"In the context of a decelerating housing market and a slowing of overall mortgage originations activity, consumers continued to choose interest-only and payment option loans in the first half of 2006," said Doug Duncan, MBA's chief economist and senior vice president of research and business development. "In particular, fixed-rate IO volume increased markedly. As expected, consumers respond to changing opportunities in the marketplace, but it looks like these products serve an important need."

Key findings from the survey (percentages are based on dollar volume of originated loans):

• Total first-mortgage originations decreased by 16 percent from the second half of 2005 to the first half of 2006. The decrease in originations was driven by a 10 percent decline in purchase mortgage volume and a 22 percent decline in refinance volume.

• For first mortgages, fixed-rate loans, including IOs, accounted for 49 percent of loans in the first half of 2006 compared to 47 percent in the second half of 2005.

• IOs accounted for 26 percent of originations in the first half of 2006. However, the composition of IO originations changed, with fixed-rate IOs accounting for 24 percent of all IOs in the first half of 2006 compared to 13 percent in the second half of 2005. Payment-option mortgages ("option ARMs") accounted for 15 percent of the dollar volume of originations in the first half of 2006, up from 8 percent in the second half of 2005.

• First-time homebuyer purchases represented almost one in three home purchases in the first half of 2006.  Their average loan amount was $189,883, significantly less than the average loan amount of $236,517 for non first-time homebuyers.

• Of first-half originations, 19 percent were for single-family attached homes, 75 percent for single-family detached homes, 1 percent for manufactured and mobile homes and 4 percent for 2-4 unit structures. About half of single-family attached home originations were for condos or cooperatives, the remainder being for other single-family attached properties such as townhouses, duplexes and rowhouses.

• From the second half of 2005 to the first half of 2006, reverse mortgage dollar volume decreased 23 percent, with FHA's Home Equity Conversion Mortgages (HECMs) decreasing by 16 percent and other reverse mortgages decreasing 76 percent. However, the total number of reverse mortgage loans increased 31 percent. This result was driven by a 7 percent decline in large dollar balance reverse mortgages, but a 32 percent increase in smaller balance HECM loans.

Data on second mortgage originations: 

• Compared with the second half of 2005, the first half of 2006 saw origination volume of all second mortgages increase by 1 percent.

• As with first mortgages, there was a trend towards fixed-rate loans. Data from repeater companies indicates that closed-end seconds increased 59 percent while variable-rate HELOCs increased only 3 percent. 

• The percentage of second-mortgage originations that were closed-ended increased progressively over the half to 34 percent of dollars and 42 percent of loans in the first half of 2006 from 22 percent of dollars and 32 percent of loans in the second half of 2005. 

The survey included 115 participants, including almost all of the top 30 originators. During the first half of 2006, survey participants originated $640 billion in first mortgages and $175 billion in second mortgages.
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Key findings from the survey (percentages are based on dollar volume of originated loans):

• Subprime first-mortgage origination volume declined by 30 percent in terms of both dollars and loan count from the second half of 2005 to the first half of 2006. Subprime loans made up 19 percent of all originations in the first half of 2006.

• For the first half of 2006, 55 percent of subprime originations were for refinance purposes compared with 60 percent in the second half of 2005.  Among subprime refinances, 75 percent were for cash-out purposes compared with 88 percent for the second half of 2005.

• Subprime loans for home purchases declined by 25 percent between the second half of 2005 and the first half of 2006, whereas prime loans for home purchases declined by only 6 percent during that same period.

• Based on loan count, one in four subprime purchase loans was made to a first-time homebuyer.

• The average loan amount for subprime loans in the first half of 2006 was $200,167; this is 7 percent higher than the average loan amount for subprime loans of $186,790 in the second half of 2005.

• Adjustable-rate mortgage loans (including interest-only ARMs) comprised 67 percent of subprime originations in the first half of 2006, versus an ARM share of 74 percent of subprime originations in the second half of 2005.

