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Meet the Biggest Mortgage Originators & Servicers in the U.S.

Jay Hammond — Tue, 12 May 2009 17:29:44 +0000

The mortgage industry changed in the last year. Most companies have found themselves under significant financial pressure. Some mortgage firms have disappeared. Others have grown and expanded their market share by acquiring struggling competitors.

The number of mortgage loan originations has also been on the rise, allowing lenders to add to the growth from mergers and acquisitions. First quarter 2009 production among American mortgage lenders increased by 73 percent over the fourth quarter 2008, based on earnings data analyzed by MortgageDaily.com. As a result, there have been some changes to the lists of top originators and top servicers helping consumers achieve the American dream of homeownership.

Wells Fargo is the nation’s biggest lender. First-quarter originations more than doubled from the fourth quarter level. Volume, including Wachovia Corp. was up 22 percent over the same quarter in 2008 – prior t the merger of the two banks. Well Fargo is the second largest servicer in the nation. Despite this, Market Intelligence Center reports that Wells Fargo shares are trading at or near a 52-week low, however, the recent offering of 341 million share of common Wells Fargo raised more than $8.6 billion.

“We’re known and admired for our conservative financial position, and a disciplined acquisition strategy that will not change,” said John Stumph, Wells Fargo President and CEO in October 2008. “In that regard, we look forward with great anticipation and confidence to completing our merger with Wachovia Corporation by year end. The union of of our two companies with provide compelling value for all our stakeholders, including Wachovia’s team members, combining the industry’s best in service and best in sales, an unbeatable combination that will create the nation’s premier coast-to-coast financial services company.”

More recently, Ed Terpening wrote on the Wells Fargo – Wachovia Blog (May 8, 2009) that “We knew from the start there’d be an awkward period between the time the merger started and the time you saw results. [....] As John said, we’re taking 2-3 years to complete this transition because we want to do what’s right for you, our customers. No sense in rushing this and making a mess in the process.”

The merger is apparently already yielding positive results, because the combined company is leading the nation in mortgage originations.

Another acquisition that has paid off in growth has been MetLife’s acquisition of most of First Horizon National Corp.’s mortgage operations. MetLife business more than doubled from the fourth quarter, landing the company at Number 8 in originations. First Horizon’s mortgage operations weren’t MetLife’s only acquisition during 2008. MetLife also acquired EverBank Reverse Mortgage LLC and selected assets from First Tennessee Bank in 2008.

Bank of America Corp. (BoA) topped the list of the biggest servicers. The company also saw originations rise by 79 percent, making it the second biggest originator in the country. BoA’s acquisition of Countrywide Financial Corp. last year has not paid off with originations from the most recent quarter down 20 percent from combined production a year ago.

JPMorgan Chase & Co., the third biggest originator and servicer, also declined despite improving activity by 30 percent over the fourth quarter. Fundings were 44 percent below the level JPMorgan and Washington Mutual Bank reported in the first quarter of 2008 before their merger.

The 10 biggest originators during the first quarter 2009 were:

With a total combined portfolio exceeding $140 billion, the 10 biggest servicers as of March 31, 2009 were:

JPMorgan Chase, MetLife and US Bancorp were among the banks recently identified by regulators as not needing any additional capital. Only MetLife had not previously received funds from the Troubled Asset Relief Program, or TARP, DailyFinance reports.

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New Fed plan will help with 2nd mortgages, home equity loans

Constantine von Hoffman — Tue, 28 Apr 2009 17:20:10 +0000

The Obama administration has announced a new program to help borrowers with second mortgages stay out of foreclosure. Under this program, the government will pay mortgage servicers $500 upfront and $250 a year for three years if they successfully modify a second mortgage, such as a home equity loan.

The Treasury Department says second mortgages are a major problem for at risk and foreclosed properties. These mortgages have created significant challenges for borrowers avoid foreclosure. This is because borrowers trying to get their primary mortgage modified also need the permission of the company holding the second mortgage. According to the AP:

The administration initiative, funded out of $50 billion in financial rescue money, relies on a series of payments to mortgage companies as an incentive to modify second loans at lower interest rates. Mortgage companies would get $500 upfront for each modified loan, plus $250 a year for three years as long as the borrower doesn’t default.

Under the new plan:

Lenders will get $500 upfront for each modified loan, plus $250 a year for three years as long as the borrower doesn’t default.
Borrowers could get up to $1,000 applied to the principal balance of their primary mortgage over five years. , The government would pick up part of investors’ costs as well.
Lenders would be given the ability to remove second mortgages entirely in exchange for larger government payouts.

