Community Commentary

Community Commentaryhttp://www.mortgagenewsdaily.com/channels/community/default.aspxenCommunityServer 2008 SP2 (Build: 31106.96)Friday Borrower Do's and Don'tshttp://www.mortgagenewsdaily.com/channels/community/312344.aspxFri, 14 Jun 2013 21:54:34 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:312344Ted Rood1http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=312344http://www.mortgagenewsdaily.com/channels/community/312344.aspx#comments<p>Here's another weekly installment of <i><b>Do's and Don't's</b></i> for prospective borrowers embarking on, or already engaged in the home mortgage process.  In case it needs to be said, the <b>"don't's" </b>are <b>strictly </b>for <b>comedy</b> (though most are based on real world examples of things that will kill or greatly delay the mortgage process).  </p> <p>The <b>"do's,"</b> on the other hand, are potentially <b>valuable nuggets</b> of information that may greatly benefit your mortgage experience.  In fact, most of them can end up making a difference in the <b>success or failure</b> of a loan, and at the very least, can help <b>avoid costly delays</b>. </p> <p> Above all else, remember that your loan originator wants to close your loan as quickly and as efficiently as you and the <b>good ones</b> fully appreciate that their <b>borrowers' satisfaction</b> plays a huge role in their long term success.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/312344.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/312344/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=312344" width="1" height="1">Do's and Don't's For a Smooth Mortgage Process: Part 2http://www.mortgagenewsdaily.com/channels/community/311905.aspxFri, 07 Jun 2013 23:46:02 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:311905Ted Rood1http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=311905http://www.mortgagenewsdaily.com/channels/community/311905.aspx#comments<p>We could all use a little comedy considering the<a target="_self" href="http://www.mortgagenewsdaily.com/consumer_rates/311931.aspx"> recent rise in rates</a>.  But <b>delays </b>in the loan process are no laughing matter, costing you more and more as rates rise (even if you lock your rate, extensions are more expensive in this environment).  With that in mind, here's the second installment of "<b>do's and don't's</b>" for prospective borrowers embarking on, or already engaged in the home mortgage process.  In case it needs to be said, the <b>"don't's" </b>are <b>strictly </b>for <b>comedy</b> (though most are based on real world examples of things that will kill or greatly delay the mortgage process).  The <b>"do's,"</b> one the other hand, are potentially <b>valuable nuggets</b> of information that may greatly benefit your mortgage experience.  In fact, most of them can end up making a difference in the <b>success or failure</b> of a loan, and at the very least, can help <b>avoid costly delays</b>.  Above all else, remember that your loan originator wants to close your loan as quickly and as efficiently as you and the <b>good ones</b> fully appreciate that their <b>borrowers' satisfaction</b> plays a huge role in their long term success.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/311905.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/311905/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=311905" width="1" height="1">Do's and Don't's For a Smooth Mortgage Processhttp://www.mortgagenewsdaily.com/channels/community/310951.aspxFri, 31 May 2013 23:25:08 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:310951Ted Rood7http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=310951http://www.mortgagenewsdaily.com/channels/community/310951.aspx#comments<p>Every borrower wants their mortgage closing to be simple and stress free.  While it may not always feel like it (between loan processors' requests for your 2011 Schedule E and page 6 of  March's bank statement), lenders want the same thing.  Here are some timely "do's and (<b>mostly </b>hypothetical) don'ts" for borrowers to consider during the loan application process.  While no single list can completely cover all loans, following these "<b>do's and don'ts</b>" during your mortgage application process will help you <b>close your loan faster</b>, sleep better at night, avoid premature gray hair, and help your loan officer give you the best service possible.  Look for more helpful hints soon, and happy mortgage hunting!</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/310951.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/310951/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=310951" width="1" height="1">To Be Frank: The Mortgage Industry, Mission or Maintenance?http://www.mortgagenewsdaily.com/channels/community/290954.aspxTue, 15 Jan 2013 20:09:54 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:290954Frank Ceizyk1http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=290954http://www.mortgagenewsdaily.com/channels/community/290954.aspx#comments<p>I was handed a book on the way home from Christmas Mass at my church this year titled "The 4 Signs of a Dynamic Catholic".  About halfway through the book, there was some discussion about the present day struggle to affect any meaningful change in this world because we have become far more oriented towards maintenance, rather than mission.  