Origination

Single-family originations by commercial and savings banks totaled $214.6 billion in the fourth quarter, down only 15% from a year ago and 6% from the previous quarter, according to Federal Deposit Insurance Corp. data.Wholesale loan production held up surprisingly well, totaling $148 billion in the fourth quarter, down only 8.6% from a year ago and 6.1% from the previous quarter. Thrifts originated $52.3 billion in 1-4 family loans in the fourth quarter, down 21% from the third quarter, according to the Office of Thrift Supervision. Compared to the fourth quarter of 2007, loan production at OTS-regulated thrifts is down 64% -- mainly due to the failures of Washington Mutual and IndyMac in the third quarter. Meanwhile, an FDIC report shows the delinquency rate on single-family loans held by banks and thrifts jumped dramatically in the fourth quarter. Loans 90 days or more past due or in non-accrual status hit 4.89%, up more than 100 basis points from the third quarter.

Bank of America funded $1.47 billion in reverse mortgages in the fourth quarter, ranking first nationwide, according to preliminary survey figures compiled by National Mortgage News and the Quarterly Data Report.BoA's reverse production business soared by 182% compared to the same period in 2007. Wells Fargo & Co. ranked second among reverse lenders, originating $1.38 billion, a 7% gain.

Zacks Equity Research predicts that when Freddie Mac releases full-year results shortly the GSE will have lost $39.50 a share. Meanwhile, the Chicago based research firm — which has a "sell" rating on the government controlled GSE — says the company will lose $13.12 a share in 2009, and $9.81 next year. In trading Tuesday, Freddie's shares were selling for 39 cents each. "Though recently the government laid out an expanded role for the GSEs in the housing market as part of its Homeowner Affordability and Stability Plan, we anticipate the price volatility to continue as the market looks for further information on the future structure of the GSEs and their role," Zacks says in a new research note. "Further, as the housing situation continues to worsen, we anticipate higher losses and write-offs. As a result, the conservatorship is expected to continue for a long time and this will yield no value to the common shareholders of the company."

Central States Mortgage, Wauwatosa, Wisc., which provided residential origination services to more than 250 credit unions, shut its doors on Monday, the second closure of a major CU-related mortgage firm in as many months.CSM is owned by 25 credit unions and the Wisconsin Credit Union League. Central States originated $538 million in residential loans in 2008, compared to $707 million the year before. The lender has been embroiled in controversy over the past eight months -- first with the firing of its CEO and founder Richard Jungen, then with a suit claiming Mr. Jungen defrauded it of $15 million through a secondary funding vehicle he owned called Interim Funding. (The alleged fraud took place while he was still managing Central States.) Members United Corporate FCU of Illinois, which provided a warehouse line of credit to Central States, is also preparing to write-off millions of dollars in loans to CSM. A message at the Central States switchboard this morning says the company has suspended operations. Mr. Jungen founded Central States in 1984, then sold a majority stake to the credit unions in 1997. He continued to head the operation until last July when he was fired.

Titan Lenders Corp., Denver, has launched a warehouse lending operations service platform to facilitate community bank and credit union entry into warehouse lending, a sector that is badly in need of liquidity. Titan said the platform will help depositories sustain a prudent level of due diligence, compliance and profitability when offering bridge financing to non-depository mortgage bankers. Mary Kladde, president of Titan, has been outspoken in the need for an increase in the availability of warehouse funds, even going as far as calling for the government to use Troubled Asset Rescue Program money for this purpose. (The Mortgage Bankers Association has done the same.) Titan will provide back-office outsourcing services on a per transaction basis. "Regional banks, community banks and credit unions could be great resources for local mortgage bankers that have lost, are in risk of losing, or need to increase the capacity of their warehouse line, at a time when purchase and refinance activity is picking up," said Ms. Kladde.

