Take your pick: this is really cool, really irritating, or merely
mesmerizing. But
don't forget to change your clocks this weekend: ClockFun
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108484119819&s=8721&e=001iPbnM8
88dW00C1SSCZ-6Xl3XjSQVSPyuHhT80jgufGSG99G39Sreo4qJo6eJhRuj-70b7T2q3J7Y8KGEzV
T1EBakWPlmlWqIXhnPAn2VA3LNR7Tg5tKoO7gMPvI1u_yggaxYJ9M8jGk=].
I think that I finally figured out Europe. When we have...
The rumors of a sovereign debt deal, stocks rally but U.S. rates go up.
The rumors turn out to be false, stocks sell off but rates improve.
The news of a deal that is struck on sovereign debt, stocks rally but U.S.
rates
go up.
A deal means that the Greeks (substitute any country) will vote on whether
or not
their government should spend less and tax more, stocks sell off but rates
improve.
Under mounting pressures, Greek Prime Minister George Papandreou agreed to
forgo
a referendum on the Eurozone's rescue program. The plan had left
Papandreou's government
in doubt as it braces for a confidence vote, although cancellation of the
referendum
eased fears that Greece will immediately exit the euro zone. Remember,
Libertarians
will tell you that the government cannot give to anybody anything that the
government
does not first take from somebody else. Not only that, but we had the
unemployment
data this morning - page down once or twice for news on that.
LO compensation remains an issue. "I still remain scared of how many lenders
have
loan officers out there who still have an interest in upselling rate and
maximizing
premium pricing. They're still asking their Secondary Departments, "Should
I lock
today or wait until tomorrow?" Talk about a red flag! Others have taken a
micro
approach with dozens of comp structures based on LO and/or origination
source (referral
versus marketing lead). The rules and security measures must be fully
thought and
implement in a consistent manner. I am finding that overages (above par
pricing)
certainly remain an area of exposure. To whom does premium pricing belong?
If
it's not passed along as a lender credit, it belongs to the bank - and what
LO is
looking to sell pricing to fatten managements P&L and not their own? This
all spells
trouble if, or when, the regulators come knocking on the door with both
independent
mortgage bankers and community banks. The problem here is that most, if not
all,
of these lenders are under the impression they're in compliance. Matchbox
has been
working with bankers to analyze how bankers have implemented their
compensation
plans and eliminate the areas of exposure." Contact Frank Fiore at
plans reviewed.
FHFA Director DeMarco's latest testimony on the GSE's can be found at
ForgetThoseOutdatedHomeOwnershipGoals
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108484119819&s=8721&e=001iPbnM8
88dW3XYU1pwVRMzUMhmUT-NdTCvhJHiK-ShNmE_nOC05C6rEBPlej4Tysq__Tl8V3LgsA6aiufhW
kp6H06Vg4JponhyKLPn_CFlw60c-cupw14-4PYnZIG38QmgtvtkPSyUDbmKZIoqDacz4rvype4go
kJUGlGV9hvQEU=].
This is timely, since Freddie Mac reported a $4.4 billion loss for the third
quarter
and said it will seek $6 billion from the U.S. Treasury Department. For
those playing
along at home, the request brings Freddie Mac's total Treasury draw to $72.2
billion
although it has returned $14.9 billion of that money to taxpayers in the
form of
dividend payments to the government (including $1.6 billion in the 3rd
quarter).
And lower rates don't help everyone: Freddie Mac reported $4.8 billion in
derivative
losses due to declining interest rates.
Things are a little rosier in the commercial and multi-family sector. The
MBA reports
that in the 3rd quarter loan originations came in 98% higher than during the
same
period last year and 10% higher than the second quarter. "Mortgage
originations
by life company portfolios hit another new record in the third quarter,"
said MBA
Vice President of Commercial Real Estate Research Jamie Woodwell. "Lending
by bank
portfolios and Fannie Mae and Freddie Mac also picked-up. Hotels, retail
properties,
office space, multifamily, industrial, etc. are all included in the numbers.