It got me <b>thinking about the mortgage industry</b>.  Are we collectively on a mission, or simply in a perpetual state of maintenance? </p> <p>If you haven't guessed by now I am a hopeless movie addict, and since the only way I can discuss anything mortgage related with my wife is to extract the eye glazing finance language out of it, I often find myself drawing analogies to my favorite scenes so I can talk about how things are in my world. </p> <p>When I think <b>mission</b>, I see...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/290954.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/290954/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=290954" width="1" height="1">To be Frank: The Gift That Keeps on Givinghttp://www.mortgagenewsdaily.com/channels/community/289293.aspxWed, 02 Jan 2013 21:08:52 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:289293Frank Ceizyk1http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=289293http://www.mortgagenewsdaily.com/channels/community/289293.aspx#comments<p>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". <br /><br />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...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/289293.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/289293/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=289293" width="1" height="1">harp 2.0To be Frank: Finding Common Ground - The Student Teacher Circlehttp://www.mortgagenewsdaily.com/channels/community/283364.aspxTue, 20 Nov 2012 19:53:16 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:283364Frank Ceizyk0http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=283364http://www.mortgagenewsdaily.com/channels/community/283364.aspx#comments<p>I remember when I first learned <b>how to process a loan</b>.  Concepts I had never learned as a media arts major in college or from my minor in business rolled off the tongues of underwriters, funders, and doc drawers like some financial tower of Babel.   I took accounting, statistics, and college algebra but<b> nothing prepared me</b> for suddenly needing to balance an understanding of debt ratios, continuity of income, seasoning of assets, title insurance, gross and net appraisal adjustments, property types, credit history analysis, lock deadlines, closing contract timelines,  MIP,  funding fees, RESPA, TILA, ECOA and on and on and on...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/283364.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/283364/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=283364" width="1" height="1">More Lowlights than Highlights in HUD's Report to Congresshttp://www.mortgagenewsdaily.com/channels/community/283745.aspxTue, 20 Nov 2012 18:48:18 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:283745Ted Rood2http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=283745http://www.mortgagenewsdaily.com/channels/community/283745.aspx#comments<p>HUD's<b> report on FHA's finances </b>to Congress was a mere 64 pages.  Here's the top (or bottom!) 10 summary for those who lack the time or motivation to peruse the entire report:</p> <ol> <li>FHA is<b> losing money</b> hand over fist.  Despite increasing loan quality and mortgage insurance rates, FHA lost over $1.5 billion in 2012 to date.<br /> <br /></li> <li>HUD's accountants had an <b>overly rosy view of housing</b>.  Last year they projected housing values would rise 11.5% by 2014.  This year's revised estimate is 4.8% appreciation by 2014, hardly a robust housing recovery!...</li> </ol>...(<a href="http://www.mortgagenewsdaily.com/channels/community/283745.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/283745/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=283745" width="1" height="1">To be Frank: Cowards Do That, And That Ain't Youhttp://www.mortgagenewsdaily.com/channels/community/282755.aspxMon, 12 Nov 2012 23:47:00 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:282755Frank Ceizyk5http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=282755http://www.mortgagenewsdaily.com/channels/community/282755.aspx#comments<p><i>"Now, if you know what you're worth, then go out and get what you're worth. But you gotta be willing to take the hits, and not pointing fingers saying you ain't where you wanna be because of him, or her, or anybody. Cowards do that and that ain't you. You're better than that!"</i></p> <p>That quote never had an impact on me the first time I saw the last installment of the Rocky sequels.  I came across it on a day I was searching the internet for something inspirational.  Something to lift my spirits above the <b>painful, slow torture</b> that mortgage loan originating had become.  Something to keep me from crossing the line that I so desperately wanted to cross...  </p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/282755.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/282755/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=282755" width="1" height="1">A Letter to President Obama Ahead of Next Tuesday's Electionhttp://www.mortgagenewsdaily.com/channels/community/281454.aspxFri, 02 Nov 2012 18:37:00 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:281454Frank Ceizyk8http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=281454http://www.mortgagenewsdaily.com/channels/community/281454.aspx#comments<p>Dear President Obama,<br /><br />As the election approaches next week, I feel compelled as a twenty veteran of the housing industry to write a letter that speaks to the <b>fundamental truth</b> of the current state of our economy.  