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To be Frank: The Gift That Keeps on Giving
Posted to: Community Commentary
Friday, December 28, 2012 12:15 PM

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One of my favorite movies this time of year is Christmas Vacation. Being a multiple year winner of neighborhood light contests, I am inspired by the auxiliary nuclear power supporting show he puts on in the name of their "fun old fashioned Griswold family Christmas".

Toward the end of the movie, the look on Clark Griswold's face when he announces to his entire family that he has already committed $10,000 to put a pool in with his bonus check, only to find that bonuses have been scrapped and he has instead been enrolled in a “jelly of the month” club is priceless. It is much like the look I see on my own face as another regulation/guideline layer/Gfee/AMC appraisal surprise knocks out an expectation for a loan approval/docs/funding, and ultimately a paycheck.  Yet cousin Eddie puts it all in perspective when he raises his antler eggnog glass and exclaims "That’s a gift that keeps on giving”. Be thankful for the little things.

Until this year, I felt like I was playing out that "jelly of the month" scene as one loan after another fell out due to a low appraisal or an underwriting guideline layer.  I had to be content with closing the vanilla deals with enough equity to keep refinancing as rates have continued to drop from 2008 to 2012.  Yet I longed for the bonus of being able to help the customers that needed it the most.  As values continued to decline, payment relief seemed like an impossible dream, and many of my customers were calling me to ask about the credit consequences of turning in their keys. 
In Christmas Vacation, dimwitted cousin Eddie takes Clark's advice and goes out and hogties, duct tapes and gift wraps Clark's boss.  The net result of his efforts: a 20% addition to last year's bonus.  HARP 2.0 wasn't exactly hogtied and giftwrapped, but it certainly took some kicking and screaming to get it here and up and running.  I got much more than a 20% bonus as a result of HARP 2.0.

This summer, I wrote about the four year ordeal that ended in victory this summer for Mr. & Mrs. A, in a piece titled "We Have a Chance".  A few weeks ago I greeted Mr. & Mrs. A at our kids' school Christmas performance.  The prior three years these greetings always began with a distressed look on Mrs. A's face as her twin daughters played around her legs, and her boys inevitably fought about who hit who first, and she asked me the pained question "anything new yet that you think will help us?".  I would cringe, say we were getting closer, and then listen to the heartbreak in her voice when I told her where values were trending in her neighborhood.

This year, I got a big hug from Mrs. A, and a hearty handshake/guy back pat from Mr. A.  They both looked well rested, and their faces were more relaxed than anytime I can remember.  "I can't tell you how much the refinance has helped us.  Thank you again, so much for never giving up."  All of those jelly of the month years were worth it for that moment.

Mr. & Mrs. A have referred me a great deal of business, and many more upside down homeowners are now saving $200 to $300/month as HARP 2.0 continues to be the gift that keeps on giving payment relief and  fending off rational defaults. 

I go into 2013 feeling hopeful that we're finally getting it right.  As values and prices show signs of stabilization, and rates stay at historical lows, there is reason to celebrate the accomplishments of 2012.  And that makes this holiday the best one "since Bing Crosby kissed Danny (expletive) Kaye."

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Mortgage Rates:
  • 30 Yr FRM 3.66%
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  • 15 Yr FRM 2.94%
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  • Jumbo 30 Year Fixed 3.61%
MBS Prices:
  • 30YR FNMA 4.5 108-30 (0-02)
  • |
  • 30YR FNMA 5.0 110-19 (0-02)
  • |
  • 30YR FNMA 5.5 111-26 (-0-04)
Recent Housing Data:
  • Mortgage Apps 10.03%
  • |
  • Refinance Index 11.33%
  • |
  • Purchase Index 8.43%