the forecast for overall residential production has been raised by nearly $100 billion for 2012. The improved outlook has this year's business up 12 percent over 2011.

Wholesale Lenders Required to Be Licensed in Nevada
The state of Nevada has clarified that wholesale lenders doing business in the state are required to be licensed as mortgage brokers.

Fannie Cuts ARM LTVs, Revises Credit Score Requirements
Loan-to-value ratios on loans with adjustable rates are being reduced by Fannie Mae, while the ratios are being increased on some fixed-rate transactions. Fannie is also making changes to some of its credit score requirements.

FHA Requirements Released for Social Security Income
Documentation requirements have been released for Social Security income used to qualify borrowers for loans insured by the Federal Housing Administration. In addition, the minimum term that the income must continue has been addressed.

HUD Chief Criticizes Wisconsin's Use of Servicer Settlement Funds
When the $25 billion settlement between the biggest U.S. mortgage servicers and most of the state attorneys general was announced in February, Department of Housing and Urban Development Secretary Shaun Donovan said that the settlement would help unemployed borrowers catch up on late payments, fund housing counseling services to connect at risk families to the help they need and help communities struggling with vacant properties that drag down neighborhood home values.

GSE Short Sales Enhanced With HAFA II
Improvements to the short sale process on loans owned or guaranteed by the government-sponsored housing enterprises are expected to streamline and shorten the process.

HARP Expansion Among Package of Bills
President Obama has called on Congress to pass a package of bills that promise to offer more refinance opportunities and expand the pool of borrowers eligible for refinance.

$8 Billion Ginnie Servicing Portfolio for Sale
Mortgage servicing rights on nearly $8 billion in mortgages backing securities guaranteed by the Government National Mortgage Association are on the market. The mostly adjustable-rate government loans are concentrated in five states. While the average loan in the portfolio is less than a year old, delinquency already exceeds 3.5 percent.

2nd Mortgage Delinquency Inches Higher
After falling to an eight-year low, seriously past due second mortgages turned slightly higher last month. But the delinquency rate on first mortgages maintained a five-year low.

Refi Forecast Raised Again
The latest outlook for refinance originations has been lifted past $1 trillion for this year. The projection for purchase financing, however, was trimmed. Home loans outstanding are expected to resume growing next year.

Small Banks Drowning in Dodd Frank
Federal legislators got an earful from executives of small banks who say they are drowning in regulations that have emerged from the 848-page Dodd-Frank Wall Street Reform and Consumer Protection Act.

OT Still Dominates Mortgage Employment Litigation
As mortgage employers continue to battle lawsuits filed by loan originators who allege unpaid overtime, a court decision to keep a related regulation in place is being appealed. But even if the appeal is successful, lenders still face similar lawsuit being filed by underwriters. Other recent court decisions in mortgage employment lawsuits involve mortgage branching, commissions on originations and losses in 401(k) plans

Wave of GSE Repurchase Demands to Continue
As the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. have expanded their scrutiny of representations and warranty breaches, the volume of repurchase demands has been on the rise and is not expected to soon subside. Now, smaller firms are also in the sights of the two housing finance agencies.

Appraisals, Dodd-Frank at Forefront of Loan Originator Concerns
The real estate appraisal process is among the most frustrating issues for mortgage loan originators, according to initial responses from the 2012 Loan Originator Survey being conducted by Mortgage Daily. Also having a big impact is the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Personal computers used by originators are dominated by one technology giant, while smart phones are dominated by a rival.

Alaska, W.V. See Biggest Growth in Loan Originators
The number of licensed or registered loan originators expanded by more than 10,000 during the second quarter, with the growth fairly evenly split between banks and non-banks. Among non-banks, Alaska and West Virginia had the highest growth rates, while Delaware had the highest rate among financial institutions.

ARM Inquiries Jump, Overall Activity Idle
As fixed rates again inched higher, interest in adjustable-rate mortgages increased for the first time in a month. Mortgage rates appear to be headed even higher. Overall inquiries for mortgages this week crept up as purchase and jumbo activity strengthened.

