National Mortgage News articles from August 2007

National Mortgage News archives from August 2007

An Industry In Crisis.
August 6, 2007... * 10th largest lender American Home goes bust * C-BASS hit by margin calls * Two MIs write down C-BASS by $1B * Fieldstone stops funding * First NLC Slashes Almost 50% of Staff * Hard money lender Flexpoint shuts wholesale...

Liquidity Crisis Worsens As AHM Collapses.
August 6, 2007... MELVILLE, NY -- The subprime liquidity crisis took yet another turn for the worse last week with margin calls playing a key role in the collapse of alt-A/prime lender, American Home Mortgage Investment Corp. here, the nations 10th largest...

C-BASS Owners Take Hit.
August 6, 2007... NEW YORK -- C-BASS here, which controls the nations 10th largest subprime servicer, was hit by margin calls last week, forcing its two mortgage insurance company owners to write down its value by more than $1 billion. Meanwhile, Fieldstone...

Downgrades for 2 MIs On Claim Worries.
August 6, 2007... NEW YORK -- Even before the announcement by MGIC and Radian that they might have to totally write off their investment in C-BASS (see below), Friedman Billings Ramsey downgraded the stock of the companies to market perform from outperform. ...

First NLC Cuts Jobs Almost 50%.
August 6, 2007... BOCA RATON, FL -- Subprime lender First NLC Financial Services here late last week cut its workforce by almost 50%, sending pink slips to 640 full-timers. The layoffs came amid a worsening liquidity crisis for all subprime funders,...

Hard-Money Lender Shuts.
August 6, 2007... FlexPoint Funding, a hard-money lender based in Irvine, Calif., has shut its wholesale division, industry sources told National Mortgage News. At press time, the company and its officials, including senior executive Dan Rawitch, could not...

Dodd Can't Push FHA Reform Through In Time.
August 6, 2007... WASHINGTON -- In the final week of the summer session, Sen. Chris Dodd, D-Conn., tried to push a Federal Housing Administration reform bill through the banking committee, but he could not get the support of key Republicans. It appears...

Fannie, Freddie Gain Business.
August 6, 2007... WASHINGTON -- The contraction in the subprime market is pushing more business to Fannie Mae and Freddie Mac and it is showing up in their issuance of mortgage-backed securities. The two secondary market agencies issued $94 billion in MBS in...

HSBC Adds to Subprime Reserves.
August 6, 2007... NEW YORK -- HSBC Holdings, in a new earnings statement, said its U.S. mortgage business suffered subprime-related writedowns of $760 million in the first half. But the bank which earlier this year exited the subprime correspondent market said...

Editorial: Building Season.(Editorial)
August 6, 2007... The mortgage industry, like the real world, has its seasons. Were about a month shy of meeting season, for instance, that autumnal ritual of state and national mortgage banker and broker conferences. But were still in building season, even if...

Open Forum: Housing, Subprime and GSE: Excerpts of Mr. Lockhart's remarks before the Exchequer Club of Washington recently are presented as our Open Forum.
August 6, 2007... Congress created OFHEO in 1992 to ensure that Fannie Mae and Freddie Mac were effectively regulated to reduce their risk of failure, and hence disruption of their public missions. Fannie Mae and Freddie Mac have an important mission of...

Subprime Credit Crunch Affects Companies Around the World.
August 6, 2007... The credit crunch that hit the market recently due largely to U.S. subprime mortgage concerns clearly had reached a point last week where it was affecting a number of market participants worldwide, some of which had not even invested directly...

Study: Affordable Housing Belongs in the National Agenda.
August 6, 2007... WASHINGTON -- First of its kind study researching the link between affordable housing and children shows decent affordable housing plays a critical role in their wellbeing. Authors of the study Enterprise Community Partners and National...

MA Court Validates AH Effort: The town of Middleborough contended that NEF did not qualify as a true government subsidy under Chapter 40B.
August 6, 2007... BOSTON -- The Massachusetts Supreme Judicial Court agreed with affordable housing advocates in clearly validating the funding program that has been responsible for more production of affordable housing in Massachusetts than any other. That...

