Category Archives: Servicing

Radian: New mortgage insurance written jumps 25% in first quarter

Private mortgage insurer Radian Group’s new mortgage insurance written jumped 25% in the first quarter 2017, helping drive a strong start to the year.

According to its first-quarter earnings release, new mortgage insurance written hit $10.1 billion for the quarter, compared to $13.9 billion in the fourth quarter of 2016 and $8.1 billion in the prior-year quarter.  

Similar to industry trends, refinance insurance dropped in the first quarter, accounting for 16% of total NIW, compared to 27% in the fourth quarter of 2016, and 19% a year ago.

Net income for the quarter increased to $76.5 million, or $0.34 per diluted share, up from $66.2 million, or $0.29 per diluted share, in the first quarter 2016.

“I am pleased to report strong first quarter results for Radian, including year over year growth in net income, book value and new MI business written,” said Radian’s CEO Rick Thornberry. “As persistency rises, we expect our large, high quality MI in-force portfolio to grow and generate future premium revenue. This is the primary driver of future earnings for Radian.”

The two charts below break down the highlights from Radian’s earnings.

The first gives an overview of how the mortgage insurer improved in the first quarter, while the second one looks specifically at net income.

Click to enlarge

one

two

(Source: Radian)

Here are other quick highlights from the report:

  • Total primary mortgage insurance in force grew to $185.9 billion, compared to $183.5 billion as of Dec. 31, 2016, and $175.4 billion as of March 31, 2016.
  • The mortgage insurance provision for losses came in at $47.2 million in the first quarter, down from $54.7 million in the fourth quarter of 2016, but up from $43.3 million in the prior-year period.
  • The total number of primary delinquent loans fell by 11.4% in the first quarter from the fourth quarter of 2016, and by 16.4% from the first quarter of 2016.
  • Total net mortgage insurance claims paid dropped to $82.1 million in the first quarter, down from $116.5 million in the fourth quarter of 2016, and $127.7 million in the first quarter of 2016.

“After nearly two months with Radian as CEO, my excitement about the prospects ahead continues to grow. I decided to join the company based on the excellent businesses, great team, diversified set of products and services, high quality portfolio, and the institutional commitment to serve customers,” Thornberry added. “Those qualities, along with a strong capital base, solid profitability and excellent market opportunity, are a winning combination.”

Article source: http://www.housingwire.com/articles/39972-radian-new-mortgage-insurance-written-jumps-25-in-first-quarter

First quarter GDP shows sharp slowdown in economic growth

Real gross domestic product showed a disappointing increase in the first quarter with the worst growth in three years, according to the advance estimate released by the Bureau of Economic Analysis.

Real GDP increased 0.7% in the first quarter, compared to the fourth quarter’s increase of 2.1%, according to the estimate.

The first quarter advanced estimate is based on source data that is incomplete or subject to further revision, and will be followed by a second estimate released in May.

Click to Enlarge

GDP

(Source: BEA)

This chart shows this is the second consecutive quarter to see declines in GDP, down from 3.5% in the third quarter and 2.1% in the second.

The slow-down in real GDP in the first quarter reflected a decrease in personal consumption expenditures, private inventory investment and in state and local government spending. There were partly offset by an increase in exports and accelerations in both nonresidential and residential fixed investment.

However, despite this slowdown, all bets are not off for an interest rate hike in June.

“The trivial 0.7% annualized gain in first-quarter GDP, below the consensus forecast at 1.2%, won’t necessarily stop the Fed from hiking interest rates again in June,” Capital Economics Chief Economist Paul Ashworth said. “In recent years there is a well-established pattern of GDP growth disappointing in the first quarter and then rallying over the remaining three quarters.”

“Indeed, since 2010, the average for first-quarter growth is only 0.9%, compared with 2.4% in each of the other three quarters,” Ashworth said. “Fed officials are well aware of this potential residual seasonality.”

He pointed out that the slowdown reflects an increase of only 0.3% in consumption. However, consumer confidence is slipping lower, but still at historical highs, and could turn around quickly in the second quarter.

Article source: http://www.housingwire.com/articles/39989-first-quarter-gdp-shows-sharp-slowdown-in-economic-growth

Feds seek fugitive who fled after being convicted in $16 million mortgage fraud scheme

Nearly a year ago, Oscar Ortiz, a 53-year-old contractor from the Houston area, pleaded guilty to conspiring to commit bank, mail and wire fraud for his role in a $16 million mortgage fraud scheme.

Ortiz was due in court this week to receive his sentencing for that conviction, but when his sentencing hearing began, Ortiz was nowhere to be found.

And now the Federal Bureau of Investigation is searching for him.

According to the U.S. Attorney’s Office for the Southern District, Ortiz now stands charged with failing to appear and is considered a fugitive.

Ortiz’s original conviction stems from a mortgage fraud scheme in which he and a conspirator, Houston Realtor Seung Min Santillan, recruited straw borrowers to purchase residential properties in the Houston area.

As part of the scheme, Ortiz and Santillan obtained mortgages from lenders to purchase properties using the names and credit of the straw borrowers.

According to the U.S. Attorney’s Office, Ortiz and Santillan provided the lenders with “materially false information” to convince them to fund the residential loans.

Ortiz and Santillan used several business entities as part of the scheme including Uptown Builders, Americorp Builders, Luxury Quality Homes and Santi Investments.

To get the straw borrowers to participate in the scheme, Ortiz and Santillan told them that the property would be in their name for only a short period of time while Ortiz made modifications to the property, before reselling the house.

Ortiz and Santillan also promised the straw borrowers that they would handle all the costs associated with purchasing and holding the properties.

Once the loans to purchase the residence in question funded, one or more of the business entities Ortiz used would receive a large portion of the loan proceeds.

According to the U.S. Attorney’s Office, this also occurred even when the same property was purchased for a second time in the name of a new straw borrower.

Court documents showed that Ortiz and Santillan were able to keep a large portion of the loan proceeds since the value of the residence had been inflated with fraudulent appraisal reports.

Last year, Santillan pleaded guilty to the conspiracy and making false statements on a loan application. And earlier this month, she was sentenced to 168 months in federal prison and ordered to pay $5,299,500 in restitution.

Ortiz, however, still remains at large with the FBI on the hunt for him.

Article source: http://www.housingwire.com/articles/39987-feds-seek-fugitive-who-fled-after-being-convicted-in-16-million-mortgage-fraud-scheme

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