Origination

PNC Bank has decided to pull the plug on National City's warehouse lending operation, giving non-banks that borrowed from the unit 12 to 18 months to find new lenders, National Mortgage News has learned.At press time a spokesman for the Pittsburgh-based PNC confirmed that the bank was indeed exiting the warehouse sector but would not comment on a time frame or how many jobs will be lost at NatCity's unit. (PNC bought the Cleveland-based bank earlier this year.) According to exclusive survey figures compiled by NMN, National City ranks second, nationwide, in terms of warehouse commitments to non-bank mortgage lenders. At year-end NatCity's warehouse group had agreed (or committed) to lend $2.2 billion to non-bank mortgage firms. "This is really going to hurt," said one advisor who works on warehouse issues. "NatCity is a big provider." The advisor, who requested his name not be used, said five non-bank borrowers received word of the pull out today. At year end the largest warehouse provider, in terms of commitments, was Colonial Bancgroup, Montgomery, Ala. In trading Wednesday Colonial's shares ended at 36 cents. The depository has applied for government backing under the Troubled Asset Relief Program. A few weeks ago JPMorgan Chase exited the warehouse lending arena.

Fitch Ratings, Chicago, has downgraded the issuer default rating of Stewart Information Services Corp., Houston, to 'BBB' from 'BBB+'. Fitch has also downgraded the insurer financial strength ratings of Stewart Title Guaranty Co., to A- from A. The Rating Outlook has been revised to Negative from Stable. This action was driven by deterioration in Stewart's absolute and risk adjusted capital levels in the fourth quarter of 2008. "An area of concern is Stewart's debt structure whereby the $107.6 million of unsecured debt may be called for any reason by the issuing banks. This constraint places an additional liquidity strain for the company particularly given the current stressful environment. Favorably, the company continues to reduce the amount outstanding by paying the obligations as they mature. Of the $62.4 million due this year approximately half has already been extinguished," Fitch said. The agency added that the company's ratings had been based on the assumption that technology investments may have allowed the title unit to show better margins than its peers in a down market, but this has not been the case.

SigniaDocs, Houston, has integrated its electronic vault technology with Equifax's identity verification engine to address their respective users' interest in using secure automation to counter increasing ID fraud through means in line with new federal rules. The engine, which is called Equifax Secure's eIDverifier, verifies online mortgage applications and the company promises borrower identification that is compliant with the Federal Trade Commission's Fair and Accurate Credit Transactions Act red flag rules. The rules, which first went into effect in November 2008 and are set for full enforcement as of May 1, require companies to look out for and address potential indicators that may be signs of ID fraud. A February report by Javelin Strategy & Research, San Francisco, indicated that the number of identity fraud victims increased 22% to 9.9 million adults in the United States in 2008.

Manhattan Bancorp, Los Angeles has agreed to invest in a new mortgage-related capital markets and advisory business with Bodi Advisors Inc. and a new MB subsidiary called MB Financial Services Inc. The three entities plan to capitalize a new limited liability company that will conduct business under the name BOM Capital LLC. BOM Capital is slated to focus on the trading of residential mortgage-backed securities and whole loans for the accounts of customers and the company will be positioned to potentially expand into the origination, brokerage and sales of mortgages. Manhattan Bancorp, which is the holding company of Bank of Manhattan, is set to initially own a 70% stake in BOM Capital with Bodi retaining a 30% stake.

The Market Composite Index, an overall measure of mortgage applications, increased 11.3% on a seasonally adjusted basis to 723.4 from 649.7 for the week ended March 6, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The catalyst for the move was the average for the 30-year fixed-rate mortgage falling below the 5% barrier for the third time this year. The first time was the week of Jan. 9, when the average was 4.89%, and the second was the week of Feb. 13, when the average was 4.99%. For the current week, the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.96% from 5.14%, with points (including the origination fee) increasing to 1.16 from 1.05 for loans with 80% loan-to-value ratios, the association said. On an unadjusted basis, the index increased 11.6% compared with the previous week and 5.7% compared with the same week one year earlier. The Purchase Index increased 7.1% to 253.3 from 236.4 one week earlier on a seasonally adjusted basis, while the Refinance Index increased 13.3% to 3470.7 from 3063.4 the week prior. Refinancings decreased to 67.9% of applications from 66.9% the previous week, while adjustable-rate mortgages accounted for 2.3% of applications, unchanged for the previous week, the MBA said. The MBA can be found online at http://www.mortgagebankers.org.

The Senate has approved final passage of an omnibus appropriations bill that increases FHA's commitment level to $315 billion for this fiscal year, up from $185 billion in FY 2008. Ginnie Mae, which securitizes Federal Housing Administration and other government-backed mortgages, also is getting a $100 billion increase in its commitment level to $300 billion. Lenders originated $66.4 billion in FHA single-family loans in the fourth quarter of FY 2008, which ended Sept. 30. In the first quarter of FY 2009, FHA endorsements totaled $71.9 billion. It appears FHA loan production could easily hit $300 billion as many lenders are using FHA loans to modify and refinance nonprime loans. Congressional appropriators allotted $13 million to the HUD Inspector General to keep a closer watch on the FHA single-family program. The appropriators also instructed the Government Accountability Office to determine whether the Inspector General's office has enough resources to audit FHA's "expanded role" in refinancing subprime, Alt A and other home mortgages.

Rep. Eddie Bernice Johnson, D-Texas, plans to introduce legislation to modernize the Community Reinvestment Act, a measure that reportedly would, among other things, extend CRA requirements to large, mainstream credit unions as well as independent mortgage companies, securities firms, insurance companies and all affiliates of holding companies. The bill has already been denounced by Fred Becker, president of the National Association of Federal Credit Unions, as unnecessary. "Credit unions...have a solid history of serving those of lesser income and minority applicants," Mr. Becker said in a statement. But David Berenbaum, executive vice president of the National Community Reinvestment Coalition, said such a "very significant expansion" of CRA to non-banks is long overdue. "We need to reach all of today's players," he said at the Consumer Bankers Association's annual Community Reinvestment Act Conference in Washington. According to Mr. Berenbaum, the bill by the Dallas legislator, a former chair of the Congressional Black Caucus, will require non-banks to meet tests similar to those institutions already covered by the 32-year-old law, but would "account for differences in their products and capacities." Rep. Johnson is scheduled to hold a press conference Friday in conjunction with NCRC's annual legislative conference.

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Already ubiquitous for its credit scoring technology, Fair Isaac Corp., Minneapolis, has officially adopted the brand 'FICO' as its corporate identity. "The FICO brand means empowerment, innovation and value...qualities that we've earned over time, that mean a great deal to our clients and partners, and that distinguish us in the marketplace," said Laurent Pacalin, chief marketing officer at FICO. The company will retain Fair Isaac Corp., as its legal name, and its NYSE ticker symbol, FIC. Effective immediately, however, the company logo, website and all other company materials will reflect its new identity: FICO. "The use of the name FICO is a simplification of the company's identity, not a change in strategy," said Mark Greene, FICO chief executive. "Our commitment remains strong as ever to our clients' businesses. We will continue to offer the full breadth of analytics and decision management products and services they need, and to operate in the geographic areas of the world that matter most to them."

Mark Korell, who once headed the nation's largest mortgage banking firm, has joined JPMorgan Chase and will assist the bank in regard to what he calls "cross strategies" tied to its correspondent lending group.Mr. Korell confirmed that he's joining JPM, but offered no other details on what exactly he'll be doing for the company. JPM is the parent of Chase, both the nation's third largest residential funder and servicer.