Technology to Help Verify Income Saves HUD Time and Money.
August 6, 2007... WASHINGTON -- Sometimes funds come from unexpected sources. A federal employee was praised for creating the Enterprise Income Verification System, a Web-based database platform that helps public housing agencies improve the management of the...

County Officials Supporting DPA.
August 6, 2007... RICHMOND, VA -- As the final state of the future of controversial seller-assisted downpayment assistance programs waits for a Senate vote, public support continues to grow. The National Association of Counties joined the ranks of supporters...

GMAC Residential Parent Incurs Loss of $254 Million.
August 6, 2007... NEW YORK -- Residential Capital LLC, the parent company of GMAC Residential, has incurred a loss of $254 million for the second quarter, an improvement from a $910 million loss in the first quarter but far below ResCaps performance a year...

Peoples Financial Earnings Down.
August 6, 2007... BILOXI, MS -- Peoples Financial Corporation, parent of The Peoples Bank, has reported first half 2007 earnings of $4.7 million, which is a decline of 7.6% from $5.09 million in earnings for the first six months of 2006. The lower earnings were...

FirstFed Releases 2Q07 Results Showing Small Drop in Income.(Financial report)
August 6, 2007... SANTA MONICA, CA -- FirstFed Financial Corp., parent company of First Federal Bank of California, reported net income of $29.1 million or $1.74 per diluted share of common stock for the second quarter of 2007, down from $32.4 million or $1.92...

No Clear End to Subprime Woes, Says PIMCO Bond Manager.
August 6, 2007... SAN FRANCISCO -- Will the mortgage industrys current decline reverse itself by January 2008? MBA chief economist Douglas Duncan predicted it will. PIMCO senior vice president Jennifer Bridwell said not. Speaking at the 35th annual Western...

Commercial MBS Risk Being Repriced Due to Market Volatility.
August 6, 2007... NEW YORK -- In a recent JPMorgan conference call on volatility in the commercial mortgage-backed securities market, Alan Todd, a JPMorgan CMBS analyst, reported that spreads on CMBS risk are now being repriced, as in most other credit sectors....

Despite Mortgages, CapOne Net Up.
August 6, 2007... McLEAN, VA -- Capital One Financial Corp. saw its year-to-year net income rise by about 36% to $750.4 million in the second quarter, a period in which it had said it was forced to offset mortgage market pressures with hundreds of layoffs. ...

Subprime Affects European Net: The strong fundamentals of the top-50 European banks resulted in four upgrades.
August 6, 2007... NEW YORK -- U.S. subprime mortgage market concerns and their effect on the capital markets appetite for risk are expected to have some bearing on European banks earnings, according to a report by the London office of Standard & Poors here. ...

Realtors Do Overseas Volume.
August 6, 2007... WASHINGTON -- Nearly one in five Realtors has sold a home to an international client in the past year, according to the National Association of Realtors. Most international homebuyers purchased single-family homes or town homes, but 22% bought...

Wachovia Sees Record Quarter Strong Credit.
August 6, 2007... CHARLOTTE, NC -- Wachovia Corp. reported $2.34 billion in net income, or $1.22 per share, in the second quarter, up from $1.88 billion, or $1.17 per share, in the second quarter of 2006, reflecting the impact of acquisitions and divestitures....

Compromise on Basel RBC Proposal.
August 6, 2007... WASHINGTON -- U.S. banking regulators agreed to kick the Basel Ia risk-based capital proposal aside as part of a compromise to move ahead with implementation of a RBC proposal known as the advanced approach under Basel II for the 11 largest and...

MERS Wins Foreclosure Challenge in Florida Court.
August 6, 2007... JACKSONVILLE, FL -- MERS recently defeated a foreclosure challenge in the Florida courts. A judge for the Middle District of Florida here dismissed a class action, which challenged MERS on the premise that MERS is not a debt collector. In...

Mortgage Industry Equity Composite.
August 6, 2007... MIEC Index: 91.5 Change: -13.6 Company 8/2/2007 7/26/2007 Wkly. 52 52 % Chg. P/E % Chg. wk/lo wk/hi Ratio American Home (AHM) 1.45 10.67 -86%...