See
the report
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108484119819&s=8721&e=001iPbnM8
88dW0QGZFAkDbT5EhU2hlTB-hOuOfWrnBxaEBaYJRRg-vYzN7ymsdREa8Fd7nbuWKKkj0Mn9BXbN
0S4P5je8IhpE66M-vv4B7boOFFF0hjdYxWPx2ig8Pp0qvLFwEA8TpXku5Sq_JPnFOsikEw6Zlq9r
1UCMantrmgMWZd59x6lkJFQqa8Uff62NzbvVCanr-HfDZcf56dVEpd4Ve5t8NwZhlq].
Barclays Capital noted that, "The survey numbers support our view that
originations
will continue to increase in the near term, though growth will be sluggish
and concentrated
outside the CMBS conduit space. Since the quality of collateral financed by
the
agencies, banks and insurance companies is higher, we expect the tier 1
properties
to be well bid, while properties in secondary and tertiary markets could
face difficulties
finding avenues to refinance, given the slowdown in conduit issuance."
But another item, generated from the Real Estate Roundtable, indicated that
commercial
real estate executives appear to have cut back their expectations on
economic conditions,
citing worries about the pace of recovery and other concerns. "The
Roundtable's
latest Sentiment Index fell for the second consecutive quarter to its lowest
point
since fall 2009. After rising slightly at the beginning of the year (77 out
of 100),
the index fell to 69 in the third quarter and to 59 in the latest survey.
Respondents
cited concerns about the pace of economic recovery; Washington's ability to
address
fiscal and tax policy challenges; new regulatory requirements; and the
long-term
European debt situation as negative factors.
When in doubt, file a lawsuit. Allied Home Mortgage sued HUD for suspending
the
firm's ability to write FHA insured home loans. Allied and James C. Hodge,
founder
and chief executive officer of the Houston-based firm claimed last year that
it
was the biggest closely held mortgage broker in the U.S., and HUD's move
earlier
this week wipes out 70% of its business.
I received several e-mails on Allied's HUD/FHA suspension - none of them
pro-Allied,
and in fact a few pointed out HUD's neglect. Here is a sample: "The
principals at
Allied will get theirs - and deservedly so. But I hope a bright, searing
light shines
on the folks at HUD/FHA as well. Allied's horrific misuse of the FHA
program hasn't
been a secret. This has gone on for years and anyone with a computer could
watch
the train wreck via their compare ratio. Where were the folks at HUD/FHA?
Why did
they let this go on and on? Maybe a prosecutor or two should sue a few of
those
folks for gross dereliction of duty and failure to mitigate taxpayer
damages. And
what makes this worse? There are other Allied's out there - just check the
compare
ratios."
The Bella Homes saga continues. Wednesday the commentary noted its site
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108484119819&s=8721&e=001iPbnM8
88dW142UrMEwAJtVusxS4uEcPlLNVQRb74O0OiJBxiRJidfaBUO4isDPJzJYS9SuujXGm6-4myPS
7umqz30H5pdVnPCLrGYVShvsud0TVqUW2g2GHeu_fFpNirk_K5Wpt7wBoLQq1uNl9FyQ==]
and received this site from a reader: Scam
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108484119819&s=8721&e=001iPbnM8
88dW1UJUY5hVZkHK7pXYNYTvQpDlZ-R8M0TgS_Oql8vEwvA4TTIAqWvZ2wLBbA-qgbMZ5omt1rFH
-DW55lbUmRUE6nddKifHIwl3Rqd9gB9ZIcaYvYb0iuy5KNUjaCOczOM-52tebsIE6blg==].
David Oldenburg, author and the CEO of California Seller Realty, writes, "In
my
new book I talk extensively about real estate "options", "mortgage
assignments",
"rent-to-owns" etc... Here is what I think Bella is doing because I work
with some
bankruptcy attorneys. Notice that Bella says, "If you qualify". I am
guessing they
are looking for situations where they can wipe out the second mortgage or
offer
them far less than what they are owed. They may even be doing this with the
first
as well, kinda like a short sale but a direct payout by them. There are lots
of
investors seeking these high-rent situations right now because of the yield
on their
money. This is easily accomplished because with a lease-option or rent to
own, the
payments can be much higher for the same priced property."
