Downey Says Non-Performing Asset Growth Slows [Housing Tracker]

| About: Downey Financial (DWNFQ)

Mortgage Trends 

Downey: Growth in Non-Performing Assets Slows. “Option-ARM specialist Downey Financial Corp. (NYSE:DSL) monthly report: Growth in non-performing assets slowed dramatically during July, to just over 3% compared to June. And July’s growth in NPAs was the slowest rate this year, by far; the previous low-growth month was May’s 5.26%... Non-performing assets dropped as a percentage of total assets for the first time in well over a year; but Downey officials noted this was an artifact of total assets increasing more so than any decrease in troubled loans. Also, Downey recovered roughly 45% of July’s deposit outflow [when] depositors over the FDIC’s insured limit had pulled their funds out over concerns that the bank may be nearing failure.” (Housing Wire, Aug. 15) 

Ginnie Mae Setting Historic Pace in August. “Lenders One, a nationwide cooperative comprised of independent mortgage bankers… said it originated more than $3 billion during a 30-day period. That mix: 43.5% to the FHA, only 5.3% jumbo, Alt-A or second mortgage products, and the rest in conforming product… nearly half of originations went to FHA, and by extension to Ginnie Mae… Ginnie Mae, the explicitly government-backed mortgage operation soundly trumped Freddie Mac (FRE) in fixed issuance during July… $24.9 billion was issued via Ginnie during the month, compared to $20.3B at Freddie. It was the first time Ginnie’s fixed issuance had been above either Freddie or Fannie Mae (FNM) in [at least] four years.” (Housing Wire, Aug. 15) 

Florida's Chief Mortgage Regulator Resigns After Being Accused of Licensing Criminals. “The head of Florida's Office of Financial Regulation, Commissioner Don Saxon, announced his resignation this week, amid allegations that he and his agency licensed thousands of mortgage brokers with felony convictions, including racketeering and money-laundering. Saxon put forth a 30-page reform proposal before the state Cabinet on Tuesday, after being ordered by Governor Charlie Crist two weeks prior to devise changes to the OFR's licensing program. However, legislators argued that Saxon should have taken steps toward reform earlier, and Cabinet CFO Alex Sink said OFR has been aware of mounting complaints about the actions of mortgage brokers for years and done nothing to push for tougher regulatory oversight.” (Default Servicing News, Aug. 15)

Subprime Loan Buyer Gets Dubai-led Investment. “In the increasingly crowded field of investors looking to buy sub and non-performing mortgage notes, one small shop has added foreign dollars to the mix: White Plains, New York-based Diversified Mortgage Workout Corporation said Friday it had received investment commitments of $20 million from a private investment group based in Dubai.” (Housing Wire, Aug. 15)

Novastar Financial Buys Appraisal Company Pipefire. “Former mortgage lender NovaStar Financial Inc. said Thursday it had acquired a majority interest in PipeFire LLC, which provides residential appraisal and similar services. The company said it will rename the Indianapolis-based PipeFire as StreetLinks National Appraisal Services with offices in Indianapolis and Kansas City. In a securities filing, NovaStar said it paid $750,000 for the 75% interest when the deal closed Aug. 8. It will pay an additional $3.25 million if StreetLinks achieves certain pre-tax income targets. Lance Anderson, NovaStar's CEO, said the downturn in the national housing market has increased demand for appraisal services.” (AP via Forbes, Aug. 15)


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