FDIC Selling Mortgage Assets of Failed Banks; "Good" Foreclosure Stats; Updates from: Chase, WAMU, USB, Wells, FAMC,SunTrust
As the lyrics from "Green Acres" noted, "New York is where I'd rather stay. I get allergic smelling hay. I just adore a penthouse view. Dah-ling I love you but give me Park Avenue."
New York regulators on Friday closed the Park Avenue Bank with total assets of $520 million and total deposits of $494 million. The FDIC has arranged for Valley National Bank (NJ) to run it. (Valley National is also taking over LibertyPointe Bank, which was shuttered Thursday.) Down in Florida Old Southern Bank was shut down, and will be run by Centennial Bank out of Arkansas. And in Louisiana, Statewide Bank was closed by the Louisiana Office of Financial Institutions, which appointed the FDIC as receiver. Home Bank, also based in Louisiana, will assume all of the deposits.
There is indeed movement in the secondary markets for mortgages. The FDIC sold $1.81 billion of notes backed by 103 non-agency residential mortgage backed securities (RMBS) from seven failed bank receiverships. "The transaction was met with robust investor demand, with over 70 investors participating across fixed and floating rate series." The investors included banks, investment funds, insurance funds and pension funds. The aggregate unpaid balance of the 103 securities was approximately $3.6 billion at the time of the sale, and the timely payment of principal and interest due on the notes are guaranteed by the FDIC, and that guaranty is backed by the full faith and credit of the United States.
Attribute it to whatever you like, RealtyTrac announced that foreclosure filings increased in February at "only" a 6% year-over-year rate, the slowest in four years, and actually declined from January's number. Perhaps those foreclosure-prevention programs, legislation, and other processing delays are capping monthly foreclosure activity. Default notices, meanwhile, were up 3% from the prior month but down 3% from a year earlier. Nevada residents can continue to chant, "We're #1" for the 38th month in a row: 1 in every 102 Nevada homes received a filing, more than four times the national rate. READ THE MND STORY INCLUDING A DISCUSSION ON SHADOW INVENTORY
News came out on Friday that WAMU has tentatively resolved disputes with JPMorgan Chase and the FDIC over $4 billion of disputed deposit accounts. As we remember, in 2008 the FDIC seized WAMU and sold its assets to JPMorgan for $1.9 billion, but this resulted in lawsuits over the deposits. JPMorgan has agreed to turn over the money to WAMU after deducting $172 million as its share of tax refunds received in exchange for 70% of expected tax refunds resulting from WAMU's prior operating losses that are valued at about $3 billion, with Washington Mutual receiving 30% and other tax refund benefits.
Chase correspondent instituted several overlays to its VA program, along with miscellaneous policy clarifications that were made to existing VA guidelines and do not represent a change to policy. To help its correspondent clients, Chase created a VA Overlay Matrix which can be found on its website. The areas that the overlays impacted included 4506-T documentation, bankruptcy and child support documentation, credit scores, down payment assistance programs, IRRRL underwriting, etc. Any client of Chase's is best served by digging into the details. Chase also issued a Credit Policy Income Update, a must-read for any underwriter.
Perhaps more importantly, however, is Chase's clarification of its portfolio Non-Agency/Jumbo product introduced last October to correspondent customers. The product is different from Chase's Agency or Government products in that Correspondents must be approved by the Chase Customer Management Group to be eligible to sell these loans to Chase. The LTV/CLTV will be reduced if the subject property is located in a Chase-defined distressed market, all condominium projects must be reviewed and approved by the Chase Project Approval Group, streamline condominium project classification is not eligible, primary residence only, and the minimum loan amount is Agency loan limits plus $1, and the maximum loan amounts available up to $2,000,000. Credit policies may be different than agency guides, and appraisals must be ordered from Chase-approved AMC's.
Union Bank, ex-Union Bank of California, has a new version of the IRS form 4506-T. Their customers have been notified, and it is on their website.
Franklin American informed their patrons that income documentation will be required on all FHA Streamline transactions with case numbers issued on or after March 11, but that this doesn't replace FAMC's requirement for the Lender Employment and Income Certification. Depending on the income, various types of documentation are required. For example, for W-2 wages, a verbal VOE is required within 10 days of closing. Self-employed borrower loans need verification from a CPA, quarterly tax payments, or a business license. A dozen types of income, a dozen types of proof.
