Origination

The Federal Housing Administration insured $29.6 billion in single-family loans in October, a 6.7% gain from October 2008, according to new government figures. FHA insured $328 billion in loans in fiscal year 2009 (which ended Sept. 30) with production averaging $27.3 billion a month. The FHA monthly report shows the government's mortgage insurance agency endorsed nearly 167,100 loans in October. Refinancings comprised 35% of endorsements and 48% of the loans went to first-time homebuyers. Meanwhile, FHA insured $1.9 billion in condominium loans and $2.5 billion in reverse mortgages (Home Equity Conversion Mortgages). As of Oct. 30, FHA's insured single-family mortgage portfolio totaled $716.4 billion with 8.7% of the loans 90 days or more past due. FHA servicers completed 8,100 loan modifications in October, up 40% from a year ago, and 971 short sales, up 130% from a year ago.

New York Community Bank has yet to make a final decision on what it will do with the wholesale lending division of AmTrust Bank, until recently one of the largest table funders in the nation. NYCB chief executive and president Joseph Ficalora said the company is working closely with the FDIC regarding AmTrust's assets. He said no immediate decisions will be made. "The values present in those lines of business are real," Mr. Ficalora said. Ten days ago NYCB bought the Cleveland-based thrift after the government seized the insolvent lender. According to the Quarterly Data Report, AmTrust ranked eighth among wholesalers in the third quarter, table funding $2.87 billion through loan brokers. The prior quarter it ranked third nationwide.

Three out of every 10 loan originators who have taken the national mortgage licensing test required under the SAFE Act have failed what is characterized as an "entry level" exam. The pass rate is better on the state-specific portion of the exam, but not by much. More than one in four applicants who have taken the tests so far have failed to achieve a passing grade, according to statistics released by the Conference of State Bank Regulators. The CSBS figures do not break out pass-fail rates by occupation. But Roy DeLoach of the National Association of Mortgage Brokers is certain his members have better scores than loan officers working directly for mortgage bankers or state-chartered financial institutions. (Although representatives of those groups may disagree.) "It's not brokers (who are failing), I guarantee you that," NAMB's executive vice president told National Mortgage News. "If you parse that out, I'm betting that the pass rate is tremendously higher" among brokers. Bill Matthews, president of the State Regulatory Registry, the CSBS subsidiary which owns and operates the National Mortgage Licensing System, said its "hard to tell" who is passing the entry-level exams at this point because testing only began on July 30. During the four-month span between July 30 and Nov. 30, according to the CSBS tally, 10,421 mortgage loan originators took the national test but just 7,219 passed, a failure rate of 31%. Of the 6,097 originators who took the tests specific to the state or states where they want to be licensed, 4,461 earned the 75% score needed to pass, a failure rate of 27%. The figures include first-time test takers as well as those licensing candidates who took the exams again. When testing began on July 30, 11 unique state tests were available. In October, seven more state tests were released, bringing the total to 18 as on Nov. 30.

Pulte Homes Inc., Bloomfield Hills, Mich., is selling its Commerce Title retail title insurance agency platform to Real Estate Disposition LLC, a real estate services company headquartered in Irvine, Calif. The Commerce Title brand, retail branch network and certain additional support assets are included in the sale. No purchase price was disclosed. Subject to regulatory and licensing approvals, the sale is expected to close in the first quarter of 2010. Commerce Title will remain headquartered in Dallas and approximately 130 retail employees will transition with the sale. Pulte is keeping a portion of the Commerce Title operations to support its homebuilder business. This will also operate out of Dallas. "This is a good transaction for both companies as it allows Pulte to focus on its builder title operations while providing new growth opportunities for the Commerce Title retail team," said Debra Still, who oversees Pulte's Financial Services Operations. Pulte acquired Commerce when the homebuilder purchased rival Centex Corp.

The First American Corp., Santa Ana, Calif., has filed a Form 10 registration statement with the Securities and Exchange Commission. The filing is an important step toward the completion of the company's separation of its financial services businesses from its information solutions businesses. The transaction is expected to close on April 1, 2010. First American shareholders will receive 100% of the common stock of the newly formed First American Financial Corp., the new parent of the financial services business.

The commercial origination and servicing business of bankrupt Capmark Financial Group Inc. has been acquired by Berkadia Commercial Mortgage LLC, a joint venture of Berkshire Hathaway Inc. and Leucadia National Corp. The sale includes a commercial servicing portfolio of more than $240 billion. Michael I. Lipson, head of global services and loan originations, and a member Capmark's executive team since 1996, has been named president of Berkadia and will continue to lead the business. Berkadia's board of directors will include two representatives each from Berkshire Hathaway and Leucadia National. Berkadia is in the process of hiring more than 1,000 of Capmark's approximately 1,500 current employees. Berkshire is headed by billionaire investor Warren Buffett. Capmark is based in Horsham, Pa. Three years ago Capmark (then known as GMAC Commercial Mortgage) was sold to an investor group led by Goldman Sachs & Co.

