 | | | | By Brandon Ivey bivey@imfpubs.com Banks large and small continue to add mortgages to their portfolios, with new additions outpacing runoff from refinances and foreclosures, according to a new Inside Nonconforming Markets analysis of call report information. The new additions to bank portfolios are largely jumbo mortgages, though some lenders are retaining agency-eligible loans. Overall, banks and thrifts held $1.76 trillion of first-lien mortgages in portfolio as of the end of the second quarter of 2014. The first-lien holdings were up 1.4 percent compared with the previous quarter and level compared with the second quarter of 2013. Among the four largest holders of first liens, only Bank of America decreased its portfolio in the second quarter. Compared with the second quarter of 2013, JPMorgan Chase was the only bank among the big four to increase its first-lien holdings. For more on the story and an exclusive ranking of depositories by their first-lien holdings, see the new edition of Inside Nonconforming Markets, now available online. Other areas of interest: Servicing, Secondary/MBS, Data/Rankings, Trends & Profitability | | By Paul Muolo pmuolo@imfpubs.com Impac Mortgage Holdings on Monday revealed the name of the bank that will buy the non-qualified mortgages it originates: Macquarie Group, the largest depository in Australia. According to a statement issued by the publicly traded Impac, Macquarie will “exclusively” purchase its Alternative QM loans, which are designed to provide financing options for what the lender calls “high-quality” borrowers who fall outside current GSE programs. This past summer Impac, a nonbank, launched a major foray into the non-QM market, but initially provided no information on its non-QM “take-out.” For now, nonbanks that fund non-QMs must sell them to an investor unless they have a balance sheet. Securitizations likely won’t happen until sometime in 2015. Impac is now originating non-QM loans through all three production channels. Macquarie first entered the U.S. mortgage market in 2002 through an affiliate called Macquarie Mortgages USA, which was based in Memphis, TN. It eventually expanded its product menu to include 100 percent LTV loans and alternative products. Other areas of interest: Originations, Secondary/MBS, Nonconforming | | By George Brooks gbrooks@imfpubs.com President Obama will meet with top banking executives and industry trade groups on Wednesday to explore potential solutions to lender overlays and related problems that hinder first-time homebuyers and other qualified borrowers from obtaining an FHA or conventional mortgage. The meeting is expected to touch on key lender issues, including credit overlays, government enforcement actions, regulatory burden and risk-based versus FHA pricing. Lenders say they are willing to originate single-family mortgages to qualified borrowers and first-time homebuyers, but they feel the post-crisis environment has turned hostile against them. Repurchases, indemnifications and legal actions have dampened their willingness to lend to moderate- and lower-income borrowers, they argue. Regardless of policy changes designed to increase lending in the lower credit score range (620 to 679), FHA enforcement actions to hold lenders accountable even for the slightest mistake or minor technical errors have undermined lenders’ desire to serve a broader swath of qualified borrowers. For further analysis, see the new edition of Inside FHA Lending. Other areas of interest: Originations, Personnel, Regulatory, Mortgage Lending & Servicing | | By Paul Muolo pmuolo@imfpubs.com Lead generation company Intermundo Media of Colorado has agreed to a $500,000 fine with the Federal Trade Commission, settling charges that it advertised to consumers promising they could refinance their mortgages for free. Delta Prime Refinance was the business trade name used by Intermundo. Lead generation companies collect contact information on consumers using the Internet and then turn around and sell those “leads” to originators. “Delta Prime Refinance made deceptive and unsupported claims in its advertisements that overstated how much consumers could reduce their payments if they refinanced their mortgages, how low their annual percentage rate would be, and how easy it would be for them to qualify for refinancing,” according to the FTC complaint. The agency noted that the ads falsely claimed there were no hidden fees, and that the mortgage refinancing was “free.” The company was charged with violating the Federal Trade Commission Act, the Mortgage Acts and Practices Advertising Rule, the Truth in Lending Act and Regulation Z. Other areas of interest: Originations, Regulatory | | By Charles Wisniowski cwisniowski@imfpubs.com The Federal Housing Finance Agency late Friday announced a $550 million legal settlement with HSBC North American Holdings, leaving just two defendants in the conservator’s civil fraud cases tied to nonprime MBS issuance. The agreement resolves claims against HSBC alleging violations of federal and state securities laws in connection with non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac from 2005-2007. HSBC – which at one time owned subprime giant Household Finance – noted in a statement that it was not among those “alleged to have committed fraud” against Fannie and Freddie. “We are pleased to have resolved this matter,” said Stuart Alderoty, general counsel for HSBC’s U.S. banking division. Under the agreement, HSBC will pay $374 million to Freddie and $176 million to Fannie. All principal and interest payments have been made on the securities at issue in the settlement, HSBC added. The Finance Agency filed separate civil claims against HSBC and 17 other firms in 2011. The two remaining cases involve Nomura Holdings and the Royal Bank of Scotland Group. Other areas of interest: Secondary/MBS, Regulatory, Nonconforming, GSEs | | By Paul Muolo, Brandon Ivey pmuolo@imfpubs.com, bivey@imfpubs.com At press time, news was breaking that mortgage REIT Two Harbors was set to issue a $373.34 million jumbo mortgage-backed security. According to a presale report from DBRS, the top contributor to the deal is Mortgage Master with a 14.8 percent share. See IMFnews Tuesday for more details… Late last week, we heard unconfirmed reports that some hedge funds that had been speculating in the stock of Fannie Mae and Freddie Mac were dumping their holdings. In trading Monday, Fannie’s stock was at $3.36. Back in March it was at almost $6… Fairholme Capital Management, one of the largest holders of GSE junior preferred stock, recently hired former Fannie Mae Chief Financial Officer Timothy Howard as a consultant to assist its law firm, Coopers and Kirk. Fairholme is one of a dozen or so preferred investors that are challenging the government’s August 2012 “net worth sweep” that effectively allowed the Treasury Department to confiscate almost all profits generated by Fannie and Freddie. Two years ago, a federal judge dismissed a shareholder lawsuit against Howard tied to the GSE’s former accounting practices (pre-conservatorship). A similar lawsuit was dismissed against former Fannie CEO Franklin Raines… Joseph Ficalora, CEO of mortgage lender New York Community Bank, said recently that the lender is well situated for another acquisition and there’s a high probability a deal might happen soon. “In addition, he specifically stated they would like to be a $75B bank versus a $52B bank, indicating they are likely to do a larger deal,” according to a report from Compass Point… FirstBank Mortgage Partners, Jackson, TN, has agreed to pay the Department of Housing and Urban Development $35,000 to settle allegations that it violated the Fair Housing Act when it denied a mortgage to a couple because one applicant was on maternity leave... MORTGAGE PEOPLE: Norcom Mortgage has opened a new branch in New Milford, CT, naming Bill Granata branch manager.
Condo Originations Can Be Important Source for Lenders Lending for the purchase or refinance of condominiums and cooperatives is a large business source for some lenders. For California-based Shea Mortgage, for example, condo lending made up 38.5 percent of its FHA loans and 25.2 percent of its sales to Fannie Mae and Freddie Mac for a total of $135.5 million in originations. For Barrington Bank and Trust, condo lending came to $224.9 million, comprising 20.0 percent of its GSE sales and 6.0 percent of its FHA lending. Learn the particulars about condo originations at thousands of mortgage lenders in IMF’s data report Agency Condo Activity: 2013. Other areas of interest: Originations, Servicing, Secondary/MBS, Personnel, Regulatory, Mergers & Acquisitions, Fannie, Freddie | | | |
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