Tomorrow is college football day. For you college football fans out there:
TexasA&MLetter
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108241352204&s=8721&e=001RM50yv
Y5Bh950LjxD0T9_xz3psxwM-zVuGe60NfCF8Sr73KfMUMrFjeiONjdlljRUoVwX-8WyL_4Ee4qhQ
2M1xTcjF1jKL0sQCtqSYlte_SSA90bRXxk3-dU4yyfri0PW81lYL8vfdJ2tqxQJGEkwMDxcd3vDg
RQ].
And yes, it is staying dark later in the morning, and the sun is going down
earlier
here in the northern hemisphere. But we don't change the clocks until
November 6th.
Likes sands through the hourglass so are the days of our lives... the U.S.
Senate
voted yesterday to restore higher loan limits, approving, 60-38, an
amendment to
a federal spending bill that would raise the maximum size of loans that can
be
guaranteed by government-controlled mortgage companies Fannie Mae (FNMA)
Freddie
Mac (FMCC) and the Federal Housing Administration. The amendment was
sponsored
by Sen. Robert Menendez (D., N.J.), but things don't look so good for it in
the
Republican-controlled House, as many argue that the current reduced loan
limits
help scale back government support of the mortgage market. Why didn't they
think
of scaling back government interference 10 years ago when "they" told
Fannie &
Freddie to increase home ownership?
If you're an appraiser, I hope that San Diego AMC AppraiserLoft doesn't owe
you
any money. Appraisers who worked for it are owed more than $3 million.
Someone wrote
to me and said that a real estate settlement firm, SettlementOne,
unfortunately
yet another company whose name is two words stuck together, is in
discussions with
AppraiserLoft to acquire certain assets of the company, but not its
liabilities,
and to help its customers. If you're an appraiser, you'll probably want to
contact
the lender directly.
When does residential mortgage lending conflict with drilling for natural
gas in
one's backyard? How about "always." BeverlyHillBillies
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108241352204&s=8721&e=001RM50yv
Y5Bh88_Cqq2G8avWWgpRZ9ORkNExGHq779e0Yc5qFSbgS-Y2f4ua0Qw68v_ZCjljEz_aKn7_7Arh
74B0R9S9Ppe78QZabUpckTbKak4koxyix7SsnnMucYoakNew7zA8Vq45gpl4WnhI0j7oYAL8xdeX
XvbIEEwGxIi4AFxgQCdbHgfADGgCjjCDweExIDi5T4MhYYtC8YXYVyBY7F1hAwbELI85aBW-R3zJ
2p7gow2BGQSA==].
I think that, since U.S. citizens feel that Congress is doing such a
wonderful job
managing our debt and handling Fannie & Freddie, that Senators legislate
residential
mortgage loan underwriting guidelines. How 'bout it!? Sens. Michael Bennet,
D-Colo.,
and Johnny Isakson, R-Ga., have unveiled the Sensible Accounting to Value
Energy
(SAVE) Act, which aims to "encourage investments in energy efficient home
building,
enable better mortgage underwriting and potentially create more than 80,000
construction
jobs. Under the bill, federal mortgage agencies would consider a borrower's
expected
energy costs when determining loan repayment ability." Once again, good
intentions...
The government can't seem to take itself out of the mortgage biz. But as it
was
pointed out to me, one presidential candidate - Ron Paul - is a free market
supporter.
His economic plan would close 5 federal agencies, including HUD - quite the
opposite
of the Refi.gov approach!
It would seem that Freddie & Fannie are "turning up the heat," "playing
hardball,"
"taking no prisoners," whatever you'd like to politely call it. It is
already a
well-known, unstated fact that the entire buyback process is handled
differently
when "small pockets" originators are involved instead of "deep pockets"
lenders.
But it seems that Fannie Mae and Freddie Mac are becoming more aggressive in
their
quest for refunds as bad home loans spread to more recent years: Buybacks
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108241352204&s=8721&e=001RM50yv
Y5Bh9VI4uAFp4LAd6GZXsOpRpX6OziDcY_YpAEWytOTBQ3m-hs2fC1wIAX2_9V_2YjOylGl5XUgG
c4g4mMoSYkz4DCKyHUzmb8pxKwgol1Gc09Ve47ppq3xU7KeVruVVU8BDuJtrMqNFqz0o5RkqWRth
wEGwiZFYVpAzugtGXB7JX0VdQLEITPfAugjQyoUtuAmmfZwGm5Q8gz3sqHNXWbbOzhiWzQNRleVl
w=].
