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January 2009 Archive

Flagstar Originations Better, Earnings Worse
Flagstar Bancorp Inc.'s loan production rose last year, while the servicing portfolio continued to grow. But the latest quarterly earnings deteriorated.

Fannie Purchases Rise, Delinquency Deteriorates
Business improved at Fannie Mae. But delinquency deteriorated.

Wholesalers Raise Minimum FHA Credit Scores
Two wholesale lenders are increasing the minimum credit score required on government loan programs.

FHA Lender Keeps Growing
A growing New York-based FHA lender added around 75 new employees last year and expects to add another 100 this year.

Fannie Working on Pilot Mod Program
Federal cramdown legislation that would allow bankruptcy judges to modify mortgages has its supporters and detractors. In other modification news, bankruptcy specialists will debate modifications this spring, while Fannie Mae has reached an agreement with a consumer advocacy group to restructure unaffordable mortgages.

CPP Insight
More than $16 billion in investments has been distributed so far this year under the capital purchase program. As the U.S. Department of the Treasury issues rules for senior executives at participating bank-holding companies, it is also trying to establish more transparency.

Apps Tumble, 30-Year Eases
Reflecting last week's increase in mortgage rates, loan applications tumbled. But government business was better, and the 30-year rate eased.

FHA Fundings Forecasted to Flourish
While the origination of loans insured by the Federal Housing Administration is expected to escalate this year, one market research firm is warning about growth being too rapid.

REOs Ease as Foreclosure Prevention Grows
Mortgage servicers are preventing an increasing number of foreclosures by modifying loans, according to a new industry report. Loan delinquency continued to increase -- though repossessions eased late last year.

Originations Nearly Double at FHA Lender
Lend America reported surging loan production during 2008. The forecast for 2009 calls for more of the same.

Reverse Mortgage Firm's Servicer Rating Upgraded
One of the biggest independent servicers of reverse mortgages saw its servicer rating upgraded. Controlled growth has enabled the Michigan-based company to safely expand its servicing operations.

PA Claims Its Piece of Countrywide Settlement
Pennsylvania's attorney general announced a $150 million settlement with Countrywide Financial Corp. The agreement is part of an $8 billion subprime settlement reached last year with several states.

Over 1,000 Job Openings
A Houston-based staffing firm is looking to fill more than 1,000 mortgage positions in 11 states. Among open assignments are underwriters and originators.

Hirings to Offset Fannie Layoffs
Recent layoffs at Fannie Mae are likely to be completely offset by planned hirings in its servicing operations.

Massive Loss at Wachovia
Mortgage originations resumed at Wachovia Corp., which had a loss of more than $40 billion last year.

New Apps Surge at Wells
Last month was among the five best on record in new mortgage applications at Wells Fargo & Co. Loan originations edged lower but are expected to surge with the new activity.

Failed Firm Faced Flurry of Litigation
A New York-based lender has shut down amid a flurry of litigation. More than 150 employees were impacted by the closing.

CA Thrift Cutting Mortgage Jobs
A Los Angeles thrift is cutting more than 60 mortgage jobs as it is slapped with a cease-and-desist order.

Net Branch Employees Join Bank
More than 50 employees from a net branch operation that failed earlier this month have been picked up by one of Atlanta's largest community banks. The chairman of their new parent said the mortgage operation was a good cultural fit for the institution.

Fidelity Bank hires former Sunshine Mortgage employees

CA Firm Sued by Fremont Over Fraud Loans
The surviving entity that was formerly known as Fremont Investment and Loan has filed a lawsuit against a defunct California mortgage firm and dozens of other defendants alleging they conspired to sell it more than $4 million in fraudulent mortgages.

Secondary Strategies
A Georgia-based firm hopes to capitalize on helping second-mortgage investors increase the value of their non-performing loans, while a California company is relying on its own ability to buy, restore and liquidate distressed assets. In other secondary news, Citigroup's mortgage lending unit has apparently made some changes in its correspondent operations.

Wells Launches Rescue Plan for Wachovia Borrowers
Wells Fargo Home Mortgage hopes to prevent nearly a half million Wachovia Corp. foreclosures. The company boasts a 70 percent success rate on its modifications.

Geithner Confirmed as Treasury Secretary
As the new administration takes shape, a new boss is in charge at the U.S. Department of the Treasury.

