Archive for November, 2011
Carrington Mortgage Services LLC hired Brad Nease as senior vice president of capital markets, a new position in which he will lead the company's efforts to expand its loan origination business.
Nease will spearhead product development, investor relations, loan trading and warehouse lending.
The lending and servicing firm announced plans in August to expand its mortgage origination business to include wholesale origination. Carrington announced its expansion in the origination space after acquiring the assets of American Home Equity Corp.
Nease previously served ICON Residential Lenders as chief operating officer of capital markets and was a partner at hedge fund advisory firm Mortgage Capital Management for 12 years.
"We’re pleased to add someone with Brad’s experience and expertise to our team," said Steve Patton, Carrington’s executive vice president of mortgage lending. "These are clearly challenging times in the secondary market and having someone with Brad’s track record and skills will help us manage these challenges and position our company for continued success."
Write to Kerri Panchuk.
Tags: American Home Equity Corp., Carrington Mortgage Services, hedge fund, ICON Residential Lenders, mortgage, Mortgage Capital Management, Origination/Lending
Posted in Origination/Lending, Top Stories | No Comments »
The United States is benefiting from positive personal consumption, but economic uncertainty looms because of political uncertainty, the European sovereign debt crisis and a growing housing inventory, a report from BBVA Compass bank said.
Further, federal initiatives aimed at improving housing and student finance are expected to fall short of the desired impact.
"While some housing data has been better than expected, an increase in distressed properties continues to threaten the market," said Nathaniel Karp, chief U.S. economist for BBVA Compass. "Recent changes to the HARP and Federal Student Loan Program will have a minimal effect on the economy and will not significantly help the labor market."
The bank released its fourth-quarter U.S. Economic Outlook report Monday, concluding that "policymakers must take swift action to reduce fiscal uncertainty." Doing so would help buoy investment and employment in the U.S., the report claims.
The study comes as Congress reaches an impasse over deficit reductions. The Super Committee now has less than 2 days to agree on $1.5 trillion in cuts over the next 10 years.
"Economic growth is contingent on reducing uncertainty both domestically and globally," said Karp. "The European debt situation continues to introduce volatility in the market and underscores the necessity of getting things in order here in the U.S."
BBVA Compass, which is based in Houston, said private-sector hiring has picked up in Sun Belt states and exports continue to drive economic activity.
Even though personal consumption in the U.S. boosted the nation's gross domestic product above expectations, Europe's financial issues leave many global economic issues on the table, the bank's report said.
Analysts at Toronto-based Capital Economics said the debt crisis overseas has yet to subside.
"The yields on government bonds issued by France, Austria, Belgium and the Netherlands have risen sharply in recent weeks in a worrying sign that the euro-zone's debt crisis is starting to rot its “core” (with the notable exception of Germany)," according to Capital Economics. "We suspect this process has further to go."
Write to Kerri Panchuk.
Tags: BBVA Compass, Capital Economics, European debt crisis, U.S. economy
Posted in Origination/Lending, Top Stories | No Comments »
Changes to the Home Affordable Refinancing Program could add between $200 billion and $300 billion mortgage originations over 2012 and 2013, according to Freddie Mac Chief Economist Frank Nothaft.
Assuming a $200,000 loan balance, it would equal roughly 1.5 million mortgages.
Last week, Fannie Mae and Freddie Mac released guideline changes to servicers and lenders in order to allow more underwater borrowers refinance into lower-rate loans. The HARP loan-to-value ratio cap, loan-level price-adjustment fees, some appraisal requirements and certain representation and warranty risk on the old loan file were removed.
Estimates of the new program's effect vary. More than 4 million Fannie and Freddie borrowers are underwater. The Federal Housing Finance Agency believes the program could double from the 838,000 refis completed since the program launched in March 2009.
Barclays Capital analysts said because borrowers who already went through HARP are not allowed to go through the new program again, prepayment speeds on higher-coupon mortgage-backed securities would be kept low.
"In summary, we do not foresee any impetus for a significant pick-up in the prepayments of post-HARP originations," BarCap analysts said. "That said, there are signs that lenders may have started to reduce refinancing frictions, which could have contributed to the surprisingly sharp pick-up in lower coupons (3.5s and 4s) during the past two months."
Moody's Analytics expect another 1.6 million borrowers should make it through the program with the new changes. Keefe, Bruyette & Woods analysts expect HARP volume to increase 10% per year over the next two years.