The banter about the servicing options continues. "On the FHFA paper's 2nd
option:
Everyone I've talked to is touting this as the best option. What isn't
discussed
is that it is assumed that a new, deep, liquid market for excess IO will
suddenly
appear. When cold water is thrown on that idea, the next response is that
the TBA
market will move to quarter coupons, so there isn't a separate IO market -
it's
embedded in your Best Ex decision." Another noted, "Without commenting on
the efficacy
of any of the approaches, I think FHFA et al are fooling themselves if they
think
these market changes will happen rapidly or happen at all, with the future
of Fannie
& Freddie still unknown. I continue to believe that if there are any
changes, they
will be minimal, and any major overhauls will be tabled until the future of
housing
finance is decided. And based on the pace of reform in Washington, that's
currently
scheduled to take place the day before hell freezes over."
As California goes, so goes the nation? "The California Department of Real
Estate
adopted rules that expand the enforceable duties and responsibilities of
supervising
mortgage brokers. In addition, the rules also clarify the specific bases for
imposition
of discipline and further explain the immediate prohibition against real
estate
business activities triggered by a person's receipt of a notice of intent."
Per
a note from AllRegs.
What we need is a new index, although it is not so new. BuildFax unveiled
its BuildFax
Remodeling Index (BFRI) for August 2011 which showed that remodeling
activity reached
a record high during the month. BuildFax found that, based on its national
footprint
of permit data, an estimate of over 3.3 million residential remodeling
projects
will be permitted in 2011. This figure is up from the estimated 3.1 million
residential
remodeling projects that were permitted in 2010, an almost 9.5 percent
increase.
August became the month with the highest level of remodeling activity since
the
Index was introduced in 2004 and represented the 22nd consecutive month of
increases.
"As mortgage rates hit record lows, it is apparent that millions of
Americans are
refinancing their homes and using some of their new monthly savings to
reinvest
in their homes with remodeling projects," said Joe Emison, VP of research
and development
at BuildFax.
I can't post every local mortgage organization's events, but let's just say
that
local organizations are alive and well. In Glenwood Springs, the Colorado
Mortgage
Lenders Association is having a lunch & continuing education session in a
few weeks.
More information can be found at CMLA
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108241352204&s=8721&e=001RM50yv
Y5Bh9eHyK8AAL9gQJN64978W6jEuNHt71wvPFFevRpCI-aYiaLeu2mPMYQMvfOnTVmmDu1-dhTeO
58WkF4-Flj_i6pjsiO4BPxcFMSNUnpuy1cmBi7GMfUB2ikYLA4blhsMOx8FTaHaXVLJsBD7AHRva
4H].
(The fellow in the photo bears a passing resemblance to Michael Milken.)
And in San Francisco, "In an effort to provide a medium for the
broker/banker community
to network about concerns, triumphs, and general questions related to the
mortgage
industry, the San Francisco/Peninsula Chapter of CAMP will commence its
first monthly
Round Table on Oct 27 at 8:30AM." For questions, please contact Kathy Pan,
[mailto:EliteCapitalInc@gmail.com]. Thelinktoregister
[http://campaign.r20.constantcontact.com/render?llr=pixqmtfab&v=0011-h27AIlE
NhQwpDeRhYHH_1tGQ_lukqQ1_0I8XBodJbPfWVDis9has3YnePMBBixmXw1X8m5eCFf7L6epwDUa
FLlouQGVjj7S9Xfqp6cLoERR8cNz8Jbb9r8cz0jnrXml-av_UUU9EO7hIaOhqs7HFpHqqivaFcv]
.
The SF chapter is also hosting NMLS training for annual license renewal on
Nov.
