If you made a Christmas wreath out of $100 bills would you have Areath-a
Franklins?
I have been retained by a very well-capitalized mortgage bank to assist in
its search for aSenior Regional Operations Manager in Sacramento, CA. It is
a national lender with a portfolio lending appetite - company-wide
production is in excess of $5 billion through its wholesale, correspondent,
retail, and direct lending channels. The ideal candidate will provide
"leadership of the continued growth, development, efficiency, and quality of
the regional operations center to support all wholesale and correspondent
operations out of assigned region, implement operational strategy and
planning execution in order to achieve operational business goals, and
should have a high core competency of understanding and practical applied
knowledge of underwriting, closing, funding, and overall wholesale and
correspondent operations processes and procedures. Experience managing a
mortgage operations center, national strategic leadership experience
preferred." Please send resumes to me at rchrisman@robchrisman.com
The Federal Reserve, the FDIC, and the OCC want your input on some proposed
rulemaking
(NPR) that focuses on "the agencies' market risk capital rules for banking
organizations with significant trading activities. The amended NPR includes
alternative standards of creditworthiness to be used in place of credit
ratings to determine the capital requirements for certain debt and
securitization positions covered by the market risk capital rules. The
proposed creditworthiness standards include the use of country risk
classifications published by the Organization for Economic Cooperation and
Development for sovereign positions, company-specific financial information
and stock market volatility for corporate debt positions, and a supervisory
formula for securitization positions." Any time one combines Basel III with
Dodd-Frank and several government agencies, it can become a little muddled:
FDICPressRelease
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108938344683&s=8721&e=001WoFjAI
DWC0w7x2aOrtLJgXztDOyVaUUVBs9gbq0rkav7JDNnR9gGf5oBldH2JqJW_yEUl4T8IFdQADYYnC
zzQZs0HVIY3h_MOyF93uONyVYbLPCI6Z2AU4XTxeT8dZp-aQIYEAKmTi_Ew0sRyNaeedJqsFdrYh
QH].
Agencies are indeed trying to clarify their supervisory and enforcement
responsibilities for Federal Consumer Financial Laws. Remember (who can
forget) that Dodd-Frank provides the CFPB with exclusive supervisory and
primary enforcement authority over "Large Institutions," defined as
institutions with total assets exceeding $10 billion.
The prudential regulators retain supervisory and enforcement authority over
their respective institutions falling under that threshold. But the devil is
in the details:
the Dodd-Frank Act does not specify how or when to calculate total assets
for purposes of applying the threshold. A copy of the joint statement is
available
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108938344683&s=8721&e=001WoFjAI
DWC0yGFE3Tse4Q0E-4gghk9g6aqKB7suq7m5VKzH6boO35wO1K4x8c10sGus74w0V4wtnT6OkvlJ
K1oLM2F2P90ppvzerxd5dH0H4FEC8VCXHnSpX6qEh6PsFrWRqHwF0QulzT-bzZjmCtbyHvcasxMg
aCFNkrSRJCb3MT3aHMiaFrBYvUvzNPQgLJ].
Lending to underwater borrowers, short sales, and foreclosures are a sign of
the times. (When a borrower can come back after one of these is discussed
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj
bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P
jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==],
top right.) On November 14th the commentary discussed lending to a borrower
who owed $280k on a home worth $200k. Of course we have HARP, and, when the
AU engines kick in, HARP 2.0, but what about borrowers that aren't covered
under that? I continue to receive feedback. "I have run into this situation
several times as well. One suggestion I have had for clients is what I call
'equity borrowing' from a family relative. If all things are stable and
credit is good for this borrower, he may want to see if he can lower his
loan balance by having a relative take out a 2nd mortgage on their property
and provide huge savings to the borrower. In this guy's case, dropping from
8% to 4.5% would save him a lot of money and he could certainly be able to
afford to pay the relative back, likely in a very rapid manner. It allows
the homeowner to take advantage of the low rates, keep their credit in tack,
and honor their obligations. It does not work for everybody, but for some
it is a good solution."
