DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/105603
the last two quarters has helped to stem rising default rates," stated Britt Johnson, senior director of Fitch Ratings. New issuances have risen almost threefold over the year, according to Fitch. In the third quarter, new issuances totaled $6.2 billion. In the first quarter, they totaled $2.1 billion. However, Fitch found in addition to the 119 newly defaulted loans in the third quarter, 81 CMBS loans reached maturity and did not refinance. These loans totaled $1.7 billion. Eleven of the 81 are now paid in full – accounting for $723 million of the $1.7 billion. Those that are not paid in full and have not been refinanced include 37 five-year loans from the 2007 vintage, totaling $1.1 billion, and 24 ten-year loans from the 2002 vintage, totaling $132.7 million. During the third quarter, three loans with values greater than $100 million defaulted, including One Skyline Tower, a $678 million office space in Virginia; Colony IV Portfolio B, a $171 million loan on office/industrial spaces in six states; and Kroger Center, a $116 million office space in Florida. Start your day with a professional pick-me-up. Start your day with the most current and critical news on the mortgage default servicing industry from DSNews.com. Sign up for our e-mail newsletter and get the top stories delivered direct to your inbox every day. Register to receive your Daily Dose at DSNews.com 116 JPMorgan Chase Posts Q3 Profit Increased mortgage-related revenue pushed JPMorgan Chase to record a healthy quarterly profit in Q 3 2012. The company posted a record net income of $5.7 billion, with net revenue at $24.9 billion. The bank saw growth in mortgage originations, reporting $47 billion, a 29 percent increase from the prior year. Year-to-date, JPMorgan reported originating 664,000 mortgages. Meanwhile, mortgage loan application volumes were $73.2 billion, up 26 percent yearover-year and 9 percent quarter-to-quarter. JPMorgan chairman and CEO Jamie Dimon said the increase in mortgage revenue stems from overall improvements in the housing market. "Importantly, we believe the housing market has turned the corner. In our mortgage banking business, we were encouraged that credit trends continued to modestly improve, and, as a result, the firm reduced the related loan loss reserves by $900 million," Dimon said in a statement. While mortgage performance did improve, Dimon noted the level of charge-offs remains elevated and said the bank expects to see high default-related expenses "for a while longer." Countrywide Counters MBIA Fraud Claims The long-running legal proceedings between New York-based MBIA Insurance Corporation and Countrywide Home Loans, which was acquired in 2008 by North Carolina-based Bank of America, has turned into a blame game as the companies battle over liability for insurance losses on bad loans. MBIA filed a lawsuit in 2008 for losses sustained from insuring mortgages originated by Countrywide. MBIA alleges Countrywide committed fraud and breached its obligation to repurchase defective loans. Countrywide's lawyers counter that MBIA neglected its due diligence when agreeing to insure the loans in question. In a motion for summary judgment filed in October, MBIA claims Countrywide "breached representations and warranties with respect to at least 56 percent of the loans in the 15 securitizations of residential mortgages" MBIA agreed to insure. MBIA claims to have found 49,000 defects in a random sample of 6,000 mortgages. Furthermore, MBIA alleges "Countrywide committed fraud and breached numerous representations and warranties in the Transaction Documents by misrepresenting the credit characteristics of the mortgage loans included in each securitization." However, Countrywide counters that any losses MBIA incurred are its own responsibility, not that of Countrywide. In fact, according to Countrywide, MBIA admitted as much when the company's CFO stated before Congress in 2008, "I'm afraid we have no one to blame but ourselves." In a memorandum for summary judgment, Countrywide's lawyers assert MBIA KNOW THIS More than 200 homes have been razed in Staten Island, Queens, and Brooklyn because of Hurricane Sandy, and another 500 may be deemed uninhabitable, the New York Daily News.