Mortgage Market Index 213 for week ended Aug. 17

Guidance Issued on LO Comp Rule
New rules on loan fees and interest rates have been proposed, while another proposal seeks to eliminate some of the disparity between bank and non-bank loan originators. In addition, changes are being proposed to the existing loan originator compensation rule that should alleviate some industry concerns.

Wells Fargo Employee Claims He Was Fired Because of Daughter's Medical Expenses
Wells Fargo & Co. says it provides comprehensive health care coverage for more than a half million employees and their families -- helping them manage medical needs including terminal illnesses. However, one terminated mortgage and securities consultant in Florida claims in a lawsuit that the company fired him to avoid medical expenses for his terminally ill daughter.

Wind Down of Fannie, Freddie Being Expedited
Plans to wind down the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. are being expedited. In addition, changes to preferred dividend payments to the government are expected to bolster market confidence. Mortgage bankers expressed cautious support for the plan.

BofA Subsidiary Settles With Washington AG
A subsidiary of Bank of America Corp. that handles foreclosures has agreed to a settlement with the state of Washington. But the cost of the settlement will come from charges BofA has already taken.

Washington Supreme Court Rules Against MERS
The highest court in the state of Washington has ruled against the Mortgage Electronic Registration Systems in a decision that is expected to create confusion, impact servicers on prior foreclosure actions and set off a wave of lawsuits.

Mortgage Layoffs Continue at Moderate Pace
Despite a healthy pace of refinance activity, pink slips are still being handed out to some mortgage-related employees -- though the pace has slowed considerably from recent years.

Fixed Rates Rise and Likely to Move Even Higher
It's been four weeks since fixed mortgage rates have fallen, and next week is likely to offer more of the same. But one adjustable-rate product managed to eke out a decline. The migration to shorter loan terms continued in the second quarter.

When to File a SAR
A government publication provides some guidance about when to file a Suspicious Activity Report.

Banks Face Foreclosures in Florida by HOAs
Big banks, which are usually the ones doing the foreclosing, are now the ones facing foreclosure. Homeowner associations in Florida are filing the foreclosures over alleged unpaid homeowners association fees.

New Appraisal Requirements Ahead
New appraisal requirements are being proposed for mortgage lenders. In addition to a deadline for a new appraisal disclosure, creditors will also face a deadline to provide a copy of the appraisal report to loan applicants.

New High Cost Loan Requirements Proposed
The definition of loans considered to be high-cost is being expanded. In addition, lenders that make these loans are being subjected to new requirements.

Impac Reports Growth
Residential production increased, the mortgage servicing portfolio expanded and earnings swung to a profit during the latest quarter at Impac Mortgage Holdings Inc. The company is posturing itself for growth in retail originations and purchase financing.

Appraisal Requirements Proposed for Higher Risk Loans
New appraisal requirements are being proposed for higher-risk mortgages. Included in the proposal is a requirement for a second appraisal at the lender's expense if the property recently sold for less than the purchase price.

Closing Rate Diminishes Due to Refinances
Loan originators have seen a diminishing share of loan applications close lately thanks to refinance business. But the closing rate on purchase financing remains strong. As the Home Affordable Refinance Program kicked into gear earlier this year, average loan-to-value ratios on conventional refinances shot up. But more recently, as mortgage lenders have faced an onslaught of refinance activity, they have been turning down applications from borrowers with higher credit scores and lower LTV ratios.

Small TN Lender Reports Growth
A mortgage banker operating from Tennessee is growing at a healthy clip and has negotiated a deal to support further growth.

Former Obama Chief of Staff Skeptical of Eminent Domain
President Barack Obama's former chief of staff has expressed skepticism about a plan to seize non-agency mortgages through the process of eminent domain. Also skeptical of the plan were other Chicago officials.

Wholesaler Scaling Back Production
With all of the wholesale mortgage lenders that have recently closed down, in addition to the rush of business being generated through the government-supported refinance program, one wholesaler has more business than it can handle.

Huge Growth at Nationstar
Over the past year, originations have more than doubled at Nationstar Mortgage Holdings Inc., while the mortgage servicing portfolio has nearly tripled and staffing is up by half. The strong growth continued into the latest quarter.