Regarding subprime second mortgages:

• Subprime second-mortgage originations declined 14 percent in dollar value from the second half of 2005 to the first half of 2006, but increased in number by 57 percent.

• The average loan amount for second mortgages in this half was $33,555, a decline from $52,382 from the second half of 2005. The significant drop in the average loan amount along with the rise in the number of second mortgage originations was driven largely by a sharp increase in low balance stand-alone Home Equity Lines of Credit.  

"In the context of a decelerating housing market and a slowing of overall mortgage originations activity, subprime mortgage originations slowed as well in the first half of 2006," said Doug Duncan, MBA's chief economist and senior vice president of research and business development. "Consumers respond to changing opportunities in the marketplace, but it looks like these products serve an important need.  In particular, one in four subprime purchase loans was made to a first-time homebuyer during this time period."

This is the second MBA report on subprime mortgage originations. The inaugural report covered subprime origination data from the second half of 2005. More than 25 companies participated in this survey, including most of the top 10 subprime originators. The origination data is from companies that originate at least 50 percent subprime or ones that could break out their subprime originations separately.
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Docs3D uses standards for all required formats, including MISMO, and offers required disclosures for all 50 states. For the protection of the borrower, the software is built with 128-bit encryption and real-time updates to cater to the changes within the industry.

Mortgage Builder LOS Completes Interface with ComplianceEase
Mortgage Builder Software Inc., Southfield, Mich., a provider of end-to-end mortgage banking software services, announced, a strategic interface with ComplianceEase, San Francisco, a provider of automated compliance and risk management services. The partnership will enable Mortgage Builder customers to determine if their loans comply with federal, state and municipal level regulations and consumer lending regulations based on lending licenses.

ComplianceEase reviews loans for a variety of multi-jurisdictional compliance regulations ranging from Section 32, Reg. Z, the Home Ownership Protection and Equity Act, to state and municipal high-cost / anti-predatory legislation. It also incorporates lender and investor requirements within the compliance audit.

Think Mortgage Picks MRG for Doc Prep Services
Think Mortgage, an Irvine, Calif., mortgage lender, selected MRG Document Technologies, Dallas, a provider of document preparation services for the financial industry, to provide disclosures and closing document packages for its lending products.

MRG offers a system for preparation and delivery of customized document packages.

PLATINUMdata Solutions Launches AVM Performance Testing Product
PLATINUMdata Solutions, Mission Viejo, Calif., a provider of collateral risk services for the mortgage industry, launched OptiVal, a patent-pending AVM performance testing service. OptiVal is an automated tool employing user-defined parameters to conduct AVM data analysis to allow mortgage originators and investors to determine performance by each individual AVM. 

OptiVal provides a framework for conducting those performance tests based on a lender’s custom metrics.

Sollen Tool Designed for Loan Qualification Process
Sollen Technologies, Dallas, an Internet-based application services provider of product, pricing and best execution capabilities for the mortgage industry, announced launch of a new technology that will be added to its Lender OnLine loan finder and pricing tool. This new tool will allow loan officers and secondary marketing users to view the actual guidelines from an investor rather than an interpreted version of the guidelines to better decide if an applicant is qualified for a particular loan program.

Lender OnLine is a Web-based application that enables loan searching, validation, loan level adjusted pricing and locking for a wholesale, retail, correspondent or call center application. The program allows the originator to capture multiple lending options in one execution, searching loan types, loan products and documentation at the same time to find the optimal match for the borrower. Electronic locking eliminates faxing and reduces phone calls. 

Source Technologies Releases On-Demand Home Loan Check System
Source Technologies, Charlotte, N.C., a provider of integrated services for managing financial transactions and other secure business processes, announced release of e-DocSecure Version 1.5., which provides security for Internet-based remote check printing.

e-DocSecure extends check printing to MICR printers at agent locations while maintaining centralized approval and control. This remote check issuance capability offers lenders a secure way for their title companies, mortgage brokers and closing attorneys to issue checks on-demand.