This started with housing, and it will end with housing. I hope to offer some perspective from someone on the frontline of the battle to <b>restore some integrity to home ownership</b>.<br /><br />Things certainly got off to a <b>rough start</b> with the modification programs. I volunteered at several housing foreclosure prevention workshops where distressed homeowners recounted how they were told to stop making their payments in order to qualify for the low rates being advertised by these fledgling efforts to modify home loans.  Although some of these borrowers achieved success in receiving modifications, all of them did so at the expense of their consumer credit scores. Any borrowing in the future will require they pay much higher interest rates for several years into the future.  </p> <p>I would give your administration <b>high scores</b> for the <b>HARP 2.0 programs</b> that are now allowing thousands, if not millions of severely underwater homeowners to take advantage of the <a href="/mortgage_rates/">current low rates</a>, and at least...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/281454.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/281454/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=281454" width="1" height="1">housing recoverybarack obamaA Letter To Governor Romney Before Next Tuesday's Electionhttp://www.mortgagenewsdaily.com/channels/community/281455.aspxFri, 02 Nov 2012 18:36:00 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:281455Frank Ceizyk7http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=281455http://www.mortgagenewsdaily.com/channels/community/281455.aspx#comments<p> </p> <p>Dear Governor Romney,<br /><br />As the election approaches next week, I feel compelled as a twenty year veteran of the housing industry to offer some perspective from the frontline of the battle to restore integrity to American home ownership.  Many colleagues, home owning consumers, and economists seem to agree on one fact about the economic climate we currently live in:  This <b>started with housing,</b> and it will <b>end with housing</b>.<br /><br />I have read <a href="/09242012_romney_obama_housing_policy.asp">your plan to end the housing crisis</a>, and I certainly applaud your desire to “facilitate foreclosure alternatives for those who cannot afford to pay their mortgage”.  I hope that if elected you will support the initiatives that are working, such as <b>HARP 2.0</b>.  Families have benefited from being able to save $200 to $400/month as they finally take advantage of <a href="/mortgage_rates/">low interest rates</a> after watching their homes drop in price up to 50% the last five years.  Several of them told me point blank at closing had they not been able to get some payment relief on such a large declining value asset, they would have simply defaulted.   The <b>next step is to allow people</b> who do not fit into the Fannie Mae and Freddie Mac loan pools to take advantage of the HARP 2.0 flexibilities so that even more American homeowners can get payment relief.  This will provide a rational alternative to rationally defaulting, keeping additional homes from being added to the shadows of foreclosed inventory.<br /><br />I am concerned about media reports indicating that your administration would target the <b>mortgage interest deduction for elimination</b>...</p> <p> </p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/281455.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/281455/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=281455" width="1" height="1">Escape From Pottersville: A New Beginning in the Mortgage Industryhttp://www.mortgagenewsdaily.com/channels/community/280382.aspxFri, 26 Oct 2012 16:12:00 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:280382Frank Ceizyk9http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=280382http://www.mortgagenewsdaily.com/channels/community/280382.aspx#comments<p>Contributing to MND the past 4 years, I have been content to represent my image as a bewildered George Bayley, wondering what happened to his beloved Bedford Falls when he stumbles across the "Pottersville" sign after wishing he'd never been born. I have lived a modern day version of George Bayley's alternate reality in Pottersville going on 5 years now.<br /><br />I have had <b>many moments when I wished I'd never gotten into this business</b>, and have come very close to jumping off that bridge to join the river of people who decide it isn't worth it.  But there are voices crying out already drowning in the water, and <b>they distract me from my self pity</b>.  The voices are those of home owners swimming in a sea of debt compared to the value of their homes. And these are not the speculative investors who took out stated income zero down loans for a quick flip profit. These are borrowers that put 20% down, paid extra principal, and their only mistake was buying during the most speculative housing boom in the history of housing. None of the hundreds of clients I've talked to over the past 5 years had hopes of double digit appreciation or quick cash out/flip plans.  