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Posts Tagged ‘Bank of America’
Wednesday, November 4th, 2009
 With the 2009 fiscal year ending on September 30, this month’s HECM volume report revealed a new list of the top 10 reverse mortgage lenders, very much changed from that of last fiscal year. The list is below, compared to that of 2009 FY. However, given how close many of the lenders are to each other in terms of the number of HECMs they endorsed, it is by no means clear how the list will shake out over the next few months.
October 2009:
1. Wells Fargo
2. Bank of America
3. MetLife Bank
4. Financial Freedom Acquisition
5. One Reverse Mortgage
6. 1st AAA Reverse Mortgage
7. First Mariner Bank
8. Security One Lending
9. Harvard Home Mortgage
10. Stay in Home Mortgage
Fiscal Year 2009:
1. Wells Fargo
2. Bank of America
3. World Alliance Financial Corp
4. Financial Freedom
5. One Reverse Mortgage
6. MetLife Bank
7. Countrywide Financial
8. Generation Mortgage
9. Urban Financial Group
10. 1st AAA Reverse Mortgage
Thus, from last year’s top 10, only 6 remain in the top 10 for October. The complete list for October can be found on the HUD website. The changes will also be reflected on the Reverse Mortgage Guides website in the Lender Directory in the near future.
Tags: 1st AAA Reverse Mortgage, 2009 FY, Bank of America, Countrywide, financial freedom, First Mariner Bank, generation mortgage, Harvard Home Mortgage, hecm, hecm volume, HECM volume report, HECMs, HUD, list, MetLife, One Reverse Mortgage, reverse mortgage, reverse mortgage lender, reverse mortgage lenders, reverse mortgages, Security One Lending, Stay in Home Mortgage, top 10 list, Urban Financial, wells fargo, World Alliance Financial Corp
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Wednesday, October 21st, 2009
 Today’s Wall Street Journal featured a very interesting article on how Bank of America is using reverse mortgages to save senior borrowers. The cases include situations where Bank of America has taken a significant write down to allow the borrowers to stay in their homes. But not all borrowers may receive the same treatment as the borrowers highlighted in the article. As the story notes, most borrowers who received the modified reverse mortgage had taken out option ARMs.
Option ARMs (Option Adjustable Rate Mortgages) have become “the new subprime mortgages,” leading many borrowers into foreclosure. 32% of option ARM borrowers were delinquent or in foreclosure last month, compared with 48% of subprime mortgage borrowers. Unlike subprime mortgages, option ARM mortgages generally went to borrowers with good credit, including seniors with significant equity in their homes looking to refinance. The option ARMs have also proved difficult to modify, since the low interest rates on the loan often cannot be lowered any further. Lawsuits have been filed by borrowers claiming they were misinformed of the loan’s complicated structure, which in many cases can lead payments to balloon after a few years.
As a result of the lawsuits, as well as the settlement of a suit against Countrywide, which was since acquired by Bank of America, Bank of America has agreed to modify option ARMs and subprime mortgages where possible. While it appears that Bank of America has so far only issued about 20 reverse mortgages to borrowers with option ARMs, it looks like a good start to fixing a significant problem. Borrowers with option ARMs from Bank of America may want to talk to their servicer or the bank about a modification, perhaps with a reverse mortgage.
Tags: ARM, Bank of America, borrower, borrowers, Countrywide, foreclosure, lawsuits, Mortgage, mortgages, option ARM, refinance, reverse mortgage, reverse mortgages, senior, subprime, subprime mortgage, Wall Street Journal
Posted in Consumer News, Industry News | No Comments »
Tuesday, October 20th, 2009
 Bank of America announced this morning that it is resuming offering fixed-rate reverse mortgage loans in Illinois. The decision comes after Bank of America has reviewed its policies relative to Illinois’ High Risk Home Loan Act (HRHLA) and determined that the loans can be offered as long as they meet the following criteria:
- Closing costs, defined as all costs paid by the borrower directly or indirectly, do not exceed 5% of the total loan amount.
- Bank of America’s high cost worksheet must be completed.
- Bank of America’s high cost worksheet must be submitted to fulfillment and indicate that the loan has “passed” the high cost test.
Says the letter, “Bank of America stands behind its commitment to provide clarity and transparency to home lending. To that end, we have chosen not to engage in the production of high cost loans.” Bank of America also announced that loans declined when the product was suspended September 16th can now be re-submitted for approval. The decision should come as welcome news to reverse mortgage lenders in Illinois.