4. For questions, please e-mail cambinfo@gmail.com
Innovation continues to happen among vendors. Mortgage Cadence, "a leading
provider
of Enterprise Lending Solutions (ELS), Default Servicing Technology and
Document
Services for the financial services industry, introduces Mortgage Cadence
Symphony
Reverse, a reverse mortgage software solution, allowing lenders to get
up-and-running
quickly utilizing standard, pre-configured workflow. Whether just entering
the reverse
market or looking to increase productivity, Symphony reverse delivers a
cost-effective
approach to enterprise lending technology...the ability to quickly implement
upcoming
changes quickly and efficiently is a growing concern for reverse lenders.
Symphony
Reverse fills that technology void and addresses those concerns by enabling
lenders
to eliminate manual processes and increase their productivity and
throughput."
Kinecta F.C.U. reminded clients that its policy on the payoff of
non-purchase money
seconds on agency loan products comes directly from the Fannie Mae seller's
guide,
and is a reminder of how to underwrite the transaction. "A non-purchase
money second
is a loan where the 2nd lien did not fund concurrently with the 1st lien,
which
means the 2nd lien was not used to purchase the property." Its bulletin goes
on
to describe the differences and Fannie's seller guide information on limited
cash-out
transactions.
UG spread the word that it is expanding its underwriting requirements to
allow greater
flexibility on broker-originated loans. "Mortgage insurance applications
received
after Nov. 13 are eligible using United Guaranty's risk-based Performance
Premium
pricing. Fixed-rate loans and adjustable-rate mortgages with no rate
adjustments
during the first five years can be insured by the American International
Group
subsidiary. Loan amounts in excess of $417,000 are eligible for broker
origination,
as are two-unit properties, second homes and cash-out refinances."
Home Savings of America got the word out that, "effective immediately,
previous
September 2011 Broker Bulletin regarding closing restrictions on USDA
purchase transactions
is rescinded; USDA purchase transactions subject to the 2% initial and 0.30%
annual
Guarantee Fee may now fund. The current USDA funding authorization expires
November
18, 2011. As that date approaches, we will advise as to any status changes.
In
the interim, we will continue to accept USDA purchase transactions for
submission,
underwriting and funding. For refinances, USDA's funding authority is
insufficient
to cover all requests in their pipeline. Any refinance transactions will be
handled
case-by-case."
Today there is no scheduled economic news, but yesterday was a pretty heavy
day.
Probably the most relevant to the mortgage & real estate biz is that NAR
reported
that Existing Home Sales dropped 3% in September from August but are still
up about
11% versus a year ago. The median sales price was $165,400, down 3.5% from
$171,400
a year earlier. The inventory of previously owned homes listed for sale,
meanwhile,
fell at the end of September to 3.48 million. That represented an 8.5-month
supply
at the current sales pace, compared with a healthy level of about six
months. Foreclosures
and other distressed properties represented about 30% of sales.
Treasuries bounced around higher and lower with 10-year notes ultimately
closing
down 6/32nds in price to yield 2.18%. MBS prices on 30-year current coupon
3.5s
and 4.0s were flat to 1/8 point lower/worse. And this morning things are
pretty
quiet, with the 10-yr and MBS's roughly unchanged from Thursday afternoon.
(You Detroit fans, don't shoot the messenger.)
This happened on a flight getting ready to depart for Detroit. Bob was
sitting on
the plane when a guy took the seat beside him. The guy was an emotional
wreck, pale,
hands shaking, moaning in fear.
"What's the matter?" Bob asked.
"I've been transferred to Detroit, there are crazy people there. They've got
lots
of shootings, gangs, race riots, drugs, poor public schools, and the highest
crime
rate in the nation."
Jack replied, "I've lived in Detroit all my life. It's not as bad as the
media says.
Find a nice home, go to work, mind your own business, and enroll your kids
in a
nice private school. It's as safe a place as anywhere in the world."
The guy relaxed and stopped shaking and said, "Oh, thank you. I've been
worried
to death. But if you live there and say it's OK, I'll take your word for it.
What
do you do for a living?"
"I'm a tail gunner on a Budweiser truck."
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=mqbkfeiab.0.epg7qedab.zy6u9cdab.8
721&ts=S0684&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep
ress%2Fdefault.aspx]
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=mqbkfeiab.0.v7uif6dab.zy6u9cdab.8
721&ts=S0684&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=mqbkfeiab.0.fpg7qedab.zy6u9cdab.8
721&ts=S0684&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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