More Mortgage Woes
"NEW YORK - Shares of MortgageIT Holdings Inc. fell Tuesday after the real-estate investment trust said it expects a loss in the first quarter because mortgage competition and the inverted yield curve have decreased the value of its sub-prime loans."
Sub-prime loans are specialized, higher-cost loans made to people with a poor credit history.
"Tuesday's weakest level of $8.86 was a new 52-week low, surpassing the prior low of $11 set Friday. The company's shares have been sliding for the past week."
"Excessive competition is expected to hurt lenders across the board, though the lack of mortgage loan volume at MortgageIT will hurt them more in particular, according to Keefe, Bruyette & Woods analyst Bose George."
"They don't have sufficient scale," George said, "and they entered the (sub-prime) business late, but bigger players are making a sufficient living at it."
"New York Mortgage Trust Inc. also reported fourth-quarter earnings Monday below Wall Street estimates. For its fourth quarter, the company said it saw a net loss of 48 cents a share, down from a net gain of 12 cents a share, a year ago."
"PHH Corp. stock fell Thursday after the mortgage company delayed the filing of its 10-K form with the Securities and Exchange Commission, citing accounting adjustments related to its spin-off from Cendant Corp."
PHH said Thursday that before the move, the company undertook "an internal reorganization which required significant accounting adjustments, and certain allocations were made that are now the subject of additional review by PHH and its independent auditors as part of the on-going audit of its 2005 financial statements."
"PHH said it could not provide a date when it would file the 10-K and subsequently canceled its fourth-quarter earnings release and conference call scheduled for March 10."
Immediately after the announcement, Fitch Ratings placed the debt of PHH on ratings watch negative. The agency said it is concerned with the unknown duration of the delay, the eventual outcome of the audit, and PHH's "depth of accounting expertise."
"Countrywide, which announced lower fourth quarter earnings, noted disappointing results on sector margins, which dropped to 0.09% of loan volume in the fourth quarter from 0.61% a year earlier. The California-based mortgage banker blamed "the Ameriquests and New Centuries of the world" as well as "companies that have a REIT" for current conditions." http://www.MortgageDaily.com/REIT.asp?spcode=pr
"Following an industry-wide decline in fourth quarter originations, Argent Mortgage cut about 16% of its 4,000-employee workforce, a company spokesman told MortgageDaily.com."
"Federal investigators say American Macro Growth Mortgage, a recently disbanded mortgage brokerage firm, helped dozens of borrowers cheat financial institutions and secure up to $100 million in loans. The FBI is trying to track down employees of the firm, who are believed to have disappeared with a fortune they made in commissions." http://www.MortgageDaily.com/MortgageFraud.asp?spcode=pr