Origination

ISGN has purchased Richmond Title Services, Plano, Texas, as part of its title business cross-sell strategy. RTS is one of the top 25 independent title agents in the US and has more than 40 employees. According to ISGN, the plan is to cross-sell RTS's services to existing ISGN customers as well as through ISGN's e-services platform, Lenstar, Bridgelink and the MORvision Plug-in Partner Network. A plug-in will be written for all Dynatek MORvision customers. ISGN said in a prepared statement that the acquisition will help ISGN gain market share in the title business by leveraging ISGN's knowledge process outsourcing onshore and offshore processing capabilities. No sale price was disclosed.

November was a challenging month for private mortgage insurance companies, which saw the amount of primary new insurance written fall to $5.8 billion from $7.7 billion in October. November is the fourth consecutive month in which the issuance of new insurance hit a new low for the members of the Mortgage Insurance Cos. of America. PMI applications also tumbled from 55,085 in September to 39,098 in November, MICA said. Meanwhile, defaults edged up to 82,978 and the cure/default ratio edged down to 53%. Outstanding PMI in force totaled $799.5 billion, down by less than 1% from November 2007. MICA's numbers do not include any information from Radian or Triad. (Radian has rejoined MICA and will be reporting in the future.)

Mortgage Bankers Association data on mortgage applications from the week ended Dec. 26 show the number of apps to be "little changed" from week to week."The Market Composite Index, a measure of mortgage loan application volume, was 1245.7, essentially unchanged, on a seasonally adjusted basis from 1245.4 one week earlier," the MBA said. The trade group noted that its adjustments included one that accounts for the fact that the week was shortened by the Christmas holiday. On an unadjusted basis, the index fell 40% from the previous week and 155% from a year earlier. However, the four-week moving average for the seasonally adjusted Market Index was up 10.3%, and while this same seasonally adjusted average for the Purchase Index was down 3.2%, it was up 15.7% for the refinance index. On a week-to-week basis, purchases inched up by 1.4% and refinance volume inched down by 0.4%, with refinances representing 82.9% of the applications in the market, down slightly from 83.2% the previous week. The seasonally adjusted Conventional Purchase Index edged up by 1.1% from the previous week and the Government Purchase Index increased by 2.2% during the same period. Adjustable-rate mortgage activity remained unchanged from the previous week at 0.8% of total applications.

The average rate for a 30-year fixed-rate mortgage set another record low in the history of Freddie Mac's weekly survey, which started in 1971. The 30-year FRM rate, at 5.10%, was down from 5.14% the previous week and 6.07% a year ago. This marked the third consecutive week of survey-record lows and the ninth straight week of declines for the 30-year rate, according to Freddie Mac chief economist Frank Nothaft. "Since the end of October, these rates have declined about 1 1/3 percentage points," which represents "payment savings of approximately $173 a month for a $200,000 loan," Mr. Nothaft said in his weekly rate report. The average 15-year FRM rate, at 4.83%, was the lowest it has been since March 25 when it was 4.70% and represents a decline from 4.91% the week previous. The average 15-year rate was 5.68% a year ago. The average rate on a five-year Treasury-indexed hybrid adjustable-rate mortgage was 5.57% in the most recent week, up from 5.49% the week previous and down from 5.78% a year ago. The average rate on a one-year Treasury-indexed ARM was 4.85%, down from the previous week's 4.95% and the previous year's 5.47%. Average points were 0.7 for 30- and 15-year FRMs and five-year Treasury-indexed hybrids, and 0.5 for one-year Treasury-indexed ARMs.

The National Association of Mortgage Brokers is opposing implementation of reforms that would prohibit brokers from picking or working with appraisers in mortgage transaction. The appraisal code of conduct that Fannie Mae and Freddie Mac, along with their regulator, have agreed to implement as part of a settlement with New York Attorney General Andrew Cuomo tries to ensure that loan officers and brokers don't influence or interfere with the property valuation process. The code is slated to go into effect May 1 and applies to loans purchased by Fannie and Freddie. "This agreement will create a severe disadvantage to small business mortgage brokers, and prevent them from engaging competitively in the mortgage marketplace," said NAMB president Marc Savitt.