New Reverse Mortgage Leader Emerging
Including government-insured and proprietary loans, reverse mortgage production grew during the latest month. The improvement hit both the retail and wholesale channels. With a new world order just around the corner for the sector, one company is poised to be the new leading originator.

Borrowers Win YSP Appeal
An Ohio appeals court overturned a judgment in favor of a wholesale lender that paid a yield spread premium to the originating mortgage broker but allegedly conspired with the broker to hide from the borrower that the interest rate was higher as a result of the premium. The borrowers' attempt to rescind the loan, however, was unsuccessful.

Allied Can Proceed With Lawsuit Against HUD
After it was suspended as an approved mortgagee for the Federal Housing Administration, Allied Home Mortgage Corp. filed a lawsuit and successfully obtained an injunction temporarily reversing the suspension. But now a federal judge has lifted the injunction, though he did rule in Allied's favor on two other motions.

Wholesaler Closes a Second Time
A wholesale mortgage lender that previously closed down then subsequently reopened is throwing in the towel for a second time. The company wants to reallocate its capital.

Servicer Consolidation Ahead
Two sets of proposed rules from the nation's consumer watchdog will push up compliance costs and drive down the number of U.S. mortgage servicers, a major ratings agency predicts. But that's not necessarily a bad thing.

Another California Community Mulling Eminent Domain
Officials in another California community are being lured by the potential profits of utilizing eminent domain to seize performing loans in private-label mortgage-backed securities, cut the loan balances and refinance the loans.

Biggest U.S. Mortgage Lenders
Second-quarter mortgage originations jumped 48.7% from a year ago, according to mortgage lender ranking data compiled by Mortgage Daily. Business was up 4.6% from the first quarter.

Small Mortgage Lenders See Big Growth
Smaller mortgage bankers are capitalizing on the fertile environment created by record-low interest rates and pushing residential loan originations higher. Many are reporting record production. Also experiencing a healthy pace of home-loan business are the nation's credit unions.

Industrial Loans Lead Improvement in CMBS Delinquency
Industrial commercial mortgage delinquency, which sank more than a hundred-basis-points last month, led a decline in the monthly rate of past-due payments on securitized commercial real estate loans. Modifications on more than $0.5 billion in loans were responsible for the overall improvement. The only category to experience deterioration was hotel.

FDIC Sues Major Banks Over RMBS Sales
A lawsuit filed by the Federal Deposit Insurance Corp. accuses more than a dozen defendants -- including units of several major financial institutions -- of deceiving failed Colonial Bank in the sale of nearly $0.4 billion in residential mortgage-backed securities.

Mortgage Activity Off Despite FHA, Purchase Strength
Rising mortgage rates continued to push down new activity. The weakness came despite strength in purchase financing, government-insured lending and cashout refinance business. Inquiries for jumbo mortgages, refinances and adjustable-rate mortgages took the biggest hit.

Mortgage Market Index 212 for week ended Aug. 10

Proposed Rules Mark New Era for Mortgage Servicers
Industry experts say that new rules proposed for mortgage servicers are mostly in line with recent regulatory actions and agreements -- though they agree there is no going back to the old ways. In addition to how distressed borrowers are handled, the proposed rules would require earlier disclosure of upcoming rate and payment adjustments and changes to the way that servicers handle borrowers with lapsed insurance coverage.

1-Year ARM Falls to Record Low
A new record low was established for the one-year adjustable-rate mortgage this week. While the news wasn't so good for fixed mortgage rates, fixed rates are positioned to fall in next week's report. The discount for a 15-year loan has increased over the past seven days.

Wholesaler Launches in Southeast
A Florida-based firm that claims to be one of the biggest mortgage bankers in the Southeast has launched a wholesale business. A former MetLife Home Loans executive is heading the new division.

Prime, Subprime Delinquency Up; FHA Foreclosures Jump
Residential delinquency on government-insured mortgages declined on a quarterly basis even as foreclosures surged. Prime and subprime mortgages experienced a significant increase in 30-day delinquency excluding foreclosures, while both categories had a healthy decline in the rate of foreclosures -- especially on adjustable-rate mortgages.