They just wanted a house that would appreciate at the 3% clip that history said was reasonable.  But that client base keeps growing as I meet people from 2009, 2010, 2011 who bought homes and are now upside down.  Something has to change.<br /><br />I've <b>had enough</b> of Pottersville. "No man is a failure who has friends", was the letter George got from his simple minded angel friend Clarence when he finally decided to escape Pottersville. George returned knowing that monumental difficulties faced him.  Yet the years of people he had helped came to his rescue.  Aren't our customers our friends? Don't we have the opportunity to create lasting relationships that will allow them to be ones who defend us in hard times? This Pottersvillean world can only exist if we give up on doing what is right for our customers. Or worse, just give up the fight, and hope that things will work themselves out. <br /><br />The <b>housing industry can fix this problem from within</b>. I've had the opportunity to interact with many inspired minds in the Mortgage News Daily community. We don't need a regulatory agency tasked with making sure we do what is right for our consumers. We have failed to appeal to the regulatory and political powers that be because we haven't built a platform of reform that is based on what we know is best for the people that are the lifeblood of what we do: the housing consumers.<br /><br />I have always wondered what a sequel to It's A Wonderfeul Life would have been like.  What battles would George have been able to fight with the support of all the people he had helped? </p> <p>I recently came across a you tube video with another Jimmy Stewart character in another idealistic Frank Capra film production: Mr. Smith Goes To Washington. Senator Jefferson Smith shows up in Washington DC with naïve, idealistic hopes of making changes that would benefit the youth of America, but ends up in the thick of political dirty tricks, false accusations, and character assassination.  In one final impassioned plea, he reminds the chamber of one rule that should dictate the interactions we have with customers, constituents, friends and family: Love Thy Neighbor. I wonder if those three idealistic words could be used as the foundation for a return to that basic golden rule when it comes to housing finance to benefit the homeowners of America.</p> <p>As I ponder a trip to Washington, DC,<b> I wonder what message I would bring</b>.  I read the industry blogs, news reports and chats, and I see a civil war going on.   How can I bring a message of unity in the name of the housing consumer when all the respective players seem so hell bent on blaming each other for this mess without any respect for the risks and challenges inherent in each of our roles in the housing system? <b>The truth is simple</b>.  I can't.  I can only speak for the customers I sit across from every day of every week, stressed because their house values are continuing a fifth year of declines with so many false calls on the bottom that they really question whether there is any investment value left in home ownership.<br /><br />Starting in the summer of 2010, I attended every single closing and <b>kept a journal of the questions and concerns</b> I heard from clients in all walks of life, with differing levels of financial sophistication.  I watched them shake their heads as appraised values dropped.  I clarified the meaning of the mysterious lump sum 3 page GFE calculations that seemed to cloak the meaning of "rates and fees" in cryptic terms that still don't get to the heart of the financial benefit of the loan.  I helped connect the dots from that to the closing HUD-1. I explained why a $500 undocumented cash deposit in a checking account would have to explained even though the average balance was over $10,000.  I had fascinating exchanges about what these consumers were told about the price trends of their house when they bought, and heart breaking sessions where I felt like a grief counselor consoling couples who were upside down by ten, twenty or more percent despite having put down the recommended 20% when they bought.  With <b>hundreds of closing conversations compiled</b>, I have a War and Peace sized volume to present clearly showing what is working, but more than often, what is not working. </p> <p>I hope that anyone reading this post will share their stories as told from the viewpoint of the population that keeps us all in the business: the current and aspiring homeowners of this country.  I look forward to sharing these true stories in the words of the American home owning consumer with the political, regulatory and legislative decision makers when I visit Washington DC in 2013.   I hope I'll see a few of you there for this new beginning.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/280382.