Mr. Oldenburg continues, "Many of these so-called people who are "helping"
home
buyers and sellers are simply using it as a tool to get more calls, more
leads that
lead to other business. Think about it... If you are an upside-down owner
and you
watch that Bella video you are going to be all over it. They can easily come
back
later and say you do not qualify but they can handle your short sale. My
guess is
the ONLY people who qualify are the ones that have an ideal situation where
they
can negotiate or get rid of some of the mortgage debt and then offer a
lower payment
to the original seller. I can guarantee there is never a situation where
Bella is
buying a home and making payments that are higher than what they are
receiving!"
And lastly, "Please look more into the Bella Homes business plan. I have
been approached
by several people about this program - we refuse to get involved. Search for
'Mortgage
Assignment Program' and you will find hundreds of sites talking about how to
sell
homes underwater homes to buyers who may never qualify. For example, this
one: AssignmentProfits
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108484119819&s=8721&e=001iPbnM8
88dW3GEk4YHzUYve0LnUq91gxY39QiXkCbBSbeKMKPGyJ0BJcWnV39ACaKM5wYa6hkv8V7T6O4Yd
Zrxhcd-aeUbQUf8M0k_bkABz_hxbjpozpipbSxtPuUkT8eAfOEvh5PKqk=].
A representative shows an underwater house to a buyer with bad credit. The
seller
can't sell and the buyer can't obtain financing. The buyer signs a contract
with
the seller with a clause that it is subject to the lender assigning the
mortgage
to the buyer. I have also heard of where they quit claim the deed to the
buyer
and then the buyer just starts making payments. Then they call the bank and
tell
them that they are the new owners. The bank is upside down, so they assign
the
loan? Smells like a scam to me."
If you'd like to learn more about FHA loan origination and processing, you
may want
to check out a webinar on Tuesday, November 8th. It is hosted by Fairway
Wholesale
Lending, and doesn't cost anything: FHATraining
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108484119819&s=8721&e=001iPbnM8
88dW3TcFIF8h7f_kDrxdbC4cu4L42uj6Ul699ZqV0QmafDs6w8L9y4AqohYSp0lBqCYoDDXTrfGy
4soQFG9kDt63LZJjCCYDrI-FdvsE_0S1802VLEKV1Abg3yFViPkb0was8GT3c3_h9Dfg==].
"This is an excellent training course for originators and processors with
little
to no FHA lending experience or with previous FHA experience but needing a
refresher,
or owner/mangers considering FHA lending as an additional product offering."
(This
is Part 1; Part 2 is on Thursday.) Write to Bob Sweeney with any questions:
Yesterday was not a great day for the U.S. fixed-income markets due to an
announced
25 basis point cut in the ECB's benchmark rate to 1.25%. Reuters noted that
the
10-year Treasury notes ended lower by 17/32nds (2.07%)...In MBS, lower
coupons struggled
from the start due to a bout of late day selling and supply yesterday, with
expectations
of more supply as Treasuries opened lower. Mortgage banker selling appears
to have
remained in the $1.5 to $2.0 billion area today with supply consisting
primarily
in 3.5% coupons." Most rate-sheet mortgage prices worsened slightly.
You'll see the same thing today, as rates are slightly higher after a decent
Nonfarm
Payrolls report for October showed a pickup of 80k jobs, back-month
revisions higher,
and the unemployment rate dropping to 9.0%. The 10-yr slid up to 2.10% and
MBS prices
are worse by about .125.
Confucius didn't say:
Man who wants pretty nurse must be patient.
Passionate kiss, like spider web, leads to undoing of fly.
Better to be pissed off than pissed on.
Lady who goes camping must beware of evil intent.
Squirrel who runs up woman's leg will not find nuts.
Man who leaps off cliff jumps to conclusion.
Man who runs in front of car gets tired; man who runs behind car gets
exhausted.
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
(Check out
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=lix9mliab.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=lix9mliab.0.v7uif6dab.zy6u9cdab.8
721&ts=S0696&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis].
For archived commentaries, go to
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=lix9mliab.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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