California is Foreclosure Capital
The country's foreclosure problems diminished last month. California had the most foreclosure filings, the worst foreclosure rate and the highest number of repossessions for the second consecutive month despite improvement in each of the three categories. Florida, meanwhile, saw deterioration in each category, and other states are likely to follow suit.

U.S. foreclosure filings fall 3% between June and July

Another Borrower-to-Renter Program Launched
Distressed borrowers with negative equity have another alternative to foreclosure that lets them stay in their current homes. It's the second such program unveiled this year.

Radian Reports Improving Performance
New business increased for the fourth consecutive month at Radian Guaranty Inc. In addition, the number of delinquent policies declined for the seventh month in a row, and the delinquency rate improved again

Fraud Risk Rises, Appraisal Fraud Worst
Aided by an increase in cities considered to be very risky, the risk of mortgage fraud was worse in the second quarter. Lenders are more likely to be stung by appraisal fraud than any other type of mortgage fraud, and a town in Tennessee had a higher risk level in this category than any other metropolitan area.

2013 Origination Outlook Increased by $230 Billion
Thanks to a turbo-charged refinance outlook, the projected volume of residential loan originations by lenders next year was lifted by more than $200 billion. Expectations for next year's government mortgage business were also increased. But this year's refinance forecast was trimmed.

Strong Quarter at Fannie
Quarterly earnings were so strong at the Federal National Mortgage Association that no taxpayer assistance was requested again. Bank of America Corp. accounts for nearly two thirds of all outstanding repurchase demands from the secondary lender. Fannie Mae reported that it has requested that several investor lawsuits be dismissed.

New Business Up Again at MGIC
New business has expanded each of the past five months at MGIC Investment Corp. Delinquency at the mortgage insurance company, meanwhie, stabilized last month.

Eminent Domain Could Have "Chilling Effect" on Housing
The use of eminent domain by local governments to restructure performing mortgages could create losses for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. and become an expense borne by U.S. taxpayers, according to the regulator of the government-sponsored enterprises. It could also have a "chilling effect" on the mortgage market. So steps are being taken to minimize the fallout.

Delinquency Decline Gaining Momentum
Late payments on home loans continued to fall in the second quarter, and fertile housing market conditions position the country's collective mortgage portfolio for further improvement. But despite the favorable trend, especially in some of the nation's worst markets, there is still some distance to reaching pre-recession delinquency levels.

Performance Weakens at PHH
Earnings eroded, delinquency deteriorated and originations eased at PHH Mortgage. But year-over-year performance improved, and the mortgage servicing portfolio grew. As mortgage insurers are hit with a growing number of lawsuits and federal investigations over captive reinsurance arrangements, PHH disclosed that it terminated a mortgage reinsurance agreement at a loss.

HARP Report Card
Government-supported refinance production nearly doubled on a monthly basis and now accounts for up to a third of all conventional refinance transactions. The states with the highest utilization rates for the federal refinance program are also the states with the highest share of negative-equity properties.

Fed Issues Sanction Against MetLife
MetLife Inc. can't get out of the mortgage business fast enough. The insurance provider has been hit with a monetary sanction in connection with its servicing and foreclosure practices. The sanction is similar to those handed out to larger banks in February in connection with the massive mortgage servicer settlement.

Wave of Lawsuits Filed Over Foreclosure Sales in Hawaii
Five lawsuits have been filed against four major banks and a law firm by former borrowers in Hawaii who claim that their properties were sold through non-judicial foreclosure sales at unnecessarily low prices -- costing them millions of dollars in losses. Three teams of lawyers assembled to take on the defendants hope to triple the damages based on state laws.

Performance Strengthens at Freddie
Rising earnings helped the Federal Home Loan Mortgage Corp. avoid additional government support. Residential delinquency at the secondary lender, which improved by 6 basis points during the latest quarter, is significantly lower on post-crisis originations.

HARP Having Big Impact on Bank Originations
Driven by a wave of business from the expanded Home Affordable Refinance Program, some banks are seeing more refinance demand than they can handle. Participation in the government-supported program is much deeper among larger financial institutions. Underwriting standards on non-traditional mortgages were tightened up, and conditions improved in the commercial mortgage market.

