The average contract interest rate for 30-year fixed-rate mortgages increased to 5.67 percent from 5.50 percent one week earlier, with points increasing to 1.29 from 1.27 the previous week (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.  

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.19 percent from 5.09 percent one week earlier, with points remaining at 1.30 (including the origination fee) for 80 percent LTV loans. The average contract interest rate for one-year adjustable-rate mortgages (ARMs) increased to 4.18 percent from 4.10 percent one week earlier, with points decreasing to 1.03 from 1.07 (including the origination fee) for 80 percent LTV loans.

The Market Composite Index stood at 727.9, a decrease of 0.6 percent on a seasonally adjusted basis from 732.3 one week earlier. On an unadjusted basis, the Index increased 1.3 percent compared with last week but was down 5.5 percent compared with the same week one year earlier. 

The MBA seasonally adjusted Purchase Index decreased by 1.3 percent to 417.8 from 423.3 the previous week. The seasonally adjusted Refinance Index increased by 0.1 percent to 2532.0 from 2530.1 one week earlier, its highest point in 10 months. The refinance share of mortgage activity decreased to 49.3 percent of total applications from 49.9 percent the previous week.  The ARM share of activity remained at 30.7 percent of total applications, its lowest level in 10 months.

Other seasonally adjusted index activity included the Conventional Index, which decreased by 0.2 percent to 1091.7 from 1093.8 the previous week; and the Government Index, which decreased by 6.5 percent to 120.9 from 129.3 the previous week.

The survey covers nearly 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
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Remittances are an important reason for Latino immigrants to be in the banking system because Latin American immigrants send $30 billion a year back home to friends and relatives, Singer said. “It’s a huge amount of money both for them and for their home economies,” she said. “80 percent of that money goes through money transfer agencies that charge up to $26 on fees for transactions.”

However, the Appleseed Foundation estimates more than half of the 17.5 million Latin American immigrants in the U.S. do not have a bank account or access to mainstream financial institutions. By not using mainstream financial services, cash-carrying immigrants face safety issues in the form violent crimes and the inability to establish credit histories and credit scores, the foundation said.  “Without a relationship with a bank or credit union, it is almost impossible for you to buy a home, to send your children to school, or to break the cycle of poverty for your family,” Singer said.
 
Oscar Rio Pohirieth, a Mexican immigrant now living in Nebraska, said he lost more than $2,500 in fees by cashing his check for $10 through a Mexican “cash advance” system rather than taking checks to the bank at no cost. “Cash was the only way that I knew to purchase anything,” Rios Pohirieth said. “Unfortunately, I was taken advantage of, and I attribute that to the fact I didn’t have my money in a safe place. When [immigrants] come to America, we don’t come with a lot of trust.  We come from countries where the banking system can be corrupt.  Here, in the U.S., it is a matter of educating people – letting them know how to get into the system and that the system is safe.” 

The Mortgage Bankers Association set up the Stop Mortgage Fraud Web site last year (www.stopmortgagefraud.com ), in English and Spanish, to educate Hispanic borrowers, as well as non-immigrant homebuyers, on their rights in the mortgage process, warning signs of mortgage fraud and where to report abusive lending practices.

MBA also partnered with Freddie Mac, the U.S. Department of Defense Reserve Forces Policy Board, the National Association of Hispanic Real Estate Professionals, the National Puerto Rican Coalition and Univision on the Welcome Home campaign to assist Spanish-speaking veterans with occupational and homeownership opportunities. Welcome Home provides a tuition free Internet based training program designed by CampusMBA to prepare past and present Spanish-speaking members of the armed forces for post-service careers in all phases of the residential and commercial lending industry. The participants said they would like to have about 1,000 new graduates a year for potential careers in mortgage sales, origination, underwriting, servicing, collections, and commercial and multifamily lending.
 
Branch Banking & Trust (BB&T), Winston-Salem, N.C., CitiMortgage, St. Louis, GMAC Mortgage, Horsham, Pa., and U.S. Bank Home Mortgage, Minneapolis, participate in the program.

The Appleseed Foundation released educational brochures in English and Spanish, called Bank on Your Future, Su Dinero, Su Familia, Y Su Futuro brochures. The brochures address issues that include how to establish and maintain credit and how to save money for the future.

