Origination

Origen Financial Inc., Southfield, Mich., saw an improvement in its fourth quarter results, posting a net loss of $4.4 million ($0.17 per share) for the quarter ended Dec. 31, 2008, as compared with a net loss of $39.1 million ($1.54 per share) for the fourth quarter of 2007. The company, formerly an originator of manufactured housing loans but now just a real estate investment trust that manages residual interests in securitized manufactured housing loan portfolios, had a net loss of $35.4 million ($1.38 per share) for the full year 2008 vs. a net loss of $31.8 million ($1.26 per share) for the full year of 2007. Ronald A. Klein, Origen's chief executive, said the company's loan portfolio performed well in the fourth quarter and that has continued into 2009. However, he continued " our portfolio is now an aging static pool which is approaching its peak default years. Accordingly, we expect to see increases in both delinquencies and defaults. In the current economic environment we expect our borrowers to face challenges especially if the unemployment rate continues to increase."

KB Home reported a net loss of $58 million for the first quarter, ending February 28, compared to a net loss of $268 million for the year-earlier period. First-quarter housing revenues totaled $304.5 million, down 58% from the same period in 2008, reflecting a 51% decrease in homes delivered and a 15% decrease in the average selling price. Net orders for new homes in the first quarter of 2009 increased 26% to 1,827, up from 1,449 net orders in the same quarter a year ago. KB also said its cancellation rate based on gross orders improved to 28% in the current period, down from 46% in the fourth quarter of 2008 and 53% in the first quarter of 2008. The first quarter pretax results included non-cash charges for inventory and joint venture impairments and land option contract abandonments of $32.3 million.

Tom Donatacci, who recently left Residential Capital Corp., has joined The Clayton Group, a loan advisory firm based in Shelton, Conn.Clayton named Mr. Donatacci executive vice president of marketing and sales. At ResCap Mr. Donatacci was in charge of new business development and oversaw its subservicing division. Meanwhile, Clayton named Tom Cronin managing director of government relations.

Loan originators are so swamped with applications that it is taking three to four weeks to get new mortgages through underwriting departments, according to the president of the National Association of Mortgage Brokers. Mr. Savitt also said that he is still concerned about large wholesalers leaving the business but sees some positives signs. "Bank of America is committed to the business, and we've seen some new entrants recently," he said.

The House Financial Services Committee on Tuesday will mark up a mortgage reform bill that bans certain types of yield spread premium payments and requires lenders to retain 5% of the credit risk on subprime loans that are sold to investors."A creditor may not directly or indirectly transfer the credit risk it retains," according to the bill sponsored by committee chairman Barney Frank, D-Mass., and fellow Democratic Reps. Brad Miller and Mel Watt of North Carolina. The sponsors want to crack down on compensation that might encourage mortgage lenders and brokers to steer borrowers into higher cost loans. "Specifically, the new measure will strengthen restrictions on compensation paid to mortgage loan originators and brokers that is based on a loan's interest rate and terms, often called a yield-spread premiums," according to Rep. Miller. Marc Savitt, president of the National Association of Mortgage Brokers told National Mortgage News that he is okay with the language in the bill, noting that "this doesn't ban yield spread premiums outright" and instead "prevents people from making a couple of extra points" by putting consumers in higher cost loans. Mr. Savitt added that his reading of the bill indicates that it would require mortgage banking firms to disclose their "servicing released premiums" to the public as well. "The bill means you have to disclose everything," said Mr. Savitt. The legislation also mandates that all licensed and registered originators would be subject to a "federal duty of care" measure under the bill, obligating them to only make loans that a customer can afford. With refinancings, lenders would have to prove a "net tangible benefit."