"Allowing eligible borrowers to refinance (who otherwise may face a limited opportunity to refinance without paying down a significant chunk of their loan principal) and obtain substantially lower interest rates and monthly payments, will likely reduce defaults, ease distressed sales in markets, and provide needed cash flow to borrowers," Nothaft said in a November economic outlook report released Monday.
He revised his mortgage origination estimates upward to $1.13 billion over 2012 from $1 billion the month before.
Nothaft and other supporters expect the program to boost economic growth if more households have more disposable income to spend. Others said the program merely moves that money away from investors to homeowners, leaving any economic effect a wash.
Nothaft's origination estimates for 2012 land above the $900 billion the Mortgage Bankers Association expects — though last month the trade group could not account for any effect from the new HARP program.
The problem, despite a recent uptick in the economy, Nothaft said, remains unemployment, which remains above 9%.
"The economic growth rate for the third quarter is barely sufficient to keep up with labor force growth, and insufficient to make a sizable dent in unemployment," Nothaft said.
Write to Jon Prior.
Follow him on Twitter @JonAPrior.
Tags: Barclays Capital, Fannie Mae, Federal Housing Finance Agency, freddie mac, HARP, Home Affordable Refinancing Program, KBW, Keefe Bruyette & Woods, MBA, moody's analytics, mortgage, Mortgage Bankers Association, originations, refinance, rep and warranty
Posted in Origination/Lending, Slider, Top Stories | 1 Comment »
A company run by former American International Group Chief Executive Maurice "Hank" Greenberg has sued the United States, claiming that the government takeover of the insurer was unconstitutional.
The lawsuit filed Monday in the U.S. Court of Federal Claims in Washington, D.C. seeks at least $25 billion for Greenberg's Starr International Co and other shareholders
Posted in Around the Web | No Comments »
Existing home sales increased 13.5% in October when compared to a year earlier and would be even higher if contract failures and cancellations plaguing the loan application process could subside, the National Association of Realtors said Monday.
Total existing home sales — including single-family townhomes, condominiums and co-ops — rose to a seasonally adjusted annual rate of 4.97 million units in October, compared to 4.9 million in September and 4.38 million a year earlier.
"Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions," said Lawrence Yun, NAR's chief economist. "Many people who are attempting to buy homes are thwarted in the process."
Yun said the rebound in home sales would be more pronounced if it were not for the number of contract failures reported in October. Overall, mortgage application failures driven by appraisal value issues, home inspection problems and employment losses pushed the contract failure rate to 33%, compared to 18% in September and 8% a year earlier.
"Other recent factors include disruption in the National Flood Insurance Program, and lower loan limits for conventional mortgages, which paradoxically force some of the most creditworthy consumers to pay unnecessarily higher interest rates," Yun said.
The good news, according to NAR, is the fact that the supply of homes is gradually subsiding. In October, the total existing inventory fell 2.2% to 3.33 million housing units, or an eight-month supply. That is down slightly from an 8.3-month supply in September.
The national median existing home sales price hit $162,500 in October, down 4.7% from a year earlier.
Write to Kerri Panchuk.
Tags: co-ops, condominiums, existing home sales, Lawrence Yun, lower loan limits, NAR, National Association of Realtors, National Flood Insurance Program, townhomes
Posted in Origination/Lending, Top Stories | 3 Comments »
October home sales in Illinois rose 15.3% from a year earlier with 8,536 homes sold, compared to 7,402 sales in October 2010.
The Illinois Association of Realtors reported the increase in its latest home sales report released on Monday.
As home sales increase, buyers favor lower priced properties across the state with the median sales price dropping 10.3% to $130,000 from $145,000 last year. In the Chicago metropolitan statistical area, single-family homes sales totaled 5,778 last month, up 23.7% from 4,670 homes a year earlier.
The average interest rate for a 30-year, fixed mortgage for the north central region hit 4.07% in October, down from 4.09% in September. In October of last year, the average 30-year, fixed-rate mortgage for the same area was 4.21%.
The median home sale price in the Chicago MSA fell to $149,900 in October, down 15.3% from $177,000 last year.
"The increase in units sold in the city of Chicago continues to show the absorption of distressed properties in the market," said realtor Bob Floss, president of the Chicago Association of Realtors.
"Prospective buyers in the market are making investments that make sense long-term," said Floss. "Those who haven't considered buying are encouraged to work with a realtor to assess their individual buying power in today's market and plan how they may make a purchase given historically low interest rates and their own financial ability."