Singer said changing the environment to make a bank less “daunting” and “intimidating” would help to bring in more Hispanic and Latino customers. “There are examples of banks that are trying to make themselves more inviting [and] more comfortable to Latinos,” Singer said. “It involves, in the first instance, having front line staff who speak Spanish who are available to greet people and answer questions.”

Wells Fargo Home Mortgage, Des Moines, started the Hispanic Customer Service Center in November to restructure the mortgage process flow to meet different needs of the Spanish-speaking customer. The call center offers access to Spanish-speaking service representatives experienced in handling non-traditional financial profiles, and a loan process that includes an increased number of written and verbal interactions in their preferred language.

"In many cases, Hispanic homebuyers are dealing not only with the challenge of conducting a transaction in a new language, but they are also dealing with a process that is new to them," said Lisa Degruyter, operations manager at the Wells Fargo Home Mortgage Hispanic Customer Service Center.
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The TRIA bill, S. 467, introduced by Senate Banking Financial Institutions Subcommittee Chairman Robert Bennett, R-Utah, and Sen. Christopher Dodd, D-Conn., would extend TRIA provisions by two years, through 2007. The bill would also call for establishment of a public/private partnership/commission to recommend a long term solution to the terrorism risk problem. Twelve senators from both parties signed on as co-sponsors.

TRIA requires the Treasury Department to report to Congress by June 30 on the effectiveness of the backstop program and the insurance industry's capacity to offer terrorism coverage if it is not renewed. The Mortgage Bankers Association and the Coalition to Insure Against Terrorism (CIAT), of which MBA is a member, have long argued that TRIA must be extended to insure an adequate supply of insurance.

Dodd and Bennett introduced the bill following comments by Federal Reserve Chairman Alan Greenspan, who told the House Financial Services Committee last week that he “had yet to be convinced” that the private market would adequately provide terrorism insurance. “While I think you can get some semblance of terrorism insurance, I have not been persuaded that this market works terribly well,” Greenspan said.

"This law is working as it was intended: to provide some measure of insurance for American workers and American companies against the risk of terrorism," Dodd said in a statement. "It needs and deserves to be extended.”

CIAT spokesman Martin DePoy said the coalition welcomed the bill’s introduction, calling it the first step in the debate to ensure that coverage would be available next year.

“We are grateful to Senators Dodd and Bennett for their leadership on the issue, and we look forward to working with them and other members of Congress as they begin efforts to identify a long-term solution to the insurance challenge presented by acts of terrorism, whether through conventional or unconventional means,” DePoy said. “A growing number of lawmakers in both the House and Senate recognize that a terrorism insurance backstop is an essential tool in preserving America’s economic security.”

Senate Banking Committee Chairman Richard Shelby, R-Ala., indicated that he would hold hearings on extension of TRIA. The first hearing will take place on March 3. Last year, Shelby did not move a similar bill out of the committee.

Meanwhile, two brownfields bills have been introduced. S. 398, introduced by Sens. Rick Santorum, R-Pa., and Evan Bayh, D-Ind., would make permanent Internal Revenue Code Section 198, which allowed the expensing of brownfields clean up costs but sunsets at the end of 2005 (The law expired at the end of 2003 but Congress extended it to 2005 last year). It would also broaden the definition of “hazardous substances” in Section 198 so it covers petroleum contamination; and repeal the provision in the law that recaptures the expense deduction as taxable income when the property is sold.

The U.S. Conference of Mayors and the Government Accounting Office estimate that there are more than 400,000 brownfields sites across the country.  Many of these properties are languishing on municipal land rolls awaiting private sector buyers.  According to a recent U.S. Conference of Mayors survey of 187 large and small cities throughout the nation, redevelopment of their existing brownfields would bring additional tax revenues of approximately $2 billion annually and could create up to 550,000 jobs.

Reps. Jerry Weller, R-Ill., Nancy Johnson, R-Conn., and Xavier Becerra, D-Calif., introduced H.R. 877 last week. the bill is identical to S. 398.

MBA has “strongly supported legislation and programs that support states and localities in cleaning up polluted industrial sites,” said MBA Chairman Michael Petrie, CMB.
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Financing on the two loans was based on a 20-year term with a 20-year amortization schedule and arranged for the borrower, Ciminello Properties, by NorthMarq through its correspondent relationship with Sun Life Assurance Company of Canada, Toronto.

