Credit Unions Boost Mortgage Originations by 17% in 2008

Credit Unions are significantly increasing their mortgage originations in the current economic meltdown and credit crisis. According to new numbers compiled by Inside Mortgage Finance, credit unions boosted their mortgage production by a healthy 17 percent during 2008. That growth came at the same time that overall mortgage originations fell 39 percent. The result was that the credit union share of total mortgage lending jumped from 2.5 percent in 2007 to a record-high 4.7 percent in 2008.

Almost one quarter of last year’s credit union originations came from just five institutions Navy Federal in Virginia, State Employees in North Carolina, Pentagon in Virginia, Boeing Employees in Washington, and Alaska USA in Alaska.

Top Banks Hold Most Second Mortgages, IMF Analysis Shows

The top four banks in the country, which account for more than half of all mortgage servicing outstanding, also hold most of the second mortgages out there. New numbers compiled by Inside Mortgage Finance show that Bank of America, JPMorgan Chase, Wells Fargo and Citigroup held a combined $117.4 billion in closed-end second mortgages at year-end. As the mortgage industry grapples with loan modifications and other efforts to resolve troubled mortgages, one of the big stumbling blocks has been dealing with second lien holders.

But the top holders of CES mortgages also happen to be the firms looking to modify the most mortgages. Citigroup was the top bank in terms of CES mortgages outstanding at year-end with $36.1 billion. BofA followed close behind with $35.3 billion in second mortgages. Last year’s wave of mergers and acquisitions helped consolidate second liens as Countrywide, Washington Mutual and Wachovia were all absorbed by the top three banks in the country.

Administration’s New Loan Mod Plan to be Analyzed

The Obama administration’s new Home Affordable Modification program and its impact on ongoing loss mitigation efforts in the mortgage industry is the subject of a new Inside Mortgage Finance audio conference scheduled for April 2 at 3 pm EDT.

This important event will feature mortgage industry legal experts Larry Platt from K&L Gates and Don Lampe from Womble Carlyle, who will explain all the nuances of the HAM program and where it fits in with other federal efforts to slow down foreclosures. The audio conference also will feature Steve Bailey, head of Bank of America’s massive mortgage servicing operation, who will provide an update on BofA’s loss mitigation efforts as well as his take on the government’s latest push to encourage more loan modifications.

Click here for more info.

MI Industry Continues to Suffer as Bailout Hopes Fade

The private mortgage insurance industry moved into dangerous territory this week as the survival of MI firms increasingly became dependent on some sort of federal bailout. Three of the MI industry’s biggest players  Radian, MGIC and PMI continued to face sagging stock prices that hovered at dangerously low levels. PMI, which just released worse than expected fourth quarter results this week, watched its share price trade around 50 cents in morning trading today.

Private MI observers contend that the industry will have a very difficult time surviving unless it gets some sort of bailout and soon. While the Obama administration is not anxious to bail out any new industries –particularly those in the insurance area– a collapse of the MI industry would force more mortgage business to FHA and could trigger huge losses at Fannie Mae and Freddie Mac.

Mortgage Debt Outstanding Continued to Slide at Year-End 2008

The dollar amount of mortgages outstanding in the U.S. slid to a one-year low at the end of 2008 as a sharp decline in new originations and a rise in defaults and foreclosures took their toll on the country’s residential mortgage holdings. Last year marked the first time since the Great Depression that mortgage debt actually declined. And it slipped in the last three quarters of 2008  hitting a record-high of $11.18 trillion at the end of the first quarter but slipping 1.4 percent to $11.03 trillion at year-end.

According to numbers compiled by Inside Mortgage Finance, the entire drop came in non-securitized mortgages held in bank and thrift portfolios. Portfolio holdings tumbled a hefty 7.9 percent in 2008 to end the year at $3.81 trillion. Thanks to a major shift to government-related lending last year, the share of mortgage debt tied to mortgage securities actually rose 2.4 percent in 2008 to reach a record-high of $7.22 trillion.

Mortgage Problems Plague Home Sales, New Survey Finds

More than half of failed home sale transactions result from mortgage-related issues, according to a new study sponsored by Inside Mortgage Finance. Most of the mortgage problems relate to the sale of distressed properties and the fact that mortgage servicers are too slow in responding to short sale or foreclosed property offers from borrowers. But a significant share of problems also relate to the fact that borrowers are having an increasingly tough time qualifying for mortgages in the current credit-starved environment.

The new study is based on a February survey of real estate agents nationwide conducted by Campbell Communications. The research is the third in a series that tracks real estate agents on home purchase and lending issues.

For details contact John Campbell at john@campbellsurveys.com or 202-363-2069.