Write to Kerri Panchuk.
Tags: 30-year fixed-rate mortgage, Chicago Association of Realtors, FRM, home sales, Illinois Association of Realtors, Illinois home sales
Posted in Origination/Lending, Top Stories | 1 Comment »
Genworth Financial Inc. (GNW: 7.77 -0.38%) is implementing changes within its mortgage insurance segment to make it easier for lenders to participate in the expanded Home Affordable Refinance Program.
The federal program launched in 2009 to help borrowers with certain loan-to-value ratios refinance into mortgages with lower interest rates. In October, the Federal Housing Finance Agency removed several barriers to refinancing to accommodate more underwater borrowers.
Genworth said the changes will make it easier for lenders to partake in the initiative. One of the incentives of HARP 2.0 is to waive reps and warranties on mortgages to mitigate the risk of lenders having to repurchase certain loans. Genworth said it will make a description of the changes available within its mortgage insurance underwriting guidelines by Dec. 1.
United Guaranty, the mortgage insurance subsidiary of AIG, noted earlier this month that while it supports HARP 2.0, it will not be offering such broad immunity on reps and warranties.
"The mortgage insurance companies waving their reps and warranties are worried about upsetting their lender relationships," said Mark Herr, a spokesman for AIG. "We're worried about assuming someone else's fraud or negligence."
"The real issue here is that some of the lenders with fraudulent or poorly documented or undocumented mortgages want to use the HARP program to relieve themselves of the risk tied to their bad lending decisions," Herr said. "They want us to surrender our legal protections against fraud."
Write to Kerri Panchuk.
Tags: AIG, Fannie Mae, freddie mac, Genworth Financial Inc., Home Affordable Refinance Program, United Guaranty Corp.
Posted in Secondary Market/Investors, Top Stories | No Comments »
Home rental vacancies in the Denver area grew slightly in the third quarter, with the vacancy rate for condos, duplexes and houses reaching 3.4% during the period, the Colorado Department of Housing said.
The rate is up from 2.9% in the second quarter and 2.6% a year earlier.
Triplexes and fourplexes experienced the highest vacancy rate of 4% for three months ended Sept. 30. Meanwhile, the vacancy rate on detached houses hit 2.6%. Vacancies on rental townhomes and condominiums hit 3.3% and 3.8%, respectively.
"The small increase in vacancies reflects the fact that we’re continuing to see new inventory come onto the market," said Susan Melton, owner of Assured Management in the Lakewood, Colo., area.
"We're still being approached by homeowners who can't sell their homes, but don't want to manage rentals themselves, and we also have established investor clients who are adding to the inventory of rental homes they already own," Melton said. "The net effect has been a slowly expanding inventory, which can produce some new vacancies while also preventing rent levels from taking off the way they have in some apartment properties."
The average rent for the Denver metropolitan area rose to $1,049 in the third quarter, up from $1,041 a year earlier.
Single-family rentals on average have been staying on the market for 24.5 days, down from 36 days last year.
Write to Kerri Panchuk.
Tags: Assured Management, Colorado Department of Housing, condos, Denver, homeowner, rental, vacancy rate
Posted in Secondary Market/Investors, Top Stories | No Comments »
A look at stories across HousingWire's weekend desk, with more coverage to come on bigger issues:
The congressional Super Committee remains in a deadlock. The committee is left with only three days to bridge a bipartisan divide to develop a plan to cut $1.5 trillion from the federal deficit over the course of ten years.
One of the committee's members Rep. Jeb Hensarling, R-Texas, told Fox News Sunday that no one is giving up hope, but "reality is starting to overtake hope."
Fellow committee member Rep. Xavier Becerra, D-Calif., agreed with Hensarling that both parties continue discussions. "I think we are deep into the fourth quarter and there is still time left on the clock," Becerra said.
As of Sunday night, the committee remained unable to reach an agreement on a bipartisan plan. Congress created the super committee this past summer, charging the members with finding $1.5 trillion in deficit reductions over the course of the next decade in exchange for raising the debt ceiling in August.
Foreclosure discounts are not as deep in non-judicial foreclosures states like California where inventory levels are moving faster than in judicial foreclosure states, according to a Housing Market Trends report for November produced by FNC Inc.
The report notes that the median price discount on foreclosures sold in California was at 10.8% in the third quarter, compared to 19.1% countrywide and 18.1% in Florida – another state hit hard by an influx of foreclosures.
