Origination

NetMore America, Inc., Walla Walla, Wash., a fast growing mortgage banking firm, has named David Shirk chief information/compliance officer. According to the company, Mr. Shirk brings 20 years of experience to the newly created position. For the fiscal year ending Sept. 30, NetMore originated more than $1 billion in new home mortgages - a 300% increase compared to the same period in 2008. For fiscal year 2010, the mortgage banker is projecting loan production of $1.3 billion to $1.5 billion. According to the Quarterly Data Report, NetMore ranks 75th among all home funders.

Pockets of housing market improvement have been seen regionally and locally but overall there is some concern that prices could soften as the market moves toward the challenging winter months, according to the October Clear Capital Home Data Index Market Report. "As anticipated, the strong gains we've been experiencing this summer are showing signs of softening," said Clear Capital president Kevin Marshall. "But growth remains sufficiently strong, providing hope as we head into a winter that will test the strength of the recovery." As of Sept. 25, on a quarterly basis, prices had appreciated by 6.3% and the saturation rate of national real estate owned properties had fallen to 28.6%. During the 12-month period between Aug. 27, 2008 and Sept. 25, prices fell by -9.9%. This marks the first return of the year-over-year national price decline to a single-digit number since the summer of 2007. "Prices remain low, driving investor activity into the non-REO marketplace across the nation. This is a good sign that the recovery is reaching beyond the distressed segment," said Mr. Marshall. "Historically, investors move in at the bottom which creates confidence for the bargain hunting fair-market buyers to enter the market as well." Regionally, housing prices continue to improve in the West, where they posted a 2.9% gain quarterly and a 1.6% six-month gain. Clear Capital's Metropolitan Statistical Area drilldown and micro market analysis also showed some positive quarterly developments as Riverside, Calif., and Orlando, Fla., generated quarterly gains for the first time in three years, while Baltimore, Md. featured a quarterly price gain of 0.1% after seven consecutive quarters of decline.

Fitch Ratings has downgraded 748 bonds in 479 residential mortgage-backed securities transactions to D, indicating that the bonds have taken principal writedowns. All the bonds in question had ratings of CCC, CC or C, indicating that a default was expected. Three hundred and seventy-five of the bonds downgraded are backed by subprime credit mortgages, 177 are backed by alternative A credit mortgages, 123 are backed by second-lien loans, 72 are scratch and dent transactions and the balance are other types of transactions.

Peter Graves will be the new celebrity spokesman for reverse mortgage lender American Advisors Group, Irvine, Calif. The television campaign will launch on Oct. 12, 2009 and coincides with the reverse mortgage originator's release of a new informational DVD, brochure and website launch. Mr. Graves is best known for his role as Jim Phelps, the team leader on the television show "Mission Impossible." His new role might be just as difficult as some of Mr. Phelps' activities. Consumer advocates such as the National Consumer Law Center are decrying marketing tactics used by reverse mortgage lenders such as the use of celebrity spokespeople. In the past, Senior Lending Network used the late Jerry Orbach and Robert Wagner; Generation Mortgage used the late Jack Kemp, former pro football player, member of the House of Representatives, vice presidential candidate and Housing and Urban Development secretary; while James Garner was a spokesman for Financial Freedom.

Essent Guaranty, a new mortgage insurance company, has agreed to buy the operating platform and technology systems of Triad Guaranty, the nation's smallest MI, which is in the process of self liquidating. Based in Radnor, Pa., Essent will pay $30 million in cash and assume what it calls "certain software contractual obligations" that the publicly traded Triad is on the hook for. Essent said it would establish its operational and software center in Winston-Salem where Triad is headquartered. Essent CEO Mark Casale said the purchase of the assets from Triad "is the next major step in the formation" of the young company's MI business. Essent has yet to write any coverage but has received $500 million in financial backing from a group of investors that includes Goldman Sachs & Co. In after hours trading Wednesday, after the deal was announced, Triad's share price shot up 11% to $1.37.

