Origination

Affiliated Mortgage Co., West Monroe, La., has become a preferred investor for members of the Lenders One mortgage cooperative. Under the new relationship, Lenders One's 135-plus members will have access to special terms offered by AMC, which, in turn, will be granted special marketing and promotional opportunities to generate business with members of the St. Louis, Mo., cooperative. AMC, a wholly owned subsidiary of Benchmark Bank, Dallas, focuses on correspondent lending and purchasing agency-quality whole loans servicing released. Both companies praised the alliance. AMC "has a strong commitment to correspondent lending, and ... a strong commitment to providing the type of customer service that is necessary to make a correspondent lending channel successful," said Lenders One CEO Scott Stern. "With investor partners such as Affiliated Mortgage, we can continue to give our members access to programs, products and pricing that will allow them to remain competitive in their markets." AMC President Dan Hastings said partnering with Lenders One is "a way to work with well-recognized, experienced mortgage bankers (throughout the country). Members have a reputation in the industry that is second to none in terms of producing quality loans, which is the type of relationship that we pride ourselves in building."

Freddie Mac reported a 30% drop in the issuance of mortgage-backed securities in July, compared to the previous month, as refinancing activity slowed dramatically. Freddie said it issued $43 billion in MBS in July, down from $61.1 billion in June when it experienced heavy seasonal deliveries from some of its largest customers. Refinancing activity also dropped off by 33% from the previous month. Purchases of refinanced loans totaled $34.1 billion in July, down from $50.9 billion in June. Freddie has issued $302.7 billion in MBS during the first seven months of this year, compared to $269.8 billion in the same period last year. The government-sponsored enterprise also reported a 17 basis point monthly increase in its single-family delinquency rate. The percentage of Freddie loans 90 days or more past due and in foreclosure rose to 2.95% in July, up from 1.01% a year ago.

House prices rose 1.4% in June following a 0.5% increase in May as the Standard & Poor's/Case-Shiller 20-city house price index registered its first consecutive monthly increase in nearly three years. However, Yale University professor Robert Shiller cautioned that it may not be a turning point due to high unemployment and the large inventories of foreclosed homes weighing on the market. Despite the upward momentum in house prices, "I would express great reluctance in forecasting where we are going from here, because we have conflicting signals right now," Mr. Shiller said. The June HPI shows that house prices are down 15.4% from a year ago and down 30.2% from their peak in the second quarter of 2006. However, only 2 cities, Detroit and Las Vegas, in the 20-city HPI experienced price declines from May to June. "For the second month in a row, we're seeing some positive signs," said David Blitzer, chairman of S&P's index committee.

President Barrack Obama wants Ben Bernanke to remain at his post at the Federal Reserve Board and has re-nominated the Fed chairman to serve for four more years. "Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and out-of-the-box thinking that has helped put the brakes on our economic freefall," the President said during a break from his vacation on Martha's Vineyard. The President said he wants Mr. Bernanke to "continue the work he's doing" to fix the financial system and engineer an economic recovery. And he stressed the need of financial regulatory reform to "ensure we never face another crisis like this again." Senate Banking Committee chairman Christopher Dodd, D-Conn., said re-appointing chairman Bernanke is "probably the right choice." However, Sen. Dodd said he has serious concerns about the Fed's failure to use its regulatory powers to protect consumers from abusive subprime lending practices. "Chairman Bernanke was too slow to act during the early stages of the foreclosure crisis, but he ultimately demonstrated effective leadership and his reappointment sends the right signal to the markets," Sen. Dodd said.

A Treasury Department proposal aimed at reforming the private-label securities market would give federal regulators some flexibility in setting risk retention standards for the banks. The legislative proposal Treasury recently sent to Congress requires securitizers to retain at least 5% of the credit risk, which cannot be sold or hedged. However, regulators can make "exceptions" and "adjustments" for banks provided they retain some risk and it leads to sound underwriting practices. "We felt it was important to give agencies some flexibility on the no hedging requirement to ensure banks were able to do appropriate risk management at the same time they were being required to retain some risk from their lending," a Treasury official said. The regulators could also lower the 5% threshold on credit risk retention for banks that securitize mortgages if some of the credit risk is retained by originators. "That would also be consistent with our aims," the Treasury official said.

