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Daily News
Monthly Fannie Mae MBS Issuance Falls
November 25, 2009
Fannie Mae issued $40.7 billion in mortgage-backed securities in October, down 14.5% from September, according to the government-sponsored enterprise. October's issuance is the lowest since January, when the GSE issued $21.3 billion in MBS and it most likely reflects a decline in refinancing volume. Freddie Mac reported a similar 13.5% drop in MBS issuance in October. Freddie also reported that its purchases of refinanced loans fell by 15% month-over-month. Fannie did not report its purchases of refinanced loans. Recently it appears Fannie and Freddie MBS issuance has been tied to the refinancing market, while Ginnie Mae issuance has been tied to the homebuying market. Ginnie Mae MBS issuance totaled $38.7 billion in October, down only 2.5% from the previous month.
Origination Software Vendor Launches Self-Serve Consumer Web Portal
November 25, 2009
Loan origination software provider Avista Solutions released a new consumer website function aimed at putting greater functionality into the hands of borrowers. The Columbia, S.C.-based LOS will "private-label" the new Web portal with lenders' websites and branding. Visitors can submit applications online, obtain automated approvals, receive online disclosures, and can receive notification when the rates they want are available. The portal also has payment calculators, loan-type scenarios and other tools so the borrower can self-serve online. Borrowers also can receive automated e-mail updates on the online status of their loans.
REDC Produces $55 Million in Auction Activity
November 25, 2009
Real Estate Disposition LLC generated $55 million during a recent weekend of auction activity in New York, Las Vegas and Reno, and a national online auction, boosting its 2009 total sales to more than $2 billion. "Many people had winning bids on properties that were more than 50% less than the house's previous high value," said REDC CEO Jeff Frieden. The national online auction of houses from coast-to-coast generated $33.6 million in sales. The Solaria, a Riverdale, N.Y., luxury high-rise residence, received bids on all 54 residences, generating 21 contracts with over $17 million in proceeds. The Las Vegas and Reno auction sold 49 of 56 properties (87.5%) for $5 million. The company has conducted 302 auctions this year and has auctioned 35,900 properties, including foreclosed houses as well as commercial and builder-developer properties. REDC can be found online at www.auction.com.
Banks' Buybacks of Defaulted Single-Family Loans Surge
November 25, 2009
Banks had to buy back $7.1 billion in defaulted single-family loans in the third quarter to reimburse mortgage investors, up from $1.9 billion in the previous quarter. Federal Deposit Insurance Corp. Call Report information shows that most of the buyback demands fell on JPMorgan Chase and Bank of America. Chase repurchased $2.7 billion in defaulted loans and BoA repurchased $2.3 billion to satisfy investor demands. Both are on the hook for troubled loans they took control of when they purchased ailing mega-thrifts — Countrywide in the case of BoA and Washington Mutual by Chase. The FDIC information also lists buybacks by Citibank ($898 million), National City Bank ($361.6 million), Wells Fargo Bank ($266 million) and SunTrust Bank ($232.3 million). Investors like Fannie Mae and Freddie Mac can require lenders to buy back defaulted loans that don't comply with their underwriting requirements. Freddie Mac forced its seller/servicers to buy back $960 million in bad mortgages in third quarter. (Fannie does not disclose buyback information.) Ginnie Mae and Federal Housing Administration also require buybacks and indemnifications on bad loans.
Reverses Coming Under Home Equity Pressure
November 24, 2009
Once booming, home equity conversion mortgages have begun a slowdown that could continue until home prices stabilize. In the year ended Sept. 30, mortgage lenders funded 114,692 reverse mortgages under the Federal Housing Administration's HECM program, an increase of 1,336% compared with 1999. Five years ago, just 43,000 reverse loans were written. Until a year ago, the reverse mortgage niche looked like a safe bet for mortgage bankers seeking a haven from the carnage in the industry. But now — with home prices still under pressure and fears of a double-dip recession growing — reverse mortgages no longer look like a safe bet.
