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If you have a few seconds, go to Google and do a search on "Let it snow."
There's even a "defrost" button.
I am sure that many originators wish that there was a defrost button for the
FHA Anti-Flipping rule. The clock is about to run out (12/31) on the HUD
temporary waiver of requirements of the FHA regulation 24 CFR 203.37a (b)(2)
FHA Anti-Flipping rule. HUD has not issued an extension of the property
flipping waiver and so lenders have shut down on lending for FHA flips. This
may be extended, but savvy lenders are taking no chances and telling their
LO's to make sure the current owner has been on title for at least 90 days
- but at least they don't need the property inspection and the second
appraisal.
An AE's broker clients on the East Coast received notes like this late last
week from the AE: "It is with deep regret that I inform you that O2 Funding
has decided to close its East Coast Operations center and has terminated all
of its sales and support staff in the East. O2 Funding experienced
explosive growth in a very short period of time, yet its parent company had
problems funding its volume in the secondary market. They have decided to
originate loans only on the West Coast via their California HQ at this
time." It is certainly a sign of the times. There are plenty of rumors out
there about other companies - take your pick: another large money-center
bank leaving correspondent lending, another large investor hitting a
mid-sized lender in the Southwest with $100 million of buybacks, of a
Southern California wholesaler exiting the Midwest, and so on. The only
thing that stays the same in this biz is change.
It has been relatively quiet in bank-closure land this month, but on Friday
in Florida Premier Community Bank of the Emerald Coast was shut down and the
depositors moved to Summit Bank, National Association. (Many believe that
the highest summit in Florida is a freeway overpass, but there are actual
hills in the north.) Western National Bank of Phoenix, Arizona, was closed
by the OCC, the FDIC was appointed receiver, and now the depositors will see
Washington Federal of Seattle on their checks.
"U.S. and international accounting rule makers have agreed in principle on a
new standard for recording loan losses that may require banks to book some
losses more quickly. Under the new plan, banks and other financial companies
would shift to an "expected-loss" model, under which they would book losses
and set aside loan-loss reserves based on future projections of losses. That
would differ from the current system, known as an "incurred-loss" model,
which requires evidence that a loss actually has occurred before the loss
can be recorded. A move to using future loss projections would have the
effect of accelerating the booking of losses":
ml
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108979709365&s=8721&e=001V8xGi3
lX8cSHG69WuQNWwZIrW9W1zyL8jXE0fX5NbJ6Qc5NtvqGeD-vBfRRpDbaUGPvAsI7VR89tnlHYVa
5uSr5zpvPebvgAgEXZzEY5wuUwOAtbfUhZEw8_EX0yBq4dkecM0BVzGE1q1uVO_LlEhwWzX4w0as
S7fLUaH7RTdNFJT_zjm6M3b9uROO_LSVdm].
There are indeed a few products trying to make a go of it. Mortgage Harmony
Corp.
is actively seeking whole loan buyers that are looking for performing and or
re-performing assets with prepayment protection in the form of The
HarmonyLoan. "Existing whole loan pools can be easily converted to
HarmonyLoans, ensuring continuity of income stream from borrower, with the
added protection of interest rate management from the consumer level."
Please contact Jay Patel for more information at jpatel@mortgageharmony.com
If you're in the New York area on January 5th, you should definitely
consider attending a free mortgage industry symposium sponsored by Digital
Risk, SNR Denton and KPMG.
Highlights of their 2 panels of industry heavy weights include "Dodd-Frank
and the Consumer Financial Protection Bureau (CFPB): Major Changes Coming"
and "Servicing Used to be so Simple before HAMP, HAFA, HARP, Consent Orders,
Mods and Other Operational Challenges." After the panels a cocktail
reception follows - you may need some.
To register, visit
um/
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108979709365&s=8721&e=001V8xGi3
lX8cT_QPv2TZfAqUiBv_awL1GeHpWSGT-TGj5o6nfylvNIpEoDmloEKGk08Ba1s8HtPgWefXb_gj
RHyWW3fytcy1zRs2n5Ki4M8MjjyPkn6Dkm7wFbeFMI2mK4iF9HahXlWbfsd-CW0oOz2BHF5tYSpD
N5EjjDXnyLwSMEJu3m6OnSPh9VuGHvAeE8]
or contact Mark Benner at mbenner@digitalrisk.com
When the SEC charges you with securities fraud, it grabs your attention. Six
former top executives of Fannie Mae and Freddie Mac were charged with
securities fraud in connection with MBS's issued by the firms. The
Securities and Exchange Commission filed separate suits against each of the
government sponsored enterprises (GSEs) while at the same time revealing
non-prosecution agreements with Fannie Mae and Freddie Mac in return for
the cooperation of the GSE's in the upcoming litigation.
Named in the Fannie Mae suit were former Fannie CEO Daniel H. Mudd, its
former Chief Risk Officer Enrico Dallavecchia, and the former EVP of
Fannie's Single Family Mortgage business, Thomas A. Lund. The three former
Freddie executives are Chairman of the Board and CEO Richard F. Syron, EVP
and Chief Business Officer Patricia L. Cook, and former EVP for the Single
Family Guarantee business Donald J. Bisenius.
