And so the debt ceiling legislation passes the House of Representatives and
heads to the Senate. So the market's attention turns back to the fact that
our economy is languishing, and thus rates are moving down. Evidence of the
current economy comes through Central Falls, Rhode Island, which sought
Chapter 9 bankruptcy protection as it struggles to meet pension obligations.
"A petition was filed today after state officials failed to persuade police,
fire and municipal employee unions to accept concessions and to get retirees
to agree to lower benefits. The city asked the court to permit the rejection
of union contracts. Are other local, state, and federal government issues
that different from Central Falls'?
Switching tracks, a word of warning from an industry vet: "Rob, you should
warn your readers to be leery of anyone still requiring compliance with the
HVCC. The HVCC was eliminated by Dodd Frank. It does not exist. You can't
comply with something that does not exist. Dodd Frank and the GSEs require
documented appraiser independence, which continues the spirit and legacy of
HVCC, but the HVCC is gone."
Ally Financial reported a net income of $113 million for the second quarter
of 2011, compared to $146 million in the prior quarter and $565 million for
the second quarter of 2010. Ally's mortgage operations (which include ResCap
and the mortgage activities of Ally Bank and ResMor Trust) are broken down
into several segments. The Origination and Servicing segment reported second
quarter 2011 pre-tax income of $47 million, down from 2010's $249 million,
with the drop attributed to lower net servicing income, which was impacted
by MSR valuation adjustments, lower production as a result of a smaller
overall mortgage market, and compressed margins due to a shift in product
mix and lower industry volume. Total mortgage loan production was $12.6
billion, up slightly from the 1st quarter but down from the $13.5 billion
in the second quarter of 2010. Ally's "Legacy Portfolio and Other" segment,
which primarily consists of loans originated prior to Jan. 1, 2009, reported
a pre-tax loss of $174 million in the second quarter of 2011, compared to a
pre-tax loss from continuing operations of $19 million in the corresponding
prior year period. The big drop was due to a mortgage repurchase expense of
$184 million.
The lenders cutting off RMIC continue. Citi sent its clients, "Correspondent
pipeline loans with mortgage insurance issued by RMIC will be provisionally
accepted however, all loans using RMIC for MI must be purchased by Citi no
later than August 24 in order to meet Fannie Mae's pooling date
requirements. (Note: there is no specific late date to register, however,
time must be allowed for file process in order to meet the August 24
"purchase by" date.) RMIC has been removed as an approved mortgage insurer
on Citi's list of approved MI companies. "In response to Fannie Mae's recent
announcement, Franklin American Mortgage Company is suspending Republic
Mortgage Insurance Company (RMIC) as an approved mortgage insurer effective
immediately.
Closed loans delivered with RMIC certificates must have a note date on or
before August 31, 2011, must be delivered to Franklin American by September
16, 2011 and must be purchased by September 30, 2011, regardless of lock
expiration." "Effective Immediately, MSI will not accept loans that are
insured by RMIC. Loans currently closed/disbursed (on/before 8/01/11), not
yet purchased by MSI: These loans must be purchased by MSI no later than
8/10/11. Loans in process, not yet closed/disbursed (on/before 8/01/11):
These loans must have a new mortgage insurance certificate issued by an
MSI-approved Mortgage Insurance Company to be eligible for MSI."
Here's a list you don't want to find your branch or company on: the FHA
Mortgagee Review Board's roster of administrative actions against
FHA-approved lenders who failed to meet its requirements. MRB sanctions
against lenders include reprimands, probations, suspensions, withdrawals of
approval, and civil monetary penalties.
Charges against these companies run the gamut of FHA violations from failure
to maintain and implement quality control (QC) plans, to failure to
implement and follow HUD/FHA's Home Equity Conversion Mortgage (HECM)
program requirements, to charging borrowers excessive and duplicative fees:
AdminActions
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106903774349&s=8721&e=001AXYmVA
tb4x8esveWwhKNJFYsAe5eSloSYPwAqFwtTHYY_NUhQ_IXHbaMUuuuvGhgLKtQYbc4djBKgl-1hA
L0bASZr820xZya2YsP6Se8WkEBozl7MGI96E-2pdDaaWOYJ0_AvfVhAyCVmft-J5WG3sQxgqEp6T
KTwl8We8Trhyw=].
