Origination

United Guaranty Corp., the Greensboro, N.C.-based mortgage insurer owned by American International Group, will remain as a subsidiary of that company following its split with AIU Holdings LLC. AIU is the special purpose vehicle that will be the holding company for AIG's commercial insurance, foreign general insurance and private client groups. Under the terms of the plan, AIG will purchase AIU's interests in UGC and two other AIG units to further separate the property casualty operations. The sales improve the quality of AIU's capital, the company said.

All but three states have committed to join the Nationwide Mortgage Licensing System, and 15 have already enacted a licensing process that meets the standards spelled out in Title V of last year's Housing and Economic Recovery Act, according to the latest count from the Conference of State Bank Supervisors. Under Title V, the Secure and Fair Enforcement Mortgage Licensing Act, all mortgage originators must be licensed or registered with the NMLS, which was launched 15 months ago by CSBS in collaboration with the American Association of Residential Mortgage Regulators. Currently, 24 states and Puerto Rico use the system to manage licensees, and 10 more states should be on the system by the end of the year, CSBS's William Matthews said at the Mortgage Bankers Association's National Secondary Market Conference in Chicago. All states save for Nevada, Ohio and Minnesota will be on the system by the end of 2010, Mr. Matthews told the conference. The system is now managing more than 96,000 licenses, he also reported, and tracking some 15,000 companies, 10,000 branches and 71,000 loan officers. Through NMLS, lenders, bankers, brokerage companies and loan officers in participating states are able to complete a single application online, regardless of the number of states in which they work. Data is housed in a centralized repository available to regulators, and licensees can access their records through the NMLS website to update, amend and renew their licenses.

Net losses on commercial real estate investments totaling $1 billion, in addition to widening debt-related credit spreads, contributed to Morgan Stanley's overall $177 million net loss for the first quarter. The firm said that while some lines of business fared well during the first quarter its results were negatively impacted by a $1.5 billion decrease in net revenues related to the tightening of its credit spreads on certain of its long-term debt and net losses of $1 billion on investments in real estate, "amidst the industry-wide decline in this market." Morgan Stanley also said its asset management unit took a pretax loss of $600 million due to "losses on real estate principal investments in the merchant banking business."

Flagstar Bancorp Inc., Troy, Mich., saw its residential mortgage volumes increase to $9.5 billion in the first quarter from $5.4 billion the previous three months, but said that under its accounting methodology it had to take a net loss for the period. Flagstar said it has adopted the fair value method of accounting for mortgages it originates for sale and thus cannot capitalize and defer recognition of loan fees as it had done previously; it also can no longer defer recognition of a portion of its expenses. It had $32.9 million in loan fees during the quarter and saw a gain on loan sales of $195.7 million. Flagstar also took a $158.2 million provision for loan losses in the first quarter. Nonperforming residential first mortgage loans increased from $432.6 million at the end of last year to $561.5 million at the end of the first quarter, while nonperforming commercial real estate mortgages increased from $164.4 million to $198.3 million during the same time frame. Overall, the company's net loss to common stockholders for the first quarter was $67.4 million ($0.76 per share), as compared with a loss of $10.6 million ($0.18 per share) for the same period one year prior.

Wells Fargo & Co., the nation's second largest residential servicer, said Wednesday that 7% of its $1.6 trillion "owned" servicing portfolio was in some stage of delinquency as of March 31, but mortgage funding volumes and overall earnings were strong. Dollar-wise the delinquencies represent $112 billion in mortgages. Releasing its 1Q results, the San Francisco-based bank also announced loan charge-offs on its mortgage portfolio including: second liens ($847 million), one- to four-family ($391 million), and commercial mortgages ($556 million). The charge-offs include the mortgage operations of Wachovia Corp., the troubled bank it bought at year-end. Despite all the bad mortgage servicing news, Wells said it earned $3.05 billion in the first quarter, a record. The bank funded $101 billion in home mortgages during the period, a 55% gain from the same period a year ago. It has a mortgage application pipeline of $101 billion.

