lending: Good New on Flood Insurance
- 04/19/10 09:57 AM
In case you didn't know, we have been hanging in limbo on properties that require flood insurance for several weeks now. The old FEMA flood insurance appropriation had expired and congress had not re-authorized until now. Congress approved the Continuing Extension ACT of 2010 (H.R. 4851), which includes a temporary extension of the Federal Emergency Management Agency's (FEMA) statutory authority to issue flood insurance policies under the National Flood Insurance Program (NFIP). The temporary amendment will expire on May 31, 2010. Many investors, such as Union Bank, Provident, and others, sent out announcements re-installing their previous flood insurance policies. We are once again … (3 comments)
lending: Has the FHA flipping rule really been waived?
- 03/05/10 02:19 AM
Lenders accross the land are taking different twists on the FHA flipping rule waiver. Just to demonstrate how major lenders are treating this tender topic, I will list some examples from the largest national leaders. Some things are simple, others not. On January 15, 2010, HUD issued a Waiver of Requirements of 24 CFR 203.37a(b)(2) revising exceptions to the FHA Flipping Rule policies. (Notice that HUD did not actually issue a Mortgagee Letter.) The FHA Flipping Rule prohibits FHA financing if the contract of sale for the purchase of the subject property is executed within 90 days of the prior acquisition … (2 comments)
lending: Consumers Beware of Rising Fees
- 02/16/10 04:53 AM
Borrowers need to be aware that many mortgage brokers are choosing to raise fees to maintain their income on each loan transaction. Following is advice from one major wholesaler to their broker customers:
THE NEW GFE See the original GFE given to the Customer - Line 1. Contains the following: Origination fee + Processing Fee + Lenders Admin. Fee + YSP (plus any other compensation / fee that the broker charges). Once you give the GFE to the Customer your line 1 will not change higher (except if the loan amount changes your origination will be adjusted up or down … (2 comments)
lending: The Death of an Industry - updated
- 02/10/10 09:03 AM
A few months ago I wrote a blog titled "The Death of an Industry". To say the least it met with a lot of resistance from the Mortgage Broker community. The Mortgage Brokers of active rain showered me with reasons why I was wrong. They contended that mortgage brokers could shop for the best deal for their customers, but of course the HVCC rules that require the lender to order the appraisal cut the shopping off at the knees. Brokers claimed they could deliver loans at a lower price to the consumer. The new RESPA rules are quickly proving a challenge to … (6 comments)
lending: Clarification on FHA removing 1% cap on origination fees
- 01/12/10 07:54 AM
Recently HUD announced elimination of the 1% origination cap on FHA loans. The change was made with the spirit of the new GFE that combines origination and other lender fees into one section. This will allow lenders to present "origination charge", a bundled fee of origination fee and lender fees, at an amount greater than 1%. It was not intended to increase our charges to borrowers. Until we have time to further explore our options, my company's policy is to restrict our "origination charge" to 1% origination fee plus the standard branch fees. This has been a source of confusion for many … (1 comments)
lending: More challenges to lenders and brokers...the lending industry contracts
- 01/11/10 05:25 AM
How many companies out there won't be able to do FHA loans if HUD moves toward a minimum $2.5 million net worth to do FHA loans? Some estimates peg the loss at 70% of all current lenders! HUD estimates that about 40% of all currently approved lenders have less than $1.0 million net worth. Maybe they'll grandfather small companies in... maybe not... Would this be good for consumers, eliminating those firms from FHA origination that are on shakier financial ground? Or would the loss of competition hurt a consumers ability to shop? Both good questions that have been partially answered by history. … (0 comments)
lending: Turbulence continues in the credit markets
- 12/07/09 09:21 AM
It does not look like we have quite turned the corner on the mortgage meltdown. Today another one bites the dust. On the heels of its parent company's bankruptcy, Amtrust Bank became the 130th bank to fail in 2009 when the FDIC took it into receivership on 12/04/09 at an estimated cost of $2 billion. New York Community Bank in Westbury, N.Y. assumed AmTrust Bank's $8.6 billion in deposits and purchased $9 billion of the failed bank's $12 billion in assets. If you follow the meltdown on the website www.ml-implode.com you find that this is the 374th major US lending operation that … (3 comments)
lending: Changes in the mortgage industry
- 09/17/09 09:35 AM
I came across a great blog that is worth the read. It is short: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=119616&discussionID=7281287&commentID=6615555#commentID_6615555 The author relates Darwin's theory of evolution to the evolution of the mortgage industry and especially as it relates to small brokers vs. large lenders. It seems to me that he is correct in his assertion that we are in a period of survival of the fittest.