Senate votes 60 to 34 in favor of confirmation

NM Firm Adding 100 Positions
A mortgage firm that operates as part of a net branch system has added 70 employees over the past year and plans to add another hundred this year as originations nearly double. The head of the operation claims to be New Mexico's No. 1 originator.

Frost Mortgage to nearly double originations, employees

U.S. Bank Servicer Rating Upgraded
A servicer rating for U.S. Bank Home Mortgage Inc. has been upgraded.

2 Lawsuits Filed by Hedge Fund
A hedge fund claims it has lost most of its investments in mortgage-backed securities issued by Ameriquest Mortgage Co. and has filed a lawsuit claiming that it was misled about the investments. The fund has also sued Wells Fargo Bank, N.A.

No. 3 Fails
A California bank was the third government-insured institution to fail this year.

Best Mortgage Employers
Just one mortgage-related company is among the 100 best U.S. employers.

Lender Collapses Amid Litigation
A New York-based mortgage company -- accused in separate lawsuits filed by a warehouse lender and a reverse mortgage lender of stealing more than $5 million -- has gone out of business.

Nevada Mortgage Regulators On the Block
The state of Nevada is considering eliminating its mortgage regulation division.

FTC Busts Broker for Dumping Files
The Federal Trade Commission has busted a Las Vegas mortgage broker for allegedly discarding hundreds of loan files with personal financial documents and private credit records in a public dumpster.

New HUD Secretary Confirmed
President Obama's nomination to head the U.S. Department of Housing and Urban Development has been confirmed.

Senate confirms Shaun Donovan

Alt-A Outlook Ugly
Deteriorating performance on Alt-A loans is expected to push losses on the least seasoned residential mortgage-backed securities to nearly one-quarter, according to a new ratings agency report.

Firm Hiring 150 Pittsburgh Employees
More than 150 mortgage-related jobs are open at a Pittsburgh-based firm that provides origination and default services. The openings include information technology positions and operational positions.

Business Deteriorates at Freddie
Secondary purchases declined at Freddie Mac as residential delinquency shot up.

Recruiter to Fill 500 Birmingham Positions
An international staffing firm is looking to immediately fill requests for more than 500 mortgage positions in Birmingham, Ala.

Fifth Third Struggling
Fifth Third Bancorp, which halted a number of mortgage programs last year, saw fundings plummet in the second half of last year. Annual earnings deteriorated by $3 billion and quarterly delinquency jumped by 13 basis points.

Mortgage Market Outlook Improves
Freddie Mac has lowered its projection for 30-year mortgage rates and increased its forecast for residential originations this year. The second quarter is looking especially good.

BB&T Performance Holds Up
Branch Banking and Trust Co. maintained healthy earnings and originations during the latest quarter.

Poor Performance at SunTrust
Fundings fell, delinquency deteriorated and losses leapt during the latest quarter at SunTrust Banks Inc.

Rates, Apps Deteriorate
An 11-week decline in fixed rates has come to an abrupt end. As mortgage rates head higher, new 1003 loan applications headed lower.

Citi Changes Chairman
After just one year on the job, Sir Win Bischoff is done as chairman of Citigroup Inc. Replacing him is someone experienced at leading a company amid devastation.

Rate Spread Reporting Rules Revised
The Federal Reserve Board revised the Home Mortgage Disclosure Act rules to modify the method of determining when the rate spread for a mortgage loan must be reported under HMDA.

The Short Sale Directory
The government is stepping into the short-sale game -- with federal tax liens and federally-insured mortgages on the table. Among several firms touting their short-sale services was one that applies the short-sale strategy to refinances.

Mortgages By the Book
New data to be required on conforming loans will help the government-sponsored housing enterprises track the performance of loans based on the originator or the appraiser. In other compliance news, lenders must now adhere to requirements that prevent mortgage fraud while compliance with another new rule has been delayed.

Wells Adding Hundreds of Mortgage Temps
Wells Fargo Home Mortgage is hiring hundreds of temporary employees to help it meet increased mortgage demand.

U.S. Bancorp Production Better
Residential originations improved at U.S. Bancorp. But delinquency and earnings were worse.

