Loan Think

Overall prepayment rates for mortgage-backed securities fell 6.9% in March after surging 52% in February, suggestingthat speeds "were front-loaded in February, most likely as originators tried to avoid the new delivery feesapplicable from March," according to Credit Suisse.

The days of debating the best-of-breed approach where a lender integrates several different best-in-class providers vs. the end-to-end approach where one system does everything are over. Lenders have spoken. They want everything to happen in one system, but that doesn’t necessarily mean they endorse the end-to-end philosophy. A new debate has emerged.

Back in 1969 while sitting at a kitchen table in Manhattan, two out-of-work mortgage professionals came up with an idea to create a nationwide mortgage lender. They were out of work because both had been employed at a non-bank lender whose new owners wanted to play games with the escrow funds of their customers (more on that tale at a later date). The two, Angelo Mozilo and David Loeb, created Countrywide Credit Industries, which eventually morphed into Countrywide Financial Corp. Come Sept. 30, Bank of America (once it buys CFC) will pull the plug on the Countrywide name. After almost 40 years it will be no more. Over the past few months CFC has become a punching bag for Sen. Charles Schumer of New York who has criticized the servicer's foreclosure practices as being (shall we say) less than consumer friendly. Mr. Mozilo was invited to testify before Sen. Schumer's committee on foreclosures but declined to appear. The hearing was held this past week in Washington. Mr. Mozilo is, presumably, preparing for retirement...

There’s a lot of talk about how the process has to change. But who’s going to change it? When you think about it the CEO, CIO, COO and CTO all have their own personal motivations to consider so none can really take command of the whole process. That’s why I think every lender needs a PRISE.

He's back: Bill Dallas. Mr. Dallas, who founded both First Franklin and Ownit Mortgage is serving as a consultant to CMG Mortgage. First Franklin met its maker after being bought by Merrill Lynch. Ownit failed 18 months ago...

At the Mortgage Bankers Association's recent tech conference in Dallas, Mortgage Technology magazineeditor Tony Garritano and I talked to our MT Editorial Advisory Board about the timetable for recovery and whatrole tech will play in it. I wonder if we will be having the same discussion next year at this time!

The first blow to you being the king of kings in your child’s eyes comes when your five-year-old says he’d prefer to get hot lunch over the lunch you as the parent prepare for him each morning. I shrugged off the embarrassment and did what any parent would do: find out how to get their child on the hot lunch list. I was excited to find the process was automated, but not that I would have to pay extra to go the automated route. What gives?

THIS JUST IN: It appears that steel magnate Wilbur Ross is still moving ahead with his plan to purchase the subprime servicing assets of Option One Mortgage Corp. For full details see Monday's National Mortgage News. Don't subscribe? Call: 800-221-1809...

The problem of mortgage fraud is certainly here to stay. As the industry moves toward an electronic process that relies more heavily on trusted data, no doubt the instances of fraud will decrease. However, fraudsters will evolve no doubt. So what’s the answer to cutting mortgage fraud really? A report entitled “US Mortgage Fraud: Types, Trends, and Detection Tools” by TowerGroup concludes technology will play a significant role.

Yet another major HELOC lender is clamping down on what type of seconds it will fund and where. It's name begins with a "C" and it's not Countrywide. We already know about CFC. For the full story see Monday's issue of National Mortgage News...