Home purchase mortgages in the United Kingdom continue to trend upward to their highest level in nearly two years while refinancing levels hold steady, the most recent data from the nation's industry trade group found. Monthly U.K. purchase loans were at 55,000 at last count in October, according to the Council of Mortgage Lenders, London. This is the highest level seen since December 2007. The number of monthly refinance loans this year has been at some of the lowest levels since the CML began tracking them in 2002. These were at 33,000 per month for the past two months. The only time since 2002 that monthly refinancing has been slower was in August of this year when the rate was 30,000. "We are still in a two-speed mortgage market. It appears that low interest rates for those with substantial deposits, coupled with this year's sustained increases in house prices, are encouraging more people to buy or move home," said CML director-general Michael Coogan. "But the same low interest rates that are driving ... purchase activity provide little incentive for borrowers to refinance their loans." Mr. Coogan said this, combined with tight lending guidelines, continues to constrain refinancing. Also declining in the United Kingdom have been fixed-rate mortgages. These peaked at 80% of the market in July but as of October had fallen to 66% of the market. Recently in the United Kingdom adjustable rates have been competitively low and there have been expectations that rates will remain at or near their current lows for the foreseeable future.

To protect seniors for fraudulent reverse mortgage schemes, the House of Representatives approved an amendment for the proposed Consumer Financial Protection Agency to monitor and regulate the practices of reverse mortgage lenders. "Many seniors are turning to reverse mortgages," said Rep. Jan Schakowsky, D-Ill., in offering her reverse mortgage amendment during debate on the Wall Street Reform and Consumer Protection bill (H.R. 4173). "We must do everything in our power to ensure the fidelity of the system and shield our parents and grandparents from being cheated or misled," she said. As proposed, the CFPA would be an independent regulatory agency that sets mortgage lending standards for all residential originators and has the power to enforce those standards. Rep. Schakowsky's amendment gives the CFPA explicit authority to regulate reverse lending practices. The House passed her amendment by a 277-149 vote. During debate, the Illinois lawmaker noted that CFPA should work with the Federal Housing Administration, which insures a reverse mortgage product called Home Equity Conversion Mortgages, in developing its reverse mortgage regulations.

The House of Representatives on Friday passed a massive regulatory reform bill that, among other things, creates a new consumer protection agency with authority to set mortgage lending standards for all residential originators. The House passed the "Wall Street Reform and Consumer Protection Act" (H.R. 4173) by a 223-202 vote. The accepted language creates the Consumer Financial Protection Agency, a Washington regulatory body that would set industrywide rules for mortgage lending and take over enforcement responsibilities from the federal banking agencies. An industry-backed amendment to gut the CFPA and turn it into a consumer protection council representing 12 regulatory agencies failed by a close vote of 223-208. The American Bankers Association said it opposes several sections of the 1,200-page bill, including the CFPA. "The breadth of authority granted to the director of the proposed new consumer financial regulator is unprecedented," said ABA president Ed Yingling. "This new regulator would not be responsible for considering institutional safety and soundness along with consumer protection." (ABA believes it's essential that the same regulatory body perform safety and soundness and consumer protection oversight.) The Mortgage Bankers Association also has issues with CFPA. But MBA and other industry groups were glad to see a bankruptcy cramdown amendment defeated by a 241-188 vote. "We are gratified that the House saw fit to vote down the bankruptcy cramdown amendment," said MBA chairman Robert Story. Earlier this year, the House passed a bill that would allow bankruptcy judges to cram down or reduce the principal amount of a homeowner's mortgage. The Senate rejected the cramdown bill.

Bridger Commercial Funding, San Francisco, is resuming originating new commercial real estate loans. Loans made under Bridger's new program will be underwritten to eligibility standards for securitization under the Federal Reserve's Term Asset-Backed Securities Loan Facility. Bridger said in addition the program would offer commercial real estate borrowers the flexibility to access a range of alternative financing structures. To date, individual borrowers have been locked out of TALF-supported financings because of the pooling requirement for newly originated loans. The new Bridger program addresses this obstacle by assembling a diversified portfolio of loans from many different borrowers that will be eligible for attractive, nonrecourse securitization funding offered under TALF. "Recent activity in the CMBS market is signaling that the credit logjam plaguing commercial real estate lending for the past two years is starting to break," said Bridger executive vice president Peter Grabell. "CMBS bond yields have fallen throughout the year, to the point where newly originated CMBS loans are becoming a viable financing option once again for borrowers." Loan amounts are between from $2 million to $20 million. Qualifying property types are multifamily, manufactured housing communities, office, retail, industrial/warehouse and self-storage. Fixed-rate loan maturities from three to five years will be offered, with traditional amortization and balloon payment features. Separately, Florida East Coast Industries, Inc., Coral Gables, Fla., has closed a $460 million property financing related to 44 office and industrial properties and certain right-of-way assets. The lender on the transaction was Bank of America NA, which subsequently securitized the loan through Banc of America Securities LLC. The company claims this transaction represents the first new issue, nongovernment supported commercial real estate securitization in 18 months.