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Mortgage Headlines
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Last Updated Thursday, June 17, 2004 10:05 AM CST
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More
to Web Sites Than Online Applications
While the Web offers a means for customers to complete 1003 loans applications online, a new report focuses on a number of customer goals including learning about different available loan types, reviewing closing costs and deciding whether or not to refinance. Web sites that are not optimized for ease-of-use are more prone to abandonment because of customer frustration at being unable to easily complete the process, Change Sciences, the report's author, said. Customer defection can have negative repercussions for overall brand trust.
FTC Investigation Devastating Small CA Firm
In a complaint, the FTC has charged that a small California mortgage company broke the law by deceiving consumers with offers for fixed-rate mortgage loans that turned out to be ARMs. But in an interview, the president of the firm, who is named in the complaint, said a disgruntled former employee altered ads that were e-mailed to the FTC -- triggering a federal probe. However, the FTC said the disgruntled employee defense was never raised, and the allegations have to do with spam and direct mail that was sent to consumers over a two-year period.
Service Identifies Problem Brokers, Originators
Sysdome Inc. announced the release of a tool that reportedly gives brokers insight to what lenders know about them and also evaluates employees within their own shop. The service utilizes scoring logic algorithms to rate individual brokers with a "score" to be shared with both the broker and Sysdome's lender clients, according to the technology provider. The subscription allows brokers to monitor their lender accessible scores, explain any irregularities, and dispute any incorrect data that appear on their reports.
Politician Expected Kickback From AZ Mortgage Broker
A county property assessor in Arizona is accused of seeking political and personal kickbacks for providing confidential taxpayer information to a mortgage broker. He allegedly provided a CD containing a private government list of about 15,000 senior citizens who qualify for a special tax break. People on that list were then solicited for reverse mortgages. In return, he expected to receive $1,000 in campaign contributions.
Purchases, Delinquency Improve at Fannie
Fannie Mae announced May business volume totaled $74.6 billion. The industry giant said the delinquency rate -- reported on a one-month lag -- for conventional single-family mortgages slipped two basis points from March to 0.56%. Fannie reported a $2.2 trillion book of business.
Appraisers Blame Brokers, Licensing for Fraud
At a hearing held by the House Financial Services Committee, a representative of the Appraisal Institute (MAI) and the American Society of Appraisers cautioned congressmen that there are deficiencies in the current real estate appraiser licensing system. "We are here to alert Congress that the licensing system it created for appraisers is broken, is not up to the requirements of the changing market demands in the 21st century, and needs to be fixed if we are going to avoid such situations in the future," MAIs president testified. He went on to say mortgage brokers regularly pressure appraisers, "a practice that has not been outlawed."
GE Completes WMC Acquisition
GE Consumer Finance has formally completed its acquisition of WMC Finance Co., according to a statement from WMC president Amy Brandt. Southern California-based WMC reported nearly $3 billion production during its most recent quarter.
Delinquencies Down, Foreclosures Edge Up
The Mortgage Bankers Association of America reported that the seasonally adjusted delinquency rate on one-to-four unit residential mortgage loans in the first quarter was 4.33% -- 16 BPS below the rate in the fourth quarter of 2003 and a whopping 52 BPS lower than a year ago. The seasonally adjusted percentage of new foreclosures, or those that entered the foreclosure process during the first quarter, edged up 1 BPS to 0.46%.
Brokers Honor Wholesaler
The National Association of Mortgage Brokers recognized M&T Mortgage Corp. as the Affiliate Company of the Year at its annual convention. The lender was honored for its efforts to promote the association's goals, projects and activities.
Brokers Use AU for More Approvals
Freddie Mac announced that three mortgage brokers received the Loan Prospector Service Award. The brokers were recognized for their distinguished efforts in expanding homeownership opportunities using Freddie's Loan Prospector automated underwriting system.The brokers were honored at an awards ceremony during the National Association of Mortgage Brokers annual convention.
3.5% Fixed Rate???
The FTC has charged in a complaint that a California company broke federal laws by misleading and deceiving customers with ads offering "extremely low mortgage rates." At a time when interest rates are rising, the offer of a 3.5% fixed payment 30-year mortgage looked almost too good to be true. While the ads claimed the loans were fixed rate, they were actually adjustable rate mortgages, the FTC has charged.
Rising ARM Still Growing in Popularity
The 1-year ARM average jumped 16 BPS from last week to 4.14%, Freddie Mac reported in its weekly survey. The ARM share of activity nudged up from the prior week to 34.6%, the Mortgage Bankers Association of America reported. The 30-year fixed-rate mortgage average came in 2 BPS higher at 6.30%, Freddie said. The Mortgage Bankers reported mortgage applications dipped by 8.9% this week.
Option One Roaring Ahead
In its fiscal fourth quarter earnings announcement,
parent H&R Block Inc. reported $6.2 billion in mortgage
production for Option One Mortgage Corporation. Fundings
were nearly $1 billion more than the prior quarter and 30%
better than a year ago.
Class Action Against Wells Focuses on Illinois
High Cost Loans
ACORN
plans to announce the filling of a class action suit against
Wells
Fargo Financial on behalf of Illinois borrowers. At
issue are recently originated high rate loans allegedly
with fees as much as 10% -- a violation of Illinois state
law, according to ACORN. Wells could wind up paying twice
the finance charge on the loans, ACORN said, as mandated
by state law.
Dallas Broker Operates With Revoked License
The Texas Savings and Loan Department issued an order to
revoke a mortgage broker's license in April 2003 following
a contested hearing as a result of his fraudulent actions,
according to the regulator's chief of enforcement. However,
the State has reason to believe the broker continues to
operate his company -- and seeks a temporary injunction
to stop him from practicing.
United Bankshares to Exit Wholesale Lending
Cardinal Financial Corporation will purchase George Mason
Mortgage, LLC for $17 million plus the unit's net worth,
according to an announcement today from seller United Bankshares,
Inc. United will continue to operate as a mortgage banker
through its banking subsidiaries, but not on a wholesale
basis, the announcement said.
Lender to Beef Up Tampa Staff
Pinnacle Financial Corp. will increase its Tampa call center
staff to 200 from its current level of 42, according to
a company spokeswoman. The call center employees consist
of loan officers and processors who take inbound calls to
make loans in all 48 states Pinnacle is licensed to conduct
business in, she added.
Non-Refi Business Continues to Sizzle at Countrywide
Countrywide Financial Corp. reported May loan fundings totaled
$31.8 billion, down from the previous month. However, the
company also reported -- again -- record purchase, subprime
and ARM fundings.
Fraud Costs CEO, Company $52 Million
A federal grand jury found that defunct Florida mortgage
firm, which was once publicly traded, and its former CEO
and chairman, committed securities fraud, breach of contract,
defamation and civil racketeering. The suit was filed by
investors after losing millions of dollars and property
through fraudulent investments and being plunged into bankruptcy.
Net Branch Co Paying Signing Bonuses
1st Metropolitan Mortgage announced it will offer a signing
bonus that will allow potential branch managers of new
and existing branches to select a target origination volume
and receive a bonus based on reaching that target. Because
it might take new branches time to ramp up their business,
the best 12 months of origination out of 15 months will
be taken into account, a spokeswoman said. Participating
branch managers that are still employed will be paid during
the first pay period of the 25th month of the program.
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