mortgage banking: 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)
mortgage banking: 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)
mortgage banking: Are Fannie and Freddie doomed?
- 01/22/10 08:34 AM
The following from a CNBC story: CNBC Reports... Fannie, Freddie Cannot Exist in Current Form: Frank Rep. Barney Frank (D-Ma.), chairman of the House Financial Services Committee, said Friday that Fannie Mae and Freddie Mac should be eliminated as they stand now. "This committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance, that's the approach rather than the piecemeal one," Frank said. Frank made his comments during the committee's hearings on executive compensation. I, for one, agree with congressman Frank on this issue. It is … (0 comments)
mortgage banking: 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)
mortgage banking: A Potpourri of Financial Information
- 01/12/10 05:55 AM
You know how the Fed has been buying up so many Fannie, Freddie and Ginnie Mae MBS? Last year the Fed made up something like 75% of all such purchases. It will be interesting to see what happens as they stop buying. The conventional wisdom is that it will cause rates to go up, but the conventional wisdom isn't always right. It seems like yesterday that Lomas & Nettleton was the nation's biggest servicer with about $20 billion? Here are the top servicers today.
Number 10 OneWest is the new name for what used to be Indy Mac Bank (a place … (0 comments)
mortgage banking: 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)
mortgage banking: 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)
mortgage banking: Where Have all the Lending Professionals Gone?
- 11/20/09 06:51 AM
It is getting more and more common that my company is asked to save a real estate transaction at the 11th hour. I got three calls in the last two days from listing agents that have had their sales put in jeopardy by pure incompetence from the lender handling the transaction for the buyer. Two of the loan officers that work for me have also rescued deals this week! It is worth a few minutes to analyze what is happening. Often, these transactions were originated by either mortgage brokers or credit unions. Brokers are at a real disadvantage because their chain … (5 comments)
mortgage banking: My Profit VS A Happy Customer
- 11/16/09 11:56 PM
Yesterday I faced a common dilemma for business; was it better to give my services away and have my customer leave the transaction happy or make a profit and risk a potential failed sale? Let me first explain the circumstances. I had received a loan application from a couple about 6 weeks ago for a USDA guaranteed loan. In case you don't know, these loans are zero down and the seller is allowed to pay closing costs. The USDA charges a 2% guarantee fee that can be financed. The seller (Metlife) had agreed to pay 5% of the buyers closing cost. … (5 comments)
mortgage banking: Fall and Flu
- 09/29/09 09:56 AM
It seems to happen every year...the kids go back to school and withing two weeks they are sick. Typically I seem to catch the bug the following week. Why should this year be an exception? Of course it is not! Last night I woke up with a terrible cough. I can feel the wave of this virus coming over me like sliding into a hot bathtub. The aches and fever are hitting now and I am sure in won't be long until nausea sets in. I am just hoping it is not the swine flu. Here is my dilema: I have … (3 comments)
mortgage banking: Fall is in the air and its time to get serious
- 09/21/09 11:30 AM
Now that the dog days of summer are past, it is time to get serious with this business. I have always had my best months in October, November, and once in December. I have always felt there were just a few factors: I am not as distracted so I work harder - back to the law of attraction Customers are not as distracted so they stop putting off their purchase ore refinance decision Kids are in school and people know they need to get stable September and October is perfect house hunting weather These may all be reasons in my own … (3 comments)
mortgage banking: 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.
I work in the mortgage industry, which as you know has been quite volatile. Because of the employer based healthcare system we have, it is important to the story to know my employment history. I offer it here as exhibit 1:
2005 - 2006 Central Pacific Mortgage Company declared bankruptcy 2006 - 2007 American Home Mortgage Company declared bankruptcy 2007 - 2008 Indymac Bank Company taken over by FDIC...placed in … (2 comments)
mortgage banking: The Future of the Mortgage Industry
- 07/24/09 07:39 AM
Yesterday I posted a blog titled "The Death of an Industry" and it obviously struck a nerve. The Mortgage Lending community has been put under the microscope lately and tensions are running high. My blog discussed how changes in business practices by large commercial banks and mortgage bankers, combined with new government regulation could conceivably spell the end of the Mortgage Broker industry. Most of the posts I got were Mortgage Brokers defending their business and their business practices. This was understandable and expected. I did however underestimate the loyalty that many real estate agents held for their Mortgage Broker lender … (1 comments)
mortgage banking: Death of an Industry
- 07/23/09 11:22 AM
I opened my first mortgage brokerage company in 1991. The industry trend was away from banks and toward brokers. Brokers had several intrinsic advantages: •1. They could shop the market place for price. While most lenders pricing is very close, mortgage brokers could find that one lender that was buying the market on a given day and take advantage. •2. They could move the loan to another wholesaler when rates went down. Although not an ethical approach from the standpoint of the wholesalers, it was common practice for mortgage brokers to lock a rate with one investor and deliver the loan … (61 comments)
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•1. A one on one credit evaluation including a free credit report. •2. An hour of training on credit scoring and what makes up a credit score. This includes a complimentary copy of our invaluable credit pamphlet, "Raise your credit score 100 points in 45 days". •3. Credit improvement analysis on our unique "Credit Xpert" score simulator. •4. Special evaluation on Credit Xpert's "What-if Simulator". •5. A 3-year enrollment in "Score … (0 comments)
mortgage banking: Business in tough times
- 10/24/08 10:31 AM
I am a firm believer that you can thrive in tough times with the right attitude and the right approach. Abigail Dougherty, a business coach and author of "The Straight Edge News" writes the following: That conversation reminded me of two lessons many business owners and managers forget."What we do speaks louder than what we say". The corollary lesson is "There is always someone watching". Here are some suggestions for guiding your business through this current economic unrest. #1 - Foster Open Communications with Your Employees As the owner/manager it is far better to communicate clearly with your employees on the state … (0 comments)
mortgage banking: Recession, Depression, or Opportunity?
- 10/20/08 07:49 AM
This morning I was listening to CNBC and herd a pundit say that he expects the US economy to go into a recession for the 4th quarter...After I picked myself off the floor from laughing so hard, I started thinking about the ramifications of the denial of Wall Street to the facts of our times. Clearly to average people, the American economy has been in recession for a long time and heading toward depression. So how does this impact me and my business? First, the amount of competition has decreased dramatically. In the past I have often lost good clients because their … (1 comments)
mortgage banking: 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)
mortgage banking: Fascintating times in mortgage lending
- 03/16/07 09:19 AM
As of today, 39 national lenders have closed their doors this year. The departure of so many lenders is leaving a vacuum in the industry. The stronger companies like American Home Mortgage are posturing to fill the market void by providing competitive programs that fill a huge need. If you want to track the lending implosion, check out www.ml-implode.com … (0 comments)
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.
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