And another: "To the AE in California who asked for advice regarding their
"good client" who's made all their payments on time but owe $280k on a home
now worth $200k, my advice would be keep making your payments. How is it
that so many people feel someone has to help a consumer who owes more than
their home is worth? What's next, do we the tax payers send everyone whose
retirement plan has lost value a check? If I get a loan to purchase
something and it turns out to have less value than I expected do I simply
stop making payments and expect no consequences? Someone stop the insanity!
If I borrow x$ for whatever purpose, whether things work out or not, I pay
x$ back, with interest. Where were all these people's parents when they
grew up? This entitlement mindset is unbelievable. Surely my dad wasn't the
only one who said no one owes you anything; you work for what you want. Earn
it.
And you pay back what you borrow."
And lastly: There are a number of lenders that participate in FHA's Negative
Equity program. The FHA allows negative equity write downs, or 'short
refinance' where the lender agrees to write down at least 10% of the unpaid
principal balance. The program sunsets December 31, 2012. FHA insured
loans, of course, are not eligible.
The HUD announcement can be found at HUDNegEq
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=lhsa5yiab.0.xqed5yiab.zy6u9cdab.8
721&ts=S0708&p=http%3A%2F%2Fwww.hud.gov%2Foffices%2Fadm%2Fhudclips%2Fletters
%2Fmortgagee%2Ffiles%2F10-23ml.pdf]
and a handy PowerPoint at HUDPP
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=lhsa5yiab.0.yqed5yiab.zy6u9cdab.8
721&ts=S0708&p=http%3A%2F%2Fwww.hud.gov%2Flocal%2Fnd%2Flibrary%2Ffhafaqs.pdf
].
A list of negative equity lenders can be found at HUDNeighborhoodWatch
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=lhsa5yiab.0.hygujqdab.zy6u9cdab.8
721&ts=S0708&p=https%3A%2F%2Fentp.hud.gov%2Fsfnw%2Fpublic%2F]
after clicking through some menu options. It is interesting to note that
Negative Equity loans do not affect the GNMA Seller/Servicer's compare
ratio, but layering additional risks (FHA minimum score is 500) may not be
advisable." (Thank you very much to Susan Kahler at kahler.susan@gmail.com
GMAC Bank (GMACB) Correspondent Funding Approved Correspondent Clients
please note that "effective December 1, 2011 GMACB implemented a new set of
adjustment caps on DU Refi Plus products. The previous cap was -1.75. The
new caps are: for Primary Residence >80 LTV and Term <=20 years cap will be
+.250, for Primary Residence >80 LTV and Term >20 Years cap will be -.500,
for Primary Residence <=80 LTV or Second Home or Investment Properties the
cap will be -1.75."
Wells Fargo let its brokers know that a few days ago the USDA Rural
Development office announced an increase in the Upfront Guarantee Fee that
will be charged on Refinance transactions using the Guaranteed Rural Housing
program (which is also known as the Single Family Housing Guaranteed loan,
Rural Development or Rural Housing). "The Upfront Guarantee Fee will
increase from 1% to 1.5%, effective Dec.
7, 2011. To support the fee increase, updates are needed to the Broker's
FirstR website and LPS. Because of the required updates, Wells Fargo will be
temporarily unable to accept Refinance Guaranteed Rural Housing loans after
Tuesday, Dec. 6, 2011. Purchase Guaranteed Rural Housing loans continue to
be accepted." Wells went
on: "According to the industry update from the national USDA Rural
Development office, the fee increase will generate more than $1.1 billion in
refinance funds available to eligible homeowners. Interest rates for these
loans continue to be low and the fee increase provides responsible
homeowners with an opportunity to refinance their existing mortgage for
lower monthly payments."
