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Let's say that you have a warehouse line with Bank of America, or anyone
else for that matter. You come into work and either the line is frozen, or
the company announces that it is eliminating that business line. What do you
do? Well, hopefully the CFO has planned for it, and has other warehouse
lines in place, because without a warehouse line a mortgage bank is
basically dead in the water. A CFO will tell you that a new warehouse line
can easily take up to 60 days to set up, and, unlike marriage, having an
extra relationship or two is a good thing (besides certain isolated
compounds in Utah). Unfortunately I don't have room to print the dozens of
institutions offering warehouse lines, but in this time when many companies
are reevaluating business segments, nothing should come as a surprise.
Out on the West Coast Guarantee Mortgage is continuing to expand. It is one
of the West Coast's "leading independently owned mortgage broker and banker
is continuing to grow its sales team and is hiring loan consultants as well
as expanding their existing branch network. Ranked among the top volume
mortgage companies in the industry, Guarantee Mortgage consistently funds
close to 2 billion per year and has been around for 20 years lending in CA,
OR, WA, and Hawaii. If you know anyone interested joining the Guarantee
Mortgage team, they should contact Ryan Madden at rmadden@gmwest.com
Speaking of originators, I received this note from an AE out in California:
"Is there anything out there to help the good client who has made all
payments on time, rate of 8% with MI who received a home possible loan in
2007? They don't fall under HARP and have tried to work with existing
servicer with no luck. The property is worth $200k and their loan balance
is $280k. They don't want to ruin their credit and stop making payments,
just to be told they can't do anything. Any advice out there?"
Apparently the press release noting the allegiance between Google and
LoanSifter last week was somewhat inaccurate. "LoanSifter...regrets to
advise that the announcement that was distributed on November 7th regarding
its relationship with Google was made prematurely and wishes to retract and
clarify the following inaccuracies: 'Google Comparison Ads' should be
referred to as 'Google Advisor,' LoanSifter is not a 'strategic partner'
with Google, but one of multiple pricing engines on Google Advisor that
share the same vendor relationship, and the pricing information Google
provides is not 'real time' pricing. Stated LoanSifter President Bruce
Backer: 'We apologize to Google and its partners for these inaccuracies and
look forward to a continued relationship with Google.'"
For an update on the extension/restoration of higher loan limits, and,
perhaps not coincidentally, NAR's contributions to politicians behind the
extension go to: NARPullsSomeWeight
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108606579924&s=8721&e=001wwvNlx
y8YHDfEWY_qs-XQJ09QIa74DQrY2TPID5VA9WhTtuRkgG3xAXNUoN8aFTRnKivp-KcfaUFKrS58q
RN4JHLmNtIabUTDtHYO81_5KscXscbNstCk7PyhWuVkJZZ2feRwbdOPciYY-6FCq2qIQjfH1pZ3G
wsLXIkDbxdguyUYm6k4e1fkXG5OjWDf69ZR_tcmQipWDU3bQ_RViuWK3I-2U49Ek1UFNz7wf2iXr
Y=].
And any investor who owns pools of jumbo loans took careful note when
Moody's said, based on its analysis of mortgage-backed bond portfolios,
homeowners with jumbos now constitute "greater strategic default risk" than
any other type of borrowers, including subprime. "That's because an
exceptionally high number of jumbo owners
- many in high-cost markets hit by real estate deflation over the past
several years - are stuck with persistent negative equity. More than half of
the jumbos analyzed by Moody's where owners are still making payments have
home market values lower than their outstanding loan balances." For the
story visit: ThatIsOneBigDefault
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108606579924&s=8721&e=001wwvNlx
y8YHCnuANG2pgvjgS49ssJU1oCCRX2xqjuTSW9GoUKMnoSfRE6I_Cy_pcmJCU93pO7y4gaNPKLZ3
tzAxWzVMnn7JDSYnrV3tbyQ6ufo7wrI9I6P7a2tNs_137Ae7IZrWm29SsVekJ3mfYZiB0g6YBoWp
9LpBtq9z02g-i8krNFyYSEtiC4ERZFhz-9u4AKAwI_02nyRBXV2fYXjLRlW-1L92QbW5-3m93rn9
tOnC2CANlZafe6nPNZIAA8].
The CFPB sent out two draft designs for a new real estate mortgage closing
disclosure form that would combine TILA and RESPA disclosures for borrowers.
The CFPB has proposed two model forms and has given the financial industry a
tool to give them feedback as to which we prefer. If you'd like to vote go
to KnowBeforeYouOwe
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108606579924&s=8721&e=001wwvNlx
y8YHCaODPNkcfewM8BBkQzxG74cpXl93z3sII8nUfDgrsohxjaqLz-tRwoBeQtTcHZmRPZxc9xZT
gNOPN3woPZbHZY7pMUqwqDAHTzwx8SiO1nd1iaT6f7oJ6GEjRm-DKbIM3BnwImep0fhQ==]
and click on "switch to industry tool."
Investors are not only concerned with default, but also pools paying off.
Last week Sterne Agee released a prepayment report which stratified GNMA
collateral by state, loan type and collateral program. "We see that states
with higher concentrations of home loans guaranteed by the U.S. Department
of Veterans Affairs (VA) have higher prepayment activity. Within GNMA, VA
loans are the fastest prepayers by a wide margin, generally followed by FHA
loans, and then lastly by Rural Housing loans. Additionally, we see that GN
I's tend to pay faster than GN IIs owing to higher WAC's (weighted average
coupon)."