Tags: Bank of America, fixed-rate, high-cost loans, HRHLA, Illinois, reverse mortgage, reverse mortgages
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Wednesday, October 7th, 2009
 In a move that is designed to help the housing industry, the Wall Street Journal reported today that Fannie Mae and Freddie Mac are working on a program to help smaller banks get the short term credit needed to help them make home loans. This would come in the form of Fannie Mae and Freddie Mac making advance commitments to buy home loans that meet a certain criteria. The program builds on a pilot program already underway between Freddie Mac and NattyMac and Provident Lender Associates LP.
While it seems that much of this plan has yet to be announced, any assistance to small banks appears to be welcome. Another column in the Wall Street Journal pointed out that there are over 8,000 mortgage lenders nationwide (not counting reverse mortgage lenders). When one considers that the majority of mortgage loans tend to be completed by the three major banks- Wells Fargo, Bank of America, and JP Morgan Chase. These three lenders alone account for 52% of new home mortgages, up 15% from the 37% market share for the top 3 lenders in 2007. An increase in market share for the top lenders likely doesn’t bode well for the industry though. As a result, it will be interesting to see if the plan with Freddie Mac and Fannie Mae will help revitalize the mortgage industry by helping the smaller lenders.
Tags: Bank of America, fannie mae, Freddie Mac, home loan, home loans, housing industry, J.P. Morgan Chase, lenders, Mortgage, mortgages, NattyMac, Provident Lender Associates LP, reverse mortagages, reverse mortgage, Wall Street Journal, wells fargo
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Monday, October 5th, 2009
 September’s HECM volume report as published by HUD (U.S. Department of Housing and Development) showed that the number of HECMs endorsed increased by about 500 loans from August to September. The number of HECMs endorsed in September was 9,473, while 8,933 HECMs were endorsed in August. However, this number does not reflect the dramatic increase in the number of case numbers assigned the last week in September during the final days of the former PLF limits. As such, the number of HECMs endorsed should rise rapidly in October and November, as they are processed and closed.
In the meantime, the HECM lenders in the top 10 remained unchanged from August. These top 10 lenders are measured by the total number of HECMs endorsed so far this year, explaining why some lenders that have left the reverse mortgage business are still in the top 10. The list is as follows:
1. Wells Fargo
2. Bank of America
3. World Alliance Financial Corp
4. Financial Freedom
5. One Reverse Mortgage
6. MetLife Bank
7. Countrywide Financial
8. Generation Mortgage
9. Urban Financial Group
10. 1st AAA Reverse Mortgage
It will be very interesting to see if this list changes in the next two months as the number of HECMs endorsed increases dramatically. The complete list for September can be found on the HUD website. The changes will be reflected on the Reverse Mortgage Guides website in the Lender Directory within the next week.
Tags: 1st AAA Reverse Mortgage, August, Bank of America, Countrywide, financial freedom, generation mortgage, hecm, HECM volume report, HECMs, HUD, MetLife, One Reverse Mortgage, PLF, reverse mortgage, reverse mortgages, September, top 10 list, Urban Financial, wells fargo, World Alliance Financial Corp
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Thursday, October 1st, 2009
 Financial Freedom announced that effective immediately, it too is discontinuing fixed-rate reverse mortgage loans in Illinois. This comes after Bank of America stopped offering its fixed-rate product in Illinois. All these changes are due to concerns about the Illinois High Risk Home Loan Act (HRHLA) which only applies in the state of Illinois. The act is designed to protect borrowers against high-cost loans, and applies to all kinds of loans and mortgages. Under the threshold set by HRHLA, many fixed-rate products are high cost, since the total closing costs often exceed 5% of the principal limit of the loan.
It is important to note that the fixed-rate product changes in Illinois do not affect any other states. Meanwhile, borrowers in Illinois can still complete reverse mortgages using the LIBOR, while local lenders wait for changes to the HRHLA to be enacted. That said, MetLife and Reverseit are still offering their fixed-rate products… at least for the time being.
Tags: Bank of America, financial freedom, fixed-rate, High Risk Home Loan Act, HRHLA, Illinois, LIBOR, MetLife, reverse mortgage, reverse mortgage loans, reverse mortgages, Reverseit
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Thursday, September 17th, 2009
 Last night Bank of America announced that it was suspending the origination of its fixed-rate product in Illinois. This occurred because of the Illinois High Risk Home Loan Act (HRHLA), which only applies in the state of Illinois. The act is designed to protect borrowers against high-cost loans, and applies to all kinds of loans and mortgages. Under the threshold set by HRHLA, Bank of America’s fixed-rate product is high cost, since the total closing costs often exceed 5% of the principal limit.
As a result, Bank of America has suspended all fixed-rate reverse mortgage loans in Illinois effective immediately. They are not allowing wholesale partners to purchase any more Illinois high cost loans. Bank of America will work with all business partners regarding Illinois loans with a closing costs:principal limit ratio greater than 5%. If new fixed-rate loan applications are received by Bank of America, Bank of America will work with the business partner to determine if the transaction should be re-disclosed as an adjustable-rate. Otherwise, the loan will be denied.