While it appears the balance between a buyers market and a sellers market is creeping back towards equilibrium, there is a likelihood of a trend back towards the buyers as the summer home purchase season ends, the chief economist of Zillow.com said. The August Zillow Real Estate Market Reports found purchasers paid 3% less than the last listing price on homes sold in the month. However, this is down from 3.3% in July and 4.5% at the start of the year. In dollar terms, the median difference between the last listing price and the sales price is $6,535 for August, compared with $7,018 in July and $10,096 in January. "Negotiating power is a clear reflection of inventory levels, which dropped nationally in August. Tighter supply in some markets is translating into less of a discount off listing price," said Zillow chief economist Stan Humphries. "Unfortunately, the brisk spring and summer home shopping season is drawing to a close now, and with foreclosures on the rise again, inventory levels will likely head back up in the coming months, leading buyers' negotiating power to regain the ground it lost in August." Florida markets are having the biggest negative gap between listing price and what the consumer is actually paying. However, in two California markets, El Centro and Stockton, buyers are paying more than the last list price.

The average rate for a 30-year fixed-rate mortgage has dropped further below 5% to a point not seen since mid-May, and average 15- and five-year mortgage rates have fallen to survey-record lows, according to Freddie Mac's most recent Primary Mortgage Market Survey. The average 30-year FRM rate slid to 4.87% from 4.94% a week ago and 5.94% a year ago; the average 15-year FRM rate descended to 4.33% from 4.36% a week ago and 5.63% a year ago; and the average rate for a five-year Treasury indexed hybrid adjustable-rate mortgage decreased to 4.35% from 4.42% a week ago and 5.90% a year ago. "Fifteen-year FRMs were at a record low since data were first collected in 1991 and five-year ARMs also hit an all-time record starting in 2005," said Frank Nothaft, Freddie Mac vice president and chief economist. "Compared to a year ago, consumers could shave almost $134 off their monthly mortgage payments on a 30-year fixed-rate loan for $200,000 by refinancing." While other rates fell week-to-week, the average one-year Treasury ARM rate rose to 4.53% from 4.49%. However, it is still lower than it was a year ago when it was 5.15%. Average points for the week ending Oct. 8 were as follows: 0.7 for 30- and 15-year FRMs and 0.5 for five-year Treasury hybrids and one-year Treasury ARMs.

The Department of Housing and Urban Department is going ahead with the implementation of a RESPA disclosure rule despite pleas by some industry groups to delay the effective date, according to a top HUD official. "We are absolutely moving forward on RESPA," HUD assistant secretary David Stevens told MortgageWire. "Jan. 1 is the implementation date." Some industry groups are complaining that the new Real Estate Settlement Procedures Act rule is complex and HUD is still providing guidance on implementation issues. The RESPA rule requires lenders and mortgage brokers to disclose their fees upfront on a standardized good faith estimate. The originator's fees cannot be increased before closing. The layout of the GFE and the revised HUD-1 settlement sheet also provides a clearer disclosure of the closing costs and how much the consumer will pay. "I think the new disclosures are going to have a very positive impact on consumers," Mr. Stevens said.

The Federal Housing Administration's single-family mortgage insurance fund could be sitting on a deficit of at least $40 billion, according to a former Fannie Mae executive who now bills himself as an expert on affordable housing. Testifying before a House subcommittee Thursday morning, Ed Pinto, who served as Fannie's chief credit officer two decades ago, said FHA has $30 billion in reserve funds but at the end of September probably had $70 billion in losses on its $725 billion book of business. Mr. Pinto called the current $30 billion cash cushion at the government's mortgage insurance agency a "bookkeeping entry" that has already been spent by the government to reduce the federal deficit. Today, FHA originations account for about 25% of the market — and growing. According to figures compiled by National Mortgage News, FHA had a market share of just 2.5% back in 2006. (Some of that includes VA-backed loans.) FHA commissioner David Stevens has said repeatedly that the insurance fund would not need a taxpayer bail out. Mr. Stevens told NMN recently that, "I have read so many stories attacking FHA without relevant data." He added that, "We are insuring the best quality book of business we have ever seen in history — bringing in a lot of fresh MI premiums." Mr. Pinto worked at Fannie Mae from 1987 to 1989.

Griff Straw, a veteran of 30 years in the mortgage banking industry, has joined appraisal management company Solidifi U.S., Chicago, as the company's president. Most recently he was a regional vice president for United Guaranty and prior to joining that company worked for Freddie Mac where he held management roles on several technology-related initiatives. In his new job, Mr. Straw will lead Solidifi as it looks to expand on its valuation services offerings in this country. Solidifi U.S.'s parent company is headquartered in Toronto and has been in business since 2004; in October 2008 it entered the U.S. market.