A senior administration official told Reuters:

“The second lien holder, as is appropriate in the junior position, is taking more of a reduction in interest rate,” one official said. “The interest rate will go at least as low as the interest rate on the first and it will (fall) much further to get there.”

Goal: Saving 10,000 homes in 2009

Jay Hammond — Tue, 17 Mar 2009 14:56:59 +0000

Leading residential mortgage banker Lend America has set a company-wide goal to save a minimum of 10,000 homes for owners facing foreclosure during 2009.

“Bearing in mind the nightmare of foreclosure confronting homeowners across the country, our ‘homes saved’ goal is not altruistic; its an absolute necessity,” said Nicholas Bratsafolis, Senior Managing Director – Structured Refinance of Latin America and a veteran of the mortgage industry. “Delivering on our goal is a win-win for everyone. It keeps homeowners in their homes at mortgage repayments they can afford, turns non-performing loans back into revenue streams for institutional holders, and avoids further stresses on the economy.”

As a first step towards achieving their goal, Lend America, one of New York’s largest privately owned direct lenders, has been using informative television advertising to establish their position as a leader in the national initiative to save homes. In fact, Lend America, one of very few mortgage banks approved by the FHA as well as a GNMA Issuer/Servicer to offer the Hope for Homeowners program. They have been closing these loans since the beginning of the year and has the highest closing volume to date of Hope for Homeowners loans in the nation. Lend America primarily uses all FHA and Fannie Mae loan products, including the government initiated Hope for Homeowners program.

Lend America is also working with some of the country’s largest institutional holders of mortgage portfolios, including hedge funds, banks and loan servicers to identify individual mortgages within the bundled loans that are in or close to foreclosure. Prospective loans are identified using Lend America’s proprietary residential loan analytics technology prior to initiating contact with the homeowner and beginning the refinancing process.

“It’s important to understand that Hope for Homeowners’ key differentiator is that it’s not a loan modification program. The loan is available to absolutely everyone, even if borrowers are behind on their mortgage payments,” said Bratsafolis. “Hope for Homeowners is a complete refinancing in which we work with the mortgage holders and borrowers to insure that a new loan when closed is affordable to the borrower and returns to the mortgage holder the maximum principal recapture. At the end of the process, the homeowner has a mortgage balance and monthly payment they can afford, and participating institutions have revenue streams where none previous existed.”

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IRS Speeds Lien Relief

Jay Hammond — Wed, 17 Dec 2008 14:52:48 +0000

The Internal Revenue Service (IRS) is giving struggling American homeowners a gift this holiday season. No, they aren’t canceling homeowners’ tax debt. They are, however, making it easier for distressed homeowners to avoid having a federal tax lien block the sale or refinancing of a home. They are also expediting the process for requesting a discharge or subordination of a tax lien.

?We don’t want the IRS to be a barrier to people saving their homes. We want to raise awareness of these lien options and speed our decision-making process so people can refinance their mortgages or sell their homes,? said IRS commissioner Doug Shulman.

The IRS issues more than 600,000 federal tax lien notices every year. Currently, there are more than 1 million federal tax liens, tied to real and personal property, outstanding. The IRS is not the only government entity interested in lowering the number of outstanding tax liens. Cities from Phoenix to Plainfield are trying to find ways to collect on or sell tax liens in order to raise much needed funds as budgets become tighter.

The IRS makes a legal claim on a property by filing a Notice of Federal Tax Lien. It serves as a public notice to other creditors that the federal government has a claim on a property. The federal claim is usually, but not always, the senior lien. In some cases, a federal tax lien can be made secondary to another lien if the IRS determines that taking a secondary position will ultimately help with collection of the tax debt. The process of taking a secondary position is called subordination. Taxpayers who are selling or otherwise giving up ownership of a property may apply for a certificate of discharge of a tax lien if the price is less than the mortgage lien and the mortgage lien is the senior lien.

Taxpayers or their representatives may apply for a subordination of a federal tax lien if they are refinancing or restructuring their mortgage. Publication 784: How to Prepare an Application for Subordination of a Federal Tax Lien, provides taxpayers with instructions for applying for a lien subordination certificate while Publication 4235: Collection Advisory Groups, provides mailing addresses the request should be sent to for processing. Without lien subordination, taxpayers may be unable to borrow funds or reduce their payments. Lending institutions generally want their lien to have priority on the home being used as collateral.