… (1 comments)
lending: CreditScore 101
- 07/31/09 07:39 AM
In a world of shrinking mortgage options, I have found a way to grow my market. I call it CS (credit score) 101. Many consumers do not meet minimum thresholds to get a mortgage loan in today's world of FNMA/FHLMC/FHA/VA/USDA only lending. Often I find that credit scores are unnecessarily low because consumers do not understand their rights under the "Fair Credit Reporting Act" or they do not keep close enough tabs on their credit report and scores. CS 101 uses several tools to help consumers understand the components that effect credit and provides strategies to improve their score and correct … (1 comments)
lending: Indymac - an insiders view
- 07/16/08 04:43 AM
After the most painful year of my 24 year mortgage banking career, I can now report that I am officially an employee of the Federal Government. As everyone knows, last Friday the Office of Thrif Supervision put Indymac Bank into receivership and tranfered most of the assets to a new company, Indymac Federal Bank, operating under a conservatorship directed by the FDIC. Monday came around and all of a sudden we were closing loans! over $10 million closed on Monday over $14 million closed on Tuesday. The FDIC was able to unwind the mess that Indymac had created in the funding … (4 comments)
lending: Rural America
- 05/19/08 08:56 AM
This weekend I took a roadtrip from Portland to Northern Idaho as a chaparone a choral competition for my daughters school. As I drove for hour upon hour through the Columbia Gorge and Palouse hills of Washington, it occurred to me that there were probabally millions of acres of land that had very little purpose other than as a sanctuary to the wildlife and eco-system the mother nature put there. I have been a real estate lender for nearly 24 years and not one bank or mortgage company I have ever worked for would be willing to lend on about 95% of the land I … (0 comments)
lending: Don't throw in the towel...act
- 04/29/08 11:29 AM
I just got a call from a Loan Officer in another state asking for help. He was looking for the answer to the age old question; How do I become a top producing Mortgage Loan Originator. I don't think he liked the answer I gave because it wasn't a recipe but a philosophy. Here are the five steps I believe it takes any sales person to be successful. It doesn't matter how good or bad the market is, it is your attitude that determines your results: Network, network, and network some more. Join every committee, every club, every leads group and every … (0 comments)
lending: Will Countrywide be the next imploded mortgage lender
- 01/10/08 04:34 AM
This is the question circling the mortgage lending community lately. No question they are in serious trouble. With the secondary market for mortgage loans in total dysfunction, Countrywide finds itself in a dilemma. If they stop making loans, they could slow the rate of loss from defaults but where do they generate cash flow for operations. If They pick up production, they can feed the giant corporate structure they have built and hang on a while longer, but the losses are mounting fast and there is no sign that a secondary market for mortgage loans is going to reemerge soon enough for CW … (4 comments)
lending: Summary of Bernake speach last August 31st
- 12/28/07 05:56 AM
The actual speech is long, but worth the read....as it not only addresses the current mortgage and financial market crisis ,but provides a good summary of the history of USA mortgage finance. Here is a summary: Bernanke clearly and unambiguously acknowledges that there has been a financial panic that has gone way beyond the underlying (deteriorating mortgage credit) fundamentals when he said, "Although this episode appears to have been triggered largely by heightened concerns about subprime mortgages, global financial losses have far exceeded even the most pessimistic projections of credit losses in those loans."
I thought the "history of mortgage finance" section is a very … (0 comments)
In case you didn't know, we have been hanging in limbo on properties that require flood insurance for several weeks now. The old FEMA flood insurance appropriation had expired and congress had not re-authorized until now. Congress approved the Continuing Extension ACT of 2010 (H.R. 4851), which includes a temporary extension of the Federal Emergency Management Agency's (FEMA) statutory authority to issue flood insurance policies under the National Flood Insurance Program (NFIP). The temporary amendment will expire on May 31, 2010. Many investors, such as Union Bank, Provident, and others, sent out announcements re-installing their previous flood insurance policies.
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