Franklin American clarified its stance on FHA loan limits. "The maximum
(ceiling) loan limits will increase from $625,500 back to $729,750 as well
as increase many county loan limits. For Case Numbers assigned before 11/18,
these loans are subject to the lower limits in effect during the time period
of 10/1-11/17 unless they meet criteria for certain exceptions. Case Numbers
Assigned 11/18-12/31: the loan limits that were in effect from effect from
1/1/11 through 9/30/11 as referenced in ML
2010-40 and reiterated in ML 2011-39 will apply. For Case Numbers assigned
in 2012, the loan limits that were in effect from January 1, 2011 through
September 30, 2011 as referenced in ML 2010-40 and reiterated in ML 2011-39
will apply, with the exception of six counties." And on 11/7 FAMC has
acknowledged the HARP/DU Refi Plus enhancements as announced by FHFA. We are
currently performing a risk analysis, and evaluating secondary marketing
opportunities in anticipation of the AUS update scheduled for March 2012.
Prices of mortgage-backed securities have been improving relative to
"risk-free"
Treasury prices for the past few weeks, which also means that mortgage
rates have been coming down relative to Treasuries. Currently, the yield on
the current coupon Fannie 30-yr MBS is higher than blend of the 5-yr and
10-yr T-notes by 1.57%. This is .13% "tighter" than at Thanksgiving. Over
that same time frame, the Ginnie 30-yr current coupon is .14% tighter to 128
bps. Prepayments have been flat, and there has been relatively little
supply of mortgages: originators just do not have any paper to sell now that
we've been at these mortgage rate levels for over a month.
We closed Wednesday with the 10-yr improving to 2.02% and MBS prices
improving as well by roughly .250.
Volatility could pick up a little tonight/tomorrow, however, given the
various EU headlines and the EU summit. Eurozone officials will likely agree
to loan EU150B to the IMF via bilateral loans from Europe's central banks
(this sum is a bit smaller than some would have liked to see) but giving the
ESM a banking license is "off the table." In this country we've had Initial
Jobless Claims, reported at 381k down from 404k, a drop of 23k. That is some
good news for the economy. Later we have Wholesale Inventories and Sales for
October along the Treasury announcing details of next week's auctions of 3-
and 10-year notes and 30-year bonds - estimated unchanged at $66 billion. In
the early going we have the 10-yr at 2.07% and MBS prices worse by about
.125.
Overheard in a retirement community diner:
"My arms have gotten so weak I can hardly lift this cup of coffee," said
one.
"Yes, I know," said another. "My cataracts are so bad; I can't even see my
coffee."
"I couldn't even mark an "X" at election time, my hands are so crippled,"
volunteered a third.
"What? Speak up! What? I can't hear you!"
"I can't turn my head because of the arthritis in my neck," said a fourth,
to which several nodded weakly in agreement.
"My blood pressure pills make me so dizzy!" exclaimed another.
"I forget where I am, and where I'm going," said another.
"I guess that's the price we pay for getting old," winced an old man as he
slowly shook his head.
The others nodded in agreement.
"Well, count your Blessings," said a woman cheerfully. "Thank God we can all
still drive!"
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=lhsa5yiab.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=lhsa5yiab.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=lhsa5yiab.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.)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~
Join My Mailing List
[http://visitor.r20.constantcontact.com/email.jsp?m=1102827910937]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~
Forward email
Instant removal with SafeUnsubscribe(TM)
TmggCt&t=001SoMNydDKFTILf5d_qpvjbg%3D%3D&llr=zy6u9cdab
Privacy Policy:
Online Marketing by
Constant Contact(R)
Chrisman Inc. | 326 Mission Ave. | San Rafael | CA | 94901
Generally I don’t learn post on blogs, but I would like to say that this write-up very compelled me to check out and do it ! Your writing style has been surprised me. Thanks, very nice post.
ReplyDeleteHomes in orange county
I agree with your conclusions and looking forward to your coming updates. Thanks for sharing.
ReplyDeleteApartments in rio de janeiro
Good to know that this topic is being covered also in this website & there are a lot of developers working on this segment but this is one of the best innovative idea ever seen.
ReplyDeleteYacht Racing News