Reeling from charges related to its mortgage holdings, the Federal Home Loan Bank of Seattle reported deep losses late Monday and became the first bank in the system to exhaust its cushion of retained earnings.The Seattle Home Loan Bank remains positively capitalized with stock used to satisfy membership requirements and advances but the depletion of the retained earnings fund, which totaled $162.3 million on Sept. 30, leaves the bank with almost $1.8 billion in total capital. That is below the regulatory risk-based capital requirement, which means the Home Loan bank is barred from paying dividends to shareholders or repurchasing capital stock. Less clear is whether the Seattle Home Loan Bank "broke the buck," which involves lowering the value of its par-value stock. The Home Loan bank's stock is redeemed in five years so the shares could theoretically regain value if they were damaged in the current climate. Such an occurrence would be a first in Home Loan Bank history and could have dire consequences for members of the Seattle bank.

The Radian Group, the nation's third largest mortgage insurance company, said as of March 15th it will no longer write new policies on "attached" condominium units.At press time the company could not be reached for comment. According to a new bulletin posted on the MI's website, the Philadelphia-based firm also will no longer insure construction-to-permanent loans and interest-only mortgages. In a new filing with the Securities and Exchange Commission, Radian says it expects to incur "significant" losses this year thanks to large claims on alt-A mortgages, high LTV loans, pool insurance and other products. In 2008 Radian had to pay claims on 110,553 first-lien primary defaults, an 82% increase from the year before. Two weeks ago Radian posted a 2008 net loss of $410 million. Its stock is trading at about $1.35 a share.

Single-family originations by commercial and savings banks totaled $214.6 billion in the fourth quarter, down only 15% from a year ago and 6% from the previous quarter, according to Federal Deposit Insurance Corp. data. Wholesale loan production has held up surprisingly well - totaling $148 billion in the fourth quarter, down only 8.6% from a year ago and 6.1% from the previous quarter. Thrifts originated $52.3 billion in 1-4 family loans in the fourth quarter, down 21% from the third quarter, according to the Office of Thrift Supervision. Compared to the fourth quarter of 2007, loan production at OTS-regulated thrifts is down 64% - mainly due to the failures of Washington Mutual and IndyMac in the third quarter. Meanwhile, an FDIC report shows the delinquency rate on single-family loans held by banks and thrifts jumped dramatically in the fourth quarter. Loans 90 days or more past due or in nonaccrual status hit 4.89%, up more than 100 basis points from the third quarter.

Central States Mortgage, Wauwatosa, Wisc., which provided residential origination services to more than 250 credit unions, shut its doors on Monday, the second closure of a major CU-related mortgage firm in as many months. CSM is owned by 25 credit unions and the Wisconsin Credit Union League. Central States originated $538 million in residential loans in 2008, compared to $707 million the year before. The lender has been embroiled in controversy over the past eight months - first with the firing of its CEO and founder Richard Jungen, then with a suit claiming Mr. Jungen defrauded it of $15 million through a secondary funding vehicle he owned called Interim Funding. (The alleged fraud took place while he was still managing Central States.) Members United Corporate FCU of Illinois, which provided a warehouse line of credit to Central States, is also preparing to write-off millions of dollars in loans to CSM. A message at the Central States switchboard this morning says the company has suspended operations. Mr. Jungen founded Central States in 1984, then sold a majority stake to the credit unions in 1997. He continued to head the operation until last July when he was fired.

Fitch Ratings, New York, has placed CMG Mortgage Insurance Co.'s insurer financial strength rating on Rating Watch Negative status, meaning it is likely to be downgraded. CMG is a joint venture between CUNA Mutual and PMI Mortgage Insurance Co., both of which own 50%. CUNA Mutual's IFS was cut from AA- down to A, which was the triggering action for the change in status. The CUNA Mutual downgrade, Fitch said, means that both owners of CMG have experienced downgrades related to deterioration in their capital levels. The rating agency had viewed the ownership structure as a positive, preventing either parent from extracting capital from CMG to the detriment of the other parent. CMG did not pay any dividends to its owners last year and there are no plans to pay dividends this year. "Fitch views the stress experienced by both parent companies and their respective weakened capital positions as raising the probability that both parents would need to extract capital from CMG MI at some point, and thus weakening the protection provided by the 50/50 ownership structure," the rating agency said, adding that if it does cut CMG's IFS, it would likely be limited to three notches. Currently, CMG's IFS "AA" and the downgrade could bring it to "A".