When I was a kid, boy bands wrote songs about girls, cars,
and school. Well, I guess the times have changed. This one, from Isaac Hollingsworth,
comes from the son of a principal in a mortgage-related recruiting firm: http://www.youtube.com/watch?v=v9UqqaHDosg
Where are the investors going? How about,
“Away”? A good-sized, relatively well capitalized retail lender
here in Northern California sold loans to
26 different correspondent investors and brokered loans to 35 different
wholesale investors in 2007. In 2008, interestingly, this same company has used
16 correspondent investors, but the brokered list has increased to over 50
different wholesalers. There is any number of reasons for this. Obviously
on the correspondent side, the industry has lost American Home, Greenpoint, National City, Aurora,
etc. On the wholesale side, as volume has dropped and each deal becomes more
precious, and they have more time on their hands, agents everywhere have become
resourceful about finding outlets for the loans. Sometimes it appears that the
only thing that's really moving is the first time homebuyer market.
Interestingly, there are companies in this market that are expanding, whether
they are retailers or wholesalers. As some large investors have exited the
market for broker business, mid-sized companies are now expanding their market
share, and making some nice profits doing it.
Speaking of the loss of investors, HSBC released a flyer
that said, “We wish to advise you that unprecedented market conditions
have made it necessary for HSBC Mortgage Corporation (USA) to cease
Wholesale/Correspondent origination operations effective immediately. HSBC
Mortgage Corporation (USA) will continue to process any loans that are
registered as of November 18, 2008. Floating loans registered as of November
18th, 2008 must be locked by December 2, 2008. All loans will have until
January 20, 2009 to fund. There will be no fundings after January 21, 2009. On
behalf of HSBC Mortgage Corporation (USA) we would like to thank you for the
relationship we have enjoyed with you in the past and wish you the best for the
future.”
I must be getting old, since I found myself confused by Wells
Fargo wholesale’s recent announcement about new loan amounts until I
read it 4-5 times. And even then, I would be hard pressed to explain it. Here
is it, verbatim: “Recently, the Federal Housing Finance Agency and the
U.S. Department of Housing and Urban Development (Mortgagee Letter 2008-36)
announced the new 2009 loan limits. Effective with registrations on and after
Nov. 17, 2008, Wells Fargo Wholesale Lending will begin accepting the 2009 loan
limits for conventional conforming and FHA transactions meeting the following
guidelines.
2009 Conventional Conforming Loan Limits
Wells Fargo Wholesale Lending will accept new registrations
on and after Nov. 17, 2008, for the 2009 conventional conforming loan limits as
long as the closing date is after Dec. 1, 2008. Reminder: 2008 High Balance
Conforming Loan Program transactions must fund and close by Dec. 1, 2008.
Pricing Loans with the 2009 Conventional
Conforming Loan Limits
The High Balance Conforming Loan Program pricing, including
applicable adjusters, is located on page five on the Wholesale state rate
sheets. Clients should enter Temporary Loan Limits as the program code on
Broker’s First®. 2009 High Balance Conforming Loan Program loans must
close after Dec. 1, 2008.
Reminder: 2008 High Balance Conforming Loan Program
transactions are not eligible for locks on and after Nov. 17. Loans locked
after Nov. 17 will be considered a 2009 High Balance Conforming Loan Program
loan and must close after Dec. 1.
Thornburg Mortgage announced that the company has not
paid the interest payment due on November 15, 2008 on its 8% Senior Notes,
because it currently does not have available funds to do so. The company is in
active negotiations with the counterparties to the Override Agreement and
expects to pay the $12.2 million interest payment once an amended and restated
agreement has been reached with the counterparties to the Override Agreement and
within the 30-day grace period under the indenture.
In order to continue their efforts to adapt to recent and
anticipated trends in the mortgage market, PMI has revised the credit score
requirement for High Balance loans to a minimum of 700 effective December 1,
2008.
Let’s get back to the market. Today we’ve
already seen The Consumer Price Index. It was expected to be -0.8%, ex-food and
energy +0.1%, and came out at -1.0% and -.1% respectively. October’s
Housing Starts came out as expected, -4.5%, and Building Permits, at -12%, fell
further than expected. Later today we’ll have the release of the October
28-29 FOMC meeting. Note that the next Fed meeting isn’t until December
16th, and it appears that the chances of overnight funds declining
to .5% above 80%, with a very slim chance of them either leaving Fed Funds the
same or reduction closer to 0%. We also saw a drop last week in mortgage
applications, which were -6.2%. Compared to last year, applications are -41%
according to the MBAA. Purchases were -12.6%, and refinancing were +2.6%. After
all this chatter, the 10-yr rests down in the mid-3.40% area, but mortgage
prices are roughly unchanged from yesterday afternoon.
A man takes his Rottweiler to the vet. "My dog's cross-eyed.
Is there anything you can do for him?"
"Well," says the vet, "let's have a look at
him" So he picks the dog up and examines his eyes, then checks his teeth.
Finally, he says, "I'm going to have to put him
down."
"What? Because he's cross-eyed?"
"No, because he's really heavy"
