Archive for April, 2011
The amount of monthly mortgages purchased for securitization by Freddie Mac fell nearly 31% in March to $26.9 billion.
The government-sponsored enterprise reported its total mortgage portfolio decreased at an annualized rate of 4.7% during the month to $2.14 trillion.
Monthly purchases and issuances have been steadily decreasing since December and are now down 46% from then, which represented the peak of 2010. Year-to-date, Freddie Mac has purchased and issued $104.7 billion in mortgage guarantees.
The drop comes amid heated debate on how and when to reduce Fannie Mae and Freddie Mac's presence in the mortgage marketplace. Under Dodd-Frank, the GSEs need to reduce market share, but there is no consensus on how to accomplish the task. Republicans approved eight bills in March calling for a rapid end to government support for the companies, including one bill that prevents the GSEs from increasing the size of their portfolio. In February, the Treasury Department proposed three options for winding down the mortgage giants.
The single-family refinance-loan purchase and guarantee volume at Freddie Mac hit $19.4 billion in March, accounting for 72% of its mortgage purchases and issuances.
Meanwhile, the aggregate unpaid principal balance of the GSE's mortgage-related investment portfolio fell by about $4.1 billion. Freddie's mortgage-related securities and other guarantee commitments also declined in March dropping 5.3% from a year earlier.
Freddie's single-family delinquency rate fell to 3.63% last month, while the multifamily delinquency rate remained flat at 0.36%.
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
Tags: Fannie Mae, freddie mac, mortgage purchases and issuances, Treasury
Posted in Secondary Market/Investors, Top Stories | 4 Comments »
The average price of a single-family home fell 3.3% in February with declines once again in most large metropolitan areas during the month, according to the Standard & Poor's/Case-Shiller index.
The ratings agency's benchmark 20-city composite showed a 1.1% drop from January with declines in 19 areas. The 10-city index also decreased 1.1% from the prior month and fell 2.6% from a year earlier.
The nation's capital was the only area in February to experience a gain from a year ago with a 2.7% increase. San Diego posted its first decline in more than a year dropping 1.8% in February from a year earlier. Last month San Diego was only one of two MSAs to post gains. Meanwhile, Detroit was the only city to see prices rise in February from the prior month with a 1% gain, narrowly managing to avoid another new low, according to S&P.
"There is very little, if any, good news about housing," according to David Blitzer, chairman of the index committee. "Ten of the 11 MSAs that recorded index lows in January fell further in February. The one exception, Detroit, is 30% below its 2000 price level. The 20-city composite is within a hair's breadth of a double dip."
The rate for both composites and 14 metropolitan areas now have declined monthly for six consecutive months, according to S&P.
Write to Jason Philyaw.
Tags: home prices, HPI, Standard & Poor's/Case-Shiller
Posted in Origination/Lending, Top Stories | 6 Comments »
Sterling Bancorp's (STL: 9.54 -0.63%) earnings soared 71% in the first quarter, as the firm improved its loan portfolio quality and accumulated more noninterest income from fee-generating products.
The New York-based holding company for Sterling National Bank reported income of $3.3 million, or 12 cents a share, for the three months ended March 31, up from $1.9 million, or 10 cents a share, a year earlier.
"We significantly strengthened Sterling's balance sheet during the 2011 first quarter with a common share offering that raised gross proceeds of $38.6 million," said Chairman and Chief Executive Louis Cappelli. "Our resulting strong capital ratios give us ample 'dry powder' that we can deploy to take advantage of growth opportunities."
Loan quality improved during the quarter, and Sterling said the provision for loan losses was cut in half, falling to $3 million. In addition, nonaccrual loans decreased nearly 60% to $7 million, according to the firm.
Noninterest income increased slightly to $11.4 million from $11.1 million a year earlier. This is due primarily to growth in accounts receivable management, factoring, trade finance and mortgage banking, Sterling said. Interest income totaled $16.4 million in the first quarter, up about 18% from $13.9 million in the year-ago period.
As of March 31, Sterling held $2.4 billion of assets on its balance sheet.
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
Disclosure: The author holds no relevant investments.
Tags: Sterling Bancorp, Sterling National Bank
Posted in Secondary Market/Investors, Top Stories | No Comments »
The official housing website of the National Association of Realtors launched a new iPad application Tuesday, as the company's other patented mobile applications have sent the website's daily usage skyrocketing.
The website pulls listings from multiple listing services all over the U.S. Every month, the company surveys up to 250 metropolitan areas and reports information regarding consumer trends, listing prices, active inventory counts, supply and demand indicators, among other things.
Steve Berkowitz, chief executive officer of Move, Inc. which operates the website, Realtor.com, said that the site riding the digital wave that is undoubtedly changing the way people look for homes today.
