I tell folks that money isn’t everything. But it sure keeps the kids in touch.

Speaking of money, can non-FHA approved lenders get paid on an FHA loan? In other words, can a mortgage lender advertise to brokers, “Get Paid On All Your FHA Loans Without Being FHA Approved!”? According to HUD, only the borrower can determine that they want to engage the services of a non-approved broker and the services of any such broker must be paid by the borrower. Approved mortgagees can’t pay for the services. The key language from HUD is as follows: “While FHA regulations permit a borrower to engage a broker who is not FHA-approved to assist him/her in obtaining mortgage financing (24 CFR 203.27(e)), the loan origination services may not be performed by that broker and the FHA approved mortgagee shall not compensate the broker for such services. FHA requires that these services be performed by either an FHA-approved lender or loan correspondent. RESPA prohibits the payment of duplicative fees. The payment to the unapproved broker for duplicated services amounts to an unearned fee in violation of section 8(b) of RESPA. Further, this payment may also act as a disguised referral fee for steering the borrower to the FHA-approved lender or loan correspondent, which is in violation of section 8(a) of RESPA.”

And, while we’re on HUD, here is their site for the Home Affordable program: http://makinghomeaffordable.gov

An explanation of the government’s plan for “Private and Public Partnership”, somewhat similar to that used in the 1980’s for disposing of bad assets, can be found at http://www.treasury.gov/press/releases/tg65.htm

In a story from Reuters, the Dutch Finance Ministry will seek to curtail bonuses among senior management (as opposed to sales staff) at financial companies receiving government support, while ING is asking some staff to give back their 2008 bonuses. http://www.reuters.com/article/ousiv/idUSTRE52M13420090323

They take their mortgage fraud penalties seriously in Texas. Here’s an example of a gal from the town of Gun Barrel, Texas, who will probably spend the rest of her life behind bars: http://www.ntxe-news.com/artman/publish/article_53083.shtml

Back to the economy for a moment: we’re continuing to hear about some decent news out there that would point to things showing signs of improvement. Of course the stock market garnered all the attention yesterday, having its best day of the year. But we also had Existing Home Sales +5.1% in February (although the national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago when the median was $195,800). Things to keep in mind for today, besides Toyota cutting production over 50%, is a $40 billion 2-year Treasury auction. The 10-yr seems happy at a yield of 2.71% and mortgage prices are worse than yesterday afternoon by another .125.

Are mortgage rates heading lower? I am no soothsayer, but one really has to question whether or not mortgage rates can fall much farther. As it is, borrowers can pay a point or two and tie up a 4.5% 30-yr mortgage, but rates are still around 5% or higher for no fees. The US government continues to be the predominant buyer of mortgages, and only of agency production, not of jumbo loans. When investors express an interest in owning mortgages, jumbo or otherwise, we may see mortgage rates drop – until then it is probably more of the same. And companies are continuing to grapple with staffing, processing, and funding issues.

Citi and Chase correspondent channels both officially followed the FHA’s limits on cash out refinances, effective April 1. “Per HUD Mortgagee Letter 2009-08, effective with case numbers assigned on or after April 1, 2009 the maximum LTV is limited to 85% of the appraiser’s estimate of value…” For them and others, the following have been added to the list of qualifying criteria: if the property has been owned less than 12 months preceding the date of the loan application as the borrower's principal residence the 85% maximum LTV is based on the lower of the appraised value or sales price of the property when acquired. This does not apply if the subject property was inherited and is or will become the heir’s principal residence. Borrowers must not be delinquent or in arrears on their current mortgage. It is acceptable for the subordinate lien holder to require the second mortgage to be modified (e.g., the amount of the lien reduced) in order to remain subordinated. FHA does not consider it a new subordinate lien even if, as part of the modification, the documents are re-executed at closing. New subordinate financing is limited to a CLTV of 85% and must meet FHA guidelines per the 4155. Effective with case numbers assigned on or after April 1st, 2009 a second appraisal is required for cash-out transactions with a loan amount greater than $417,000, and if a property is located in a declining market.

Mortgage insurance through a CitiMortgage-approved mortgage insurance carrier is required for all Loans with LTV’s over 80%. Citi reminded their clients that for conforming conventional loans MI is not available if the loan has any of the following: Loans with a FICO <660, Second Homes, Cash-Out Refinances, Interest Only transaction with FICO <680, etc.

Who Says There No Benefits Of Getting OLDER...???

Kidnappers are not very interested in you, and in a hostage situation you are likely to be released first.

People call at 9 PM and ask, “Did I wake you?”

There is nothing left to learn the hard way.

Things you buy now won't wear out.

You can live without s-x but not without your glasses.

You get into heated arguments about pension plans.

You quit trying to hold your stomach in no matter who walks into the room.

You sing along with elevator music.

Your eyes won't get much worse

Your joints are more accurate meteorologists than the national weather service.

Your secrets are safe with your friends because they can't remember them either.

You can't remember who sent you this list.

Rob

(For archived commentaries, check www.robchrisman.com, or to subscribe write to rchrisman@robchrisman.com)