Mortgage Information

Moody’s Investors Service said that it lowered LoanCare Servicing Center Inc.’s servicer quality rating for prime mortgages to SQ4+. Moody’s attributed the downgrade to the bankruptcy filing of the company’s parent. Last month, Fitch Ratings announced it lowered LoanCare’s prime servicer rating.

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LoanCare Servicer Ratings Downgraded Again

The Federal Reserve Bank of New York said that it has begun purchasing agency-guaranteed mortgage-backed securities. The plan calls for the purchase of up to $100 billion in direct obligations and up to $500 billion in MBS. The fed also created an operating subsidiary to acquire nearly $40 billion in residential MBS from American International Group Inc.’s U.S. life insurance companies, a recent press release said.

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Fed Becomes Mammoth Secondary Player

During 2008, consumer bankruptcy filings were one-third higher than in 2007, the American Bankruptcy Institute reported. Fourth-quarter 2008 filings were up around 4 percent from the third quarter. But December filings fell 15 percent from November.

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Bankruptcy Activity Mixed

A stimulus plan was proposed to Congress by President-elect Barack Obama. The upcoming administration is calling for existing cabinet members to use their existing authority to step up loan modifications. He is recommending clarification of servicers’ legal liability when they modify loans. Obama is also advocating bankruptcy-code reform that would enable bankruptcy judges to modify mortgages.

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The Modification President

Yesterday the Fed bought their first round of mortgage securities guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. This kicks off the Federal Reserve’s plan to buy $500 billion in mortgage-backed securities by mid-2009, right on schedule. One of many historically unique programs to drive down the affordability of home buying and return much needed buyers to the market.

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[News] Fed Begins Buying MBS, Pushing Down Mortgage Rates

An investigation by New York’s attorney general into discriminatory lending practices at GreenPoint Mortgage Funding Inc. prompted the state to launch an investigation into mortgage brokers. So far, two mortgage brokers have settled with the state, while a third has been sued. “The office is continuing its investigation into potential discriminatory pricing by other mortgage brokers,” an announcement from the attorney general said.

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GreenPoint Brokers Targeted by New York

The monthly Treasury average was down nearly one-quarter percent from November to December, according to data published by the Federal Reserve Board. MTA was down 270 basis points from December 2007. MTA has fallen each month since April 2007.

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MTA Descends Deeper

GMAC Financial Service sissued a statement indicating that it had completed separate private-exchange and cash-tender offers to purchase or exchange $17.5 billion in outstanding GMAC notes and $3.7 billion in notes of Residential Capital LLC. An agreement has been reached between PHH Mortgage Corp. parent PHH Corp. and lenders in its Chesapeake Funding LLC program to extend the expiration date of the notes. Flagstar Bancorp Inc. said last week that the audit committee of its board of directors has approved for the company to bypass shareholder approval to issue convertible participating voting preferred stock as part of an investment by MP Thrift Investments L.P.

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Financing for the Financiers

Mark R. Danahy was named president of PHH

Navy Federal Credit Union reported 2008 mortgage production of $5.7 billion. The level of lending was the second highest ever. During 2009, Navy has committed to $6.0 billion in originations.

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Credit Union Originates Nearly $6 Billion