The report, authored by FNC senior research economist Yanling Mayer, noted that foreclosure discounts in Florida have been declining these past two years and fell below the national average for the first time since the mortgage market crisis developed three to four years ago.
During the third quarter, the median foreclosure sale price hit $129,000 down 4% from $135,000 last year. Meanwhile, the median discount for the third quarter is at 19.1%, up from 18.6% a year earlier.
Dallas County District Attorney Craig Watkins hosted a national conference on MERS litigation issues for legal scholars and attorneys representing various counties in the states of Texas, Oklahoma, Ohio, Florida, Pennsylvania and West Virginia.
Dallas County sued Mortgage Electronic Registration Systems, and its parent company Merscorp, earlier this year, claiming the registry failed to pay fees to the Dallas County on various mortgage transfers made during the securitization process.
MERS contends the Dallas County case and several others that have popped up since then are without merit.
Oklahoma City-based a la mode, a mortgage technology firm, says its Mercury Network is already submitting live appraisals to the Uniform Collateral Data Portal, ahead of the Dec. 1 deadline set up by Fannie Mae and Freddie Mac.
The UCPD is a single portal created by the GSEs for the submission of real estate appraisals. Every industry player submitting appraisal information to the GSEs on or after Dec. 1 will have to submit their appraisals through this portal.
The Mercury Network is a la mode's existing vendor management platform. Earlier this year, the network was named an appraisal submission platform for the GSEs.
Veros Real Estate Solutions is the technology vendor behind the UCPD services; however, a la mode will link companies to the platforms.
Lenders and appraisers using the Mercury Network to make submissions will be able to access an audit trail of the appraisal file and receive automatic revision requests sent to appraisers when necessary. The system also has an error-checking mechanism to ensure appraisals submitted are ready for review.
The Federal Deposit Insurance Corp. and Louisiana banking regulators closed Central Progressive Bank in Lacombe, La., last Friday. All deposit accounts were transferred to First NBC Bank of New Orleans, La. The FDIC estimates the action will cost the FDIC Insurance Fund about $58.1 million.
The same day Polk County Bank in Johnston, Iowa, was shut down by the Iowa Division of Banking. The FDIC was appointed receiver and entered into a purchase and assumption agreement with Grinnell State Bank in Grinnell, Iowa. Grinnell State Bank has assumed all of the deposits of the Polk County Bank.
Handling the closing will cost the FDIC Deposit Insurance Fund $12 million. Polk County Bank is the 89th FDIC-insured bank failure in the nation this year and the first in Iowa for 2011.
Write to Kerri Panchuk.
Tags: a la mode, Central Progressive Bank, Dallas County District Attorney Craig Watkins, Fannie Mae, FDIC, federal deficit, Federal Deposit Insurance Corp., First NBC Bank, freddie mac, Iowa Division of Banking, Polk County Bank, super committee, UCPD, Veros Real Estate Solutions
Posted in Secondary Market/Investors, Top Stories | No Comments »
The nation's gross domestic product will grow at a modest 2.5% in the final quarter of this year and by 2.4% in 2012, according to economists responding to the latest National Association of Business Economics survey, which managed to find some bright spots concerning next year's economic outlook.
"Business spending remains a strong positive and housing starts are expected to continue to rise from the bottom seen in 2010," the report said. Corporate profits and stocks are predicted to strengthen.
Economists surveyed expect housing starts to reach 600,000 units in 2011, just slightly above the 2010 total.
Housing starts are expected to increase 10% in 2012. The 2012 figure was revised downward slightly from the September estimate of 700,000 units to 660,000 units.
Respondents expect the odds of a recession to be low, but said consumer spending will remain muted at about 2.1% growth in 2012, well below the historic norm of 2.8%.
Unemployment is expected to decline only marginally, with accommodative monetary policy remaining. Monthly job gains are expected to rise steadily over the forecast horizon, from an average of 100,000 during the fourth quarter of 2011 to 130,000 by the end of next year. The jobless rate will decline from 9.1% to 8.7% in 2012.
The European debt crisis also remains a concern.
The November NABE outlook presents the consensus of macroeconomic forecasts from a panel of 49 professional forecasters. It was conducted Oct. 20- Nov. 2.
Write to Kerry Curry.
Follow her on Twitter @communicatorKLC.
Tags: economists, GDP, Gross Domestic Product, housing, housing starts, National Association of Business Economics
Posted in Origination/Lending, Top Stories | No Comments »