Moody's Outlook for Credit Is Dire.
August 6, 2007... NEW YORK -- Mark Zandi, one of the nations most prominent housing economists, is predicting that mortgage credit quality will erode measurably between now and next summer. And if that isnt pessimistic enough, he also says that there is a...

Publicly traded Subprime and Alt-A Related Firms.
August 6, 2007... B&C Stock Price Index: 105.4 Change: -5.0 Company 52 wk/lo 52 wk/hi 8/2/2007 Wkly.% Chg. % Chg. P/E Ratio Delta Financial Corp (DFC) 7.26 13.60 9.30 -13% 28.10% 7.57 HSBC Holding (HBC) ...

Wells Keeps Wary Eye on Alt-A.
August 6, 2007... DES MOINES -- Wells Fargo has decided to make day-to-day decisions on the pricing and availability of third-party-originated alternative-A credit loans in response to a dampening in demand for the product in the capital markets. These...

Roundup: CDOs Placed on Rating Watch Negative by Fitch.
August 6, 2007... NEW YORK -- Twenty-six classes from 12 structured finance collateralized debt obligations have been placed on Rating Watch Negative by Fitch Ratings. The actions, which affect $603 million of notes in CDOs issued between 2001 and 2006,...

FAAMLT.
August 6, 2007... NEW YORK -- Four certificates from two Finance America Mortgage Loan Trust securitizations issued in 2004 have been downgraded by Moodys Investors Service. The downgrades were as follows: Series 2004-1, Class M6, from A3 to Baa2, Class M7,...

CSFB.
August 6, 2007... NEW YORK -- Twenty-two tranches issued by CSFB Home Equity Asset Trust have been downgraded by Moodys Investors Service, and 32 HEAT tranches have been placed on review for possible downgrade. The collateral backing each deal consists...

LMLTS.
August 6, 2007... NEW YORK -- Two classes of Luminent Mortgage Loan Trust Series 2006-3 have been downgraded by Fitch Ratings. Class II-B-4 was downgraded from BB to B+ and Class II-B-5 was downgraded from B to CCC and assigned a Distressed Recovery rating...

RAMI.
August 6, 2007... NEW YORK -- Four classes of Residential Accredit Loan Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings. The downgrades were as follows: Series 2005-QS5, Class B-1, from BB to B+, and Class B-2, from B to C/DR4;...

IndyMac Earnings, $45 Million, Shrink 57%: The reverse mortgage business was a big winner for IndyMac, as Financial Freedom earned $18.8 million.
August 6, 2007... PASADENA, CA -- IndyMac Bancorp Inc. here reported second-quarter earnings of $44.8 million, or $0.60 per share, down 57% from the $104.7 million, or $1.49 per share, recorded for the same period last year. Nonperforming assets at the company...

Flagstar 2Q07 Results Down Substantially.(Financial report)
August 6, 2007... TROY, MI -- Flagstar Bancorp Inc. here posted second-quarter net earnings of $15.1 million, down substantially from second-quarter 2006 net earnings of $28.6 million. On a linked-quarter basis, net earnings increased from $7.8 million in the...

People.
August 6, 2007... CALIFORNIA PasadenaIndyMac Bank has added new members to its mortgage bank. Jay Wilcox comes to IndyMac as a business development manager for the wholesale lending divisions Alaska region. Steve Austin joins IndyMac as a business...

An Industry in Crisis.
August 13, 2007... * Bush says no B&C bailout for lenders * Fannie asks for 'cap' increase to help B/C * Option One Cuts More Staff * Aegis Closes Production * Nomura Shuts Conduit * Bear co-prez canned in hedge fund mess * French bank...

Fannie Wants Authority to Ease B/C Crunch.
August 13, 2007... WASHINGTON -- Fannie Mae reacting to the requests of its seller/servicers, including some of the nations largest lenders has formally asked its regulator for permission to increase its on-balance-sheet holdings in order to provide liquidity...

Mortgage Casualty List, August.
August 13, 2007... ($ in Billions) Lender Annualized The Name Fundings Situation American Home $66,980 Filed for BK, swamped by margin calls Impac Mortgage (NC) $8,896...