Sometimes originators ask, "Why won't an investor pay 104 or 106 for a
loan?" The answer is, of course, that the investor believes a loan like that
is going to prepay early. And the latest prepayment news is relatively
enlightening, especially for loan agents targeting refinances. This comes
from a Wall Street research desk:
"The dominant feature of last month's prepayment report was the focus on
refinancing high-credit borrowers. Although the overall level of paydowns
was consistent with market expectations, the distribution of refinancing
across cohorts diverged from Street expectations. The (recent) trend of
increased focus on the high-credit borrowers should continue, leading
30-year 4.0s and 4.5s to diverge further from the lower-credit high coupons.
The October prepayments will reflect the peak levels of the MBA refi index
reached in the late summer/early fall. 15-year MBS, which has prepaid faster
than 30-year collateral during the current refi wave, is forecast to remain
2-3 CPR in front of the 30-year sector."
MetLife Inc., currently looking for a buyer for its mortgage origination
groups, has announced to its retail and wholesale origination channels that
it will require a financial assessment of all of its reverse mortgage
borrowers beginning today.
"The announcement comes following underwriting guidance published by the
National Reverse Mortgage Lenders Association that aims to assist lenders in
assessing whether reverse mortgage borrowers are able and willing to pay the
taxes and insurance on their loans." While FHA has not made an official rule
on the issue, Acting Commissioner Carol Galante issued a statement last
month to the effect that there is nothing stopping lenders from conducting
such an assessment, which for MetLife focuses on three criteria including
residual cash flow, credit history, and principal limit usage (PLU). Other
reverse lenders, such as Generation Mortgage and Security One Lending, are
expected to do the same.
Wells Fargo's wholesale group turned some heads, and turned them again, last
week.
It first announced that, "The minimum Loan Score for non-credit qualifying
FHA Streamlined Refinances (including High Balance) will increase to 700"
starting today, but that, "Loans not meeting the new minimum Loan Score can
still be processed as a credit-qualifying Streamlined Refinance or a
Rate/Term Refinance when the Loan Score is at least 640."
But then Friday Wells' announced, "FHA Streamlined Refinance non-credit
qualifying minimum Loan Score changes have been postponed until further
notice."
What is in a name? For VA Mortgage Center, it must have been something since
it changed its name to Veterans United Home Loans. Started in 2002, Veterans
United Home Loans "grew by leveraging online leads into customers that its
specialized underwriting staff could help through the process of qualifying
for a VA loan"
and "the cost to generate online leads has tripled in the past few years" so
new marketing efforts are underway.
A name that is going away is Community Bank of Rockmart, of Rockmart
Georgia, which was closed Friday and its depositors placed with Century Bank
of Georgia over in Cartersville.
Pinnacle Capital Mortgage recently spread the word among its clients that
the "USDA recently announced that commitment authority for refinances is
temporarily unavailable.
Until further notice, PCM will NOT LOCK or FUND any USDA refinances with
"subject-to"
conditional commitments." In addition, the Mortgage Broker Fee Agreement is
no longer required by PCM.
SunTrust Mortgage updated several documents to remove references to the
eliminated Portfolio Affordable Housing Mortgage Program. FHA no longer
charges an annual
(monthly) mortgage insurance premium (MIP) on loans with a 78% or less LTV
and a 15-year or less loan term. Additionally, on FHA mortgages with a loan
term of 15 years or less, the annual MIP automatically cancels when the LTV
ratio reaches 78%, regardless of the length of time the borrower has paid
the annual MIP. SunTrust also enhanced the guidelines for its Key Loan
program.
Chase released a bulletin with information regarding appraisal services
available through DataQuick, a new Chase-approved Appraisal Management
Company (AMC).
Well, mortgage origination has slowed slightly, and the Fed keeps buying
MBS's, so what should that do to prices? Make them go up, of course, at
least relative to Treasury prices. And that is what happened Thursday. (The
weekly NY Fed recap saw another $1.1 billion per day of MBS purchases by
the Fed.) For economic news we have zip today. Tomorrow we'll have the
Producer Price Index, Retail Sales, and Empire Manufacturing. Wednesday is
the Consumer Price Index, Industrial Production & Capacity Utilization, and
a NAHB Housing Market Index. Thursday is Jobless Claims, Housing Starts,
Building Permits, and a Philly Fed number. Friday is Leading Economic
Indicators. In the early going the 10-yr T-note is at 2.08% and mortgage
prices are roughly unchanged.
(Warning: Parental discretion advised!)
First-year students at the Purdue Vet School were attending their first
anatomy class with a real dead cow. They all gathered around the surgery
table with the body covered with a white sheet. The professor started the
class by telling them, "In Veterinary medicine it is necessary to have two
important qualities as a doctor.
The first is that you not be disgusted by anything involving the animal's
body."
For an example, the professor pulled back the sheet, stuck his finger in the
rump of the cow, withdrew it, and stuck his finger in his mouth. "Go ahead
and do the same thing," he told his students.
The students freaked out, hesitated for several minutes, but eventually took
turns sticking a finger in the butt of the dead cow and sucking on it.
When everyone finished, the Professor looked at them and said, "The second
most important quality is observation. I stuck in my middle finger and
sucked on my index finger. Now learn to pay attention. Life's tough but it's
even tougher if you're stupid."
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 the impact of HARP 2.0 and the
differences in the agency's programs. 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
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