Street Resource Group, DataVerify Integrate Fraud Prevention Platform
Street Resource Group Inc., Atlanta, a provider of technology services and software specific to mortgage warehouse lending, announced today it would provide integration with DataVerify Corp.’s (Chesterfield, Mo.) data integrity verification and fraud prevention platform product, DRIVE (Data Risk Integrity Verification Engine). SRG clients will be able to access DataVerify’s tools, analytics and metrics designed to maximize credit data and collateral accuracy within the context of SRG’s efficient mortgage warehouse lending software.   

WLS provides online connectivity between the mortgage warehouse and originators with loan-level accounting control, collateral tracking, risk management, document imaging and reporting features.

Street Resource Group also announced a relationship with Iron Mountain Intellectual Property Management Inc., Boston, as its technology escrow agent. Through this strategy, SRG canprovide additional risk management, business continuity assurance and regulatory compliance to its clients.  

Visionet Systems Introduces Tech-Driven BPO Outsourcing
Visionet Systems, Cranbury, N.J., announced availability of its workflow-based technology to drive and manage work performed in its Bangalore, India facility. Visionet’s business process outsourcing (BPO) center in Bangalore, India is a 30,000 square foot facility with capacity for more than 600 processors. 

The Bangalore facility focuses on post-close review, compliance, document indexing and tracking, lien release and both mass and off-cycle escrow management to mortgage lending and servicing organizations.

Workway Expands in Florida
Workway, a Burbank, Calif. - based firm specializing in staffing for the financial industry, announced the opening of its new office in Tampa, Fla., which expands its area of service to meet the increased demand for experienced financial staff.

Workway has expanded its service area throughout central Florida to meet increased staffing needs of the region. Workway officials said the new office allows Workway to respond to Tampa’s booming housing market, including the rejuvenation of old neighborhoods and the emerging residential downtown. 

MERS Closes One Thousandth eNote
Fannie Mae this month purchased the 1,000th electronic note (eNote) on the eRegistry from MERS, Vienna, Va. Fannie Mae bought the eNote from Ohio Savings Bank of Cleveland, Ohio.

Launched in April 2004, the MERS eRegistry is the system of record that identifies the owner (controller) and custodian (location) for registered eNotes, providing liquidity, transferability and security for lenders. In 2003, the Mortgage Bankers Association sanctioned creation of a single, national eNote registry system and endorsed MERS as its builder and provider. EDS of Plano, Tex., is the technology provider for the MERS eRegistry. 

Impac Enhances iMAP Market Analysis Platform
Impac Mortgage Holdings Inc., Newport Beach, Calif., a mortgage real estate investment trust (“REIT”), announced enhancements to iMAP (“Impac Market Analysis Platform”), the company’s web-based market research tool for correspondent lenders and brokers, which launched in May.

Impac said it has added 20 percent more market data, enabling users to analyze a target market by credit grade, occupancy status and product type (prime, Alt-A or subprime). In addition, the upgrades enable users to sort state and metro areas by their individual “Impac Risk Index” score as well as by their overall ranking, and includes improved user-friendly graphical interfaces.

CoreLogic Named to Deloitte’s Technology Fast 500 List
CoreLogic, Sacremento, Calif., a provider of collateral risk-analysis and management technology and services to the U.S. mortgage banking industry, was named to the Deloitte’s 2006 Technology Fast 500. CoreLogic is ranked 79th out of 500 companies.

Deloitte’s Technology Fast 500 is a ranking of the 500 fastest growing technology, media, telecommunications and life sciences companies in North America. To achieve the top 100 ranking on the list, CoreLogic reported a five year growth rate of 2,973 percent. The ranking is based on percentage revenue growth over five years (2001–2005). Overall, companies that ranked on the 2006 Technology Fast 500 had growth rates ranging from 210 to 48,948 percent over five years with an average growth rate of 2,147 percent. 