MTA Again Fails to Fall
For only the second time in more than three years, the Monthly Treasury Average failed to establish a new record low. But the index still stands within a basis point of its all-time low.

Mortgage Fees Retreat
Closing costs on U.S. mortgages have fallen 8 percent over the past year. Much of the decline was the result of lower title and closing costs. One state has held the distinction of being the most expensive state to close a mortgage for three years in a row.

MGIC Upgrades Hard-Hit Markets
Real estate brokers, home sellers and home buyers in one California desert town blame real estate appraisers for local sagging home prices. Some point to the use of out-of-area appraisers.

Appraisers Blamed for Stagnant Values
Real estate brokers, home sellers and home buyers in one California desert town blame real estate appraisers for local sagging home prices. Some point to the use of out-of-area appraisers.

Study Finds Seniors Struggle to Understand Reverse Mortgages
The director of the Consumer Financial Protection Bureau says that the low share of consumers with reverse mortgages is likely to balloon as baby boomers come of age. A CFPB study found that seniors struggle to understand reverse mortgages and tend to focus on how much they are receiving without considering long-term costs. But the regulator's assessment conflicts with industry findings.

2 Depression-Era Institutions Succumb to Great Recession
Another two depression-era financial institutions succumbed to the Great Recession. The latest bank failure was in Illinois. An additional institution was thrown into liquidation.

FL Winding Down Foreclosure Law Firm Investigations
Florida is winding down investigations into several law firms that were suspected of using forged and fraudulent documents in the foreclosure process. The lack of actions against these firms has raised the ire of some.

Ruling Could Impact Ongoing Ga. Foreclosures
A four-to-three Georgia Court of Appeals decision last month was expected to result in a wave of litigation by plaintiffs who faced a previous foreclosure. Now there is speculation that the ruling could impact foreclosures still in process.

SC Bank Buying NC Mortgage Firm
North Carolina. With the strategic move, the bank will expand its markets by eight. CertusBank, N.A., only opened for business last year with the acquisition of another failed financial institution.

HUD Investigating SunTrust
An investigation has been launched into SunTrust Banks Inc.'s origination practices on loans insured by the Federal Housing Administration. Word of the investigation comes on the heels of a lending discrimination settlement and seems to shed light on a recent executive recruiting decision.

FHA Originations & Delinquency Deteriorate, But New Apps Soar
While originations insured by the Federal Housing Administration were slower in June, an explosion in new refinance applications should help reverse the negative momentum in government home lending. Serious delinquency, meanwhile, was around 10 basis points higher.

Bankruptcies Fall
Fewer borrowers resorted to bankruptcy last month than a month earlier and a year earlier. The year-to-date U.S. per-capita rate eased in July, and the state with the worst per-capita rate is the same state with the worst year-to-date foreclosure rate.

M.I. Firms Hit With CFPB Investigations, Mountain of Litigation
Several lenders and mortgage insurance companies are named as defendants in class actions alleging violations of the Real Estate Settlement Procedures Act of 1974 because of captive reinsurance arrangements. In addition to the civil litigation, the mortgage insurers have been subpoenaed by the government and, more recently, been hit with civil investigative demands from the Consumer Financial Protection Bureau.

Weekly Mortgage Business Retreats; Jumbo Off Most
Slowing jumbo activity took a bite out of business this week, as did retreating refinance inquiries. Pricing inquiries for government-insured mortgages were the only type tracked to move higher. Pressure on upcoming business is likely to ease based on a probable increase in mortgage rates by the next report.

Mortgage Market Index 228 for week ended Aug. 3

IL Law Raises Mortgage Fraud Fines & Fees for Licenses
Legislation that has become law in Illinois raises the cost of licensing for mortgage companies and triples the penalty for committing mortgage fraud.

Foreclosure Review Deadline Extended
Federal consent order deadlines for borrowers to report alleged abuse by mortgage servicers have been extended three months. Some lump sum payments can exceed $100,000.

