If you have $100, maybe you can buy a house. For the next year, in some
states buyers need a down payment of only $100 to purchase a HUD-owned REO
home. The buyer must be an owner-occupant, utilizing financing insured by
the FHA. Standard FHA underwriting guidelines apply, and the sale must be
for the full amount of the current list price.
(hmmm...) This is being done in the Denver and Atlanta HUD regions, and can
also be applied to an FHA 203k loan which can be used to fund repairs and
renovations on the home. The 203k program allows buyers to finance both the
mortgage and additional money for rehabilitation needs with a single
government-insured loan. Shop 'til you drop
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108349891685&s=8721&e=001TEDd3N
WLK9Q-EfogFuTc1lVBmI5RW5OBVOJyEpXnQ0LUhHl3Nqfg9TjhQSPQdzw5RgmNv-eFmmCEvf7H3s
tU18AT8M5N04MaE5gc6KSP2XHYqgTkTpqw0_8VOiXfocITy47Wd_lujjmMPijEZaOtfhr1QLMvJi
vg7s_1LPAE8Q59ZDtXwUueQTOcBtIA6pEGvdnAMXtFmwVtvbrVjAen6g==].
I don't think the HUD program above is being offered in Philly, which is
where the family of Freddie's CEO Charles Haldeman lives. I mention him
because he will be stepping down next year after about two years running
the company. Freddie's definitely had its management ranks "thinned" over
the last few years, attributed by some to a "siege mentality" that has had
made it more difficult for top leaders to execute decisions quickly. In
addition to that, the future of the company is uncertain, as we all know. In
a speech this month, Mr. Haldeman said uncertainty over Freddie's future was
having a "really negative impact on the morale at the company." Including a
base salary of $900,000, Mr. Haldeman stands to make as much as $6 million
in deferred and bonus pay for 2011. Brush up that resume to send to Freddie!
I always feel like I am opening a can of worms when I bring up LO comp. But
the issue just won't die. I received this note: "There seems to be some
confusion out there among lenders on rebates. Who do they belong to? If a
lender is operating under a borrower-paid compensation plan, and there is a
rebate that exceeds the third party fee, some lenders seem to assume that it
is their money, whereas others'
policies are to give the funds to the borrower within the 1%/$2000 limit of
a no cash-out refi. In our exciting new regulated world, how can regulators
allow different lenders to have different policies with regard to excess
rebate?"
In a similar vein, Home Savings of America spread the word that, "Under the
Regulation Z LO Compensation Rules, Premium Points (amount above par) must
be credited to the borrower and may be applied to borrowers 3rd party
closing costs, per diem interest, escrow impounds deposits and lender. HSOA
has made changes to our policy to allow for the payment of property taxes
from excess premium pricing under certain conditions.
Once the premium points have been applied to the 3rd party closing costs,
per diem interest, escrow/impounds deposits and lender fees premium points
may be applied to property taxes that are current and due at closing.
Premium points cannot be applied to the payment of any delinquent/past due
property taxes. Premium Points cannot be applied to property taxes for FFG
products or for properties located in the state of TX. Premium points cannot
be applied to broker fees. Borrowers are not allowed to receive a credit for
the excess premium at closing."
Recently the commentary noted, "Lenders say they are charging relatively
higher mortgage rates because of tighter lending standards, falling home
prices and a lack of capacity to process new home loans, all of which have
increased costs. And the Fed can't mandate that, right?"
Someone wrote in, "Yes, lenders have the flexibility to easily charge more
or less at any time they desire and also to derive that compensation from
both the borrower AND through the sale of the loan. Unfortunately the 'Fed'
via Dodd Frank HAS mandated exactly the opposite for mortgage brokers.
Brokers can only change their compensation at specific intervals determined
by the wholesalers they work with. The flexibility to change compensation is
either good for both, or it's not. In addition, brokers can only derive
compensation from the lender or borrower, not both like banks do.
Clearly for the borrower, having the flexibility to pay broker compensation
both directly and through lender compensation is an advantage. Yet the
discrepancy in both setting compensation and how it is paid exists. Begs
the question why? The reason brokers flourished is because they proved
their worth to the consumer. Obviously these many obstacles imposed on
brokers have contributed to their reduced numbers.
Licensing requirements are another impediment to brokers' ability to expand
while banks have no such limiting requirements, yet the banks are unable to
handle capacity so they raise their rates and consumers pay more. So again,
how has this helped the consumer?"
Yesterday the commentary mentioned Zillow, and how it is coming to an iPhone
near you. Now the consumer is being given Nail Your Mortgage. This company
uses trademarked PocketQuote, giving them an automated mortgage quote that
consumers can generate anonymously, for free. The company claims that it
shows real, up-to-the-minute rates and fees based on information provided by
the consumer. "Its accuracy is personally guaranteed by Mark Pickett, CEO of
Nail Your Mortgage, who is so confident in the accuracy and competitiveness
of PocketQuote that Nail Your Mortgage has offered to pay 3,000 Illinois
residents' mortgage payments for one year, under the Nail Your Mortgage
Challenge, if they can find a cheaper mortgage option than Nail Your
Mortgage." "Nail Your Mortgage connects consumers and wholesale lenders.