According to MICA (Mortgage Insurance Companies of America) private mortgage
insurers wrote $4.8 billion in new insurance on mortgage loans originated in
June, up from
$3.92 billion in May. MICA's members include Genworth, MGIC, PMI, Radian,
and RMIC.
Insurers under the MICA umbrella had $606.3 billion in primary mortgage
insurance in force last month, down from $610.8 billion a month earlier.
Insurers who are part of MICA received 28,214 applications for private
mortgage insurance in June.
Of that group, 24,161 borrowers ended up using private mortgage insurance to
refinance or purchase a mortgage. During the same month, the companies also
reported 45,573 defaults and 38,753 cures on troubled mortgages.
One of the trends in our industry over the last year or so has been a
renewed interest in regional and special interest mortgage groups, and the
conferences of those groups.
For example, one such group is the Community Mortgage Lenders of America,
which represents over 80 of the leading independent lenders in the country,
generating an annual origination volume of over $100 billion in mortgage
loans. "CMLA was founded out of the concern that emerging federal policies
threaten to severely diminish community based lending, while increasing
regulatory concentration to the detriment of competition and consumers.
Typical CMLA member are both bank and non-bank community based lenders with
a strong commitment to fundamental underwriting standards and prudent
lending. The CMLA provides a critical voice for the middle market community
lender who feels that many other advocacy efforts do not represent them as
lenders or the communities in which they serve." If you're interested in
learning more, shoot an e-mail to Kevin Cuff at kmcuff@thecmla.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106903774349&s=8721&e=001AXYmVA
tb4x9u0YdKYsDgUeeetlgL1Vre93S8RgiOuOVHy6rEAKUSPN9rcii8c1hn1WRpgdAA9KSDTFDyog
u0hEo2I4Y7PURetHrmunjwndKue-suRVBcvA==].
In New England, the 24th annual New England Mortgage Banking Conference
(NEMBC) is gearing up for September 21-23 in Newport, Rhode Island.
"Thriving in a Challenging in Market" is the theme ("Together we will
navigate through the maze of industry challenges while identifying areas of
opportunity. Learn more about the top regulatory issues facing our industry
today such as Dodd-Frank, MLO Compensation and the Consumer Finance
Protection Bureau and regulatory issues.") For more information contact
Melody Bohl, Conference Director, at Melody@MelodyBohl.com
[mailto:Melody@MelodyBohl.com] or go to NEMBC
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106903774349&s=8721&e=001AXYmVA
tb4x_5SdEfwDjz7nOCzMWvQSn14eQB2wsI78gxAB0PZsMS1Tj5I6GsTNQiKjWKG3T7hvo3q_8BoH
a3r1ZU5XNGnhXmNTNc7xQG3to=].
Another is the Mortgage Bankers Association of the Carolinas which is
hosting its 56th annual convention titled "News You Can Use", September
23-25 in Myrtle Beach, South Carolina. Along with various speakers,
educational opportunities, and exhibitors, there will be continuing
education and ample networking time. Contact Rhonda Marcum at rbm@mbac.org
[mailto:rbm@mbac.org] for more information. Details are available at
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106903774349&s=8721&e=001AXYmVA
tb4x9c8j-RtjNYMMiX5Rs7I6fTXcHrVWYmbP4mzSm7wDpW-Gs0SmIm_5nnKEVN0GCvQqZtVA_uKn
LMrDlgrWgAWGmGefZRavzH9IA=]
at "Upcoming Events".