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/280382/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=280382" width="1" height="1">OP-ED: Collateral Substitution Mortgage: A Solution to the Housing Crisis?http://www.mortgagenewsdaily.com/channels/community/268034.aspxFri, 03 Aug 2012 20:11:00 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:268034Robert Goldberg0http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=268034http://www.mortgagenewsdaily.com/channels/community/268034.aspx#comments<p>The housing statistics are staggering. Over the past five years, the 30% average drop in prices has cost homeowners approximately $7 trillion in wealth. More importantly, according to data from CoreLogic, over 11 million homes are now underwater, representing nearly one-quarter of all mortgages. Close to one-half of all homes are either underwater or have equity positions of less than 20% of their current home value. Beside the obvious loss of wealth, this contraction in home equity values has frozen the housing market and introduced a large structural impediment to the country's natural ability to reallocate labor from high unemployment regions to more prosperous areas of the country.</p> <p>To see how the contraction in home prices has compounded the country's economic problems, consider a homeowner living in a high unemployment region with a home price now at or below the outstanding mortgage balance. Perhaps, the homeowner would like to move to a region with better job prospects, North Dakota comes to mind, but to do so would require either abandoning his house or agreeing to a short sale. Either way, the homeowner ends up with no equity and possibly a weakened credit record. Purchasing a new home will be out of the question since he has lost his equity for a down payment, and even renting may be difficult depending on his credit position. The result is that the homeowner is frozen and the country loses its dynamic ability to reallocate resources.  Whereas in Europe people do not readily move from high to low unemployment regions because of cultural and political impediments, <b>Americans are now frozen</b> because of personal wealth considerations.</p> <p>The mortgage situation affects more than just people looking to move to regions with better job prospects. It also affects <b>growing families looking to upsize</b> their residences as well as <b>empty nesters and elderly looking to downsize</b>. After selling their current homes and recovering what if any remaining equity, even families with stable jobs and solid income streams likely now lack the requisite down payment necessary for their move. The result is that these families do not move, contributing to the frozen market and fostering an inefficient allocation of resources.</p> <p>There is <b>a simple solution to this problem</b> and, in fact, it already exists in certain securitized obligations and is in limited use in private commercial real estate transactions. The answer is to convert outstanding as well as new mortgages to a <b>collateral substitution mortgage</b>. Specifically, homeowners should be allowed to substitute housing collateral of the equal or greater value without requiring the payoff of the original mortgage loans. Valuation of the existing and proposed home collateral would be based on independent appraisers acceptable to the mortgage originator or processor for outstanding loans. A form of this product, called a <b>portable mortgage</b>, was briefly offered by E-Trade back in 2003.</p> <p>Let's see <b>how this might work</b>. Consider a homeowner that purchased a house for $300,000 with a $270,000 mortgage. Because of the decline in housing prices, the home is now worth $250,000. A homeowner wants to move to a region with better job prospects and finds a house also worth $250,000. However, it is impossible for the homeowner to move since he has no equity to use as down payment for the new home. But, using collateral substitution, the homeowner would sell his home and use the proceeds to buy the new home which would then secure the current outstanding mortgage. The lender is no worse off, and is likely in a better position if the homeowner has moved to improve his job prospects.</p> <p>Or assume a homeowner wants to purchase a $260,000 home and has saved the additional $10,000 necessary for the purchase. The homeowner would use the $250,000 sale proceeds along with the extra $10,000 to purchase the new home and the new home would be substituted as security on the outstanding loan. The bank ends up in an improved situation since there is now a $260,000 property securing the mortgage, an increase in collateral value of $10,000. Without this process, the homeowner would not have been able to make the move since, even with a short sale, he would only have had $10,000 as down payment for the new home, well below currently required levels.</p> <p>This process would also help those downsizing. Again, consider a homeowner looking to downsize to a $200,000 home. If the homeowner sells his current home he would recover no equity and may not have savings available for the new down payment. But, by allowing the homeowner to use part of the sales proceeds to pay down $50,000 of the mortgage balance and then substitute the new home collateral, both the homeowner and lender would be in a better position.</p> <p>There also are long-term benefits to new homebuyers. Using a collateral substitution mortgage would allow borrowers to lock in the <a href="http://www.mortgagenewsdaily.com/mortgage_rates/"><b>very low current long-term mortgage rates</b></a> and continue to keep these mortgages outstanding as they move to subsequent properties.  