TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/113472
The latest Or ig i nat ion SERVICING Online Applicants Beat Out Average Credit Score Se r v ic i ng Credit scores among online mortgage applicants rose in 2012, and Mortgage Marvel expects the trend to continue. s e c on da r y m a r k e t a na ly t ic s T Looking for a Way Out A government report says Treasury failed to put together an exit strategy for its investment in Ally. I n a report, a taxpayer watchdog agency accused Treasury of lacking a "concrete" plan to help Ally pay back taxpayers and move toward financial stability. "Four years after its first government bailout, Ally still owes taxpayers $14.6 billion and Treasury has no concrete exit plan that balances repayment to taxpayers with Ally's financial stability," the Office of the Special Inspector General for Troubled Asset Relief Program stated in the report. Although Treasury made three investments into Ally, totaling $17.2 billion, the report says Treasury never required the 62 | The M Report company to "spell out a plan" to address issues surrounding Residential Capital, Ally's mortgage arm that caused most of the company's losses. Ally, formerly known as GMAC, was at one time one of the nation's largest subprime lenders. According to the report, Treasury's lack of a plan to address the subprime mortgage component going into the GMAC investment may be the main reason why Ally still remains in TARP. Initially, Treasury did plan to pay back taxpayers through a public sale of stock, but in May 2012, ResCap filed for bankruptcy, which led to the delay of the initial public offering. In a letter from Treasury, Timothy G. Massad, assistant secretary for the department's Office of Financial Stability, explained the strategic initiatives for Ally's exit include the Chapter 11 ResCap bankruptcy and the sale of Ally's international operations, "which will generate cash that can be used to repay Treasury." "As these two key initiatives are completed, Treasury will be able to monetize its remaining investment through a sale of its stock (either through a public or private sale) or through further sales of assets," Massad stated. he average credit score among online mortgage shoppers is rising and is well above the overall national average, according to a recent study by MortgageMarvel.com. In 2012, the average FICO score for online mortgage shoppers was 734, a four-point increase from 2011. Last year's average was also 70 points above the overall national average credit score of 664, according to MortgageMarvel.com's findings. The company expects this trend to continue throughout this year, in part due to opportunities on the job front and rising incomes. MortgageMarvel.com conducted its analysis by reviewing more than 450,000 mortgage applications submitted on Mortgagebot—owner of MortgageMarvel.com—in 2012. For the third consecutive year, California applicants scored higher than all other states. The average FICO score for Mortgagebot applicants from California was 755. Last year was also the third consecutive year for Mississippi applicants to rank lowest in MortgageMarvel.com's study. The average credit score for Mississippi applicants was 689. While Mississippi's average is 45 points below the national average for online mortgage applicants, MortgageMarvel.com's COO, Rick Allen, pointed out a score of 689 "is still considered to be a good credit score." "If you're shopping for a first home, a score in this range is certainly considered to be good,