"Mobile is changing the way people buy and sell homes and our iPad app opens real estate up to millions of people with an amazing visual search experience," Berkowitz commented. "It combines mobile's instant gratification and investigative component that everyone loves with Move’s search technology."
The app offers search results that feed directly from Realtor.com with pictures and property details, different mapping views including street view, maps that allow you to insert notes about the property directly in your search, and a property check list to which you can add events.
The launch of the iPad app comes after Realtor.com mobile apps produced outstanding consumer results.
"In the past year, Realtor.com mobile apps have contributed to a 240% increase in consumer outreach to local agents, and open house views have increased by 459% in just four months," said Errol Samuelson, president of Realtor.com.
The site is simultaneously launching its improve iPhone app, Realtor.com 2.0.
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
Tags: iPad application, Move Inc., National Association of Realtors, Realtor.com, Realtor.com 2.0
Posted in Origination/Lending, Top Stories | 1 Comment »
The Federal Trade Commission mailed $1.5 million in refund checks to Hispanic borrowers who were allegedly charged more on their mortgage than whites.
The refund stems from a lawsuit the FTC filed against California-based Golden Empire Mortgage and its CEO Howard Kootstra. The suit alleged the company charged Hispanic consumers higher prices for mortgages. The pricing disparity could not be explained in the borrowers' credit or underwriting risk.
In September, a settlement was struck. A $5.5 million judgment was suspended when the defendants paid the $1.5 million for the refunds. The settlement bars the defendants from discriminating on the basis of national origin in future loans and requires Golden Empire to establish a policy restricting the discretion of a loan originator's pricing.
Golden Empire is also required to establish a fair-lending monitoring program, another program to ensure the accuracy and completeness of its data and training programs for employees.
The FTC sent more than 3,100 checks, urging borrowers who receive the checks to cash them before June 21.
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
Tags: borrowers, California, FTC, Golden Empire, Hispanic, Kootstra, mortgage
Posted in Origination/Lending, Top Stories | No Comments »
Commercial and multifamily originations for 2010 spiked 44% from the year before, the Mortgage Bankers Association said Monday.
Mortgage bankers lent a reported $118.8 billion in closed commercial and multifamily loans, according the trade group. More than $6 billion of that total is attributable to the fourth quarter alone.
Fannie Mae, Freddie Mac and the Federal Housing Administration invested $42.8 billion collectively, making them the largest investor group. Life insurance companies and pension funds contributed a total $30.6 billion during the year.
Multifamily properties received the largest amount of funding at $48.9 billion, followed by office properties at $22.6 billion. The MBA estimated this figure is up 170% over 2009.
First liens accounted for 92% of all originations in 2010, the MBA said.
The MBA released the official numbers today, which beat the trade group's forecast of an annual origination gain of 36% over 2009. That forecast was estimated based on quarterly data.
Earlier this month, the MBA named Wells Fargo (WFC: 29.37 +1.10%) the top commercial/multifamily originator of 2010. The San Francisco-based bank was followed by Holiday Fenoglio Fowler (HF: 13.91 -1.14%), Meridian Capital Group, CBRE Capital Markets, Prudential Mortgage Capital Co., MetLife Real Estate Investments (MET: 34.76 +0.75%), Deutsche Bank Commercial Real Estate (DB: 44.04 +1.47%), Northmarq Capital and Berkadia Commerical Mortgage.
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
Disclosure: The author holds no relevant investments.
Tags: Berkadia Commerical Mortgage, CBRE Capital Markets, Deutsche Bank Commercial Real Estate, Fannie Mae, Federal Housing Administration, freddie mac, Holiday Fenoglio Fowler, Meridian Capital Group, MetLife Real Estate Investments, Mortgage Bankers Association, Northmarq Capital, Prudential Mortgage Capital Co., Wells Fargo
Posted in Origination/Lending, Slider, Top Stories | 4 Comments »
Analysts at Wall Street investment bank Morgan Stanley (MS: 18.10 -0.28%) are adjusting their home price expectations downward amid continued turmoil in the mortgage industry.
"We believe a lower level of mortgage credit availability is, and will, contribute to weakness in the housing market," analysts said in a note to clients. "Recent developments in issues such as GSE reform, Dodd-Frank securitization rules, and foreclosure settlement issues suggest a tighter and more expensive environment for mortgage credit."
In October, the same Morgan Stanley analysts expected housing prices to continue to slide, reaching new depths in 2012. In December, the prediction stood at a 6% to 11% decline from third-quarter levels. The analysts now project another 6% to 11% drop from the fourth quarter.
"This is lower than our previous projection of as the index declined nearly 4% from Q3 to Q4," they said. "This increases peak-to-trough decline projections by roughly 3%."
The analysts said they could revise their estimates. Morgan Stanley will raise its estimates should prices for distressed and nondistressed properties meet sooner rather than later. However, the firm will lower estimates if liquidations increase housing supply, which would drag down market prices.