This feature provides an incentive to choose fixed rather than adjustable rate financing which should have a stabilizing effect on homeowner wealth as the economy recovers and rates rise to more natural levels.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/268034.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/268034/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=268034" width="1" height="1">portable mortgagecollateral substitution mortgagemortgage ratesWe Have A Chance…Victories In The Battle Against Lost Home Equityhttp://www.mortgagenewsdaily.com/channels/community/265780.aspxTue, 03 Jul 2012 19:36:14 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:265780Frank Ceizyk5http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=265780http://www.mortgagenewsdaily.com/channels/community/265780.aspx#comments<p>One of my favorite movies during the July 4th holiday is The Patriot. The sacrifices Benjamin Martin and many others make to win a chance at freedom against insurmountable odds always inspire and remind me what an incredible blessing it is to live in America. <br /> <br /> I find a kindred spirit in the ragtag militia that Benjamin leads into battle. They aren’t well respected by the regular army, and often run at the first sign a skirmish is not going their way. Leadership falls apart, the lines disburse, and they are quickly overrun by the more disciplined redcoat forces, causing many battles to be lost. <br /> <br /> Within housing, up until now, I have felt as if <b>mortgage brokers</b> represent that <b>disorganized militia</b>, unable to stand their ground in extended volleys with regulators, politicians, or legislators before breaking lines and running, surrendering or abandoning the cause altogether by getting out of the business. <br /> <br /> The homeowner casualties were too high, battles seemed unwinnable, and I was <b>on the verge of leaving</b> the cause thinking it was a losing proposition. A few<b> inspirational voices on this site</b> spoke words about leadership, and the value of educating and helping customers one loan at a time. Those words helped me stay the course. <br /> <br /> Now, the tide is turning. In the last two months, I have helped customers I had never been able to help before. </p> <p><b>A fireman and his family </b>of five are saving $200/month even though their equity has dropped to less than 5% of their house value. They weren’t required to incur the expense of an appraisal or mortgage insurance. <br /> <br /><b> A software engineer </b>caring for a large extended family is saving $551/month after 75 days of skirmishing to get his loan approved and MI transferred on his 123% LTV house with no appraisal requirement. <br /> <br /><b> A VA nurse </b>with a growing case load of distressed veterans returning from multiple tours of duty reduced her payoff period by 10 years, and still lowered her payment $100/month on her 105% LTV house, with no appraisal required. <br /> <br /><b> A couple with a 170% LTV</b> investment house purchased for an elderly father and care taking brother were facing an adjustment from interest only to fully amortizing. Now they have a 30 year fixed fully amortizing loan that will keep their payment from going up $250/month—and they were not subject to the agonizing unpredictability of an appraisal. <br /> <br /> My b<b>iggest success story</b>—Mr. & Mrs. A—whom <a href="/channels/community/251607.aspx">I spoke about a few months ago</a> in the Community Commentary, just signed last week, while their family of four children happily colored pictures, and fought over who was cheating at Go Fish. The new loan will save them $350/month. It was a long <b>4 year battle</b> that included a bankrupt builder, TB & W servicing their loan before their servicing disappeared into a black hole for 6 months, a failed refinance attempt when an appraisal came in at 105% of their loan balance in 2010, a trip to the Arizona Department of Housing to propose the use the billions of federal dollars allocated to Arizona to develop a HARP 2.0 type loan which the state ignored in favor of a doomed “you must be 90 days late to be eligible for principal reduction loan program”, an LP accept for the HARP 2.0 program in March, followed by a two month wait to find an investor who would offer unlimited LTV, and an HVE appraisal waiver, and a rate with a big enough credit to cover their prepaids and closing costs, keeping them from adding anything to their principal on their 131% LTV house. <br /> <br /> Mrs. A had tears in her eyes as we left the closing, her twin 3 year old girls, 9 year old and 6 year old boys scrambling around her. She thanked me for never giving up. <br /> <br /> It was not just me that didn’t give up. This administration pushed for<b> HARP 2.0</b>, product development geniuses developed a market for these loans, mortgage bankers found ways to fund the loans by working with Fannie and Freddie on all the complex issues related to pricing and selling them, creating guidelines for them, and then bringing them to the market. Account representatives, underwriters, doc drawers, and funders all learned the nuances of the programs to approve, get the docs to closing and fund them. Forgive me if I’ve left anyone out; I’m sure many more experts were involved in this