Originations

Wells Fargo Home Mortgage, Des Moines, Iowa, has decided to "temporarily suspend" the purchase of nonconforming mortgage loans through its wholesale channel. The move was effective on Jan. 5. A statement from a company spokesman said "Wells Fargo has long been the nation's No. 1 retail mortgage lender and a leading third-party lender. Due to low market demand and higher risks, we have decided to temporarily suspend nonconforming product offerings through our wholesale channel."

Agree Realty Corp., Farmington Hills, Mich., has exercised its option to extend the maturity date of its $55 million line of credit from November 2009 to November 2011. All other terms of the agreement remain unchanged. This includes that the company can continue to choose to pay interest on the facility at a rate of 100 basis points over Libor or at the prime rate. Excluding this facility, the company has no debt expirations before 2015.

Avista Solutions has integrated the Avista Agile loan origination system with DocMagic, a loan document solution provider. The integration to DocMagic streamlines the loan document production process for Avista Solutions customers, giving Avista customers access to DocMagic's e-disclosure and e-sign features. DocMagic's interface with Avista's Agile LOS is a direct interface. DocMagic's e-disclosure feature allows lenders to deliver and get receipt confirmations of disclosure documents via e-mail. DocMagic monitors the entire e-disclosure process, notifying lenders when borrowers view their documents and mailing printed copies of the documents to borrowers if they fail to view them electronically within 48 hours.

Roughly 50 different investors received confidential bid packages on IndyMac Bank FSB, the insolvent thrift that is also the nation's ninth largest residential servicer. A spokesman for the Federal Deposit Insurance Corp. also clarified that the investor group awarded IndyMac this past Friday is putting roughly $2.9 billion into the deal: $1.6 billion that represents the difference between the thrift's liabilities and the value of its assets (after the assets have been marked-to-market) and another $1.3 billion in cash that will be used to capitalize the re-constituted lender/servicer. "It's failed bank math," he said. The spokesman said at least 80 different investors were invited to bid but declined to say how many were involved in the final bid process. Of the 80, 50 received bid packages. Late last week the FDIC agreed to sell the Pasadena, Calif.-based IndyMac to IMB Management Holdings, a consortium of hedge funds led by Dune Capital, J.C. Flowers, Paulson & Co., and others. IndyMac has $13.9 billion in assets and $12.3 billion in liabilities, said the spokesman.

The National Association of Realtors' Pending Home Sales Index fell 4% between October and November and is now at the lowest point since the trade group started tracking this data in 2001. Job losses and low consumer confidence were the driving factors, the group said. The new index is 82.3, compared with 85.7 in October and 86.9 for November 2007. And according to NAR chief economist Lawrence Yun, "December's housing market activity could be comparably lower due to ongoing problems in the economy, so a real-estate focused stimulus plan is urgently needed. With a properly real-estate focused stimulus measure, home sales could rise more than expected, by more than 10% to 5.5 million in 2009, and easily begin to stabilize home prices in many parts of the country." NAR calls for expanding a $7,500 tax credit to all homebuyers and permanently raising the conforming loan limits. "The unique housing affordability conditions in today's market underscore the opportunities in giving consumers the necessary incentives to stimulate our economy through a housing recovery," Mr. Yun said.

The Department of Housing and Urban Development has agreed to delay for 90 days the implementation of a RESPA rule that would ban builders from offering discounts to home buyers that use their affiliated mortgage companies. The National Association of Home Builders is trying to overturn the "required use" section of the new Real Estate Settlement Procedures Act rule that was slated to go into effect Jan. 16. The builders have filed a complaint in a U.S. district count in Alexandria, Va., seeking an injunction to block implementation. A HUD spokesman said the department agreed to postpone the effective date so its attorneys "can argue the case on the merits of the issue." NAHB officials could not be reached for comment.

An accused participant in a mortgage fraud scheme has pled guilty to conspiring to commit mail fraud and wire fraud. Seth Srader entered his plea on Dec. 11, 2008, before U.S. District Judge Keith Ellison. Srader was charged in a mortgage fraud scheme involving the recruitment of individuals to purchase residential properties at or near 100% financing using their good credit. The borrowers were paid from the loan proceeds for their participation in the acquisition of the property. Loan officers at mortgage brokerage offices were utilized to furnish false and fraudulent information to the lenders. Loan proceeds would be disbursed to one or more of the conspirators through checks or wire transfers from the title company to a bank account established in an assumed name. Srader participated in the scheme as a borrower, purchasing two residential properties in the Houston area, borrowing a total of $869,310. Each loan was obtained using false and fraudulent information. The residential loans Srader obtained during the scheme eventually fell into default. Srader has been permitted to remain free on bond pending sentencing, which has been set for March 3, 2009.