Nearly 525,000 square feet of land is under development with a 60,000 square-foot building. The majority of the property is under short-term leases as BJ’s Wholesale Club obtains approvals to build a new store. “The loans cover two properties, one of which is occupied by ProFoods, and the second of which is under development. Sun Life’s confidence in Ciminello Properties enabled them to structure a long term deal despite the current vacancy related to the ongoing redevelopment,” said Craig Bjornsund, senior vice president at NorthMarq Inc.

Bjornsund arranged first mortgage financing of $2.2 million for a 26,000 square-foot retail property in Queens. The property is home to tenants that include McDonald’s and Rite Aid. NorthMarq arranged financing, based on a 10-year term, through its correspondent relationship with Genworth Financial, Richmond, Va.

“This well located retail property is undergoing a change from local tenants to better, well known national retailers like McDonald’s and Rite Aid, with more to follow,” Bjornsund said.

Ernest DesRochers, senior vice president and managing director, and Charles Cotsalas , vice president, in the Long Island regional office of NorthMarq, arranged three first mortgage refinancings for a total of $10.3 million through NorthMarq’s correspondent lender, Sun Life Assurance Company of Canada.

A 52,000 square-foot office property in Great Neck, New York, financed at $2.6 million over a 10-year term with a 25-year amortization schedule for the borrower, 150/160 Associates LLC. The 199,529 square-foot Nassau County industrial portfolio of five properties refinanced at $4.9 million. The property, located throughout the towns of Hicksville and Westbury, New York, was based on a 10-year term with a 25-year amortization schedule and was arranged for the entities Spiegel Associates. A first mortgage refinancing of $2.8 million for a 49,800 square-foot office building in Manhasset, New York, was based on a 10-year term with a 25-year amortization schedule and was arranged for the borrower, Miracle Properties.
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The designation program is now open to MBA members and nonmembers, with a parallel program for commercial mortgage servicers planned for 2006.

"Servicing is a vital mortgage banking function," said Dan Thoms, vice president of MBA education and business development. "With the Certified Mortgage Servicer designation, those individuals performing these tasks now have the opportunity to be recognized for their professional excellence, whether they provide impeccable customer service, manage investor accounting, or minimize defaults."

CampusMBA offers the CMS designation in conjunction with Fidelity Information Services, a division of Fidelity National Financial, Jackonsvinlle, Fla. Together they are developing content for the servicing-focused courses that compliment the existing CampusMBA curriculum and that can be universally applied to all servicers and servicing systems across the industry. 

"Fidelity is proud to partner with CampusMBA to offer courses that will benefit both the mortgage servicing industry and all MBA members," said Hugh Harris, president of the Financial Services Technology Solutions division of Fidelity Information Services. "The new CMS designation will add value to the mortgage industry by identifying professionals who have expertise in, and a commitment to, mortgage servicing."

The program promotes continuing education and ensures ongoing subject matter expertise through three levels of certification. The certification levels are based on the candidate's experience and knowledge, recognizing core competencies and providing a structured development path.

"The CMS designation is part of a strategic initiative by the MBA to develop industry certifications and standards in education and training that result in a stronger, more professional industry," said Andy Hubbard, vice president of Aegis Mortgage and chairman of the MBA's Education Task Force. "We are excited to offer this designation along with Fidelity."

The curriculum is designed to provide targeted training on concepts and procedures in one of three tracks: Loan Administration, Financial Controls and Investor Administration, and Default Administration. Designation candidates must choose a servicing track at the beginning of the CMS program. The course and workshop curriculum combines the best of CampusMBA and Fidelity content, creating an exceptional program.

"CampusMBA is the mortgage industry's premier educational program," said Harris. "This designation acknowledges those companies who have Certified Mortgage Servicers on their staff and brings the mortgage servicing industry to a higher level of professionalism."

Program prerequisites include three years real estate finance industry experience, completion of the Servicing Professional Certificate and completion of the Servicing Achievement Certificate. Upon meeting these prerequisites, candidates must successfully complete a prescribed servicing curriculum and pass a comprehensive written exam.

