Origination

Federal regulators expect banks and thrifts to move certain mortgage securitizations onto their balance sheets due to new accounting rules and are seeking comment on the impact it will have on capital ratios. The new Financial Accounting Standard Board rules go into effect in January. Request for comment was published in Tuesday's Federal Register and is a short 30 days. Institutions have until October 15 to respond and convince regulators that they need capital relief. The request for comments asks whether a phase-in of risk-based capital requirements over four quarters is needed. Federal Reserve Board chief accountant Arthur Lindo told certified public accountants at their annual banking conference that certain private-label mortgage backed securities are "likely to come on board." And securitizations where the servicing bank has residual interests are likely to be consolidated under Financial Accounting Standards 166 and 167.

LoanSifter, a Web-based loan product eligibility and pricing tool, has expanded its offering given the shift from broker to banker, to include LoanSifter Banker Edition to help automate backend processes. LoanSifter Banker Edition is a single product eligibility and pricing solution for bankers, credit unions and community banks. The product includes an automated rate sheet generator, a wholesale/third-party originator Web portal, an online 1003 mortgage application, and an upcoming bulk-pricing tool. These features expand on the original LoanSifter solution, consisting of a secondary pricing engine, scenario rate alerts and monitoring, custom e-mail rate campaigns, open house flyers, website quoting, and lead auto-quoting.

MGIC Investment Corp., in a new regulatory filing, said that it is delaying by 10 years an interest payment on its 9% convertible junior subordinated debentures. Originally, the interest payment was due Oct. 1 of this year but now will not be paid until Oct. 1, 2019. The bonds do not come due until 2063. In trading Monday, MGIC's shares were down 6% to $9.17. Other publicly traded MIs were either flat, or down slightly. In terms of book-of-business, the MI is the nation's largest with policies-in-force of $223 billion, according to the Quarterly Data Report.

The first "material" year-over-year increase in July's purchase lending seen in two years has increased hopes for a recovery in the United Kingdom's market, but experts remain reluctant to forecast a turnaround. Purchase mortgages in July represented 56,000 loans totaling £7.5 billion ($12.4 billion), up from 47,000 loans totaling £7.1 billion ($11.8 billion) during the same period last year, according the Council of Mortgage Lenders, London. CML economist Paul Samter said that while evidence is strong that purchase lending in increasing, constraints on the industry's ability to fund increased lending, reduced consumer interest in refinancing and persisting weaknesses in the economy make it likely that on the whole lending could remain relative subdued for some time. During July, total gross U.K. lending was £14.5 billion ($24.0 billion), 42% lower than during the same month last year.

Standard & Poor's Corp. is significantly increasing credit enhancement levels for U.S. residential mortgage-backed securities receiving its top AAA rating. In an effort to update its criteria so an RMBS pool can withstand an extreme economic downturn without defaulting going forward, S&P is establishing a 7.5% credit enhancement level for the archetypical, AAA-rated prime credit quality RMBS pool. S&P also said that, although it is difficult to say what "typical" alternative-A and subprime credit loans might look like in the future, it expects that "an archetypical pool that has similar characteristics to alt-A and subprime would have AAA credit enhancement levels of 18% and 30%, respectively."

If the Federal Reserve Board suddenly stops purchasing agency mortgage-backed securities on Jan. 1, mortgage rates could jump by 30 basis points to 50 bps, according to Fannie Mae chief economist Doug Duncan. Conventional mortgages with principal balance up to $417,000 would likely rise by 30 bp and rates on higher balance loans of $650,000 to $729,750 could go up by 50 bps, he told MortgageWire. The Fed's $1.25 trillion MBS purchase program is slated to expire Dec. 31. But Mr. Duncan expects the Fed will extend and slowly wind down its purchases of Fannie, Freddie Mac and Ginnie Mae MBS. "Thus, incremental winding down of the Fed's program may not be too disruptive of rates and spreads," Mr. Duncan said in his August economic forecast. The Fed is expected to decide how it will wind down the MBS purchase program at the Sept. 22-23 Federal Open Market Committee meeting.

The Department of Housing and Urban Development said the Federal Housing Administration is delaying the Oct. 1 effective date of its new condominium policies for one month while it finalizes several modifications. A mortgagee letter issued in June allows FHA direct endorsement lenders for the first time to approve condominium projects so that unit sales can be financed with FHA-insured loans. The industry has welcomed this new streamlined approach to building approvals. However, FHA continues to limit the number of condo units that can be financed in one complex to 30%. And 50% of the units must be occupied before FHA financing can be used. The National Association of Realtors has been pressing HUD to relax those restrictions. "We'll be issuing new guidance soon, with several modifications to the policy described in Mortgagee Letter 09-19," a HUD spokesman said, with a November 2 effective date.

Federal regulators have closed Illinois-based Corus Bank, the lender on several high-profile Tampa Bay area projects. The Federal Deposit Insurance Corp., which was appointed receiver after Corus was seized late Friday, entered a purchase and assumption agreement with MB Financial Bank of Chicago. MB will pay a 0.2% premium to assume all the deposits, the FDIC said in a release. MB also agreed to purchase about $3 billion of assets, mainly cash and marketable securities, the release said. The FDIC said it plans to sell substantially all of the remaining assets of Corus Bank in the next 30 days in a private placement. The failure of Corus will cost the FDIC's deposit insurance fund $1.7 billion, the release said.

U.S. District Judge Catherine C. Blake sentenced Deborah Williams, a title company owner from Pasadena, Md., to 84 months in prison for mail fraud and diverting settlement funds for her benefit. Williams was ordered to forfeit $3.4 million. Williams was the sole officer and director of Day Title, a title company with offices in Severna Park, Md., that conducted real estate closings and issued title insurance policies. According to Rod Rosenstein, U.S. attorney for the District of Maryland, Williams concealed her illegal transactions by falsely representing on settlement documents that her company had paid off lien holders and then sent the falsified settlement documents to the lender by commercial carrier. She initiated stop payments of payoff checks that had been disbursed or intentionally failed to mail the payoff checks to the lien holder.

Mountain Funding LLC has appointed Arthur Nevid to be its chief investment officer and to spearhead the national real estate investment company's plans to acquire $1 billion of distressed real estate debt portfolios over the next two to three years. He also will serve as managing director of the Charlotte, N.C., company's special servicing affiliate, which currently manages $1 billion in mortgage debt on 90 commercial properties. Since 1997, Mr. Nevid has served as Mountain's managing director of lending and investment. Prior to joining Mountain Funding, Mr. Nevid was the U.S. executive managing director of a French-owned development company based in New York City, and a real estate investment banker and asset manager at Merrill Lynch Hubbard.