NABE Expects a Boom in Housing Starts Next Year
November 24, 2009
Housing starts will increase by 36% next year and the housing sector will contribute to economic growth for the first time since 2005, according to the November survey by the National Association of Business Economics. The 48 professional forecasters see housing starts hitting 790,000 units in 2010, which is up from 580,000 in 2009. The economists also expect house prices will bottom out this year and rise 2% in 2010. "When asked what factors were driving the housing rebound, panelists identified low house prices and interest rates as the two most important factors," a summary of the survey results says. The economists are forecasting that the 10-year Treasury note will yield 4.2% by the end of 2010 and the unemployment rate will average 9.6% in the fourth quarter of 2010. The unemployment rate is expected to "remain stubbornly higher." However, hiring is expected to pick up soon. "Within the next few months, companies should be adding instead of cutting jobs," said NABE president Lynn Reaser.
Case-Shiller Index Points to Home Prices Firming Up
November 24, 2009
Home prices rose 0.3% in September, compared to 1.2% in August, according to the Standard & Poor's/Case-Shiller 20-city house price index, which posted its fourth consecutive monthly increase. Overall, the 20-city HPI is down 9.4% from a year ago but the declines are decelerating. In August, home prices were off 11.3% from a year ago. Values have improved since the spring, according to David Blitzer, chairman of S&P's index committee. "However, the gains in the most recent month are more modest than during the seasonally strong summer months," he said. IHS Global Insight economist Patrick Newport said prices are stabilizing across the country but he still expects another 5% decline. "We believe that prices have further to fall — about another 5% — because the foreclosure rate, which hit a record at the end of the third quarter, and the unemployment rate are still rising," he said.
FACL: ARMs and '05 — '08 Book Dominate Underwater Loans
November 24, 2009
Roughly 23% of consumers with a residential mortgage are now "underwater" on their loans — especially if they bought a home between 2005 and 2008 and used an ARM, according to new figures released by First American CoreLogic. In a new report FACL says 10.7 million mortgagors have negative equity which is heavily concentrated in five states: Arizona, California, Florida, Michigan, and Nevada. FACL recently changed the methodology by which it calculates negative equity, which resulted in the numbers actually looking better. (Previously, it assumed that all HELOCs were tapped to their full extent.) Nevada leads the nation in negative equity (65% of mortgagors underwater) with Oklahoma having the lowest rate, 6.1%.
Citigroup Reporting Higher Redefaults on Loan Mods
November 24, 2009
Citigroup is reporting a higher redefault rate on home loans it has modified and signs of heightened risk in its servicing portfolio. In a new report Citi said the redefault rate in the third quarter on its $746.8 billion servicing portfolio did not exceed 39% for loans modified between the second quarter of 2008 and the second quarter of 2009. That rate — the percentage of borrowers who become delinquent 60 or 90 days after modification — was higher than Citi's redefault rate in the second quarter, which did not exceed 29%. Still, Citi's third-quarter redefault rate was lower than the industry average of roughly 50% reported in September by the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Sanjiv Das, the chief executive of Citi's mortgage unit, said in an interview that economic trends are working against industry and government efforts. "People are just not able to keep up with all their different kinds of debt, and they take what they can get from the bank in terms of modification, but after six months they go back to redefaulting," he said.
Freddie: Additional Losses on TBW May be 'Significant'
November 24, 2009
Freddie Mac says in a new public filing that not only does it have financial exposure of almost $1.1 billion due to the failure of Taylor, Bean & Whitaker but it faces additional losses on the company that "could be significant." The GSE is waiting to hear word from the Federal Deposit Insurance Corp. regarding a $595 million claim it filed with the agency regarding Colonial Bank of Alabama. Colonial, which failed in August, was TBW's largest warehouse provider and held servicing related "monies" tied to loans serviced by TBW for Freddie. The GSE, which is operating under a government conservatorship, had hit TBW with $500 million in loan buyback requests but now that the firm is liquidating it has to stand in line with other creditors. A spokesman for Freddie said the company is working with the FDIC regarding its $595 million Colonial claim. "We have to stand in line there too," he said.