One bright spot is in the multifamily space. New construction is at a stand still and demand is rising. Supply is limited and therefore rents are rising across the nation, the analysts said.
Follow him on Twitter @JacobGaffney.
Tags: Dodd-Frank, GSE reform, home price index, Morgan Stanley
Posted in Origination/Lending, Top Stories | 43 Comments »
Analysts at Stephens Inc. lowered their estimate for 2011 earnings at Lender Processing Services (LPS: 16.78 +1.39%) but maintained their overweight view on the company's stock price with a target price of $42.
Carter Malloy, an analyst at Little Rock, Ark.-based Stephens, now expects LPS to earn $2.37 billion this year with adjusted income of $3.69 a share, down from a prior estimate of $2.45 billion, or $3.80 a share.
Along with more than a dozen large mortgage servicers, LPS recently signed a consent order with regulators to establish new foreclosure processes following a federal investigation. LPS also announced plans to hire an outside firm to study the company's default management businesses and document execution practices.
Malloy said the company still stands to strengthen its business model through additional gains in market share, potential cost savings through increased operating efficiencies and a more aggressive stance on share buybacks.
"Though we largely expect LPS’ (first quarter) results to be below published Street estimates, we think that investors are fully aware of a bad macro environment and its likely impact on the quarter," Malloy said.
He also questioned the recent decision by Alabama-based attorney Nick Wooten, who filed another lawsuit alleging LPS split attorney fees between foreclosure law firms and third-party mortgage servicing providers. Wooten said he plans to file 10 to 12 more similar cases in coming weeks.
"Wooten implied that each of his estimated 200 firms in the LPS default network would have to address their relationship with LPS," Malloy said. "We think this raises an important point: are (some) 200 law firms and many of the nation’s largest servicers all involved in a conspiracy to make foreclosures more expensive?"
He said Stephens analysts believe the LPS desktop system and network of foreclosure law firms improves the efficiency of the process and lowers costs for all parties involved, including the homeowner.
"It is difficult for us to imagine that 200 law firms signed up to be part of an illegal fee-splitting arrangement," Malloy said.
LPS is set to report first-quarter earnings Thursday.
Write to Jason Philyaw.
Posted in Servicing/Default, Top Stories | No Comments »
The National Association of Mortgage Brokers will decide this week on whether to continue its lawsuit seeking to block the Federal Reserve rule governing how mortgage brokers are paid.
The Fed rule, required under the Dodd-Frank Act, went into effect April 6 after a brief stay for the U.S. Court of Appeals for the District of Columbia to hear lawsuits brought by National Association of Independent Housing Professionals and NAMB to end the rule. The original lawsuits were filed in the U.S. District Court for the District of Columbia.
The rule ends higher compensation for originators when a borrower accepts a higher interest rate mortgage, known as the yield spread premium. The rule was written to prevent borrowers from being steered into higher-cost mortgage products than the lender requires.
The rule also ends of the practice of mortgage originators receiving payments directly from the borrower and the lender simultaneously.
The NAIHP dropped its lawsuit to pursue other strategies last week, but Mike Anderson, the director of government affairs at NAMB, said they are discussing strategy and cost with attorneys this week.
"We have not dropped the lawsuit," Anderson told HousingWire Monday. "We'll have our final decision this Thursday."
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
Tags: appeals, compensation, Dodd-Frank, Federal Reserve, lawsuit, loan officer, mortgage, NAIHP, NAMB, yield spread premium
Posted in Origination/Lending, Top Stories | 1 Comment »
The Loan Post Inc. launched a new short-sale platform Monday that moves the entire process online and secures documentation with an e-signature, a growing trend at many banks.
ShortSale360 is a designed to contain all relevant documents for a short sale and transport them to all parties involved. The technology includes compliance guidelines for the Home Affordable Foreclosure Alternatives program.
Chief Executive Chris Fuelling said the feature not only streamlines a short-sale transaction, but also pinpoints fraud more easily.
"There's a tracking system that contains the date that each document was sent and opened, the email address of those who received the files and every IP address that accessed the documents," Fuelling said in an interview with HousingWire. "The e-signature is more secure, quicker and easier to track down."
Fuelling said his company is not looking for signature fraud when dealing with short sales through ShortSale360; however, Loan Post will investigate documents associated with any contested short sale.
Fuelling of Loan Post said e-signing is imperative to improved timelines in the short-sale space.
"Short sales are the way markets are going to be corrected faster," as opposed to loan modifications, Fuelling said. "If we are going to complete short sales in 30 to 45 days, which is what everyone wants to do, you need that kind of technology."
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
Tags: e-signature, HAFA, John Ryan, ShortSale360, The Loan Post
Posted in Servicing/Default, Top Stories | 3 Comments »