Freddie Mac has delayed its pricing of a five-year Reference Note offering expected to be at least $1 billion in size due to the "unattended death" of the government-sponsored enterprise's acting chief financial officer David Kellermann — an employee of the firm for 16 years. Mr. Kellermann was found dead at his Northern Virginia home early Wednesday morning, according to police. A spokeswoman for the Fairfax County Police Department told National Mortgage News that the medical examiner will perform an autopsy on the 41-year-old Mr. Kellermann later today. The police issued a press statement saying, "there was no evidence of foul play." Freddie said it found it "appropriate" to "temporarily postpone" the pricing "at least one day" in response to the death. Mr. Kellermann had been Freddie's CFO since September, when the government placed it and its sister company, Fannie Mae, into a federal conservatorship. As acting CFO, Kellermann was responsible for the GSE's financial controls, financial reporting, tax, capital oversight and related matters. He began his career at the company as a financial analyst/auditor. He also worked in Freddie's securities sales and trading unit. One former Freddie employee who worked at the GSE when Mr. Kellermann was there described him as "a very nice man, a family man." According to his company bio, he was a volunteer board member of the D.C. Coalition for the Homeless. Back in 2003 Freddie was embroiled in an accounting scandal where its top executives were accused of under-reporting income by $5 billion. A criminal investigation ensued but no charges were ever brought. Freddie's CEO (also appointed in September), David Moffett, resigned last month. Mr. Kellermann was promoted to acting CFO when Anthony 'Buddy' Piszel resigned.

David Kellermann, the acting chief financial officer of Freddie Mac -- and an employee of the firm for 16 years -- was found dead at his Northern Virginia home early Wednesday morning in what authorities said was an apparent suicide, according to combined press reports. The 41-year-old Kellermann had been Freddie Mac's chief financial officer since September, when the government placed the mortgage investing giant and its sister company, Fannie Mae, into a federal conservatorship. A spokesman for Freddie Mac had no comment and referred all press inquiries to the Fairfax County police. As acting chief financial officer, Kellermann was responsible for the GSE's financial controls, financial reporting, tax, capital oversight and related matters. He began his career at the company as a financial analyst/auditor. He also worked in Freddie's securities sales and trading unit. Freddie's CEO (also appointed in September), David Moffett, resigned last month. The company's stock trades for 86 cents a share.

As more and more seniors and their families are faced with the decision about where mom and dad will live as they age, it is crucial for the family to be sure that the individual needs of each person is met. How can we as reverse mortgage professionals become a resource and guide our clients through the maze of issues to be considered?

M&T Bank Corp., Buffalo, N.Y., had record residential mortgage banking revenue of $48 million in the first quarter, a 50% increase from the same period last year. The bank's origination pipeline totaled $4.4 billion at March 31, up 85% from the end of the fourth quarter. In Q4, M&T took a $5 million valuation impairment on its mortgage servicing portfolio. M&T said it has modified $216 million of mortgage loans — primarily alt-A loans, of which $106 million were classified as non-accrual. The remaining modified loans were classified as "renegotiated" loans and were accruing interest as of March 31, 2009.

U.S. Bancorp said its mortgage banking business had record revenue for the first quarter of 2009 driven by record application and production volume. The company had $233 million in mortgage banking revenues, compared with $23 million for the fourth quarter and $105 million for the first quarter of 2008. During the quarter, U.S. Bancorp had $25 billion of loan applications and $13.4 billion of loan production volume. However, the company had a $530 million credit loss provision and total net charge-offs of $788 million for the first quarter. The increase in net charge offs from $239 million for the same period one year ago was due to factors affecting the residential housing markets, including homebuilding and related industries. Residential mortgage loan net charge-offs increased from $26 million in the first quarter 2008 to $91 million for the most recent period.