Subprime Downgrades Abundant
More than 500 tranches from dozens of subprime residential mortgage-backed securities have been recently downgraded.

Volume at PA Firm Down Over $20 billion
Annual volume was down by more than $20 billion at a Pennsylvania-based commercial mortgage firm.

FDIC Settles Secondary Subprime Suit
The Federal Deposit Insurance Corporation has agreed to pay nearly $0.1 billion over allegations it refused to repurchase more than 1,000 defaulted subprime mortgages originated by a failed Illinois bank that it took over.

Huge Subprime Settlements at Merrill
Merrill Lynch & Co. Inc. has reached settlements in two cases tied to its investments in subprime collaterallized debt obligations. The formerly independent firm will fork out more than a half billion dollars to settle the litigation.

Executives Out
The chiefs of four institutions are exiting their jobs. In other executive news, the death of one of New Century Financial Corp.'s founders marks the second recent passing of an executive who helped shape subprime mortgage lending.

Modification Statistics and Programs
As mortgage companies commit to an increasing number of loan modifications, more modification firms are popping up. Two groups testified before Congress last week that funds from the Troubled Asset Relief Program should be used to modify loans -- with one of the groups calling for cramdowns on as many as 5 million mortgages that are not even in bankruptcy.

2 Banks First to Fail in '09
Two banks with nearly $1 billion in assets between them were the first two government-insured casualties of the new year.

Mortgage Job Losses Ease
Mortgage-related layoffs have eased and may be near a bottom. Quarterly job cuts were down by nearly 25 percent, and annual migration out of real estate finance dropped by more than half.

Another 800 Laid Off
Nearly 800 more fourth-quarter mortgage-related layoffs have been identified by The latest round of job cuts involved commercial mortgage employees and mortgage insurance jobs.

First Horizon Originations Evaporate
Quarterly residential originations plummeted 97 percent at First Horizon National Corp. -- reflecting the recent sale of most of its mortgage operations.

Advertising Mistakes
Recent Federal Trade Commission complaints against three mortgage firms offer insight about avoiding advertisements that are not compliant with Truth-in-Lending Act requirements that go into effect later this year.

Originations Down by Half at Citi
Quarterly mortgage production was down by nearly half from a year earlier at Citigroup Inc. -- which reported a massive loss.

BoA Earnings & Originations Worse, Apps Higher
Bank of America Corp. saw quarterly originations decline but said new activity picked up at the end of the year. While earnings deteriorated last year, results might have been worse without the acquisition of Countrywide Financial Corp.

Hard Money Lender Says Did Nothing Wrong
A Nevada hard money lender has taken the unusual step of issuing a press release to defend itself against accusations by state regulators, a local newspaper and some of its investors.

Outsourcing Scrutinized
A new report indicates that a growing number of servicers are looking to outsource more functions. But doubt was raised about the ability of offshore vendors to handle delinquent borrowers.

30-Year Cracks 5%
The 30-year fell below five percent for the first time in at least 37 years. At the same time, adjustable-rate mortgage yields are heading higher than fixed rates. Refinance applications surged, but purchase and government activity were both down.

Chase Originations, Earnings Tumble
Residential originations were down 40 percent last year at JPMorgan Chase & Co., while earnings were off nearly two-thirds. Delinquency, meanwhile, increased.

Countrywide Sued Over Denied Modification
Attorneys for a couple who became delinquent on their mortgage and were subsequently foreclosed on are accusing Countrywide Home Loans of claiming in public to be pursuing a diligent loan modification strategy while denying legitimate modification requests.

2008: A Foreclosure Nightmare
California, Florida and Nevada led a surge in U.S. foreclosure activity last year. Although filings began easing last fall, activity reversed in December.

Regulation Under Fire
As regulatory orders continued to be hurled at financial institutions, a state audit identified shortfalls with Nevada mortgage regulators and a federal audit called the U.S. financial regulatory system fragmented, outdated and inadequate.

Inside The CPP
Congress yesterday heard from regulators, trade associations and other groups about the effectiveness of the $750 billion Troubled Asset Relief Program -- with criticism coming from all sides. Meanwhile, more than 40 banks received nearly $15 billion in the latest round of TARP investments.

Over 2 Million Foreclosures in 2008
A new report indicates that foreclosures were filed on more than 2 million mortgages last year, while repossessions nearly reached 1 million.