process behind the scenes and they all deserve credit for these victories. <br /> <br /> Just the five examples of closed loans I provided above represent<b> $17,000/month</b> in payment reduction. The savings in potential rational defaults? Priceless. At many of these closings, customers who never dreamed of walking away said they don’t know what they would have done if these refinances hadn’t gone through. <br /> <br /> I will celebrate this Independence Day knowing that my efforts, along with industry colleagues who saw these programs through to fruition, have provided and can continue to provide some financial freedom in the form of lower payments to distressed homeowners. Our lines held long enough after HARP 2.0 was introduced to do some good, and we are gaining momentum for an offensive. Homeowners finally get to <b>gain some ground</b> lost after five years of home equity bleeding. <br /> <br /> Perhaps we can build on these <b>success stories</b>, and present them as a <b>united front </b>with a single mission and focus on what we do—<b>help as many homeowners as possible</b>--to the regulatory, legislative and political powers that be. If we show them enough successes, there may be a day when we will no longer be subject to regulation without representation, and can demonstrate we are capable of governing our own industry, with the best interests of American homeowners in mind. <br /> <br /> That is an Independence Day I look forward to.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/265780.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/265780/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=265780" width="1" height="1">Managing Mortgage Risk in the New Era of Bankinghttp://www.mortgagenewsdaily.com/channels/community/261746.aspxMon, 04 Jun 2012 16:46:28 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:261746Cindi Dixon0http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=261746http://www.mortgagenewsdaily.com/channels/community/261746.aspx#comments<p>Headlines promulgating JP Morgan Chase’s recent transgressions reveal capricious trading practices, resulting in record-breaking losses to the institution that has otherwise experienced recent recondite growth and profits. As a result, the financial services industry is <b>in the hot seat once again</b>, reigniting the question of effective banking regulatory oversight. Ultimately, regardless of your political persuasion or position on the regulatory environment, the underlying issue is defining the line that divides strategic capital growth from secure wealth management. In the aftermath of the mortgage crisis, the empirical question remains: <b>What impact on quality and oversight will these events have on the mortgage markets?</b><br /><br />The global meltdown of the mortgage system has left a far-reaching divide that, many years later, continues to raise issues of <b>loan quality management</b>. While government efforts continue to define the parameters of a qualified residential mortgage, the Consumer Financial Protection Bureau, CFPB, seeks to revolutionize the way lenders communicate with consumers. Fannie Mae and Freddie Mac, once pillars of the mortgage banking community since 1968 and 1970, respectively, face uncertain futures as a result of this regulatory turmoil. Even the Federal Reserve Governor, Elizabeth A. Duke, has weighed in on the issue, discussing the necessity to standardize quality control procedures. In the end, consumers will always need homes and banks will be there to lend the requisite capital.<br /><br />In a recent meeting of the National Association of Realtors, Duke emphasized the <b>critical message</b> that loan quality cannot be compromised in favor of growth as mortgage lenders are preparing for this growth. Positive market data inferring the real estate bottom has been reached is beginning to capture headlines. Just this month, Fox News reports "<a href="http://www.foxbusiness.com/news/2012/05/16/rpt-feature-foreclosed-americans-find-way-back-to-homeownership/">Foreclosed Americans Find Way Back to Homeownership</a>", chronicling new purchase applications on the rise for buyers affected by foreclosure. Forecasting growth in a burgeoning purchase market comes with the onus of managing loan quality in this new risk-centric environment. The days of no income, no asset, no verification loan programs are well-behind us and lenders now understand the far-reaching implications of poor quality control. As a result, industry practices demand an increased focus on managing loan quality.<br /><br />From regional credit unions to large national lenders, <b>independent quality control oversight</b> coupled with a <b>return to manual underwriting</b> are now the <b>buzz words</b> of responsible mortgage banking. Duke states "If technology and data standardization can be used to enhance quality control reviews at the time of purchase rather than after the loans became delinquent, it would allow errors to be corrected much earlier, resulting in better outcomes for taxpayers, borrowers, investors, and lenders." The industry is responding to quality requirements by moving away from check-list underwriting introduced by Fannie Mae and Freddie Mac’s Desktop Underwriter and Loan Prospector systems introduced in the 1990s. The trend today is the return to comprehensive manual underwriting and independent quality control reverifications not seen in almost two decades.