A federal tax lien can make it difficult to sell or give up ownership of a property, as well. The IRS may issue a certificate of discharge of a tax lien if the sale price is less than the amount owed on a senior mortgage lien. The IRS may also issue a certificate of discharge in other circumstances if the taxpayer has sufficient equity in other assets, can substitute other assets, or is able to pay the IRS its equity in the property. Taxpayers should follow the directions in Publication 783: Instructions on How to Apply for a Certificate of Discharge of a Federal Tax Lien when applying for a tax lien discharge. There is no form to submit however a typed letter of request must accompany certain documentation and be mailed to the appropriate address listed in Publication 4235.

The IRS urges taxpayers to contact the agency’s Collection Advisory Group early in the sales or refinancing process so that it can begin work on their requests for subordination or discharge of a federal tax lien. People sometimes delay informing lenders of tax liens which only serves to further delay the transaction.

?We realize these are difficult times for many Americans,? Shulman said. ?We will ensure we have the resources in place to resolve these issues quickly and homeowners can complete their transactions.?

You can hear an audio version of the announcement here. (MP3)

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Introducing Blown Mortgage News

Morgan — Thu, 18 Sep 2008 04:00:11 +0000

Gang, I’m happy to announce Blown Mortgage News, a user-generated link blog of the latest mortgage and real estate news and information. You can access the new news site at http://news.blownmortgage.com.

The Premise

I can’t cover all the news these days, but want you to know about it.
You have access to great sources of information that can make us all smarter.
You have stuff you want me to cover, now you have a say.

How it Works

Sign up for a free account from Reddit, the social news site.
Submit your links.
Vote links and stories up and down
I review the top vote-getters and write my take on them

What does the future hold?

I’m working on assembling a podcast crew that want to discuss the top stories each week which will then be broadcast here on BlownMortgage.com

Sweetening the Pot

In order to get folks excited I’m going to raffle off a $50 Amazon gift card once the first 50 users are signed up and have submitted a link to the new Blown Mortgage News.

What are you waiting for?

Join now!

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Monday’s Blame Game: The S&L Crisis.

phillenbrand — Mon, 07 Jan 2008 15:32:06 +0000

Everyone seems to be wagging their fingers right now at the banks for not learning the lessons of the S&L crisis in the 1980’s.

Oh, Contraire. As the Becker-Posner blog points out, the banks DID learn lessons from the S+L crisis. A grossly abbreviated summary: thrifts and S&L’s made spectacularly bad loans, betting big on one asset class. When the asset class (largely land and partly junk bonds) didn’t pan out, S&L’s started to die. They were hyperleveraged, which should be legal. What is incorrect is the explicit and implicit guarantees that the federal government makes to the millionaires that make big and unsustainable bets.

Without batting an eye, the government stood up to cover the bets that they made. What’s more, without batting an eye, we subsidized incompetence, fraud, malfeasance, corruption, stupidity, greed, and idiotic regulation. Regulation caused the S+L crisis: remember, the depression’s bank failures caused the government to severely limit the menu of products that Thrifts/S+Ls could invest in. When the menu was expanded, it was still relatively limited. The thrift managers didn’t have access to the entire market, just a basket of products and programs, suggested by lobbyists, and acceptable to the Carter administration. FDIC insurance gives the government the right to be part of the conversation, as they become stakeholders.

Sound Familiar?

Betting big that land would continue to appreciate 20% and more, S&L’s allowed all sorts of land speculation in exchange for high interest rates. Underwriting guidelines went from prudent to, "aww,hell, he says he’s good for it–what’s the harm?" Somehow, nobody is willing to believe any market cycle can possibly come to an end. Ever. So when the land’s price and it’s utility got far enough apart, the market lost its appetite, and the S&L’s lost their capital.

Not wanting to let these thrifts implode, the government decided to give the millionaires money. Lots of money. Because, hey, we can’t let the banks collapse, now, can we? They need the money, or else the capital markets will totally seize up! Community banks were what we were saving in the 1980’s.

Today, it’s Joe Homeowner. He’s the hostage–or front man–we must protect. Because when we bail him out, we’re also going to see a bunch of bankers that made these investments breathe a sigh of relief.

And the beat goes on.

P.S. Go Buckeyes. And Jim Delany? Come on, allow a playoff already.

When not rooting (in vain) for the Buckeyes to win the BCS championship game, Chris Johnson runs the Ten Day Team at First Ohio Home Finance

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