The Federal Reserve Board has selected four investment managers to run its mortgage-backed securities purchase program that will begin in early January and buy up to $500 billion in agency MBS by end of the second quarter. The Fed said it selected BlackRock Inc., Goldman Sachs Asset Management, PIMCO and Wellington Management Co. LLP to purchase Fannie Mae, Freddie Mac and Ginnie Mae MBS and employ a "passive buy and hold investment strategy." Credit Suisse analysts expect the Federal Reserve MBS purchases will drive mortgage rates down and boost the issuance of Fannie Mae, Freddie Mac and Ginnie Mae MBS. "We estimate that mortgage rates will get to 4.75% in the first quarter," said Mahesh Swaminathan, a Credit Suisse mortgage strategist. Fannie, Freddie and Ginnie combined MBS issuance has averaged $65 to $70 billion in recent months. "Monthly MBS issuance will rise to $100-$125 billion range in the first quarter of 2009," Mr. Swaminathan said. He expects Ginnie Mae MBS will make up one-third to 40% of monthly issuance.

The Treasury Department said it will invest $5 billion in Troubled Asset Relief Program funds in GMAC Financial Services to keep the auto and mortgage lender running as part of its effort to assist the domestic automobile industry. Treasury also is lending $1 billion to General Motors so the car maker can participate in a rights offering and support GMAC's reorganization as a bank holding company. The Federal Reserve Board approved GMAC's application to become a BHC on Dec. 24. GMAC said it would immediately expand its financing for car buyers thanks to its new access to low-cost funding. During the fourth quarter, the company's mortgage lending and servicing arm, Residential Capital, "dialed back" its lending, a spokeswoman said, because it had to pay servicing advances to investors on an increasing number of delinquent loans. ResCap services nearly $400 billion in mortgages. "We are hopeful that GMAC's bank holding company structure and the infusion of capital through the TARP program will improve ResCap's access to cost competitive capital, which will increase the amount of credit that we can extend to mortgage consumers," GMAC spokeswoman Jeannine Bruin said. GMAC originated $8.5 billion in single-family loans in the fourth quarter, down from $10.8 billion in the third quarter.

House prices fell by 2.2% from September to October and prices are off by 18% over the previous 12 months, according to Standard & Poor's/Case-Shiller housing price index that tracks existing home sales in 20 major metropolitan areas. "The bear market continues with home prices back to their March 2004 levels," said David Blitzer, chairman of S&P's index committee. Since the peak in house prices in mid-2006, the 20-city HPI is down 23.4% as of October 30. Over the previous 12 months, 14 of the 20 cities are reporting price declines in excess of 10%. Even Seattle and Portland are reporting annual rates of decline of 10.5% and 10.2% respectively. IHS Global Insight economist Patrick Newport expects house price declines will accelerate over the next few months. "Although prices are near equilibrium in many cities, they are likely to undershoot the equilibrium price on the way down-just as they overshot on the way up-because the number of homes on the market remains high," Mr. Newport said.

The American Financial Services Association is urging president-elect Barack Obama's transition team to consider several options to increase consumer credit, including bond insurance for asset-backed securities issued by finance companies. "Government must play a direct and immediate role in bringing liquidity and confidence back to the securitizations market through the purchase of securities or by issuance of insurance or guarantees," according to an AFSA report sent to the transition team. "Finance companies extend 40% to 50% of all consumer lending in the United States," AFSA executive vice president Bill Himpler said. But he noted that the flow of credit from finance companies to consumers is threatened by today's financial crisis. AFSA also wants the new administration to give Community Reinvestment Act credit to banks that extend credit to finance companies that are offering workouts to struggling borrowers.

Best known for its Funding Suite credit and AVM product, Cogent Road is expanding its offerings to enable lenders to go fully paperless with Business Spaces, an e-collaboration document management system designed to first help lenders eliminate paper and gradually move to full electronic processes. Business Spaces automates work processes by delivering documents, tracking their status and notifying key workgroups of issues that may delay closing. The moment a loan officer orders a credit report, a Business Space is created and the applicant is notified via e-mail. The loan applicant enters a private, secured environment through which he or she can view, e-sign or upload documents directly into the Business Space via computer, fax or an easy-to-use virtual printer. Further, the borrower can also communicate using micro-blogs and discussion threads integrated in different areas within the Business Space. With automatic audit logging, all borrower actions are effectively tracked for compliance purposes. As the loan progresses, the Business Space evolves into a collaborative workspace enabling communication between the loan officer and title agents, notary agents, appraisers and real estate agents.