Home-Account.com

Federal banking regulators said last week in a new report that nearly one-third of outstanding mortgages were approved with less than full documentation. Around one-fifth had credit scores below 660, and more than 90 percent were serviced by a third party. The findings came from the Comptroller of the Currency and Office of Thrift Supervision, which jointly surveyed the 14 largest mortgage servicers.

Banks surveyed were Bank of America, Citibank, First Horizon, HSBC, JPMorgan Chase, National City, U.S. Bank, Wachovia and Wells Fargo. Thrifts surveyed were Countrywide, IndyMac, Merrill Lynch, Wachovia FSB and Washington Mutual. All of these thrifts have either failed or been acquired since last summer.

The respondents serviced 34,877,891 mortgages for $6.1 trillion as of Sept. 30, 2008. Their combined portfolios accounted for around 90 percent of first mortgages serviced by banks and thrifts and more than 60 percent of all U.S. mortgages.

The servicers owned less than 10 percent of the loans they serviced, based on the number of loans outstanding. Those loans were owned by third parties through residential mortgage-backed securitizations and loan sales. The share of loans serviced for Fannie Mae and Freddie Mac was 62 percent.

Around nine percent of the loans serviced by the surveyed institutions were subprime. Borrowers with credit scores below 620 were considered subprime.

Alt-A loans amounted to 10 percent, the report said. Alt-A included borrowers with scores between 620 and 659. Low- and no-documentation loans made up 30 percent of loans serviced by the institutions.

Jumbo mortgages amounted to seven percent.

cringely Lender Updates, News Bank of America, CitiBank, Countrywide, First Horizon, HSBC, IndyMac, JPMorgan Chase, Low-doc mortgages, Merrill Lynch, National City, News, newsp, no-doc mortgages, pnews, survey, USBank, Wachovia, Wachovia FSB, Washington Mutual, Wells Fargo

January 16, 2009 — Fourth quarter mortgage production was down by almost 50 percent from a year earlier at CitiGroup, according to the company. Last year’s residential originations were $104.3 billion, down from $163.3 billion in 2007.

Fourth-quarter 2008 production was $16.6 billion, down from $22.0 billion in Q3 and from $32.0 billion a year earlier.

The third-party mortgage servicing portfolio ended the year at $646.6 billion, up slightly from $646.5 billion at the end of September and $599.6 billion at the end of 2007.

CitiBank said it held $197.4 billion in home loans as of Dec. 31, lower than $202.0 billion on Sept. 30 and $218.6 billion a year earlier.

Including loans it owns, Citi serviced $844.0 billion in mortgages at the end of last year, higher than $818.2 billion at the end of 2007.

The 90-day delinquency rate on residential loans was 4.73 percent at the end of December, climbing from 3.85 percent in the third quarter and 2.22 percent 12 months prior.

Citi reported an $18.7 billion loss for 2008 — deteriorating substantially from a $3.6 billion profit in 2007. During just the fourth quarter, the company had an $8.3 billion loss — worse than the $2.8 billion third-quarter loss but better than the $9.8 billion loss in the fourth-quarter 2007. Included in the results were $4.6 billion in subprime net write-downs, $1.3 billion in net Alt-A write-downs and $1.0 billion in commercial real estate write-downs.

The company said it will split into two divisions: Citicorp and Citi Holdings. It expects to close on a joint venture with Morgan Stanley in the second half of this year where it will get a 49 percent stake in the new entity, Morgan Stanley Smith Barney, in exchange for contributing subsidiary Smith Barney.

cringely Lender Updates 2008, CitiBank, CitiCorp, CitiGroup, earnings, Lender Updates, mortgages, newsp, pnews, Q4