Mortgage Fraud Categories
Mortgage Asset Research Institute (MARI) states that reported incidents of mortgage fraud and misrepresentation by professionals in the mortgage industry are continuing to climb and increased by 7% from 2008 to 2009. Is it more fraud or better reporting of previously undiscovered fraud? Either way, MARI believes that mortgage fraud is “significantly understated”. Florida has moved back into first place in the country for mortgage fraud and misrepresentation, followed by NY, CA, AZ, MI, MD, NJ, GA, IL, and VA. The top fraud incident type in 2009 – representing 59% of all reported fraud types – was application misrepresentation. Next were frauds related to appraisal and valuation misrepresentation, which increased from 22% of reported misrepresentation in 2008 to 33%. With an 11% increase, this is the most notable increase in reported fraud types in 2009. Thank you HVCC appraisal regs?
Ellie Mae IPO Filing
If you’d like to own a piece of Ellie Mae, you will soon have a chance. Ellie has filed papers with the SEC for an initial public offering worth up to $86.25 million. The company, which sells software to mortgage originators, has hired Goldman Sachs as the lead underwriter, along with William Blair, Keefe, Bruyette & Woods, Macquarie Capital, Piper Jaffray, and ThinkEquity. Maybe not so coincidentally, Ellie Mae reported earnings of $1.7 million on sales of $37.7 million in 2009.
Mortgage Company Capital Requirements
Are mortgage companies really going to have to reserve capital (up to 5%) for securitized loans, thus constricting hedging and volumes & liquidity in the secondary markets? CML America and Lenders One are garnering support for an amendment which would create a “zero category” of risk retention for “qualified mortgages” — those mortgages that meet standard underwriting criteria. The amendment would mean that standard fixed rate, adjustable rate, and jumbo mortgages would not be subject to any capital charge. High risk loans (option ARMS, neg-am, etc) would remain the focus of the risk retention provision. CML and Lenders One recommend contacting your US Senator through their Legislative Assistant (LA) and telling the LA that not only are you a business owner in the state and that you are concerned about risk retention for mortgages in the proposed Dodd bill. “Very clearly state that Senator Landrieu has an amendment that permits risk retention for higher risk mortgages but exempts the kinds of products that had nothing to do with the mortgage crisis” and ask that they “support Senator support Senator Landrieu’s amendment, and advise them that Senator’s Stabenow and Hagen are also co-sponsoring.” (It doesn’t have an amendment number yet.)
Citi Cuts Jumbo Rates
According to Reuters (I guess that is one way to release mortgage pricing news), CitiMortgage sharply reduced rates on jumbo loans. The CEO announced that the company cut rates (raised prices) on 30-year fixed-rate and 5/1 adjustable-rate loans. “We are beginning to see a lot of interest in the jumbo market,” Das said. “We want to demonstrate that Citi is a leader in jumbo mortgages and we believe that end of the market has been underserved,” he added. Most banks are comfortable holding on to their jumbo loans – there are some nice spreads.
GMAC Mortgage To Rebrand Ally Capital
GMAC Financial Services, owner of ResCap, and who hasn’t paid back its TARP money, reported its first quarterly profit ($231 million from the bank, but $162 million after including losses from other divisions) since receiving Troubled Asset Relief Program, or TARP, funds (which have not been paid back yet). And on Monday GMAC will rebrand itself Ally Financial Inc., thus matching one of its businesses, Ally Bank.
Mortgage Company Closure
Universal Mortgage, a private mortgage bank in Wisconsin that’s been around since the 1960’s, will begin permanently closing the business this month, eventually eliminating about 100 jobs.
ISM Higher, Rates Better
Yesterday was not a particularly busy day on mortgage trading desks, although rates were a little higher to start the day. Traders report that current coupon yields are above 4.40% and that the spread to Treasuries remains somewhat high. We did have a fair amount of news, all of it reflecting economic recovery. The ISM Manufacturing Index increased to 60.4 in April, up from 59.6 in March and 56.5 in February, and growing at its fastest pace since 2004. Construction Spending increased .2% from the revised February number (private construction spending – residential – fell 0.9% below February totals, but was more than offset by an increase of 2.3% in the public sector for education structures and highway construction). Today we will have Factory Orders and Pending Home Sales, and ahead of that we have a rally: the 10-yr is back down to 3.65% and mortgage prices are better by about .250.
This is mythical and deep… truly beautiful.
A man asked an American Indian, “What is your wife’s name?”
He replied, “She called Five Horses”.
The man said, “That’s an unusual name for your wife. What does it mean?”
The Old Indian answered, “It old Indian name. It mean ‘Nag, Nag, Nag, Nag, Nag’!”