Funds' Collapse Claims Spector.
August 13, 2007... NEW YORK -- Bear Stearns co-president and co-chief operating officer Warren Spector resigned Aug. 5 in the wake of a costly collapse of two Bear-sponsored hedge funds that invested in risky subprime-related assets. The two funds once...

MI Merger Hits Market Snag.
August 13, 2007... MILWAUKEE -- The proposed merger of MGIC Investment Corp. here and Radian Group Inc., Philadelphia, has hit a serious snag as a result of the writedown in the value of C-BASS, a joint venture the two firms own a majority stake in. When the...

Aegis Lays Off Most of Staff.
August 13, 2007... HOUSTON -- Aegis Mortgage Corp. here, once a top-ranked subprime funder, last week let go what it calls a substantial number of its employees, leaving the company with a skeleton crew of workers. And in one other shutdown, Morgan Stanley...

OOMC Cuts 185 Execs.
August 13, 2007... IRVINE, CA -- Option One Mortgage Corp. here last week trimmed 185 account executives from its work force as part of a restructuring plan, noting that more cuts may lie ahead. Meanwhile, the nations third largest subprime lender which...

Woes Shake Stocks Anew.
August 13, 2007... NEW YORK -- Mortgage industry stocks took it on the chin again last Thursday as additional concerns about subprime consumer credit quality spread through the market and caused another large selloff. But by and large, mortgage sector stocks...

Impac Stops Alt-A Lending.
August 13, 2007... IRVINE, CA -- Impac Mortgage Holdings here has suspended originations of alt-A loans a bread-and-butter product for the lender but maintains it has enough cash to continue operating. When the publicly traded REIT said last Tuesday that it...

Nomura Shuts Nonprime Conduit.
August 13, 2007... NEW YORK -- Investment banker Nomura Securities has closed its nonconforming mortgage conduit and laid off staff in its fixed-income research department, industry sources told National Mortgage News. Meanwhile, one mortgage executive close...

Dingell: Limit MI Deduction.
August 13, 2007... WASHINGTON -- Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, wants to end the mortgage interest tax deduction on residences with more than 3,000 square feet, a move that could hurt the jumbo mortgage market....

NatCity Suspends Equity Wholesale.
August 13, 2007... CLEVELAND -- The broker-based wholesale home-equity lending unit of National City Corp. has suspended its approvals of new applications for new home-equity loans and lines of credit but the company is continuing to offer home-equity products...

Wachovia Drops Alt-A Brokers.
August 13, 2007... CHARLOTTE, NC -- Wachovia recently ceased funding alternative-A credit loans through brokers, noting that its becoming more difficult to sell these mortgages in the secondary market. The company said in a Aug. 3 statement, Given the current...

Clinton Calls for More Disclosure of Broker Income.
August 13, 2007... WASHINGTON -- Sen. Hillary Clinton, D-N.Y., is preparing to introduce legislation this September that cracks down on abusive subprime lending and provides $1 billion for foreclosure prevention funds. I think we have to act now, with smart,...

Mood Decidedly Glum on Housing.
August 13, 2007... LAS VEGAS -- Speakers at the California Mortgage Bankers Associations Western States Loan Servicing Conference here were largely pessimistic about the prospects for a quick recovery in home values and loan performance, especially for the...

Editorial: The Big Squeeze.(Editorial)
August 13, 2007... Dont panic! Thats our initial reaction to part two of the liquidity squeeze which continues to claim nonprime and even prime lenders at an accelerating rate. In an example of horse-out-of-the-barn underwriting, some funders now are...

Open Forum: Looking at the Non-Depositories: Excerpts of Gov. Kroszner's remarks before the Interagency Minority Depository Institutions National Conference in Miami recently are presented as our Open Forum.
August 13, 2007... With respect to supervision, the Federal Reserve exercises its examination and enforcement authority to monitor and address issues of concern at the banks it oversees. In addition, we often issue guidance to provide the industry with...

B/C Liquidity Crisis Causes French Bank to Suspend Funds' NAVs.
August 13, 2007... Liquidity in certain market segments of the U.S. securitization market had seen complete evaporation in reaction to U.S. subprime mortgage woes, according to a statement that had been issued by French bank BNP Paribas last Thursday morning. ...