Brokers Lead Mortgage Job Expansion
The job news in the mortgage sector mirrored good news for the overall U.S. job market. Interest rates are already feeling the sting as the stock market shot up. Mortgage broker employment, which grew by 6 percent from the prior month, hasn't been this strong since 2010.

LPS Settles MO Robo-Signing Charges
A $2 million settlement has been reached between Missouri's attorney general and Lender Processing Services Inc. over alleged criminal robo-signing activity at a subsidiary. State criminal charges against LPS will be dropped as part of the deal.

Record Rates Elude Mortgage Shoppers
Mortgage rates, which had been on a record-breaking streak, turned higher this week. Similar rates could be on the horizon unless Friday's employment report surprises investors.

MGIC Share Price in De-listing Territory
MGIC Investment Corp.'s disclosure about a disagreement between its insurance regulator in Wisconsin and the Federal Home Loan Mortgage Corp. over how it uses capital sent its share price plummeting. If the stock doesn't recovery quickly, the Milwaukee-based firm could be in jeopardy of being de-listed by the Big Board.

M.I. Business at Highest Level Since 2009
It's been more than three years since mortgage insurance companies have insured as much in mortgage volume as they did in June. It's been even longer since policies in force increased.

PennyMac Business Soars
Quarterly mortgage production nearly doubled at PennyMac Mortgage Investment Trust, and new activity is in line to keep business elevated. By October, the pace of new originations is expected to nearly double again.

Quicken Unit is July's Top Reverse Lender
Thanks to the exit of the most prominent reverse lender, government-insured reverse mortgage production took a dive last month. Quicken Loans Inc.'s reverse mortgage subsidiary emerged as last month's biggest originator.

Bank Buys Mortgage Broker
A New York bank has acquired a local mortgage broker with around a dozen mortgage loan originators. It's the second time in the past three years that the financial institution has delved deeper into real estate finance.

Genworth to Retain M.I. Unit
Capital required to sell off its mortgage insurance subsidiary is preventing Genworth Financial Inc. from cutting the unit loose. But the mortgage insurance business could be on its way back to the black.

Ally Mortgage Originations Slow With ResCap Bankruptcy
Residential loan production was off by nearly a third at Ally Financial Inc. and has diminished by more than half over the past year. The results reflect the effect of the bankruptcy of Residential Capital LLC. Home-loan delinquency was lower.

Business Eases, Delinquency Down at Fannie
Monthly secondary marketing activity slipped at the Federal National Mortgage Association, though business has still maintained a healthy pace and is headed up. Loan performance continued a stellar two-year run of no increases in late payments.

Bank Finds Mortgage Originations Through Low Income Workshops
When Dollar Bank held its first Mortgages for Mothers workshop in 1999, Mona N. Generett hoped that a couple hundred lower-income women interested in buying homes would show up.

Guaranty Bank Selling Mortgage Unit
Guaranty Bank said Tuesday it plans to sell its national Shelter Mortgage unit to bolster the bank's capital, which has been sapped by loan losses during the housing slump.

CRE Originations Strengthen to Post-Crisis High
Helped by a surge in conduit financing and commercial mortgages originated for life insurance companies, quarterly originations of commercial real estate loans reached their highest level since prior to the financial crisis. Hotel lending had the biggest impact on a linked-quarter basis, while lending for retail properties led the year-over-year growth.

COFI Ekes Out Another Record
The Cost of Funds Index has fallen to a new all-time low each of the last four months, though the degree of the decline is diminishing. The one-year Treasury yield tumbled to its lowest level in five months.

Monthly Agency Issuance Eases
Agency issuance of mortgage backed securities was lower last month but remains at a healthy pace. Freddie Mac was responsible for most of the monthly decline, though Ginnie Mae shouldered some of the responsibility. Fannie Mae activity, however, was 10 percent better.

No GSE HAMPs
The regulator of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. has reaffirmed his opposition to principal writedowns. A decision not to implement a federal loan modification program for the government sponsored enterprises was made because it didn't meet the objectives of their conservatorships.

FHFA acting director reaffirms position against principal writedowns

BoA Closing Relo Business
Bank of America Corp.'s mortgage unit is closing down its relocation business. Impacted employees are mostly expected to be absorbed into other parts of the company.
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