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Feb. 14, 2011: Jobs, job changes, and lawsuits in mortgage banking; Will Oregon pass this law? Lots of vendor, lender, and agency updates
Rob Chrisman
Valentine's
Day…Opinions differ as to who was the original Valentine but the
most popular theory is that he was a clergyman who was executed
for secretly marrying couples in ancient Rome. In A.D. 496, Pope
Gelasius I declared Feb. 14 as Valentine Day. Through the
centuries, the Christian holiday became a time to exchange love
messages, and St. Valentine became the patron saint of lovers.
Esther Howland, a native of Massachusetts, is given credit for
selling the first mass-produced valentine cards in the 1840s,
and often candy and flowers are given. According to the census
bureau, 24 pounds was the per capita consumption of candy by
Americans in 2009. And for flowers, USDA stats show that $359
million was the combined wholesale value of domestically
produced cut flowers in 2009 for all flower-producing operations
with $100,000 or more in sales. Among states, California was the
leading producer, alone accounting for about three-quarters of
this amount ($269 million).
And while we’re talking about sweet things, AmeriSave
Institutional Lending is recruiting account executives for its
West and Midwest Regions. The company, given its focus on
technology, is well known for providing both wholesale and
correspondent lending to community banks and credit unions -
exclusively FDIC and NCUA insured institutions. AmeriSave has a
full range of secondary market mortgage products and a national
Full Eagle Direct Endorsement with FHA. Experienced folks with a
sales background in wholesale/correspondent lending, mortgage
Insurance or agency work should check out the link: http://www.applicantstack.com/client/amerisave/x/apply/a28qbzu2mulw/aaaq
Maybe some of the
folks that Wells Fargo just laid off can apply. 142
temporary employees in Des Moines, who were hired to handle
mortgage refinancing, were laid off. It is a sign
of the times that other mortgage companies are doing the same
thing. The number is small relative to the 13,000 employed
there. Indicative of other mortgage originators, Wells reported
that during the fourth quarter of 2010, mortgage applications in
the pipeline were down 27% from the third quarter, and that
refinancing represented about 70% of Wells Fargo's mortgage
business in the fourth quarter of 2010. And the St. Louis
Post-Dispatch reports that another 200 WFHM
employees were laid off in St. Louis. Once again, the
workers were temporary employees, specializing in the bank's
Home Affordable Refinance Program.
"A former chief
executive of IndyMac Bancorp and two former
chief financial officers were accused of securities fraud for
concealing the bank's financial condition.” So the SEC stated in
one lawsuit versus IndyMac. http://www.reuters.com/article/2011/02/12/us-sec-indymac-idUSTRE71A7BD20110212
On the other side of the country, Chase has
tapped someone new to run its mortgage operation. http://dealbook.nytimes.com/2011/02/11/jpmorgan-names-new-head-for-mortgage-business/?srcdlbksb
Any company, or originator, doing business in Oregon
has probably seen this proposed law. It seems that the state
legislators are considering a bill that would prevent the sale
or transfer of the loan or the servicing by anyone but a bank -
it "states mortgage banker, broker, originator," etc. but leaves
out banks. http://www.leg.state.or.us/11reg/measpdf/sb0600.dir/sb0663.intro.pdf
Here is an article that a few folks have sent to me which
presents one opinion about the originator
compensation issue. Whether or not the large investors
subscribe to this opinion remains to be seen, but it is worth a
look: http://www.sg-resdigital.com/resdigital/201102re#pg25
The much anticipated 31-page “White Paper” on the
GSEs was released and held few surprises after being
leaked earlier in the week. The three basic options
are 1) A privatized system with very limited government backing
and a focus on low to moderate income households; 2) A
privatized system with a “springing guarantee” that increases
government support in times of crisis; and 3) A reduced
structure whereby the government only participates in
catastrophic reinsurance. The FHA may return to its role as a
lender for affordable mortgages, rather than a subprime
alternative as many believe has happened.
There is plenty of
fodder filling the internet with analysis, opinions,
predictions, forecasts, etc. The goals of the
government’s plan are to ensure minimal housing & mortgage
market disruption, have Congress actually determine the plan,
and minimize the impact to the taxpayer while minimizing
government subsidization.
One of the main concepts will be to replace much of the money
from government programs with money from private investors. At
this point it is unclear whether or not this will increase
rates, relative to where they are now, but most analysts believe
that rates will probably be slightly higher, but that down
payments may also go up. The effect of increasing the down
payment would actually make pools of mortgages safer for
investors, and therefore actually serve to push rates down. The
proposal also recommends increasing guarantee/guarantor fees,
and lowering the maximum loan amount. Decreasing the maximum
convention loan from $729k to $625k in high cost areas will
impact a certain portion of borrowers. Overall, from an
investor’s point of view, the prospects of a decreasing loan
size, increasing some fees, and possibly reducing the supply
somewhat may actually help rates.
For example, the Community
Mortgage Bankers Project believes that the proposal fails
to address the current, and growing, market share concentration
among a handful of too‐big‐to‐fail,
FDIC-insured banks. But the
report was useful in providing a road map for how the GSEs will
be steered over the next few years – and it will indeed take
years although many of the provisions will not require
Congressional approval, and so are highly likely to be
implemented in the near future. Importantly for investors, the
Treasury reiterates several times that it is committed to
keeping GSE debt and MBS obligations performing. One report
said, “The prospects of a decreasing loan size, increasing
guarantee fees, and reduced net supply should all be positive
developments for (MBS pricing).