Reverse Firm Plans 200 Hires
A growing reverse mortgage company is looking to professionals in other fields to fuel a 100 percent increase in originations and the addition of 200 positions.

LoanWell projects 100% growth in originations

Bank Consolidation in Full Swing
Several bank acquisitions are either underway or completed, and one billionaire wants to join the fray.

Chase Closing Wholesale Business
With a hefty retail lending force in place now that it has acquired Washington Mutual Bank, Chase has decided to abandon business from mortgage brokers. Correspondent business will still be accepted as long as brokers weren't involved in the origination.

Countrywide Sued Over Rates on Active Duty Borrowers
A class action lawsuit claims Countrywide Financial Corp. violated federal law after it didn't lower the interest rate on a mortgage when the borrower was called to active duty. But the formerly biggest U.S. mortgage lender has denied the allegations and said it never received proof of the lead plaintiff's active duty.

The FHA Times
Recently passed federal legislation has resulted in program changes at the Federal Housing Administration -- including revised ratios for refinances, enhanced alternatives on junior liens and required certification for FHA appraisers. Among other government lending activity is an FHA Webinar for community banks, testimony by mortgage bankers that FHA approval for mortgage brokers should be more rigid and a service that claims to enable non-FHA brokers to originate FHA loans.

Kansas Company Settles Fax Lawsuit
A Kansas mortgage company settled a class action lawsuit over thousands of unsolicited fax advertisements.

GMAC Unit Among Defendants in Patent Lawsuit
A GMAC Financial Services subsidiary and a California-based lender are being sued for alleged unauthorized use of a patented system that pays down consumer debt through credit lines.

Another Net Branch Operation Closes
Managers of the 19 branches operated by one of Georgia's largest mortgage companies are scrambling to find a new home -- with one potential suitor reportedly considering a deal. The collapse brings to eight the number of branch operations to fail since last year.

Several Entities Make Changes at the Top
Chairmen at two financial institutions were recently replaced, while new chief executives were named at three firms. Even regulators and government-sponsored enterprises saw changes at the top.

The Modification Report
Two firms said they are among only 80 approved by the State of California to collect advance fees for helping delinquent borrowers obtain modifications from loan servicers. Other recent modification activity includes banker opposition to cramdown legislation endorsed by one of its own, modification agents being recruited from the ranks of mortgage brokers and a report that calls for federal compensation of servicers.

Over 300 Mortgage-Related Failures
The number of non-bank mortgage companies to close eased last year, but bank and credit union failures soared.

Bank and Credit Union Failures Soar in 2008
So far during the new millennium, more than 50 federally insured banks have failed -- with nearly half of those failures occurring last year. Meanwhile, credit union failures doubled last year.

Four Firms Fail
As a Florida-based bank remains on life support, two credit unions and a mortgage-related law firm have made their way to the Mortgage Graveyard.

5,000 Layoffs Reported
During the past 90 days, five financial firms have disclosed more than 5,000 layoffs -- including many mortgage-related jobs.

Deceptive ARM Ads Lead to Settlements
Three mortgage firms have settled allegations of deceptive advertising with the Federal Trade Commission.

Mortgage Jobs Lower
The mortgage industry saw a net job loss in November, though the tide may have turned.

Reverse Production Higher
Annual reverse mortgage production continued to grow.

Citi Supports Cramdowns
Senate Democrats have found an ally in Citigroup Inc. for their proposed legislation to allow bankruptcy judges to modify mortgages. Citi's endorsement follows an endorsement by U.S. homebuilders -- though it is in opposition to the position taken by the country's mortgage bankers.

Bad Underwriting at Heart of Mortgage Meltdown
A new survey of bankers indicated poor underwriting standards were the single biggest factor in the credit crisis. Mortgage fraud, however, had little impact.

Moratorium Emporium
A moratorium has been extended on conforming loans as fast-track modifications are implemented. Meanwhile, more states are implementing their own moratoriums -- which some see as beneficial to all parties.

Another Record Low for 30-Year
The Federal Reserve's plan to acquire agency mortgage-backed securities has already cut the spread between mortgage rates and comparable Treasury yields by 36 basis points and pushed the 30-year yield to its lowest level on record.