Turning Point Introduces End-to-End Marketing System
The Turning Point, Sedona, Ariz., announced an end-to-end marketing system, MACH 3, a secure online platform.

The MACH 3 system enables loan officers and marketing executives to implement targeted campaigns in real-time, from concept development to fulfillment. Branch managers and corporate-level executives track results and oversee operations using Mach 3's digital dashboard.
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CBRE/Melody has been a national member of the program since the early 1990s. The Washington, D.C. office arranged more than $2 billion in multifamily financings for the past two years. Program Plus lenders must meet Freddie Mac’s standards for both origination and servicing of multifamily loans.

*****
Investor confidence remains strong in publicly held firms whose primary business involves apartments and condos, according to the Multifamily Stock Index (MFSI), from the National Association of Home Builders (NAHB) .

The MFSI gained 42 points in September to reach an index value of 3,371, a rise of more than 1.25 percent from the previous month’s 3,328 number and a year-over-year gain of 30 percent. This latest increase sets a new all-time high for the MFSI—which tracks the stocks of 24 publicly traded firms including 20 Real Estate Investment Trusts (REITs) principally involved in owning, developing, and managing multifamily housing.

“With rental vacancies falling and rents rising, the outlook for new rental construction has brightened considerably,” said David Seiders, chief economist at NAHB. “Investors are anticipating rising value in multifamily companies despite a weakening condo market.”

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Principal Real Estate Investors, Des Moines, purchased three Class A industrial buildings in Nashville, Tenn. Developed in phases from 1998 to 2001, buildings I, III and IV are part of the MidSouth Logistec Center .

The MidSouth Logistec Center is a 240-acre master planned distribution park developed by Ozburn Properties. Situated on a total of 80 acres, each of the three cross-dock facilities offer a total of more than 1.5 million square feet of industrial space and are currently 100 percent leased. Major tenants include Hewlett-Packard, Ozburn-Hessey Logistics, Waldenbooks, Genco and United Stationers.

Douglas McDowell and Randy Wolcott with ProVenture Commercial Real Estate brokered this transaction.
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• The Third General Session kicks off at 8:30 a.m. CDT with the “White House Insiders.” Moderated by Greta Van Susteren, host of Fox News Channel’s “On the Record with Greta Van Susteren,” the session features Andy Card, former chief of staff for President George W. Bush; Marlin Fitzwater, White House press secretary for Presidents Ronald Reagan and George H.W. Bush; Dee Dee Myers, White House press secretary for President Bill Clinton; and Jack Valenti, special assistant to President Lyndon Johnson and former head of the Motion Picture Association of America;

• MBA presents the annual “Investing in Communities” award to Mayor Michael Guido of Dearborn, Mich.;

• MBA holds a special Residential Member-Only Forum, to give MBA members the opportunity to engage in an interactive discussion with MBA staff and fellow members;

• The MORPAC Luncheon (MBA’s political action committee) honors immediate past-MBA Chairman Regina Lowrie, CMB;

• The Sports Luncheon features NFL Hall of Fame defensive end and Fox Sports analyst Howie Long;

• The Fourth General Session provides the annual economic/housing outlook from MBA Chief Economist Doug Duncan and former Federal Reserve Governor Lyle Gramley;

• Breakout sessions continue along four tracks: Business Strategies; Technology; Management; and International; and

• Finally, ClubMBA features the comedy of “Saturday Night Live” veteran Darrell Hammond and the music of Grammy Award-winning singer/songwriter Michael McDonald.

For more information, visit the Convention Web site, http://events.mortgagebankers.org/93rd_annual/default.html.
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RESTECH is the technology steering committee for MBA's residential members, responsible for identifying various issues and making recommendations for policies and initiatives involving technology to MBA's Residential Board of Governors (RESBOG). RESTECH is composed of eight representatives from MBA member companies of all sizes.