Enrollment and curriculum for the Certified Mortgage Servicer designation is now available.  For more information, visit www.campusmba.org or call (202) 557-2763. For more information on CampusMBA, visit www.campusmba.org or call (800) 348-8653.
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CampusMBA, the education arm of the Mortgage Bankers Association, offers an Audio Program on Friday, February 25, from 3:00 - 4:30 p.m. EDT to bring you up to speed on HMDA's new requirements. Listeners will learn:

• The background and purpose of HMDA
• Pre-2005 HMDA reporting requirements
• New requirements and how they work, including data elements, coverage requirements and new definitions
• The "nuts and bolts" of reporting, including how and when data is to be reported, checking data internally before reporting and submission formats
• How data is disclosed by lenders, the Federal Financial Institutions Examination Council and the Federal Reserve Board
• What the data may show, what it won’t show, and why
• What the regulators are saying about HMDA
• Other concerns

Listeners will also have the opportunity to ask questions about these and other HMDA matters during the question and answer session.

Panelists include Andrew Sandler, partner with the law firm Skadden, Arps, Slate, Meagher & Flom LLP; Jeffrey Jaffe, national CRA/fair lending director for CitiGroup; Amy Brachio of Ernst and Young; and Ken Markison, MBA’s senior director and regulatory counsel.

The program includes a 60-minute presentation, followed by a 30-minute interactive question and answer session. Just dial in from your conference room speakerphone to train your staff—whether there are two or 20 employees in attendance.

To register, click here or call (800) 348-8653. Registration is $225 per site for MBA members, $325 per site for Nonmembers. If you have any content questions in advance of the audio program, please direct them to Ken Markison at kmarkinson@mortgagebankers.org or call (202) 557-2930.
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One of those issues involves Washington, D.C.–based Fannie Mae’s and McLean, Va.–based Freddie Mac’s possible reduction of minimum servicing fees.

“Right now we’re in the midst of a possible reduction of Fannie Mae’s and Freddie Mac’s minimum servicing fees, and MBA has made sure the servicing sector has a strong voice in this debate,” Petrie said.

Last month, MBA hosted a cross-section of our membership in roundtable discussion on potential changes to those minimum servicing fees, and MBA’s Loan Administration Committee is meeting here on this issue.

FHA has several initiatives under way that could affect servicers, such as a soon-to-be-released Treble Damages rule. In fiscal 1999, VA and HUD appropriations law authorized HUD to impose treble damages for a lender’s failure to engage in loss mitigation. But Petrie said the treble damages penalty is “excessive and could seriously jeopardize the attractiveness of servicing and originating FHA-insured loans.”

“Application of the penalty on even a small fraction of loans serviced could wipe out a company’s servicing revenue for the year. That is because the treble damages penalty is calculated based on the unpaid principal balance, reimbursable fees and debenture interest claimed by the servicer,” Petrie said. The penalty is not based on any actual losses to HUD. Penalties could be as high as $300,000 per violation. A small servicer subject to treble damages on as few as three or four cases could be forced out of business even if the lender had a high workout to foreclosure success rate, the industry’s measure of success.

MBA and HUD believe that the loss mitigation program is successful. The majority of servicers are performing loss mitigation, Petrie said. From March 2003 to February 2004, HUD paid 76,402 loss mitigation incentive claims. This figure does not even include informal forbearance agreements. Petrie said the treble damages penalty is unnecessary and could drive lenders away from the FHA program.

Although HUD will not provide a bright-line safe harbor for servicers in Tier 1-3 (a critical MBA recommendation), the NPR states that HUD’s enforcement action and treble damages penalty will be focused on Tier-4 servicers.

Another issue addressed by Petrie was the recent announcement from the VA proposing changes to 38 CFR Part 36, “Loan Guaranty: Loan Servicing and Claims Procedures Modifications.” The proposed regulations could result in significant changed to long-standing VA guaranteed loan servicing procedures.

“MBA members were very involved on this issue, offering input while the project was underway, and we will continue to comment through the formal rulemaking process,” Petrie said.

Key changes include:
• Increased delegation of authority to servicers;
• Financial incentives for the completion of workout options and alternatives to foreclosure;
• Automated claims submission
• New electronic reporting requirements;
• National jurisdiction and national distribution of cases within VA;
• Standardized VA requirements and processes; and
• A new Web and rule-based VA loan data servicing system.
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