Although Bank of America has only been issuing its fixed-rate product for the last month or so, this change is still likely to reverberate throughout Illinois.
Tags: Bank of America, fixed-rate, High Risk Home Loan Act, high-cost loan, high-cost loans, HRHLA, Illinois, loan, Mortgage, reverse mortgage, reverse mortgages
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Wednesday, August 26th, 2009
 The Office of the Inspector General (OIG) found Bank of America’s HECM Servicing Division to be out of compliance. The OIG alleged that Bank of America did not comply with two important HUD requirements in its servicing of reverse mortgages. It did not maintain the annual certifications of the borrower’s residency, and it failed to notify HUD in a timely manner when the reverse mortgages became due and payable as a result of the death of the borrower. One reverse mortgage loan file also did not contain an appraisal.
Bank of America disputes the findings of the OIG. Their main objection appears to be that many of the loans in question were not being serviced by Bank of America when the loan was completed or when the borrower passed away, and rather are files that have since been acquired by Bank of America when Bank of America acquired the Seattle Mortgage Company in April 2007. The OIG responded that the acquiring servicer is responsible for receiving the complete file from the prior servicer. Another Bank of America objection is that many of the certificates of occupancy could be found through online methods, while the OIG only reviewed the hard copy files. The OIG responded that while there was a written procedure, it did not appear to always be followed, and the occupancy certificates need to be retained.
A complete copy of the report, including Bank of America’s response, can be found below:
OIG Audit Report of Bank of America
Tags: audit, Bank of America, compliance, hecm, HUD, loan, loans, Office of Inspector General, OIG, procedure, reverse mortgage, reverse mortgages, servicing
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Friday, August 21st, 2009
 A federal judge in Manhattan ruled yesterday that the Helping Families Save Their Homes Act of 2009 did not exempt Countrywide from investor lawsuits. Countrywide had argued that the federal legislation automatically voided its pledge to buy back loans from investors if those loans were modified for troubled borrowers. The Helping Families Save Their Homes Act of 2009 was meant to help encourage servicing companies to modify loans, in part by providing some protection under liability arising from loan changes.
However, many of the mortgages owned by Countrywide (which has since been purchased by Bank of America), are owned by investors. The investors receive interests and principal payments from borrowers over the life of the loans. When the loans are modified, these payments are typically reduced. The investors are arguing that when Countrywide and Bank of America agreed to modify the loans, they breached their contract with the investors.
The ruling in the case said that the legislation did not prevent Countrywide’s investors from trying to enforce their rights under the mortgage servicing contracts. It would be up to the investors to prove that Countrywide’s pooling and servicing agreement requires it to repurchase the loans the bank modifies. The case would be in state court, outside of federal jurisdiction. Countrywide wanted the case to take place in federal court, due to the law being a federal law.
This case has some interesting implications. Right now, the Obama Administration has made it their priority to modify mortgages for borrowers, attempting to help the over 13% of homeowners who are currently delinquent on their mortgages. However, this case shows that even if the servicing companies and lenders agree, other parties, such as investors and hedge funds, may object. Certaintly there are bound to be losers from the housing bust and subprime mortgage crisis- the question is who will bear the brunt of the blow. As individuals argue in their self interest, it appears dangerously likely that the good of the collective whole will suffer.
Tags: Bank of America, Countrywide, home loans, investor, investors, lawsuits, legislation, lender, lenders, loan, loan suit, loans, Mortgage, mortgages, ruling, servicing companies, subprime mortgage crisis, The Helping Families Save Their Homes Act of 2009
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Thursday, August 20th, 2009
 On Wednesday night, Bank of America officially introduced its new fixed-rate HECM. The reverse mortgage product, a Fixed HECM 5.56, will be added to Bank of America’s current product offering of the Monthly Libor 225, Monthly Libor 250, Monthly Libor 275, Monthly Libor 300, and the Annual CMT 600. Bank of America also added new disclosures to their application packages. From now on, all application packages for Bank of America loans will include:
- HECM Reverse Mortgage Product Disclosure
- Important Disclosure: Your Payment of Property Charges
- General Questions Regarding HECM Reverse Mortgage Loans
Included in Fixed-Rate Packages Only:
- Truth in Lending Disclosure
- Home Mortgage Disclosure Act (HMDA)
The Bank of America fixed rate product has been highly anticipated for some time, and will hopefully help lower the procesing times for fixed rate loans throughout the industry.
More information can be found in the official press release: 2009-8-18-fixed-rate-release
Tags: Bank of America, breaking news, CMT, disclosures, fixed-rate, hecm, LIBOR, loan, loans, reverse mortgage, reverse mortgages
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