Ameriana Bancorp, New Castle, Ind., along with joint-venture partners First Merchants Corp., Muncie, Ind., and Mutual First Financial, Muncie, has closed on an agreement to sell the assets of Indiana Title Insurance Co. to IN Title Co., a newly formed company led by current ITIC executives. Ameriana's ownership interest in ITIC is 20.94%. Ameriana expects to incur a loss of approximately $225,000 on the sale of this interest, which will be reported in its fourth quarter 2008 results. ITIC has offices in New Castle and Muncie. Jerome J. Gassen, president and chief executive of Ameriana Bancorp, said, "As part of our continued efforts to strengthen our commercial focus and reach new markets, we have made the decision to dispose of our interest in this business that is, at best, ancillary to our primary banking operations. We intend to redeploy the capital from this business to support more attractive growth opportunities in our core operations."

Navy Federal Credit Union, Vienna, Va., after doing $5.7 billion in mortgage originations in 2008, has committed $6 billion to originate mortgage loans for its members in 2009. The 2008 production volume was the second highest in the company's history. According to SourceMedia's Mortgage Industry Directory, Navy FCU did $5.1 billion in 2007 and $4.8 billion in 2006. Cutler Dawson, president and chief executive said that because the CU did not do subprime loans, it "saw a strong 'return to trust' in 2008 and we're committed to continuing that momentum in 2009."

After zooming up 36 basis points between September and October, the Eleventh Federal Home Loan District Cost of Funds Index increased a more modest three basis points between October and November. The Index, as computed by the Federal Home Loan Bank of San Francisco, was 3.155% for November, compared with 3.125% for October. This is the third consecutive increase for this index, which because of its weighted average computation is known as a lagging indicator. Any impact of the Federal Reserve's drastic rate cut is not likely to be seen in COFI for between three and six months from now. To calculate the November index, FHLB-SF used average total funds of $79.3 billion and total interest expense of $208.4 million. More information is located at http://www.fhlbsf.com.

The National Association of Realtors is demanding an explanation for Fannie Mae's latest loan fee hike, warning that it could push more borrowers into Federal Housing Administration loans and counter the government's effort to lower the cost of mortgage financing. In a letter to the GSE's regulator, Realtors president Charles McMillan notes that Fannie provided no "justification or even explanation for the increases" even though it is operating in conservatorship and under government control. A Federal Housing Finance Agency spokeswoman said the agency is "reviewing the Realtors' letter." Fannie Mae continues to charge a 25 basis point adverse market fee on all loans. Starting April 1, Fannie Mae is raising its delivery fees on certain cash-out refinancings, two-unit properties, condominiums, interest-only loans and loans with subordinate financing, according to a Dec. 29 letter to its lenders. The standard delivery fee on a mortgage to a borrower with a 670 credit score and a 20% down payment would go up by 75 basis points to 2.5%. "Is the purpose of increasing fees to shift higher risk borrowers to the FHA insurance program? What will the impact of such a move be in terms of risk and cost to the government and the taxpayer?" the NAR letter says.

The Tennessee Commissioner of Commerce and Insurance is now requiring fingerprints from certain license and registration applicants, including mortgage lenders, brokers, servicers and loan originators. According to written analysis from iComply, which is authored and published by a team of mortgage banking attorneys, there must be provisional authorization for mortgage loan originators to conduct business while awaiting registration approval from the commissioner. The requirement became effective on January 1. In other regulatory news, with the start of the new year North Carolina is requiring mortgage servicers to be licensed by the its Commissioner of Banks before acting as a servicer. The bill also changes the "brick-and-mortar" requirements for mortgage brokers to specify that a broker's physical location in North Carolina may not be a home or residence.