Bond Investors Urge Fed to Take Cautious Approach to Subprime: 'In our view, the board should focus its efforts on preventing unfair and deceptive lending practices.'.
August 13, 2007... WASHINGTON -- Market forces have already diminished the availability of subprime mortgages and the Federal Reserve Board needs to be careful as it drafts a proposal to impose tougher rules on lenders, according to two bond market groups. ...

Displaced Senior Managers Help Others Search for New Jobs.
August 13, 2007... MELVILLE, NY -- The former senior management team from the American Brokers Conduit, the wholesale channel run by the bankrupt American Home Mortgage here, has been trying to help find jobs for other former employees of the unit, one manager...

HomeBanc Shifts Gears in Face of Tough Liquidity Crunch.
August 13, 2007... ATLANTA -- Back in January of this year, Kevin D. Race was promoted from president to chief executive of HomeBanc Corp. here to oversee the long-troubled companys streamlining of operations. When the promotion of Mr. Race was made, HomeBanc...

Wolters Kluwer Names New Mortgage Leader.
August 13, 2007... MINNEAPOLIS -- Wolters Kluwer Financial Services here has named Ken Newton executive vice president of Banking Content, as part of a move the company believes will make it more nimble and responsive to clients in a very difficult market. ...

Principal Eyes Small CRE Loans.
August 13, 2007... DES MOINES -- Principal Real Estate Investors, the Dallas-based real estate lending affiliate of Principal Financial Group here, has entered the small-balance commercial mortgage loan niche with a program called Principal Commercial Mortgage...

Colonial Now Focuses on MF.
August 13, 2007... BIRMINGHAM, AL -- Colonial Properties Trust has completed a strategic initiative to become a multifamily-focused real estate investment trust with the sale of some retail properties for a total price of $265.8 million. Previously, the REIT...

EQR Makes $275 Million During Second Quarter.
August 13, 2007... CHICAGO -- Equity Residential reported net income of $275 million for the second quarter (earnings of $0.95 per share), compared to net income of $150 million (EPS of $0.51) for the second quarter of 2006. The largest multifamily real...

Housing REITs See Net Grow.
August 13, 2007... NEW YORK -- Three single-family residential mortgage real estate investment trusts realized year-to-year increases in net earnings during the second quarter ended June 30. Annaly Capital Management here saw $85.7 million in net income...

Auction Opens Chicago Summit: Bids from the auction will support the Little Heroes Pediatric Cancer Foundation.
August 13, 2007... OAK BROOK, IL -- Inland Real Estate Auctions Inc. here will hold a charity auction in support of the Little Heroes Pediatric Cancer Foundation today as part of the opening gala for the Midwest Commercial Real Estate Summit at the Chicago...

Stewart and Title Unit Settle Charges with CA Commissioner.
August 13, 2007... SACRAMENTO, CA -- Stewart Title Guaranty Co., Houston, and a title agency it owns, Electronic Closing Services Inc., also known as E-Title, have agreed to a $1.5 million settlement with the California Department of Insurance. In a...

RI Home Sales Drop by 5.4%.
August 13, 2007... BOSTON -- Following the pattern for the rest of southern New England, home sales and prices in Rhode Island were down at the end of May. Sales and prices of single-family homes in the state fell in May, although condominium sales were healthy,...

Downgrade for Option One Mortgage Over 'Poor Performance'.
August 13, 2007... KANSAS CITY, MO -- Even though H&R Block Inc. here has a deal in place to sell Option One Mortgage Corp., Irvine, Calif., Fitch Ratings has downgraded Blocks issuer default rating from A to A- and placed it on Rating Watch Negative status. The...

Genworth Unit Buys Reverse Lender: The largest HECM originator is Wells Fargo, followed by Financial Freedom.
August 13, 2007... RICHMOND, VA -- Senior Financial Inc., a subsidiary of Genworth Financial Inc. here, has agreed to acquire Liberty Reverse Mortgage Inc., Rancho Cordova, Calif., in a $50 million transaction. According to data issued by the Department of...

