Origination

Even though consumers are being foreclosed on in near-record numbers, customer satisfaction with home-equity lenders is on the rise, according to a new study released by J.D. Power & Associates. On a scale of 1000, overall customer satisfaction totaled 780 this year, compared to 766 in 2007. J.D. Power surveyed consumers about the application/approval process, closing, treatment by loan officers and problem resolution. When it came to customer satisfaction, Bank of America scored the highest nationwide with 811, followed by SunTrust (809) and Wachovia (807). According to survey figures compiled by National Mortgage News, BoA is the largest second-lien lender in the nation. The bank is in the process of buying Countrywide Financial Corp., the nation's largest residential lender. Countrywide ranked 10th in customer satisfaction with a score of 728.

Bill Beckmann, president of CitiMortgage will leave the unit by the end of June, MortgageWire has learned. A spokesman for Citigroup confirmed the departure, noting that, "We're developing a transition plan now." No immediate successor was named. Up until last year Mr. Beckmann managed only Citigroup's 'A' paper business. Like a handful of other large originators, Citigroup merged its nonprime business into its prime unit. Until the end of June Mr. Beckmann will oversee CitiMortgage, which is based in O'Fallon, Mo., Citi Home Equity, and Citi Residential Lending. CRL, though, which includes the old Argent Mortgage subprime wholesale division, is being closed. In a memo, Citigroup said Mr. Beckmann is stepping down "to spend more time with his family."

The average 30-year fixed mortgage rate rose from 5.98% to 6.08% over the seven-day period ended May 29, according to Freddie Mac's Primary Mortgage Market Survey. The average 15-year fixed mortgage rate rose from 5.55% to 5.66%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages increased from 5.61% to 5.62%, and the average rate for one-year Treasury-indexed ARMs fell from 5.24% 5.22%, Freddie Mac reported. Fees and points averaged 0.6 of a point for 30-year fixed-rate mortgages and 0.6 of a point for 15-year fixed-rate mortgages and ARMs. "Mortgage rates drifted up this week over market concerns that the Federal Reserve Board may raise short-term rates later this year," said Frank Nothaft, Freddie Mac's chief economist. "A recent working paper published by the Federal Reserve Bank of Minneapolis suggested that the recent rate cuts run a risk of unhinging long-term market expectations for inflation. Indeed, market inflation expectations increased over the last few weeks and the federal funds futures market now has a 25 basis point rate hike priced in by the end of the year." A year ago, the average 30-year and 15-year fixed mortgage rates were 6.42% and 5.55%, respectively, and the average hybrid and one-year ARM rates were 5.62% and 6.19%, Freddie Mac said.

Standard & Poor's has dropped ratings on two closed-end second-lien, primarily fixed-rate residential mortgage-backed securities transactions to D. The ratings of GSAMP Trust 2006-5, classes A-1 and A-2 of Long Beach Mortgage Loan Trust 2006-A, classes A-1 through A3, were affected. "The downgrades reflect the deterioration of the collateral pools as these transactions have continued to realize monthly net losses at an unprecedented pace," S&P said.

1st Reverse Financial Services LLC has hired former regulator Dennis Thomas to be its new chief financial officer. Mr. Thomas will be responsible for all fiscal matters and reporting activities for 1st Reverse, a subsidiary of Wilmington Savings Fund Society FSB. Previously, Mr. Thomas was director of internal audit for the Federal Home Loan Bank of Chicago where he directed the GSE's staff in a variety of audits, including the Mortgage Partnership Finance, derivatives and hedging strategies. He also served as a regional accountant for the Office of Thrift Supervision.