"I am honored to welcome Allan and Chris to the RESTECH leadership," said Robert Story Jr., CMB, RESBOG chairman and president of Seattle Financial Group in Seattle. "I have seen the many contributions they have made to the association and I look forward to working closely with them over the next year."

Additionally, RESTECH's Residential Technology Software and Services Subcommittee has been assembled for 2006-2007. This subcommittee was initiated last year and helps improve communication between the residential vendor community and the MBA and its leadership. The mission of this subcommittee is to provide a forum for discussion and escalation of new issues as seen by the residential technology software and services provider community, and for vetting industry issues that RESTECH (or other committee) is currently discussing, where a software or service provider consensus is desired. 

Members of this Subcommittee include:

· Tim Anderson, vice president of eMortgage Services with Stewart Transaction Solutions, Jacksonville, Fla.;
· Mike Bixby, president of Bixby Consulting Inc., Hialeah, Fla.;
· Michael Brady, CIO at Lending Tree Inc., Charlotte, N.C.;
· Brian Fitzpatrick, president of Lydian Technology Group, Jacksonville, Fla.;
· Mike Fleck, system development manager with AIG United Guaranty, Greensboro, N.C.;
· Mick Goldstein, executive vice president and chief security officer at RealEC Technologies, Santa Ana, Calif.;
· Roger Gudobba, senior principal of strategic business development at Wolters Kluwer Financial Services, Troy, Mich.;
· Diana Helander, group business development manager of worldwide standards with Adobe Systems, McLean, Va.;
· Phil Huff, president and CEO of eLynx Ltd., Cincinnati;
· Roy Martin, vice president of sales and marketing with Xetus Corp., Mountain View, Calif.;
· Terry Van Bibber, president of Safedocs Inc., Walnut Creek, Calif.;
· Prashant Kothari, president of String Information Services, Washington, D.C.; and
· Chetan Patel, executive vice president of MortgageHub, Conshohocken, Pa.

The co-chairs and RESTECH liaisons for this subcommittee are:

· David Walton, vice president of software engineering and CIO at Fiserv Lending Solutions-UniFi Products, Plantation, Fla.; and
· Ruth Thompson, CIO with Desert Document Services Inc., Tempe, Ariz.
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"The CMT designation represents expertise in technology and the mortgage industry," said Allan Lubitz, senior vice president and CIO of Option One Mortgage Corp., Irvine, Calif., and chairman of MBA's Residential Technology Committee (ResTech). "I commend CMT designees for their dedication and professionalism."  

This year's CMTs include:

• Shelley Boland, head of technology with Macquarie Mortgages USA Inc., Memphis, Tenn.;
• Jo Ann Crook, product executive with Fidelity Information Services, Jacksonville, Fla.;
• Doug Doedens, vice president of enterprise technology architecture with First American Title Insurance Co., Santa Ana, Calif.;
• Dave Donovan, technology strategy manager with Fidelity National Information Services, Jacksonville, Fla.;
• Sue Ellingson, marketing director with Netupdate Inc., Bellevue, Wash.;
• Doug Horton, vice president and IS channel leader with LandAmerica, Glen Allen, Va.;
• John Jenkins, director of business systems with HSBC Mortgage Services, Charlotte, N.C.
• Clint Johnson, vice president with SunTrust Mortgage Inc., Richmond, Va.;
• Chris King, president of CRMnow, Aliso Viejo, Calif.;
• Erik Krogh, first vice president with IndyMac Bank, Pasadena, Calif.;
• Robert Lux, vice president of enterprise application services with GMAC Residential Holding Corp., Horsham, Pa.;
• Robert Murray, vice president of enterprise technology architecture with First American Title Insurance Co., Santa Ana, Calif.;
• James Owens, vice president of information management consulting with Fidelity National Financial, Jacksonville, Fla.;
• Thomas Parker, senior manager with E*Trade Bank, Laguna Niguel, Calif.;
• Timothy Rush, sales & business development with First American SMS, Orange, Calif.;
• Joan White, systems analyst with AIG United Guaranty, Greensboro, N.C.; and
• David Williamson, executive vice president and director of mortgage consulting with LendingLogix, McKinney, Texas.

