Origination

PHH Corp., Mt. Laurel, N.J., has rescheduled an investor call on its corporate "transformation initiative" until next Tuesday due to blizzard conditions in the mid-Atlantic. A top-10 ranked lender/servicer, PHH said the transformation initiative is centered on making it a "more successful, more efficient and more customer-focused company." PHH Mortgage is one of the largest private-label lender/servicers in the United States. Jerry Selitto, president and CEO, will host the conference call along with Mark Danahy, EVP in charge of mortgages, and others.

Rates on 30-year fixed rate mortgages are back below the 5% threshold, but that has not translated into an increase in activity, the Mortgage Bankers Association's Weekly Mortgage Applications Survey found. MBA's Market Composite Index for the week of Feb. 5, 2010, a measure of mortgage loan application volume, decreased 1.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.6% compared with the previous week. The Refinance Index increased a scant 1.4% from the previous week and the seasonally adjusted Purchase Index decreased 7.0% from one week earlier. The market share of refi applications is 69.7%, an increase over the previous week's 69.2%. The market share of adjustable rate mortgage loan applications remained at 4.5% for the second consecutive week. The average contract interest rate for 30-year fixed-rate mortgages fell to 4.94% from 5.01%, with points rising to 1.06 from 1.04 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported. The average contract interest rate for 15-year FRMs remained unchanged at 4.33%. The average contract interest rate for one-year ARMs decreased to 6.68% from 6.70%.

For the next few weeks, Broker Universe will feature some of our favorite Sue Haviland columns from the past year.I've received a great many calls and e-mails lately from coaching clients regarding seniors who "just won't make a decision right now about the reverse mortgage." Those readers who know me are fully aware of my typical advice in this situation: "Look in the mirror."

PHH Corp., Mt. Laurel, N.J., said it will hold an investor call on Wednesday afternoon to provide an update on its previously announced "transformation initiative." No further details were available at press time. PHH's largest corporate share holder is Black Rock Financial, New York. Its mortgage unit ranks among the top ten in both lending and servicing, according to the Quarterly Data Report.

The now-profitable UBS AG still faces at least a couple of challenges that date back to its involvement in the U.S. subprime mortgage space, but is seeing some funding diversification benefits from a new Swiss residential mortgage covered bond program. The company as a whole, which previously had been struggling with a chain of quarterly losses, generated a profit of about 1.2 billion Swiss francs ($1.1 billion) in the fourth quarter. Remaining mortgage-related challenges for the firm include exposures to monoline insurers through credit-default swaps of asset-backed securities. As of Dec. 31, the total fair value of CDS protection purchased from the monolines was $2.3 billion after cumulative credit valuation adjustments of $2.8 billion. Some of the related charges in this area did not flow through as profit or loss because of accounting rules for assets characterized as loans and receivables. The company in the fourth quarter also faced a suit in the Southern District of New York alleging securities fraud in connection with disclosures relating to its losses in certain areas that include subprime mortgage markets. It is seeking to have the claim dismissed. During the fiscal period the company said it was able to diversify funding by issuing the equivalent of 4.5 billion Swiss francs ($4.2 billion) in euro-denominated five- and 10-year covered bonds backed by Swiss residential mortgages.

A community group says minorities in California are twice as likely as whites to have a home loan application denied to them, raising concerns that large lenders have returned to the practice of redlining. The findings are based on Home Mortgage Disclosure Act figures for the calendar year 2008. In a study titled "From Foreclosure to Re-Redlining," the California Reinvestment Coalition used HMDA figures to analyze lending patterns in five California cities. The 45-page report examined the overall drop in prime lending from 2006 to 2008 and claims that lower-cost prime loans fell dramatically in minority neighborhoods during that period as compared to white neighborhoods. Redlining, the practice of denying, discouraging or increasing the cost of banking services to residents on the basis of race or ethnicity, is forbidden by the Community Reinvestment Act of 1977.

President Obama wants to expand Small Business Administration guarantees to commercial real estate loans, a move that may bolster the struggling market. The administration is asking Congress to allow owner-occupied commercial real estate loans maturing in the next year to be refinanced through the SBA's 504 program. That program currently cannot be used to refinance maturing debt. The president also proposed increasing the cap for SBA Express loans, which carry a 50% government guarantee, to $1 million from $350,000. "Even companies with great credit histories are facing challenges refinancing at what are historically low rates," Obama said during a speech in Maryland. "Property values have fallen and lending has dropped. As a result, many businesses that would otherwise survive this downturn are at risk of defaulting, which in turn will lead to even lower property values and less lending." Under the proposal, existing lenders would refinance up to 70% of the current property value and the SBA would finance the balance. When new lenders do the refinancing, the SBA would finance even more, up to 40%. The administration said nearly $19 billion of commercial real estate loans could be refinanced each year.

GMAC Financial Services says it remains committed to its Ditech brand, even as it shifts most of its Costa Mesa, Calif. operations to Fort Washington, Pa. GMAC said Ditech, "was not performing up to expectations in its previous configuration." By being moved to Fort Washington, GMAC hopes to gain efficiencies by sharing common infrastructure with Ditech and GMAC Mortgage. A GMAC spokeswoman said there are 269 employees affected by the move, including 119 loan officers that have been let go. All new applications are already being handled in Fort Washington. Another 150 back office employees remain working out of Costa Mesa for the next 60 days to clear the pipeline of loan originations generated before the announcement. There will be approximately 30 employees left at Costa Mesa to support mortgage servicing. During the heyday of subprime and home equity lending, Ditech was known for its marketing prowess and cable TV ads. In a statement GMAC said it would continue to support Ditech "with a dynamic mix of marketing and advertising designed to reach its target customers, and this mix may include direct marketing, digital advertising and more traditional forms of advertising such as television spots."

Pulte Homes, Inc., reported a $36.3 million pre-tax loss on its mortgage operations in the fourth quarter, blaming the performance on loan repurchase charges. In the same quarter a year earlier, the home builder's mortgage division lost $7.9 million. Pulte Home Mortgage saw total fundings fall by 33% to $2.28 billon in 2009 despite its August acquisition of Centex Corp, and its mortgage subsidiary. However, fourth quarter originations got a boost from the merger. PHM funded $906 million in loans, compared to $848 million in Q4 2008. Roughly 40% of its production was FHA-based. (Pulte sells most of its loans to investors in the secondary market.) The Bloomfield Hills, Mich., based builder says its loss exposure on mortgage loans "increased significantly" since its takeover of Centex's mortgage operations. The company also noted "increasing aggressiveness" on the part of investors presenting claims on defaulted loans in its third quarter securities filing. Pulte recorded losses related to contingent repurchase obligation charges of $37 million in the fourth quarter, compared to $23.6 million for the previous three quarters. Overall, Pulte Home posted a $1.2 billion loss for 2009 after receiving $800 million of income tax benefits that Congress passed in November. The bill extended the homebuyer tax credit program until April 30 and extended the carry-back period for operating losses (for home builders and others) to five years from two.

The Department of Housing and Urban Development has created an office of sustainable housing that will work on improving energy-efficient homes and financing for such projects. The new Office of Sustainable Housing and Communities will also work with city, county and rural governments to locate housing near jobs, schools and transportation. To promote sustainability, OSHC will use a $50 million fund to invest in energy-efficient homes and buildings in order to "lay the groundwork for the clean energy economy," HUD said. As part of that effort, the office wants to improve on HUD's energy efficient mortgage products and other energy retro financing options. Shelly Poticha is the director of OSHC.