News

Lenders Direct Capital Corporation Closes; Cites 'Lack of Investor Demand'

Lake Forest, Calif.-based Lenders Direct Capital Corporation is the lastest subprime operation to shut its doors, sources have confirmed to Housing Wire. CEO Michael McQuiggan cited the lack of investor demand for their loan products and the current state of the U.S. nonprime lending industry as factors in reaching the decision to cease wholesale originations. No word was given regarding loans already in the company's pipeline. According to the Mortgage Bankers Association, LDCC originated 8,692 loans worth $1.23 billion during 2005, and ranked 197th on a list of the top 300 single-family home purchase loan originators.
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Fed's Bies Resigns

The Federal Reserve said Friday that Susan Schmidt Bies submitted her resignation as a member of the Board of Governors, effective March 30, 2007. Bies, who has been a member of the Board since December 7, 2001, submitted her resignation to President Bush, and said she plans to spend more time with her family. She does not plan to attend the March 20-21 meeting of the Federal Open Market Committee.
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Countrywide Loan Fundings Jump 13 Percent; Pending Foreclosures Up 50 Percent

Countrywide Financial Corporation said Thursday that mortgage loan fundings for January 2007 reached $37 billion, up 13 percent from January 2006. Average daily mortgage loan application activity in January was $2.8 billion, up 17 percent from January 2006. Countrywide's servicing portfolio, the second largest in the nation behind leader Wells Fargo, surpassed $1.3 trillion at January 31, 2007, an increase of $190 billion from last year.
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Fannie Provides Timetable for Restated 2005, 2006 Results

Fannie Mae CFO Robert Blakely said Thursday that the company expects to provide its restated 2005 and 2006 financial results to the Securities and Exchange Commission before the end of this year. In remarks made of the Credit Suisse Financial Services Forum in Naples, Florida, Blakely said the secondary market giant plans to file its 2005 10-K in August, with the 2006 10-K beng filed sometime after that.
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Mercantile Bancorp to Acquire Missouri-based HNB Financial

Mercantile Bancorp, Inc. said Thursday that it had reached a definitive agreement to acquire privately-held HNB Financial Services, Inc., based in Hannibal, Missouri, in an all cash transaction valued at $30.2 million. HNB Financial is the parent of HNB Bank, which had $161.4 million in assets as of December 31, 2006 and has five full-service banking locations in eastern Missouri.
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Dodd: Subprime 'Crisis' Must be Dealt With

In a Senate Banking Committee hearing yesterday addressing predatory lending and the effect of increasing foreclosures, Senator Christopher Dodd (D-CT) called for action to address what he characterized as "a grave threat from predatory, abusive, and irresponsible lending practices undertaken by too many subprime lenders." "Today, there are too many incentives in the subprime market to make loans that put borrowers at too great a risk of failure," Dodd said, pointing to the fact that more than half of all subprime loans go stated-income rather than full or partial doc.
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Repurchases Force New Century to Restate Earnings

Caught unprepared by a flood of loan repurchases, New Century Financial Corporation said late Wednesday that it will restate its consolidated financial results for the first three quarters of 2006 and will delay the release of fourth quarter results indefinitely as the subprime REIT looks to correct errors associated with its accounting for loan repurchases. In addition to failing to perform fair-value adjustments on its loan loss reserves after repurchases, New Century said repurchase allowances did not account for a growing volume of repurchase claims during 2006. Collectively, the errors suggest that as subprime market performance deteriorated throughout the year, repurchase volumes at the subprime morgage banking giant quickly outstripped originally-established loss reserves.
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