In filing its petition for protection under Chapter 11 of the Bankruptcy Code Taylor, Bean & Whitaker Mortgage Corp., Ocala, Fla. indicated its bankruptcy estates might have funds available to distribute to unsecured creditors. The filing was made on Aug. 24 in the U.S. Bankruptcy Court, Middle District of Florida in Jacksonville. A statement from the company said it will operate on a scaled-down basis, and it could possibly liquidate its assets. Neil Luria of Navigant Capital Advisors has been named chief restructuring officer, while two directors, Bill Maloney and Bruce Layman, will direct TBW's business. The TBW statement recounted the timeline involving the suspension of its origination activities, adding that on Aug. 6, the now-failed Colonial Bank suspended approximately 100 TBW bank accounts, creating problems for the company in terms of processing borrower payments and making insurance and tax payments on their behalf. TBW said it is in discussions with the Federal Deposit Insurance Corp. "in hopes that this circumstance can be remedied immediately." A copy of the petition, which was obtained courtesy of Bankruptcy Creditors' Service Inc., Fairless Hills, Pa., contains over 2,900 creditors listed. The company checked off that it had over $1 billion in assets and $1 billion in liabilities. The company also checked off the box that stated it believed funds from the bankruptcy estate would be available to distribute to the unsecured creditors.

The Cortland Savings and Banking Company, a Youngstown-Warren, Ohio area state bank engaged in commercial and retail banking services, has opted to change LOS systems in an effort to create a more customer-driven experience. The company said it chose Mortgage Builder because it needed to modernize its residential real estate lending system in order to control costs and stay well within the compliance requirements of today's financial world, but it did not want to lose its personal touch and feel in order to gain efficiency. The company's old LOS was DOS-based and Cortland found that it was not adequate technology to help the lender keep up with new RESPA and Regulation Z changes.

Pricing vendor Mortgage Pricing Systems has integrated its LEAP! application with Ellie Mae's Encompass LOS. This integration enables Encompass users to automatically export a loan file into LEAP! and return key product and pricing data back to Encompass with a few clicks. Mortgage Pricing Systems distinguishes itself from other product and pricing engine providers by giving Encompass users immediate access to pricing, eliminating the need for additional data entry on the LEAP! website. Qualified programs and pricing are displayed in seconds. Furthermore, by combining simple presentation with numerous sorting and filtering options, users can modify desired rate, price and program (agency, FHA and VA) on a single page without constantly re-qualifying a loan.

Financial marketing firm Victory Financial Group LLC has integrated PriceMyLoan's automated underwriting and loan pricing engine into their online mortgage lending platform, myTurboLoan. The integration between the two companies enables consumers to instantly prequalify and accurately price loans for their custom loan scenarios. Victory Financial Group maintains a network of over 30,000 financial planners and real estate agents. The company provides technology solutions to these professionals in the form of custom websites, online tools and search engine optimization services. myTurboLoan is a featured tool that is used by their network to provide instant loan qualification and rate quotes to their clients.

Another defendant in the fraud case involving $12.6 million mortgage fraud scheme that involved 25 upscale residential properties in Lee's Summit and Raymore, Mo., has pleaded guilty in federal court. According to Matt J. Whitworth, acting U.S. attorney for the Western District of Missouri, Jerome Shade Howard of Anaheim, Calif., pleaded guilty before U.S. Chief District Judge Fernando J. Gaitan to his role in a scheme to buy new homes built by Jerry R. Emerick at inflated prices, obtaining mortgage loans for more than the actual sale price by providing false information to mortgage lenders, then keeping the extra proceeds. Howard admitted that he received more than $900,000 in illegal kickbacks as part of nearly $8.5 million in fraudulent mortgage loans. Howard is among 12 defendants who have pleaded guilty to the scheme. Sentencing for Howard will be scheduled after the U.S. Probation Office completes a pre-sentence investigation. Emerick pleaded guilty in April to conspiracy to commit mortgage fraud and wire fraud and to transfer funds obtained by fraud across state lines.