Heading west, the Colorado Mortgage Lenders Association is having its annual
meeting tomorrow and Thursday in Vail - for more information go to Colorado
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106903774349&s=8721&e=001AXYmVA
tb4x8vBtdBTxWFG7ydR_9AR-0VR2Tc3KCY52yNnlt1n96kjspRahR5vD4HdresKglx5JwnSXwa4A
_x0E7eRpl-SgRPNMC4xWP1LUI=].
And farther west, the Pacific Northwest Mortgage Lenders Conference is
September
18-20 in Portland, Oregon. "This annual conference is a unique opportunity
for the mortgage professionals in the Northwest and across the country to
gather, share insights and hear from some of the nation's leaders in our
industry. The guest speakers will cover topics that include regional and
national economic forecasts, updates from FNMA, FHLMC, HUD and MI. The
national MBA will provide critical and timely updates on local and national
legislative issues that affect our business.
Go to PacNorWest
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106903774349&s=8721&e=001AXYmVA
tb4x_Hw0CrqpgChhiY_iCRCZGZeCMjuewFF5892CDxKKg5nCj8DyajXWknUaSfRF3_TSlqPaEh1v
0btL4XmqRrT43McbOLAvBuzhpm1qzrkrWnmhDVwN61uDxc5QPXFU-xO9V_0kLcKW_lyA==].
GMAC's correspondents learned that New Jersey Title Insurance Company is no
longer an acceptable closing agent, or provider of title insurance
commitments/binders on loans delivered to GMACB. ("Loans delivered with New
Jersey Title Insurance Company as the closing agent or title insurance
issuing company are ineligible for sale to GMACB.") GMAC also tweaked its
pricing for the 7/1 and 10/1 Non I/O ARM adjustment for High Balance and
Super Conforming, moving it from -.250 to -.500.
Flagstar let its broker clients know that, "FHA statutory loan limits are
expected to decrease on October 1, to pre- Housing and Economic Recovery Act
(HERA) limits.
Though FHA has not yet published the implementation process, we expect FHA
to allow loans to close at today's higher loan limits provided credit
approval is issued on or before September 30, 2011. Loan limit changes to
our system will be ready to implement when the changes take effect. At this
time, we have not determined a cut-off registration and/or submission date
for loans that will be affected by the upcoming loan limit decrease."
Turning to "los mercados," it is almost as if the focus has already shifted
from the US debt and deficit issues back to the fact that our economy is
dragging. Yesterday the ISM manufacturing index, which is closely monitored
for a gauge of manufacturing activity, plunged to 50.9 in July from 55.3 in
June - way below expectations. Economists continue to cut their GDP
forecasts for 2011 below 2% - stagflation? - and this latest nightmare in
Washington DC won't help the consumer, the jobs market, or the housing
market.
But every loan rep focused on refi's is pretty happy (assuming their clients
are clean and have equity). Mortgage-backed securities were up/better about
.375 yesterday on heavier-than-normal volumes. 10-year notes rallied
18/32nds and down to a yield of 2.74%. Today we have the debt bill moving to
the Senate, but we have also had Personal Income and Outlays for June (+.1%
but -.2%, respectively). After the numbers the 10-yr is at 2.70% and MBS
prices are better .125-.250.
People born before 1946 were called The Silent generation.
People born between 1946 and 1964 are called The Baby Boomers.
People born between 1965 and 1979 are called Generation X.
And people born between 1980 and 2010 are called Generation Y.
Why do we call the last group Generation Y?
Y should I get a job?
Y should I leave home and find my own place?
Y should I get a car when I can borrow yours?
Y should I clean my room?
Y should I wash and iron my own clothes?
Y should I buy any food?
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 QRM, and doubts about its passage. 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=nenwj7gab.0.epg7qedab.zy6u9cdab.8
721&ts=S0659&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep
ress%2Fdefault.aspx]
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=nenwj7gab.0.v7uif6dab.zy6u9cdab.8
721&ts=S0659&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=nenwj7gab.0.fpg7qedab.zy6u9cdab.8
721&ts=S0659&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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