Homographs are words of like spelling
but with more than one meaning. A homograph that is also pronounced differently
is a heteronym. You think English is easy?? This took a lot of work to put
together! (Part 3 of 4.)
We take English for granted.
But if we explore its paradoxes, we find that quicksand can work slowly, boxing
rings are square and a guinea pig is neither from Guinea nor is it a pig.
And why is it that writers
write but fingers don't fing, grocers don't groce and hammers don't ham? If the
plural of tooth is teeth, why isn't the plural of booth, beeth? One goose, 2
geese. So one moose, 2 meese? One index, 2 indices?
Doesn't it seem crazy that you
can make amends but not one amend? If you have a bunch of odds and ends and get
rid of all but one of them, what do you call it?
If teachers taught, why didn't
preachers praught? If a vegetarian eats vegetables, what does a humanitarian
eat?
Here in New York the airplanes
will be filled with capital markets staff and CEOs heading home from the MBA's
conference. More observations tomorrow. But generally speaking, if I had to sum
things up, I'd say that versus last year's event where TRID was a major topic,
this year's conference was back to business as usual: scratching out every
basis point out of execution and trying to figure out the best way to sell or
hold loans in a stagnant rate environment.
"it is next to impossible
to find a good deal on a Full Eagle today, because owners tend to over-value
them, while buyers tend to under appreciate the time, test cases and approval
process to secure the Full Eagle / HUD Designation", says Dr. Rick
Roque (413.297.6895), "Sometimes, depending upon the state, it is
easier to buy a small full eagle platform in order to secure the state license,
than it is to apply for a state license and wait - California and New
York are two states that come to mind!". Dr. Roque makes a very good
point given the wait times in these states that can exceed 9-16 months in order
to get a company licensed.
For lenders who are
interesting in buying a completely clean, FULL EAGLE/HUD Designation
that is for sale for approx. $350K, let me know. It has a small staff
maintaining the license in CALIFORNIA that is looking to be sold asap - the
entity is a wholly owned subsidiary and due to a change in strategy is no
longer needed. If you are looking for immediately licensing in California
and a Full Eagle, principals and agents are encouraged to confidentially
respond: Rob Chrisman.
On the flip side of all
this, HSBC Holdings is cutting more than 800 IT jobs in the UK, where
the bank aims to eliminate 8,000 jobs before 2018 to shrink its global
workforce by 50,000.
FHA & VA news? You
bet there is. The New York Times reports that, "Life may soon get tougher
for private buyers of distressed mortgages from the federal government. (HUD)
said that it would announce a new set of rules governing the sale of mortgages
formerly guaranteed by the government. The new rules would come after months of
criticism from housing advocates that the loan sale program, which began in
2010, has benefited private equity firms and hedge funds at the expense of
strapped borrowers...One of the expected changes will probably affect the kind
of mortgage modifications private buyers can give to distressed borrowers, many
of whom have not made mortgage payments in two years.
HUD has another sale of
delinquent loans slated for today that will not be impacted by any of this.
(The loans being sold by the agency in that auction are ones deemed
"extremely delinquent," or those whose borrowers have not made
payments for 48 months.)
"This month, the
National Consumer Law Center issued a report analyzing the loan sale program
and specifically criticized private buyers for interest-only modifications that
did not reduce the overall amount of debt a homeowner owed and reverted back to
the original loan terms after a five-year period. 'There is no evidence from
the sales over the past four years that the speculative investors gave
homeowners loan modifications that reduced the principal of the loans at any
significant rate or that sustainable modifications were provided in substantial
numbers.'
"To date, HUD has
auctioned off just over 105,000 mortgages to more than a dozen private buyers
who have bought the loans at a sharp discount to their face value. Two of the
largest buyers of distressed mortgages have been Lone Star Funds, a private
equity firm based in Dallas, and Bayview Asset Management, a firm affiliated
with the Blackstone Group, one of the world's largest private equity firms. Up
until now, HUD officials have generally supported the loan sale program as
being the last best chance to keep delinquent borrowers in their homes. The loans
sold by the government are ones that were originally written by large banks
with insurance guarantees by the federal government.
"The loans sale has
been successful in reducing the cost to the government of guaranteeing those mortgages
against a default because once the loans are sold, they are no longer insured
by the Federal Housing Administration's mortgage insurance fund."