<br /><br />Credit risk professionals are striving to balance these enhanced quality demands with now-increasing production. Emerging mortgage quality control technology is expected to bring the independent component to loan reviews the GSE’s are requiring. Lenders have developed new underwriting guidelines that are reminiscent of old in their down payment and ability to repay rules. Industry experts are hopeful that the combination of constrained loan programs, technology and the emphasis on consumer education will provide the foundation the American mortgage banking industry needs to reestablish itself. In the face of much adversity, lenders are finding new ways to meet their objectives of profitability while keeping alive the American dream of home ownership.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/261746.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/261746/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=261746" width="1" height="1">Quality Controlmortgage riskmanual underwritingmortgage marketsloan qualityBeginning the Housing Healing Process with HARP 2.0http://www.mortgagenewsdaily.com/channels/community/251607.aspxThu, 22 Mar 2012 16:43:05 GMT2bb7a989-b681-446d-a7f2-bd5f0562f228:251607Frank Ceizyk3http://www.mortgagenewsdaily.com/channels/community/rsscomments.aspx?PostID=251607http://www.mortgagenewsdaily.com/channels/community/251607.aspx#comments<p>Dear Fellow Mortgage Industry Professionals,<br /><br />I know that the industry is in a fit over what to do with the <b>HARP 2.0 program</b>, but I would submit to you, that the findings I received today for my customers on the new LP Relief Refinance Program are the exact reason why we should make sure we can close and fund these loans without further dawdling over reps and warrants and technical issues we've had more than enough time to work out by now.<br /><br />For the sake of privacy, I will call these customers <b>Mr. & Mrs. A</b>.  In 2007, after three years of searching, and following the advice of financial advisers, they put 20% of hard earned money down, had plenty of cash reserves, and hoped for a reasonable return on their investment in their dream home assuming a 2-3% annual rate of appreciation that historically has been the norm.<br /><br />Little did they know that by the time their house was built, values were topping out a 60% increase in just over 4 years in Pima County.  This fact that went unnoticed since we value residential real estate on a 90 day time period without looking at historical price valuations to even out spikes that don’t match up to economic fundamentals.<br /><br />The entire housing industry was selling the <b>economic fallacy</b> that housing values never go down, and Mr. & Mrs. A. had no reason to assume that they were speculating on a very high priced house.  Even if they were, they felt an extra sense of security knowing they had put 20% down on the house.<br /><br />Since the down turn starting in 2007, and after 5 years of trying to refinance their house, including 3 years I have been trying to find a way to help them, I have an LP Streamlined Accept, with an HVE value of $217,000 and an LTV of 127%. <br /><br />Despite all of the downturns in housing and the economy, Mr. & Mrs. A. have maintained impeccable credit scores, a respectable amount of savings considering the four children they lovingly care for, and stand to save over $300/month from this refinance.<br /><br />Imagine how far $3600/year will go with a family of 6! <br /><br />I can only hope that we will deliver on the incredible promise this program has to help customers like the As by allowing them to complete this refinance using the Freddie Mac accepted HVE value--rather than subjecting them to the random slot machine pull that is the AMC appraisal system. <br /><br />They have a deficit of $169,000 from the price they paid for their house at purchase to the HVE value I pulled today.  Allowing them to save $3600/yr seems like a small concession for the lending industry to make considering the losses they have taken since they purchased their house.<br /><br />I have seen loan modifications given to borrowers who put 0% down payments on their homes during the same time period who are now paying 2% rates, most of whom were 90 days late on their payments at the time the modification was granted.<br /><br />I think it is time we gave home owners like Mr. & Mrs. A. the opportunity to save money at current rates in the high 3s/low 4s since they have proven after 4 years their ability to repay despite the year after year loss of investment value in their home.<br /><br />I hope that Mr. & Mrs. A. will be one the first success stories we share together for the HARP 2.0 Relief Refinance.<br /><br />Perhaps we will be able to say "this is the day we started turning things around in housing by helping people who are severely underwater, but have shown the ability to repay their mortgage to, obtain payment relief".</p>...(<a href="http://www.mortgagenewsdaily.com/channels/community/251607.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/251607/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=251607" width="1" height="1">