Mortgage News and Market Snapshot provided by:Global Home Finance Inc.: February 24: MI companies watching for the FHA MIP increase; BofA & Fannie - does it matter? The CFPB needs board members

Mortgage Rates are LOW! Take advantage now and you could save a bundle or two! Apply http://globalhomefinance.com/apply.php !

That doesn't necessarily mean every LO should be rooting for civil unrest

and the

collapse of Greece, however. But just look at some of the things that have

happened

out there: Chinese manufacturing contracted for the 4th straight month. Iran

refused

to let inspectors into certain nuclear sites, Euro manufacturing came in

lower

than expected, Fitch downgraded Greece, the Bank of England minutes came out

dovish than expected, oil prices are above $108 per barrel...the list goes

on and

on. Meanwhile, our rates and currency remain relatively stable, and our

markets

relatively liquid: a safe haven - and this is helping our mortgage rates.

There is plenty of blame to go around for the mess we're in: borrowers,

brokers,

lenders, investors, appraisers, rating agencies, investment banks, and so

on. The

rating agencies have begun to come under more scrutiny, since their role

ties together

many of these parties. Credit rating agencies have been widely criticized in

recent

years for the poor performance of their ratings on mortgage-backed

securities (MBS)

and other structured-finance bonds. In response to the concerns of investors

and

other market participants, the 2010 Dodd-Frank Act incorporates a range of

reforms

likely to significantly reshape the rating industry. Too lengthy to mention

in this

commentary, more details can be found 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==]

where the current blog discusses the role of rating agencies in the current

environment.

Can't the mortgage industry go through a week without some piece of big news

breaking?

Bank of America "is cutting off Fannie Mae from loans starting this month,

except

for modifications and some refinancings (Making Home Affordable Program),

because

of Fannie's stance on repurchases, Bank of America said yesterday in a

filing. The

firms are in talks to end the disagreement, the bank said." Bank of America

is in

plenty of lawsuits, and spending $1.5 billion a quarter on legal fees,

including

some against MI companies, many of whom contract with Fannie Mae after the

fact

to resolve loan issues long after what some would assume is a "reasonable"

amount

of time. In November, BofA said it refused to cooperate with what it deemed

a new

Fannie Mae policy that required loan repurchases if an insurer drops

coverage. Should

we care? Maybe, maybe not - after all, since Fannie & Freddie are both

controlled

by the FHFA and the U.S. government, loans are still destined for the same

basic

place. Here is the complete story

[http://r20.rs6.net/tn.jsp?t=h9d55fjab.0.ymxm5fjab.zy6u9cdab.8721&ts=S0732&p

=http%3A%2F%2Fwww.bloomberg.com%2Fnews%2F2012-02-23%2Fbofa-halts-routing-new

-mortgages-to-fannie-mae.html].

Anyone can sign up for the CFPB Junior Rangers Program. (I made that up -

the program

doesn't actually exist.) But if you'd like to have input, and something

nifty for

that resume, the CFPB is looking for experts for its Consumer Advisory

Board. "If

you know anyone with innovative ideas and a keen perspective on how consumer

finance

markets affect American consumers, we want to hear from you! Learn how you

can submit

a nomination for our Consumer Advisory Board." Check it out at DoIGetABadge?

[http://r20.rs6.net/tn.jsp?t=h9d55fjab.0.zmxm5fjab.zy6u9cdab.8721&ts=S0732&p

=http%3A%2F%2Fwww.consumerfinance.gov%2Fwere-taking-nominations-for-our-cons

umer-advisory-board%2F]

Wednesday I noted some NMLS statistics from another publication. It turns

out that

they were somewhat misleading, some would say incorrect, but fortunately an

official

from the

Conference of State Bank Supervisors wrote to me all the way from Washington

to set the record straight - thank you. Here are the most up-to-date,

accurate numbers

for licensing: LicensingData

[http://r20.rs6.net/tn.jsp?t=h9d55fjab.0.9mxm5fjab.zy6u9cdab.8721&ts=S0732&p

=http%3A%2F%2Fmortgage.nationwidelicensingsystem.org%2Fabout%2Fdocuments%2Fq

uarter-3-2011-licensing-data.pdf].

And looking into the numbers, Joel Brenner, Compliance and QC Manager with

imortgage,

wrote, "Rob, regarding the NMLS statistics showing growth in the branch and

License

LO areas, we have to remember that with banks going out of business, or LO's

who

previously worked for exempt organizations now joining the ranks of

mortgage banking

many LO's who previously didn't need a license will have to obtain one. It's

possible

for the licensure statistics to rise even with continuing consolidation in

the jobs

arena for LO's."

I love stories like, "In response to a Financial Times report indicating

that the

five biggest U.S. mortgage servicers can credit actions under the Home

Affordable

Modification Program toward their obligations to the $25 billion national

foreclosure

settlement, HUD insists that the deal will not be subsidized by taxpayers.