The lawsuits allege that the former executives caused their respective
companies to materially misstate their holdings of risky loans, including
subprime loans, in periodic and other filings with the SEC and in public
statements, investor calls, and media interviews. Between the suits the
time period covered goes from December
2006 through August 2008. Here is one, of the many, reports:
2.html
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108979709365&s=8721&e=001V8xGi3
lX8cR6stCQtSpG8SbeNrAn4S0YfCvZhDN66MWjQ-26M5mYIgNzoKD000lfv7bejrtXlupp48sFYg
noqwi2Yev1I6O-ji3ryVZMnK2K_2lmnP2u5u4YbxSgwmAC0xh8BOOiblBbWgcvsLxK8TAQDk2mKZ
prxrqCRly9rgIqed3gABQ6cpXBeg4HbSuK0smM7-ItDIU=].
For some good news, GMAC Bank's clients learned that GMACB will be changing
the Jumbo ARM incentive for FICO >=720 and LTV <=70 from +.500 to +.750.
"This, along with the other jumbo incentives on purchases and on FICO >=720,
are being extended through January."
How do foreign nationals obtain loans these days? Apparently New Penn has a
program that helps buyers of FNMA-approved condos, even if the borrower has
no credit and no housing payment history and does not qualify for
conventional financing. "New Penn's Foreign National Portfolio Loan
Product: up to $650k loan amounts per property, up to 65% LTV on purchases,
self-employed okay, occupancy includes owner occupied & second homes."
Franklin American "is expanding options for the disclosure of itemized lump
sum fees and/or any loan fees paid by third parties that are to be excluded
from the finance charge. Options for providing itemizations include:
attachment or Addendum to the HUD-1, naming specific fees paid with credit,
lender's specific closing instructions itemizing fees and/or credits,
accurate itemization of the Amount Financed as outlined in Regulation Z, and
lender's system generated itemization of fees (e.g. "Fee Sheet"), which must
be transaction specific (includes the lender's name, borrower's name, and
loan number). There are restrictions - for example for VA loans, a Fee Sheet
or Closing Instructions are not acceptable for documentation of
Seller/Lender credits since they are not signed by the borrower at closing
(refer to VA Circular 26-10-09).
FAMC will no longer allow for handwritten notes, asterisks, and other
un-identified non-system generated methods of itemized fee disclosure. As
always, read the bulletin for specific details!
Early last week Wells Fargo Wholesale came out with new Fannie DU Refi Plus
and Freddie Relief Refinance Mortgage price adjusters, along with an updated
Initial Loan Submission Checklist for Non-conforming loans. In addition,
Wells' wholesale came out with new extension costs: "Wells Fargo Home
Mortgage currently requires brokers to purchase extensions in 3-, 5-, 7-,
10-, 14- or 21-day increments at a cost of 3 bps per day (3-day increment =
9 bps, etc.).
Effective Dec. 12, 2011, WFHM will open those options to any amount of days
from
3 to 21 (i.e., 3-, 4-, 5-, 6-, 7-day increments up to 21). WFHM is not
changing the 3 bps-per-day cost at this time."
Flagstar Bank announced that "second home and investment properties are now
eligible for loans not currently serviced by Flagstar Bank on the Fannie Mae
DU Refi Plus and Freddie Mac Relief Open Access II. In addition, Flagstar
Bank has lowered the price adjustment cap on the new HARP II products."
Czechs are signing condolence books to pay tribute to their former President
Vaclav Havel, who led a peaceful revolution that toppled the communist
regime in 1989, while the world markets are reacting to the death of Kim
Jong Il in North Korea.
(A state television presenter said that the leader died Saturday on a train
trip of physical and mental over-work on his way to give "field guidance." I
like it.) The death has momentarily taken the spotlight away from Europe,
and given the military uncertainty of the situation caused a move toward the
dollar - and of course one way to do that is to buy fixed-income
securities. Here in the United States, most economists tend to agree that
economic data recently shows an economy that is getting steadier after a
shaky journey through most of the year.
For action-packed economic news this week, we have a lot of housing news in
addition to NAR's re-statement of years' worth of housing stats. Today is
the NAHB Housing Market Index, tomorrow is Housing Starts and Building
Permits, Wednesday is the usual MBA index and Existing Home Sales, Thursday
is the FHFA Housing Price Index, and Friday is New Home Sales. Sprinkle in
Jobless Claims and Leading Economic Indicators on Thursday, and Durable
Goods, Personal Income, and Personal Consumption on Friday, along with
thinly staffed trading desks and mortgage shops, and suddenly everyone is
hoping for a very non-volatile week. We find the 10-yr a 1.86% and MBS
prices slightly better, perhaps unchanged.
A TOUCHING CHRISTMAS STORY
A couple was doing last minute shopping on Christmas Eve.
Walking through the very crowded mall the wife looked up and noticed her
husband was nowhere around. She became very upset because they had a lot
to do.
She used her cell phone to call her husband to ask where he was.
The husband, in a calm voice said, "Honey remember the jewelry store we went
into five years ago, where you fell in love with that diamond necklace that
we could not afford and I told you that I would get it for you one day?"
The wife, crying, said "Yes, I remember".
Husband: "Well, I'm in the bar next to that jewelry store."
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 discusses the time frames for borrowers returning to
A-paper status after a short sale or foreclosure. 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=vn6of9iab.0.epg7qedab.zy6u9cdab.8
721&ts=S0708&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep
ress%2Fdefault.aspx]
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=vn6of9iab.0.v7uif6dab.zy6u9cdab.8
721&ts=S0708&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=vn6of9iab.0.fpg7qedab.zy6u9cdab.8
721&ts=S0708&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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