The CMT designation is presented to information technology professionals, including managers and executives, in recognition of their industry experience, professional education, and their knowledge of the unique technological needs of the real estate finance industry. The first class graduated in 2004 and to date 52 people have received the designation.

To be eligible for designation consideration, candidates must meet rigorous standards. CMT candidates must amass 150 points earned through a combination of professional experience; secondary education; continuing education through MBA-sponsored events and CampusMBA courses; and participation in MBA at the local, state and/or national level. They must have a minimum of two years industry experience, have a technology background and be in a technology leadership position within the residential or commercial real estate finance industry.

After meeting the specific requirements, candidates then submit a thesis on a specific initiative, implementation, or conversion in which they actively participated, and pass a two part oral presentation and exam conducted by a panel of industry experts. Designees must meet continuing education requirements every two years to remain in active status.

To learn more or enroll in the Certified Mortgage Technologist designation program, visit Professional Designations at www.campusmba.org or call (202) 557-2763.

For more information on CampusMBA, winner of the 2004 Best Virtual Corporate University/Best Use of Technology CUBIC Award, visit www.campusmba.org or call (800) 348-8653.
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“All successful communities have a sense of equal opportunity. Something is in it for everybody—a sense of shared responsibility and a sense of genuine belonging—inclusion,” Clinton said here yesterday at the Mortgage Bankers Association’s 93rd Annual Convention & Expo. “Unless people in wealthier countries feel that their dreams can be fulfilled, that their aspirations have a reasonable chance of being realized, that their country is moving in the right direction and that their children can live their dreams, it will be very hard to muster the support of our people to support either a security policy or a policy to make a world with more partners [compared] to terrorists.”

Clinton noted a 4 percent decrease in Americans with private health insurance from 2001 to 2005 with a corresponding 32 percent increase in employment for health insurance companies—and 15 percent more in administrative costs to healthcare. He said under current economic conditions, average hourly wages remain stagnant, poverty among working people is up and the number of working families without health insurance has increased by 4 percent despite five years of productivity growth.

Clinton cited the United Kingdom an example of what he said was a balanced approach to meeting social and environmental goals—working to alleviate climate change, moving beyond its goals for greenhouse gas emissions and adding new high-wage jobs that are “not easily exportable.”

Clinton also cited  Denmark, a country with 5 percent or less unemployment, 20 percent electricity from wind, “the same cost as long-term coal,” an economy up by 50 percent and zero increase in energy use.

“With efficiency and conservation, [Denmark] has added to the bottom line, exploded employment and raised wages. I think we have to do something about that. I think the deficits we are running are unsustainable and highly related [to energy],” Clinton said.

Clinton also noted that the current U.S. budget deficit is "unsustainable" based on U.S. debt to other countries. "China , basically, is our banker,” Clinton said.  

However, Clinton noted that the U.S. can produce wind energy for the same cost as coal and used Chicago as an example of the leading U.S. city for “greening” rooftops of urban buildings. A 90 degree day in the summertime on a roof of an urban building could reach a surface temperature of 160 degrees, but it would drop by half with a green roof, according to Clinton.

“It has breathtaking consequences the way we use energy and creates jobs for the all the people who fix the roofs,” the former President said. “The same is true for solar energy and other efficiencies and changing the lighting. I simply believe that we should be giving our tax incentives to create tomorrow’s energy economy instead of providing those same incentives that are not at all needed for expiration as long as oil is $60 a barrel or more, which it probably will be from now on.”
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