But "Dozens of
public officials, including member of Congress, have written to HUD officials,
criticizing the program for leading to increased foreclosures and profit for
private equity. Two of the more outspoken legislative critics have been Senator
Elizabeth Warren, the Massachusetts Democrat, who is known for her support of
liberal causes, and Representative Michael E. Capuano, a Massachusetts Democrat
and former mayor of Somerville, Mass."
VA's newsflash
contains information on the following: Foreclosures on Mobile Homes, Extension
of serivcemembers' Civil Relief Act (SCRA), Illinois Consent Judgments,
Servicer Transfer Events, Liquidation Appraisal Fees, Bulk Upload Template,
VALERI Password Reset Requests, Improper Transfer of Custody or Invalid Sales
Results, and Development Updates. Click the link to view Servicer Newsflash May 11, 2016.Final.pdf
FHA published Mortgagee Letter
2016-07: Expanded Permissive
Loss Mitigation for Home Equity Conversion Mortgages (HECMs) and Mortgagee's
Optional Extension to Submitting a Due and Payable Request. The ML provides
mortgagees with an optional extension when submitting a due and payable request
where borrowers are behind on the payment of their property taxes and/or hazard
insurance premium by less than $2,000. IN addition, FHA published its quarterly
Lender Insightnewsletter. Issue #11 includes information on: annual
recertification's, voluntary withdrawals, quarterly loan review update, test
cases and more.
First
Community Mortgage has posted information regarding FHA student loan payment
calculations. In addition, updates have been made to its FHA Streamline Refi
guidelines. Click here to view the applicable bulletin.
Ditech customers
should note,FHA underwriting guidelines have been clarified or updated related
to the following topics: Net Tangible Benefit, Housing Payment History for
Streamline Refinances, Tax Abatements.
And Ditech posted the
following clarification with regard to payment increases on VA Interest Rate
Reduction Refinance Loans. If the monthly payment (PITI) increases by 20% or
more, the following is required: The veteran must be credit qualified to
determine that they can support the proposed payment and other recurring
monthly obligations. A Lender Certification on the lender's letterhead as shown
below must be provided. The certification must be signed and dated by the
underwriter. I hereby certify that the borrower(s) qualify for the new
payment (PITI) which exceeds the previous payment by at least 20%. Refer to
the VA Refinance Product Summary for specific requirements for credit
qualifying IRRRL transactions.
With
all the capital markets folks here in Manhattan for the MBA Secondary Marketing
Conference, what's going on with the MBS market? Not much. Tuesday MBS prices
improved slightly relative to Treasury prices as the bond market reconsidered
the odds of a potential June rate hike as a couple Fed Governors (Kaplan and
Williams) predicted more hikes than the market is. Myself, I just don't see it
- and I think the odds of a June short-term rate increase are less than 5%. A
few Governors have been noting that the conditions are there for at least two
to three rate hikes in 2016.
Yesterday's market was
particularly interesting, proving once again that a) sometimes markets aren't
logical, and b) why I will never be a day trader. Treasuries did well despite
the headline CPI, housing starts, and industrial production for April all
beating estimates! This improving data comes on the back of
better-than-expected April retail sales, released on Friday.
Of interest to those
watching the agency MBS markets was some news out of the NY Fed (the same one
that is charged with buying agency MBS using the proceeds of early
payoffs/refinances every day). The New York Fed released a statement announcing that two small value exercises
(sales) would be conducted in MBS. The operations will occur on May 25 and June
1 (consecutive Wednesdays) between 2:00 and 2:30pm. The two operations will not
exceed $150 million in current face. The first operation will sell up to $30mn
each of four FNMA pools while the second operation contains two baskets of GNMA
pools totaling $29.7 billion.
There isn't much news
today to move rates - maybe the Japanese GDP figures? We had the MBA's poll of
application data from last week. Total mortgage application volume fell 1.6
percent last week from the previous week on a seasonally adjusted basis, but
volume was 18.4 percent higher than the same week one year ago. Purchase apps
fell 6 percent last week but is still nearly 12 percent higher than one year
ago. Refi apps rose 1 percent from the previous week, seasonally adjusted, and
are 24 percent higher than one year ago. In the afternoon analysts will pour
over the minutes from the April 26 to 27 FOMC meeting.
For those quantitatively
inclined we closed Tuesday with the 10-year at 1.76% and in the very early
going today it's at 1.78% with agency MBS prices worse a smidge.
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