Agency

officials clarify, "For HAMP modifications that do include principal

reduction,

servicers only receive credit for the portion of the principal reduction

that they

themselves pay for, not for the portion covered by incentives in the

program." There's

an old saying, "The government can't give what it doesn't take from someone

else

first," and whether it is the taxpayers, or from banks' depositors, the

money has

to come from somewhere.

While we're on HUD, many believe that FHA is a "ticking time bomb." HUD's

certainly

working on a different timeline than Fannie & Freddie: the GSEs' problems

are mainly

from the weak credits of 2005-2008, but FHA/VA wasn't insuring any loans in

the

bubble years. Their volumes have been surging since 2009. And even though

the 2009-2012

FHA/VA vintages are "better" loans, they're still FHA/VA loans, and many

believe

that future defaults will be significant. So in volume terms, Ginnies will

facing peak default and buyouts over the next 2-4 years. What this means for

investors

and lenders is more buyouts, more modifications, and ongoing pressure on the

FHA

insurance fund, which makes HUD much more likely to raise MIPs than to drop

them.

FHA Commissioner Galante recently said that the FHA would announce

additional premium

changes to new mortgage business and streamline refi loans in the coming

days.

Although changes to FHA premiums are widely expected, she was quoted as

saying that

"we will be making changes to the streamline refinance program structure of

premiums

soon to achieve greater use of the program". The language suggests that she

may

be referring to the possibility of grandfathering in FHA premiums for

streamline

refi loans or capping their fee to the existing 110 basis points even if

fee for

non-streamline refi's were to increase further. She also mentioned that the

changes

would affect loans written prior to May 2009, "when the insurance premium

structure

was very different from what it is today." The May 2009 date creates some

confusion

as FHA premiums were first increased in October 2010. Co-incidentally, May

2009

is the current cut-off date for the HARP program which makes it even more

confusing.

Regardless, MI companies are very pleased with the news.

Although there is still a fair amount of uncertainty on this issue, if the

comments

are accurately quoted, the likelihood of grandfathering premiums for FHA

loans in

the case of streamline refinancings is definitely much higher. If this were

to happen,

2009-2010 Ginnie 4.5 prepayments could increase dramatically. And what

investor

wants to own mortgages that are expected to pay off soon?

IMMAAG has issued a "Call to Action" after meeting with members of Congress

and

with D.C.-based mortgage industry associations "who share similar even if

not totally

congruent concerns about the direction recent legislative and regulatory

actions

have taken and the absence of justification for such initiatives." The

action focuses

on the LO compensation guidelines - yes, they're still an issue, especially

with

the CFPB issuing its "Notice of Streamlining Project, Request for

Information",

a five page request in the Federal Register for the public to share its

concerns

and identify its highest priorities for regulatory streamlining by March 5,

2012.

"Document your specific (but unidentified) examples of consumer harm

associated

with the April 2011 Loan Originator Compensation Rule and what makes it

harmful

and a direct result of changes required by the rule. Send that as quickly as

possible

to admin@immaag.com [mailto:admin@immaag.com] and your example will be

aggregated

with all those received and will be sent directly to Mr. Carroll in response

his request." Statements can also be sent to that address on appraiser

independence

(required by the Dodd Frank Act), the Red Flags Rule and any other

regulation.

Housing and jobs, jobs and housing. The FHFA's index, focused on property

values

for Freddie and Fannie radar screen, showed that house prices fell modestly

the fourth quarter of 2011: -.1%. Over the past year, seasonally adjusted

prices

fell 2.4% from the fourth quarter of 2010 to the fourth quarter of 2011.

No one can really complain about mortgage rates, and Thursday saw several

intra-day

price changes. Originator volume was lower than average, easily soaked up by

the

Fed's daily purchases (what happens when that goes away?) and other

investors buying

production. MBS pricing improved by about .250 in price, and our 10-yr

closed around

1.98%. And there is not much news moving our markets, at least in this

country -

the only thing we have is Consumer Sentiment for February and New Home

Sales. Rates

are pretty much unchanged from Thursday's close, with the 10-yr at 1.98% and

MBS

prices unmoved.

(Parental guidance suggested.)

Sometimes it is good to look at the "flip side" of things - in this case 3

minutes

on dating. http://biggeekdad.com/2012/02/the-flip-side-of-dating/

[http://r20.rs6.net/tn.jsp?t=h9d55fjab.0.8mxm5fjab.zy6u9cdab.8721&ts=S0732&p

=http%3A%2F%2Fbiggeekdad.com%2F2012%2F02%2Fthe-flip-side-of-dating%2F]

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 role of rating agencies in the current

environment.

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

Friday, February 24, 2012

February 24: MI companies watching for the FHA MIP increase; BofA & Fannie - does it matter? The CFPB needs board members

No comments:

Post a Comment