Southwest Georgia Blames Mortgage for Drop: Earnings per diluted share for the first six months of 2007 were $0.63.
August 13, 2007... MOULTRIE, GA -- In the second quarter, Southwest Georgia Financial Corp., a full-service community bank holding company, reported net income of $620,000, a 49% decline from net income of $1.2 million for the second quarter of 2006. On a per...

GNMA (FHA/VA) as a Percentage of Total Production.
August 13, 2007... ($ in Billions) The Total Prime B&C FHA/ FHA/VA Year Prod Prod Vol VA Share of Total Prod. 2007(e) $2,400 $1,146 $400 $79 3.29% 2006 $3,267 $1,339 $663 $82 2.50% 2005 ...

Roundup: Fitch Downgrades Deals.
August 13, 2007... NEW YORK -- One hundred fifty classes of subprime residential mortgage-backed securities with outstanding balances totaling $2.4 billion were downgraded by Fitch Ratings on Aug. 1. Fitch also affirmed the ratings on 232 classes with outstanding...

Hybrid CDOs on Watch.
August 13, 2007... NEW YORK -- Thirty-three tranches from 10 transactions of U.S. cash-flow and hybrid collateralized debt obligations of asset-backed securities have been placed on CreditWatch with negative implications by Standard & Poors Ratings Services. ...

S&P Downgrades CDOs.
August 13, 2007... NEW YORK -- Standard & Poors Ratings Services has placed 68 classes from 19 collateralized debt obligations with exposure to recently downgraded subprime residential mortgage-backed securities on CreditWatch with negative implications. The...

Moody's Downgrades HE Bonds.
August 13, 2007... NEW YORK -- Twenty-two classes from 10 second-lien subprime transactions issued in 2007 have been placed on review for possible downgrade by Moodys Investors Service. The rating actions affected deals issued by Ace Securities Corp. Home...

C-BASS Rating on Watch.
August 13, 2007... NEW YORK -- The CAM1 structured finance rating of C-BASS Investment Management LLC, an asset manager of collateralized debt obligations, has been placed on Rating Watch Negative by Derivative Fitch. Fitch said the rating action stemmed from...

CSFB Tranches on Review.
August 13, 2007... NEW YORK -- Three tranches from two deals issued by Credit Suisse First Boston Mortgage Securities Corp. in 2002 and 2003 have been placed under review for possible downgrade by Moodys Investors Service. The affected securities were as...

CSFB Classes Downgraded.
August 13, 2007... NEW YORK -- Two tranches from CSFB Mortgage-Backed Pass-Through Certificates series 2001-11 have been downgraded by Moodys Investors Service, and two tranches have been placed under review for possible downgrade. Class C-B-3 was downgraded from...

Fitch Adds Loss Forecasts.
August 13, 2007... NEW YORK -- In conjunction with its Aug. 1 rating actions, Fitch Ratings also said that it is publishing detailed information on expected-loss forecasts and the losses each security can withstand. An expected remaining loss percentage is...

Fannie Adds Originator Details.
August 13, 2007... WASHINGTON -- Fannie Mae plans to provide third-party origination statistics for substantially all of its mortgage-backed securities beginning with September issuances. For each new issue MBS, Fannie plans to provide the following: the...

GE CMBS Deal Downgraded.
August 13, 2007... NEW YORK -- Class J of GE Capital Commercial Mortgage Corp.s commercial mortgage pass-through certificates, Series 2000-1, has been downgraded from CC/DR4 to C/DR5 by Fitch Ratings. Fitch also upgraded one class in the transaction and affirmed...

Moody's Refines Approach.
August 13, 2007... NEW YORK -- Moodys has also refined its approach to analyzing securitizations of payment-option adjustable-rate mortgages. The methodology revisions, stemming from the weaker housing and mortgage markets, also refine the rating agencys...

Nomura Classes on Watch.
August 13, 2007... NEW YORK -- Class B4 of Nomura Asset Acceptance Corp. Alternative Loan Trust mortgage pass-through certificates, Series 2003-A1, has been placed on Rating Watch Negative by Fitch Ratings. Fitch also affirmed the ratings on 11 classes in two...