IMFnews 1/7/2009
Breaking News and Market Trends in the Residential Mortgage Industry

Some Large Lenders Continue to Focus on ARM Lending

Despite a widespread push to encourage "safe" fixed-rate mortgage lending in 2008, a surprising number of major lenders continued to pump out quite a bit of adjustable-rate mortgages. According to new numbers compiled by Inside Mortgage Finance, Chase was the largest ARM lender in the first three quarters of 2008 with $36.8 billion in volume and a hefty 37 percent market share. ARMs accounted for 23 percent of Chase's total mortgage originations during the nine-month period. Other major lenders with heavy ARM lending included Bank of America (20 percent) and PHH Mortgage (29 percent). Two lenders, ING Bank and Astoria Federal, both reported ARMs accounted for more than 90 percent of their mortgage business last year. But most of 2008's ARM lending appeared to come in the first three quarters of the year. Preliminary fourth quarter data show that ARMs accounted for only about 3 percent of Fannie Mae's and Freddie Mac's business and even less for FHA.

Mortgage Industry Looks for Details of Possible Borrower "Bailout"

With a new Congress starting work this week on avoiding an economic meltdown, there was growing speculation that some sort of foreclosure relief plan for mortgage borrowers definitely will be part of the legislative mix. Specifically, mortgage servicers and investors are looking for a foreclosure relief plan that will reduce costs or exposure associated with loan modifications and other borrower workouts. Loss mitigation strategies in 2009 is the subject of an Inside Mortgage Finance audio conference scheduled for next Thursday, Jan. 15, at 3:30 pm ET. Hear about the latest enhancements and alternatives in mortgage loss mitigation from HUD, the FDIC, a legal expert and the largest mortgage servicer in the country at this important event. Click here () for more info.

HUD Delays RESPA Rule Implementation in Wake of Lawsuits

In response to a legal challenge mounted by the National Association of Home Builders, HUD today agreed to delay the implementation of the so-called "required use" provision in its recently finalized RESPA rule for 90 days. The provision, which prohibits the offering of consumer discounts or incentives that are tied to the use of a settlement service affiliate, applies only to home builders but not to settlement service providers. HUD claims the NAHB had requested a delay in the implementation of the provision, which is slated to take effect Jan. 16, but forced the agency's hand by filing a lawsuit seeking a temporary injunction. The National Association of Mortgage Brokers also has sued HUD over the new RESPA rule.

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Inside Mortgage Finance Audio Conference:

Loss Mitigation Strategies 2009

January 15, 2009 3:30 PM ET

Learn about the latest loss mitigation strategies at a new Inside Mortgage Finance audio conference on January 15, 2009.

To register, go to www.imfpubs.com/audioconferences

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The articles below are from the latest issues of newsletters published by Inside Mortgage Finance Publications. Full-text access is available via newsletter subscription or pay per view.

Biggest RESPA Losers Seek Injunctive Relief

Mortgage broker and homebuilder trade associations have filed lawsuits in federal court that could delay the implementation of a controversial final rule overhauling disclosure procedures under the Real Estate Settlement Procedures Act. The more urgent action was taken by the National Association Home Builders, which is trying to stop a provision redefining "required use" from taking effect... More...

http://www.imfpubs.com/issues/imfpubs_irs/20_1/news/1000010638-1.html

Frank Seeks to Refocus TARP on Foreclosures

Congress convenes this week with a heavy legislative plate of high-priority issues pertaining to the economy and the financial system with significant implications for the mortgage industry. House Financial Services Chairman Barney Frank, D-MA, is expected to introduce legislation requiring the use of Troubled Assets Relief Program funds to curb foreclosures and lower... More...

http://www.imfpubs.com/issues/imfpubs_irs/20_1/news/1000010639-1.html

Groups Propose Various Measures To Cut Rates, Curb Foreclosures

Industry and consumer groups are continuing to push for initiatives to reduce mortgage interest rates and curb worsening default and foreclosure rates. The National Association of Realtors has put forth a proposal based on an idea floated by the Treasury Department in which banks are encouraged to offer purchase home mortgages with a 4.5 interest rate. The proposal's aim is to jump... More...

http://www.imfpubs.com/issues/imfpubs_irs/20_1/news/1000010642-1.html

Regulators Relent on Stringent GSE Appraiser Reform Proposal

Mortgage lenders won a major concession last week under a revised appraisal code agreement between the New York Attorney General's Office, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. Under the terms of the revised agreement, lenders will still be able to use their own appraisers, either in-house or through affiliates, provided they erect firewalls between the loan... More...

http://www.imfpubs.com/issues/imfpubs_irs/20_1/news/1000010643-1.html

IOs Were the GSEs' Alternative Mortgage Product of Choice as 2008 Came to a Close

Interest-only mortgages dominated sales of alternative mortgages to Fannie Mae and Freddie Mac in November 2008 in a trend that looks to continue this year. According to the Inside Mortgage Finance MBS Database, the government-sponsored enterprises pooled $1.52 billion of interest-only mortgages, jumbo mortgages and 40-year mortgages in... [Includes one chart and one graph] More...

http://www.imfpubs.com/issues/imfpubs_ibcl/2009_1/news/1000010616-1.html

Non-Prime Loan Modifications Expected to Increase

Non-prime servicers are expected to increase their loan modification efforts in 2009 as the sector's performance continues to decline. Meanwhile, a debate is brewing about the effectiveness of the mods completed thus far. Completed subprime loan modifications increased slightly in November to 74,000, up 1,000 from the previous month, according to the Hope Now Alliance. Subprime repayment plans... More...

http://www.imfpubs.com/issues/imfpubs_ibcl/2009_1/news/1000010619-1.html

MBA Defends its Dire Cramdown Predictions

The Mortgage Bankers Association recently defended the doom and gloom it predicted for borrowers if Congress allows cramdowns on primary residences. The defense came in response to Sen. Richard Durbin, D-IL, who continues to push cramdown legislation and asked the MBA to justify claims made at... More...

http://www.imfpubs.com/issues/imfpubs_ibcl/2009_1/news/1000010626-1.html

Troubling Precedent Seen in Subprime Mod Law

A subprime loan modification "protocol" implemented in December by North Carolina puts increased pressure on servicers and could be adopted by other states, according to a review by industry lawyers. The North Carolina Office of the Commissioner of Banks implemented the protocol as part of a recently created... More...

http://www.imfpubs.com/issues/imfpubs_ibcl/2009_1/news/1000010629-1.html

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The 2009 Mortgage Market Statistical Annual

Get this two-volume set, containing 780 pages of vital data to calculate market share, research trends and make strategic plans.

For information, please visit www.imfpubs.com/books

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