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Origination News Headlines

Clarification

September 5, 2008

In response to a story on loan production at GMAC's Residential Capital LLC unit, a company spokeswoman has asked to clarify her statements to MortgageWire.

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Fitch Downgrades Beazer's IDR, Debt

September 5, 2008

Fitch Ratings has downgraded the Issuer Default Rating and outstanding debt ratings of Beazer Homes USA Inc. and removed them from Rating Watch Negative.

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ECC Reports $68.7M Loss for First Half

September 5, 2008

ECC Capital Corp., a real estate investment trust headquartered in Irvine, Calif., has reported a net loss of $68.7 million for the six months ended June 30.

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Columbia Shutting Mortgage Banking Ops

September 5, 2008

Columbia Bancorp, The Dalles, Ore., is shutting the in-house mortgage banking operation at its subsidiary Columbia River Bank.

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FirstAm Units Unveil Vacant-Property Service

September 4, 2008

First American Field Services and First American Real Estate Tax Service have announced the availability of a new vacant-property registration service aimed at helping lenders and servicers comply with changing municipal ordinances.

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Featured Story

Downpayment Assistance Providers Seek Bill

By Brian Collins

WASHINGTON-Nonprofit housing groups and their supporters will be lobbying Congress to pass a bill in September so they can continue to arrange downpayment assistance on Federal Housing Administration loans in October.

But they will likely have more success next year with a new Congress and new administration.

Congress passed a major housing bill in July that bans seller-funded downpayment assistance on FHA loans starting Oct. 1.

Sources indicate that a bill introduced by Rep. Al Green, D-Texas, to repeal the ban of seller-funded DPA will be lucky to make it through the House before Congress adjourns for the elections.

"Maybe they will make it through the House, but it doesn't have a chance in the Senate," one source said.

Origination Views

How Financial Innovation Went Wrong

By Frederic S. Mishkin

Mr. Mishkin, a departing Federal Reserve governor, spoke at the Caesarea Forum of the Israel Democracy Institute, Eliat, Israel, in July on how he believes problems with financial innovation and origination incentives led to the "subprime crisis." The following is an edited excerpt of his prepared remarks on these topics.

In the United States, financial innovation has recently manifested itself partly in the development of the market for subprime mortgages. While that market had serious weaknesses that eventually imposed large costs on many borrowers and their communities, it also brought considerable benefits to many others who were able to take advantage of responsible products never before available. As a result, they found themselves far better off financially than they probably would have been otherwise. As this recent experience suggests, financial liberalization and innovation bring many benefits but can also create information and incentive problems that lead to mistakes. When mistakes of this nature become evident, financial markets can seize up, with potentially significant adverse consequences for the economy.