Origination

For the second consecutive month, the amount of new primary mortgage insurance written by the members of the Mortgage Insurance Cos. of America was at the lowest point since the group adopted its current reporting methodology. In September, there was just $8.1 billion of total primary new insurance written ($36 million of it through the bulk channel), compared with August's $10.2 billion (zero through the bulk channel). In August 2001, MICA adopted its current reporting methodology. The MICA numbers do not include any data from Radian Group or Triad Guaranty; the latter company is currently in run-off. The number of applications received slipped from 65,546 in August to 62,209 in September. The amount of primary insurance in force at MICA members fell from $801.7 billion in August down to $801.3 billion in September. The amount of pool risk written in September was $19.9 million, down from $24.2 million in August. The cure default ratio was 53.9%, with 41,400 cures and 76,776 defaults reported during the month.

A group of credit unions calling themselves the Credit Union Housing Roundtable is calling on their regulator, the National Credit Union Administration, to make $1 billion of low-cost loans available to help consumers refinance troubled mortgage loans. The proposal comes as banking regulators are preparing a plan to fund mortgage refinancings through banks for millions of homeowners facing foreclosure or in delinquency on their home loans. "We think that credit unions are in a position to help and we ought to be able to create our own version that is not going to be at the taxpayers' expense," said Gary Oakland, president of BECU (formerly Boeing Employees CU), one of the organizers of the group. --Credit Union Journal

Blaming its performance on "several significant credit and asset disposition charges," Flagstar Bancorp Inc., Troy, Mich., lost $62.1 million ($0.79 per share) in the third quarter, compared to a net loss of $32.1 million ($0.53 per share) in the same period last year. The company, which ranks 13th among all residential funders, according to the Quarterly Data Report, suffered $162.7 million (pre-tax) of credit and asset disposition charges during the quarter, including a $17.1 million decrease in loan administration income because of the failure by Lehman Brothers to honor a commitment to purchase $65 million in excess servicing. (Lehman filed for bankruptcy protection this fall.) In 3Q, Flagstar originated $6.7 billion in mortgages, an 18% decline from last year.

Zaio Corp. of Canada abruptly pulled the plug on its U.S. property database unit, dismissing its top officers. The end came on Thursday when Zaio issued a press release confirming the shut down. The company said that the division's top officers, James Kirchmeyer and Douglas Vincent have resigned. Zaio, which bills itself as a technology and database company, says its secure database has 140 million property records and 24 million photographs.

JPMorgan Chase said it is expanding it loan modification program to keep more people in their homes and plans to extend the effort to its Washington Mutual and EMC Mortgage divisions. "While implementing these enhancements, Chase will not put any additional loans into the foreclosure process," the company said. (JPM bought WaMu last month and took control of EMC when it acquired Bear Stearns.) As part of this initiative, the lender is setting up regional counseling centers, hiring additional councilors and introducing new financing alternatives. "The enhanced program is expected to help 400,000 families -- with $70 billion in loans -- in the next two years," the banking company said.

The White House is reviewing several foreclosure prevention programs but is not ready to endorse a new loan modification program that the Treasury Department and the FDIC are working on. "We're doing an analysis right now on several different ideas" to help more homeowners, said the President's press secretary Dana Perino. During a press briefing she said the White House is willing to consider the FDIC proposal, which involves guarantees to increase loan modifications. She said the Administration wants any program to strike a balance in terms of effectiveness, fairness and protecting the taxpayer. After her remarks, Senate Banking Committee chairman Christopher Dodd, D-Conn., sent a letter to President Bush urging him endorse the FDIC proposal and direct Treasury to create the new program. The program is needed to "address the exploding foreclosure crisis" and the country cannot afford "further delay," Sen. Dodd says in the letter, which was signed by eight other committee Democrats.

Suffering from decimated home values and a lack of customers -- not to mention no secondary market for non-prime -- mortgage bankers saw their loan volumes fall by 9% in the third quarter, according to preliminary survey figures compiled by National Mortgage News. The results are based on survey figures filed by ten firms, none of which are top ten lenders. However, the results show one intriguing trend: some lenders are posting gains in wholesale or correspondent production -- a likely response to all the companies that have left those channels. (For the full story and the rankings see the Monday edition of NMN.)

Federal law enforcement officials are close to announcing settlements in several mortgage and securities fraud probes that were started in 2007, according to one litigator watching the cases. "There are some discussions that are active," said attorney James Wareham of the Paul Hastings law firm. Settlements involving lenders and even home builders could be announced in a few weeks but there are no timetables, said Mr. Wareham, who supervises 300 litigators. The Department of Justice, and the Securities and Exchange Commission want to close out some of the cases and re-direct experienced investigators to bigger cases involving packaging of mortgage-backed securities and collateralized debt obligations, Mr. Wareham said in an interview. DOJ is investigating at least 20 subprime lenders and several Wall Street firms.

Roughly 48% of Nevada homes that are mortgaged have negative equity -- making the state, by far, the hardest hit when it comes to the nation's housing crisis, according to a new report issued by First American CoreLogic. After Nevada, Michigan ranked second in negative equity (39% of homes with mortgages), followed by Florida and Arizona (29% each), and California with 27%. FACL based its findings on a database of 42 million properties where there's a first and/or second lien. Nationwide, 18% of homes have negative equity, the company found. During the housing boom, Arizona, California, and Nevada where among the fastest growing in terms of price appreciation. Michigan and Ohio (where 22% of mortgaged homes have negative equity) have been hard hit by the decline in the U.S. auto industry.

As a result of condo construction lending, which led to significant increases in loan loss provisions, Corus Bankshares, Inc., Chicago, took a net loss for the 2008 third quarter of $128 million down from a net income of $35.5 million in the third quarter of 2007. The year-to-date 2008 results were a net loss of $139.7 million compared to net income of $104.3 million in 2007. "We are operating in an economic environment that is more challenging and volatile than any we have ever seen," said Robert J. Glickman, president and chief executive officer. "Our stock price has also suffered tremendously as a result. Unfortunately, we anticipate these difficulties will persist for some time." As of September 30, 2008, Corus Bank's capital totaled approximately $971 million.