It seems that every year funding for the USDA Rural Development loan program will be eliminated, and every year it comes back. Maybe that is an exaggeration, and frankly I don't see Congress and the President cutting home ownership aid to farmers and those in rural areas. But this year the situation is back, and Wells Fargo's wholesale group announced that the USDA announced that program funding for the Single Family Housing Guaranteed Loan Program (SFHGLP) will likely be exhausted by the end of April and therefore Wells will no longer accept new submissions of RD loans. READ MORE
SunTrust reminded its clients that starting April Fool's Day onward all correspondent clients must be MERS members, able to register and transfer loans through MERS and to create unique MIN numbers using "org id" assigned by MERS. SunTrust Mortgage Identification Numbers (MINs) will not be accepted on loans closed on or after April 1, 2010.
U.S. Bank Home Mortgage Wholesale Division made several revisions to its Super Conforming, DU Refi Plus and VA programs. For its FHLMC jumbo fixed super conforming product, for 1-4 unit properties the maximum loan amount will be capped at the lower of the maximum county limit or $1 million, with no manual underwriting. County limits can be found HERE
USBHM also reminded clients that with Fannie's DU 8.0 will allow borrowers to be removed from the new loan on a DU Refi Plus Streamline transaction, provided that proof/documents are in the loan file at the time of underwriting submission, to allow the borrower to be removed (such as proof that the remaining borrower has been making payments). Starting tomorrow, USBHM has established new 2 unit and 3-4 unit LTV's for purchase and cash Out Refinance transactions of 90% and 80% respectively. The investor also put out new FICO score requirements for IRRRL transactions, defined credit score requirements, and stated, "IRRRL transactions will now limit investment properties to transactions that involve the refinance of a VA loan currently serviced by USBHM. IRRRL transactions secured by investment property where USBHM is not the servicer of the existing mortgage are not eligible."
This is better than watching the ball drop in Times Square! The Fed purchased $10 billion (net) in agency mortgage-backed securities over the past week, bringing its total net purchase to about $1.226 trillion. That leaves the Fed with a little under 3 weeks to purchase an additional $25 billion - after that we may have to watch them sell it. Tomorrow we have a Fed meeting, and any surprises in the Fed's statement could produce a large reaction - but the end of their program is no surprise. HERE are some charts and more color.
After a decent Retail Sales number on Friday drove rates higher (Super Bowl-related electronic sales?), they bounced right back throughout the day after a weak University of Michigan Consumer Confidence number, and some investors improved pricing. Insurance companies, the Fed, money managers, and hedge funds were in buying mortgages, as has become standard. Much of the buying has been in higher coupons, possibly because of the impact of Fannie & Freddie's buy downs. Origination was "moderate". One thing to note is that dealers are seeing some interest from investors in buying pools of 15-yr mortgages. READ MORE
As opposed to last week, this week is full of scheduled economic news to move the equity and bond markets, the most important being the inflation twins, PPI and CPI. Today we have the Empire State Manufacturing Survey, along with Industrial Production and Capacity Utilization. Tomorrow we have some Import & Export numbers, and New Residential Construction. Wednesday is the Producer Price Index; Thursday is Initial Claims, the Consumer Price Index, and the Philly Fed. Pre-numbers this morning we find the 10-yr at 3.70% and mortgages better by about .125 in price.
(Rated PG)
Into a Belfast pub comes Paddy Murphy, looking like he'd just been run over by a train. His arm is in a sling, his nose is broken, his face is cut, and bruised, and he's walking with a limp.
"What happened to you?" asks Sean, the bartender.
"Michael O'Connor and me had a fight," says Paddy.
"That little O'Connor," says Sean, "He couldn't do that to you; he must have had something in his hand."
"That he did," says Paddy, "a shovel is what he had, and a terrible lickin' he gave me with it."
"Well," says Sean, "you should have defended yourself. Didn't you have something in your hand?"
"That I did," said Paddy, "Mrs. O'Connor's ***, and a thing of beauty it was; but useless in a fight."