Loan sale advisory firm DebtX, Boston, plans to sell through two separate sales a total of 108 million euros ($147 million) in nonperforming real estate loans from financial institutions in Germany. The first sale involves 94 million euros ($128 million) in nonperforming commercial real estate loans from throughout Germany and is scheduled to take place on April 23. The second involves 14 million euros ($19 million) of nonperforming loans secured primarily by residential real estate in East Germany and it is scheduled to take place on May 14. The company expects to hold additional European loan sales in coming months as more financial institutions in the euro zone seek to sell the assets rather than managing them through prolonged workouts, said DebtX managing director Gifford West.

The Federal Housing Administration is adopting Fannie Mae and Freddie Mac forms for appraisers to use in collecting more information about property values in declining markets. Starting April 1, appraisals for FHA loans must include the Fannie and Freddie addendum for market conditions in declining markets. In those markets, FHA wants appraisals to include at least two comparable sales that closed within 90 days. "As home prices continue to decline in many housing markets throughout the country due to job losses and increased foreclosed, FHA finds it necessary and prudent to set additional guidance for collateral assessment practices for properties located in a declining market," FHA commissioner Brian Montgomery, a holdover from the Bush administration awaiting Senate confirmation of his replacement, says in the letter to lenders and appraisers.

Integrated Asset Services LLC, a Denver-based default management and residential collateral valuation services provider, has rolled out a new product, called the "Conditioned Valuation Model." The company describes a CVM as a cost-effective tool that allows the integration of automated property analytics with human observation, adding that it falls out on the continuum between an automated valuation model and a broker price opinion. A CVM delivers a real-time, 360-degree view of the condition of the property, the neighborhood, the condition-adjusted value and market price trends. "Traditionally, the industry has had the choice of a more expensive human-based solution or faster and riskier automated solutions. But the current mortgage industry requires these two valuation approaches interact intelligently and at the right price point," said Dave McCarthy, chief executive of IAS. A CVM costs half the price of a standard BPO. The executive said CVM was designed to help avoid AVM failure to disclose supporting data and valuation methodologies that result in questionable property valuations. The CVM uses a valuation formula that integrates property data from IntelliReal, IAS' technology partner, to provide real estate intelligence, analysis, current neighborhood sales data and active listings. The data is then combined with a hands-on inspection performed by a third-party property inspection firm, including photos on the subject property and its neighborhood condition, occupancy status, and conditions that impact value.

FBI director Robert S. Mueller told Congress that the growing number of mortgage fraud cases are "straining" the agency's resources and that the bureau now has 250 agents working on investigations — double the number from two years ago. In his prepared testimony Mr. Mueller said there are now 2,000 open mortgage fraud cases. Three years ago the agency had 700 open cases. "We have had to shift resources from other criminal programs to address the fiscal crisis," Mr. Mueller said. He noted that the agency is trying to combat mortgage fraud by using computer programs, including what he called "property flipping computer applications."

The average rate for the 30-year fixed-rate mortgage fell to a record low in the Freddie Mac Primary Mortgage Market Survey for the week ending March 26. In addition, the average rates for 15-year FRMs and five-year hybrid Treasury-indexed adjustable-rate mortgages fell to lows not seen since Freddie began tracking them. "The Federal Reserve's announcement that it intends to purchase Treasury securities over the next six months caused bond yields to drop and mortgage rates followed," said Frank Nothaft, Freddie Mac vice president and chief economist. The average 30-year FRM rate was 4.85%, down from 4.98% the week before and 5.85% the year before; the average 15-year FRM rate was 4.58%, down from 4.61% the week before and 5.34% the year before; and the average five-year Treasury-indexed hybrid rate was 4.96%, down from 4.98% the week before and 5.67% the year before. Freddie has tracked the 30-year rate since 1971, the 15-year rate since 1991 and the five-year rate since 2005. The average rate on one-year Treasury indexed ARMs also fell in the latest week when it was 4.85%, down from 4.91% the week before and 5.24% a year ago. Average points were 0.7 for 30- and 15-year FRMs as well as five-year Treasury-indexed hybrids, and 0.6 for one-year Treasury-indexed ARMs.