The MBA released a
letter that they sent to FHFA recommending
the extension of the HARP program deadline from June 30,
2011 to December 31, 2012. Along with the extension of the
program they recommended a number of changes, which include
changing the cutoff date, increasing or removing the LTV limits,
and reducing or dropping LLPA for HARP refinancing. Most believe
that the program will be extended, and maybe the cutoff dates
changes, but don’t bet on the other suggestions being adopted. http://www.mortgagebankers.org/NewsandMedia/PressCenter/75641.htm
MIAC announced that
it has entered into a “strategic partnership” with
SettlementOne.
SettlementOne is a provider of data and appraisal services to
financial lending institutions nationwide. The release said,
“This alliance will provide MIAC customers with integrated
credit, tax, and data service solutions, along with quality,
fully compliant appraisal services, all within a centralized
ordering platform.”
The investor changes
continue. Here we have yet another unintended consequence of the
Fed trying to repair the credit crisis. Are temporary
buydown loans really part of the meltdown? Probably not.
But investors from BofA to Wells have suspended them. In
Franklin American’s case, “FAMC must suspend the
purchase of all temporary buydowns until the Federal Reserve
Board clarifies the process for proper disclosure of temporary
buydowns on the updated Truth in Lending disclosure.”
“This Notice affects
existing and future mediation, foreclosure, bankruptcy, and
litigation referrals of mortgage loans in the State of Florida.
Fannie Mae has terminated its relationship with
Ben-Ezra & Katz. Servicers may not refer any future
Fannie Mae matters to the Ben-Ezra Firm. Servicers that have
existing Fannie Mae matters at the Ben-Ezra Firm must take
immediate action to transfer those matters to other firms in the
Fannie Mae Retained Attorney Network in Florida – go to www.eFannieMae.com.
Affiliated Mortgage updated its VA
IRRRLs product lines, and Flagstar Correspondent
has posted an update to its rate sheet which applies to its
Government product lines. Flagstar also got the word out to its
brokers about Florida attached properties, conflict of interest,
& Chinese Drywall. The company also sent out news on FHA
& VA’s “Property Flipping Waiver Extension,” discussed
enforcement of signature requirements for FHA Sponsored
Originators, VA prior approval brokers, etc. Flagstar also, over
the weekend, implemented a price adjustment on Government loans
without a FICO score. “The price adjustment will be the same as
the current adjustment for loans with a FICO of 620-639.”
Mortgage Services
III recently announced
changes in the age of appraisals for its Conventional High
Balance loans, a temporary ban on loans with Temporary Buy
Downs, a change in its extension policy, a change to its “No
Cash Out Refinance Seasoning” requirement, and a change in the
eligible borrowers for MSI Freddie Mac Relief Refinance.
NYCB Mortgage
Company adjusted its
condominium/PUD Project Questionnaire, noting it “will be
required for all condominium loans that receive a Property
Inspection Waiver (PIW) finding.” (The following project types
are ineligible: new converted, non-gut rehabilitation
condominium projects; hotel or motel condominium conversions;
and new condominium projects that contain one or more units with
less than 400 square feet of space.)
On to something
simple – like rates. Friday we were done with the auctions, and
the GSE Reform information was released, and it seemed like the
markets breathed a sigh of relief. Mortgages did well relative
to Treasuries. MBS prices improved between .5-.625, and it
seemed like sellers sat on the sidelines: Tradeweb volume
averaged just 74% of the 30-day average. The new 10-yr T-note
improved by .5 in price and closed at 3.65%.
Unlike last week,
this week is filled with economic news upon which to chew. Today
is pretty clear, which is good since lots of guys have to run
out and obtain last-minute Valentine's Day items. Tomorrow we
have the Empire State Manufacturing Index, along with Retail
Sales and Import & Export prices. Wednesday is Housing
Starts & Building Permits, the Producer Price Index (PPI),
and Industrial Production and Capacity Utilization. Thursday
brings us Jobless Claims, the Consumer Price Index (CPI),
Leading Economic Indicators, and the Philly Fed index. Early on we find the 10-yrat 3.66% and MBS nearly
unchanged.
Since seniors are
texting and tweeting more and more there appears to be a need
for a STC (Senior Texting Code). If you qualify for Senior
Discounts this is the code for you.
ATD ~ At The Doctor's
BFF ~ Best Friend Farted
BTW ~ Bring The Wheelchair
CBM ~ Covered By Medicare
CUATSC ~ See You At The Senior Center
DWI ~ Driving While Incontinent
FWIW ~ Forgot Where I Was
FYI ~ Found Your Insulin
GHA ~ Got Heartburn Again
HGBM ~ Had Good Bowel Movement
LOL ~ Living On Lipitor
LWO ~ Lawrence Welk's On
OMMR ~ On My Massage Recliner
ROFL-CGU ~ Rolling On The Floor Laughing-Can't Get Up
SGGP ~ Sorry, Gotta Go Poop
TTYL ~ Talk To You Louder
WAITT ~ Who Am I Talking To?
GGLKI ~ Gotta Go, Laxative Kicking In
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