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underwriting: Homeownership ratio drops, apartment demand grows - 05/05/12 12:51 PM
It’s hardly a surprise that the homeownership number continues to backpedal in today’s wobbly real estate market and tight mortgage milieu.
 
Foreclosures mercilessly push borrowers from their homes and this trend seemingly will continue for several more years as another 5-6 million homeowners could face the same fate. The recent $25 billion controversial settlement with mortgage loan servicers over alleged shady practices will predictably lead to home loan lenders accelerating court filings on delinquent borrowers. Mortgage money is very affordable but helps little when strict underwriting standards erode borrower approval chances. Inventory levels in many housing markets – like … (6 comments)

underwriting: Mortgage foreclosure errors could cloud titles for a long time - 10/02/10 03:25 PM
The wounded mortgage industry has been working as best it can to pick itself up from the canvas, with massive support and guidance from the government. It has instituted many internal policy changes, on one hand, to correct the grave underwriting, mortgage-backed security and other mistakes made in the not too distant past. On the other, Washington has come up with its own legislative cures to prevent another spectacular mortgage and real estate collapse from creeping up on the country again. Despite the continuing uncertainty and weakness in housing, cautious optimism is also entering into the mix. Maybe the worst is … (14 comments)

underwriting: Mortgage lenders in HUD's crosshairs over high FHA insurance claims - 02/28/10 08:05 PM
FHA-insured home loans have carved a large chunk of the market during this prolonged housing meltdown. Conventional mortgage lenders have withdrawn in large numbers into the shadows to get TLC from the government just to be able to survive. Many have plain vanished from the scene, generally swallowed by a little stronger bank.
FHA has become the favorite of first-time home buyers for its more lenient underwriting guidelines and lower down payment requirements. Its programs, however, are open to all applicants and many refinances have been done through it. Since FHA started gobbling up market share a couple of years ago, … (6 comments)

underwriting: Mortgage lenders forced to buy back bad loans - 02/02/10 05:57 PM
Mortgage paper by the millions has been lately marked with a big fire-red stamp BAD. Or some home loan industry observers prefer to use the equally merciless description TOXIC. There probably are a few other choice words floating in the media about them. Nevertheless, these mortgages in default are a major weight on the books of anyone who holds them - generally portfolio lenders and investors - and that being so, they want to get rid of them, if at all possible.
Fannie Mae and Freddie Mac, the colossal GSEs, which make up a large chunk of the secondary mortgage market, … (13 comments)

underwriting: Real estate rebound straight ahead? - 05/29/07 01:38 PM
 
It's straight ahead all right, but the real question is when. First of all, let's clarify this a little. We're talking about residential real estate and more specifically about the regions that have been lately whacked by stagnant or falling home prices, high levels of listing inventories and tougher mortgage underwriting standards. As we know, all real estate is local, so some areas are doing just fine, like generally the Northwest and New York City.
The rebound may still be a few months away for the affected regions. We're seeing encouraging signs, though, that the slide appears to have come to a halt and … (0 comments)

underwriting: Is it time to refinance? - 04/27/07 04:51 PM
It very well may be. The most urgent reason to do so is if the homeowner has an adjustable rate mortgage, or an ARM, and it's about to reset upward. That way the payments can be kept from changing too much or not at all. To cash out some of the built-up equity for a home improvement project or something else could be another good reason to do it. And there still are older loans with high interest rates that could benefit from today's low levels.
There are a few things that need to be taken into account, though. Is there a prepayment penalty … (0 comments)

underwriting: Mortgage buybacks the rage. - 04/16/07 12:44 PM
There was very little talk about mortgage buybacks before the year 2006. Why? The real estate market was doing quite well in those days. We all remember that. If a borrower fell on hard times, he could quickly unload the property and make a profit in the process, too. Even a shoddy loan was a good loan. That was then.
What's a buyback anyway? When a bundle of mortgages is sold, there's a contract between the parties that often stipulates that the seller must take back from the buyer loans that go into default early on, usually within 90 days. Another reason for such action … (2 comments)

underwriting: Subprime bailout? - 04/03/07 12:54 PM
All government levels are hesitant at this point to get involved in any meaningful way. Perhaps that's the correct call. In case there was a bailout, how would that shape up?
In a full bailout of affected borrowers, the banks would also be rescued. Including those that could be labeled the biggest culprits in this mess. Those who recklessly loosened their underwriting guidelines to keep meeting their target numbers. I wouldn't like to see my tax dollar go to save them. You wouldn't either, I bet. The society as a whole would be paying dearly to lift by the collar these irresponsible people and mortgage lenders … (5 comments)

underwriting: Subprime meltdown overblown? - 03/30/07 10:19 PM
How serious is it? It might actually be less of a problem than previously believed. A Federal Reserve Governor estimates that ARMs, in the eye of the storm, make up only about 8% of the entire home loan market. Relatively small number. Here's a bigger number. In some calculations the lenders could suffer $300 billion or more in losses. But, that's minor when we remember that the recent tech bust ate up around $9 trillion in corporate equity. So, is it more hype than anything else?
It could possibly still get uglier, yes, but nevertheless I'm beginning to consider it merely a correction. As … (6 comments)