FHLBs Could Face Massive Losses
The Federal Home Loan Banks could face more than $13 billion in losses on their private-label mortgage-backed securities portfolio depending on how their regulator interprets accounting rules, a ratings agency report said. A worst-case scenario has all but four of the banks under-capitalized.

GMAC Cautiously Optimistic About ResCap
GMAC LLC is suggesting it might continue to provide capital support to ailing Residential Capital LLC -- which has had nearly $10 billion in losses since 2007.

Wells Halts Wholesale Jumbo
Wells Fargo Home Mortgage has halted wholesale originations of jumbo loans.

Net Branch Failed Without FHA
A 100-branch company is closing down, leaving many managers scrambling to find new homes. One manager speculated that the firm's demise was its inability to quickly establish government lending in each state.

Record HELOC Delinquency
Home-equity delinquency deteriorated -- with late payments on credit lines secured by real estate reaching an all-time high.

FDIC Sells $500 Million Portfolio
A mortgage company run by former Countrywide Financial Corp. executives has acquired more than a half billion dollars in mortgages originated by a failed bank.

Alt-A Ratings Downgraded
All three major ratings agencies have recently acknowledged a decline in the performance Alternative-A loans, prompting downgrades on hundreds of residential mortgage-backed securities tranches.

CPP Insider
Investments in banks under the Troubled Asset Relief Program exceeded $25 billion last month. So far, the U.S. government has taken stakes in more than 200 banks for which it hopes to earn more than $40 billion.

Securities Class Actions Level Off
Investor class action filings jumped last year, with more than $600 billion in cases filed against financial services firms. But an expected second-half surge never happened.

Saxon Subprime Servicer Rating Lowered
Problems at Saxon Mortgage Services Inc. have led to a downgrade of its subprime servicer rating.

LoanCare Servicer Ratings Downgraded Again
For the second time in less than 30 days, LoanCare Servicing Center Inc. has seen its servicer rating downgraded.

Fed Becomes Mammoth Secondary Player
The U.S. government now has a big hand in the secondary mortgage market -- with billions of dollars in mortgage-related assets recently traded. Meanwhile, a Wells Fargo & Co. unit inked a deal with a group of community banks, and a division of First American Corp. has launched a service that fixes errors on adjustable-rate loan portfolios.

Bankruptcy Activity Mixed
Annual and quarterly bankruptcy filings by consumers jumped, but monthly activity was lower.

The Modification President
A stimulus plan proposed to Congress by President-elect Barack Obama calls for his cabinet to use its existing authority to step up loan modifications. It also proposes that servicers not be held liable for modifications and that bankruptcy judges be empowered to modify loan balances.

Obama submits stimulus plan to Congress

GreenPoint Brokers Targeted by New York
Two New York mortgage brokers have settled charges that they charged minorities thousands of dollars more in fees, while a third broker faces a lawsuit by the state and more brokers face investigations. The actions were prompted by an investigation into defunct wholesaler GreenPoint Mortgage Funding Inc.

MTA Descends Deeper
Following 20 consecutive monthly declines, the monthly Treasury average fell to its lowest point in more than four years.

PHH Mortgage has promoted its chief financial officer to chief executive officer.

Financing for the Financiers
Several institutions have wrapped up big corporate financing transactions that will enhance their capital positions.

Credit Union Originates Nearly $6 Billion
The world's biggest credit union reported nearly $6 billion in residential originations during last year.

New CEO at MBA
A new chief executive officer will oversee the country's primary trade group for the mortgage industry as signs of life emerge in the sector.

Deal Reached on IndyMac Sale
The Federal Deposit Insurance Corporation has reached an agreement to sell the banking operations of IndyMac Federal Bank FSB.

Gov Biz Pushes Agency Issuance Higher
Agency issuances for mortgage-backed securities fell last year on conforming mortgages but more than doubled for government loans -- helping to push overall agency issuance higher.

W&W Deal Done
Wells Fargo & Co. has closed on its acquisition of Wachovia Corp. The move potentially creates a new No. 1 mortgage lender. Meanwhile, Bank of America Corp. completed its own acquisition.

Rise in COFI Eases
A recent surge in the cost of funds index has eased. The index has been recently impacted by historic government measures and the failure or acquisition of some of its big members.

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