Wholesale lenders are able to offer their mortgages at wholesale interest
rates with zero margin or markup and consumers are able to see all
information affecting the rate and fees quoted. Finally, unlike other
companies that only claim to be online mortgage providers, Nail Your
Mortgage allows consumers to manage the entire mortgage process online. A
document management feature allows consumers to handle all their paperwork
online, while an auditing platform enables consumers to monitor the progress
of their mortgage application without phone calls or emails." (And no, this
is not a paid-for announcement.) Write to Mr. Pickett at
or go to www.nailyourmortgage.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108349891685&s=8721&e=001TEDd3N
WLK9T1YBA2GtXXhbfhNhP5t_czAaCBVI1U61SGwYY9HGyvlDmKkugBKaqNkey8tU89rruRiNsTDf
WckdS_tVAnGV6FSaneuS5g5TdR9mEShEKBQ6MTbWprdAm_].
Here in the Northeast Berkshire Hills Bancorp has agreed to acquire The
Connecticut Bank and Trust Company for approximately $30mm in cash and stock
(138% of Connecticut Bank's tangible book). And in North Carolina, seeking
to boost capital, Waccamaw Bankshares will sell 11 branches, $180 million
in deposits, and $98 million of performing loans to First Bancorp for a 1.5%
premium.
Looking at a little big lender/investor news, Bank of America issued a
disaster update for the state of New York over the remnants of Tropical
Storm Lee. GMAC Bank Correspondent Funding (GMACB) will begin to assess
$125/loan fees for missing Final Documents aged greater than 180 days based
on the November 2011 Missing Final Document Report (which focuses on the
Recorded Mortgage, Recorded Assignment and Final Title Policy). And starting
December 1, for conventional conforming loan applications GMACB will require
"successful submission of UAD compliant appraisals to the UCDP prior to
purchase as described in bulletins CL11-090 and CL11-096. If using GMACB's
VEROS Appraisal Management System exclusively, no further action by you is
necessary."
Well, rates are up this morning. But yesterday rates were up also, more on
potential news from Europe rather than U.S. economic news. (We did, however,
have New Home Sales increase by 5.7% in September - a five month high! The
supply of homes at the current sales rate fell to about 6 months, the
lowest since April of 2010.) 10-year notes plunged .625 to 2.20%.
Rate-sheet mortgage prices were worse by about .250. Mortgage banker supply
came in around $1.5 billion, just fine given demand from the Fed, servicers
and money managers.
The big news overnight was from Europe, but here third quarter GDP was
+2.5%, as expected, although the price index was a little higher than
expected. Weekly Jobless Claims came in at 402k - hardly any change. (Later
we'll have Pending Home Sales, and a $29 billion 7-yr note auction.) But
across the Atlantic European leaders agreed to boost the region's bailout
fund and struck a deal with private banks and insurers to accept 50% losses
on Greek bonds, along with foreseeing a recapitalization of hard-hit
European banks and a leveraging of the bloc's rescue fund to give it
firepower of 1 trillion euros ($1.4 trillion). Stocks liked the European
news, and with "less risk" in the world bond prices are worse: the 10-yr is
up to 2.30% and MBS prices are worse about .375.
Here is part 2 of the thirty-one top things that you will never hear a
Southern boy say:
15. I just couldn't find a thing at Wal-Mart today.
14. Trim the fat off that steak.
13. Cappuccino tastes better than espresso.
12. The tires on that truck are too big.
11. I've got it all on the C: DRIVE.
10. Unsweetened tea tastes better.
9. My fiancé, Bobbie Jo, is registered at Tiffany's.
8. I've got two cases of Zima for the Super Bowl.
7. Checkmate
6. She's too young to be wearing a bikini.
5. Hey, here's an episode of "Hee Haw" that we haven't seen.
4. I don't have a favorite college team.
3. You guys.
2. Those shorts ought to be a little longer, Becky Mae.....darlin'
AND THE NUMBER ONE THANG THAT YOU WILL NEVER HEAR A SOUTHERN BOY SAY:
1. Nope, no more for me. I'm driving!
If you're interested, visit my twice-a-month blog at the STRATMOR Group web
site located at www.stratmorgroup.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj
bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P
jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]
. The current blog takes a look at Fannie & Freddie & the FHFA, and the
changes they have in the hopper. If you have both the time and inclination,
make a comment on what I have written, or on other comments so that folks
can learn what's going on out there from the other readers.
Rob
(Check out
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=fdn9mhiab.0.epg7qedab.zy6u9cdab.8
721&ts=S0696&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep
ress%2Fdefault.aspx]
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=fdn9mhiab.0.v7uif6dab.zy6u9cdab.8
721&ts=S0696&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis].
For archived commentaries, go to www.robchrisman.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=fdn9mhiab.0.fpg7qedab.zy6u9cdab.8
721&ts=S0696&p=http%3A%2F%2Fwww.robchrisman.com%2F].
Copyright 2011 Rob Chrisman. All rights reserved. Occasional paid notices
do appear.
This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of Rob Chrisman.)
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