Now that GMAC Financial Services has received both bank holding company approval and a $5 billion investment from the U.S. Treasury, one of its next moves will be to ramp up its deposit gathering capabilities. A spokeswoman for the company said GMAC's bank, GMAC Bank of Utah, will remain as an online bank. She said marketing plans regarding deposits could be announced over the next few weeks. GMACFS also controls Residential Capital Corp. of Horsham, Pa., a $391 billion servicer. In late December the Treasury invested $5 billion in GMACFS, by purchasing preferred stock that carries an 8% yield. "The overall health of GMAC has greatly improved," said the spokeswoman. The company recently completed a note exchange offer that fell short of its goals but the government investment in the company boosted its immediate financial outlook. The warehouse lending platform of GMAC is housed in its bank.

Federal Housing Administration lender Shore Mortgage, Birmingham, Mich., which is licensed in 25 states, said it is planning to significantly grow its origination staff due to rate-driven increases in its business and its reputation for swift mortgage closings. President Robert Rahal said in a prepared statement that the company is seeking to hire an additional 80 to 100 new employees and has a training program for those lacking experience. He said positions the company is seeking to fill include loan officers (10-20 people per month for the next three months), underwriters, processors, closers, post-closing specialists and account executives. The company is licensed to do business in Alabama, Arkansas, Arizona, Florida, Georgia, Illinois, Indiana, Maine, Michigan, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Utah, Virginia, Washington and Wisconsin.

Fannie Mae bought just $29.65 billion in mortgages from its seller/servicers in November, its worst purchase month of the year. The government sponsored enterprise also issued $23.8 billion in mortgage-backed securities during the month, a low for the year as well. Its commitments plunged to a yearly low of $21.19 billion in November too. However, since November ended mortgage rates have plunged and the GSE's December commitments should show an increase. Fannie, and its sister company, Freddie Mac, have been operating under a government conservatorship since September.

A consortium of private equity investors led by Dune Capital Management has agreed to pay $13.9 billion to acquire IndyMac and its $158 billion servicing portfolio from the Federal Deposit Insurance Corp. The new owners of IndyMac -- which also includes J.C. Flowers & Co., Paulson & Co. and others -- will control the nation's 10th largest servicing company, according to figures compiled by National Mortgage News and the Quarterly Data Report. Besides the servicing portfolio and platform, Dune and its partners will take control of: a $16 billion loan portfolio, $6.9 billion in securities, the Freedom Financial reverse mortgage business (including $20.2 billion in receivables) and 33 retail branches. The sale is not without risk to the government. FDIC has agreed to share losses on some of the thrift's loans and will be on the hook for $2 billion in construction and other loans made by the Pasadena-based IndyMac. The investors formed IMB Management Holdings to buy the thrift, which will be structured under a holding company called IMB HoldCo LLC. Steven Mnuchin, chairman and co-CEO of Dune, will be chairman and CEO of IMB. The sale was announced Friday afternoon. At least one other bidder -- also a private equity consortium -- was vying for IndyMac, which was created by Countrywide Home Loans in the 1980s as a non-conforming loan conduit. The investor consortium will capitalize the institution with $1.3 billion in cash. IMB will continue IndyMac's much ballyhooed loan modification program where troubled mortgages are restructured, providing consumers with easier payment plans.

The Federal Deposit Insurance Corp. has trimmed the final list of IndyMac bidders down to two private equity consortiums: Dune Capital Management and one other, according to investment banking sources. The identity of the other consortium could not be ascertained at press time. "The deal still isn't done," said the source. "We could hear today or any time over the next few days." The FDIC declined to comment. One source, requesting anonymity, said Apollo Management is out of the running as a bidder. The agency prefers to sell IndyMac FSB of Pasadena, Calif. in a whole bank transaction instead of the government retaining some of its troubled assets. The agency, noted one investment banker, is very focused on getting private equity investors to put as much money as possible at the bank holding company level in the event more cash is needed at an institution. "The problem with private equity investors is that they want as much control as possible but they want limited liability in case something goes wrong," said the investment banker. The FDIC had hoped to complete the deal by year-end but has not. Complicating the sale of IndyMac's $180 billion residential servicing portfolio is large buyback requests forced upon the failed thrift by Fannie Mae. Fannie said it is waiting on "information from the FDIC with regard to servicing valuations and confirmation of the identity and eligibility of the proposed buyers in order to finalize an agreement." Fannie, which is operating under a federal conservatorship itself, added that it "will continue to work constructively with the FDIC and IndyMac Federal Bank to reach a resolution in the near term that is in the best interest of all parties involved." IndyMac was taken over the government last summer and has operated under a conservatorship ever since.

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.