Mission Capital Advisors, a commercial, residential and consumer loan and asset sale advisor, has brokered the sale of two residential mortgage loan portfolios with a balance of $195 million. The first deal consisted of $157 million of home loans, 73 of which are performing and 437 of which were subperforming or nonperforming first and junior liens. The deal also included 78 real estate-owned assets. The second deal consisted of a $37 million portfolio of 99 performing and 68 subperforming or nonperforming first and second liens. That deal included 105 ARM loans and 62 fixed-rate loans. Joseph Runk Jr., principal of Mission Capital Advisors, said that despite a "constrictive environment," there are still "a significant number of buyers entering the market who are seeking to add to their portfolios."

In an effort to improve liquidity, Impac Mortgage Holdings Inc., a real estate investment trust headquartered in Irvine, Calif., is making an offer to the holders of its Series B and Series C preferred stock to exchange those shares for common stock in the company. If approved and completed, the swap would end Impac's obligation to pay or accrue quarterly dividends on the preferred stock, allowing it to use or preserve the cash for other purposes. Joseph Tomkinson, chairman and chief executive, said, "The possible exchange offer to swap preferred for common stock could have a very positive effect on the liquidity of the company. If successful, not only will it reduce our fixed-dividend expense, it will also strengthen the company's capital structure. Ultimately a successful exchange offering will help management in its attempt to rebuild shareholder value." For 2007, Impac recorded a loss of $2 billion.

Despite its financial problems, Countrywide Financial Corp. ranked first among all residential originators in the first quarter, funding $73 billion in home mortgages, according to exclusive survey figures compiled by National Mortgage News. Wells Fargo Bank ranked a close second with fundings of $65 billion. Meanwhile, CFC will hold a special meeting of shareholders on June 25 to vote on the sale of the company to financial services giant Bank of America. In January, BoA offered $7 a share for CFC. Over the past week its share price has fluctuated between $4.50 and $5.50. On Wednesday, BoA named Barbara Desoer, its chief technology and operations officer, to head the combined mortgage operations of the two. David Sambol, the Countrywide executive anointed by BoA in January to manage the combined mortgage operations, abruptly announced his retirement on Wednesday.

The Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ending May 23, 2008, which showed mortgage loan application volume was 593.3, a decrease of 4.6% on a seasonally adjusted basis from 621.6 one week earlier. On an unadjusted basis, the Index decreased 4.6% compared with the previous week and was down 7.5% compared with the same week one year earlier. Similarly, The Refinance Index decreased 8.9% to 2013.5 from 2210.5 the previous week and the seasonally adjusted Purchase Index increased 0.1% to 352.7 from 352.5 one week earlier. The Conventional Purchase Index increased 0.8% while the Government Purchase Index (largely FHA) decreased 2.2%. On an unadjusted basis, the Conventional Purchase Index increased 0.1% to 517.7 from 517.0 the previous week. The four-week moving average for the seasonally adjusted Market Index is up 1% to 636.2 from 629.6. The four-week moving average is up 0.9% to 366.2 from 363.1 for the Purchase Index, while this average is up 1.2% to 2230.0 from 2202.9 for the Refinance Index. The refinance share of mortgage activity decreased to 46.1% of total applications from 48.2% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.3% from 10.0% of total applications from the previous week.

A survey conducted for the National Apartment Association found that 67% of current renters do not plan to become homeowners in the next year. Moreover, 80% of those surveyed said the state of the U.S. housing market would not improve over the next six months. "The country is deep into the discussion of the economic fallout of subprime mortgage lending. However, little attention has been paid to how the crisis is impacting people's choices to stay in rental homes and wait out the storm," said NAA president Douglas Culkin. "The results of this survey reflect what our membership is experiencing across the country. Renters are not eager to take a chance on homeownership this year. If the economy improves, that trend may abate, but, for now, people are generally staying put." The survey also found that those who believe in the financial benefits of renting vs. owning has increased by five percentage points over one year ago, from 43% up to 48%. "Just last week, the Commerce Department cited that the main reason for an upswing in U.S. homebuilding is the construction of rental properties - not single-family homes - further supporting our findings of what the average U.S. adult is experiencing," added Mr. Culkin.