MBS MORNING: Explaining the Mortgage Supply Chain

re: MBS MORNING: Explaining the Mortgage Supply Chain

Jeff Larson — Wed, 22 Apr 2009 15:30:20 GMT

Steve, you nailed the issues with it right on the head. Yes, it will work for some but I believe very few in light of the massive exodus the powers that be would like to lead us on. For crying out loud, they forced them to take the TARP money the least they could do is use the leverage if in fact they really want to help. I know there are many other issues to make something like that work but out of the box fundementals and thinking are needed to set the course for true recovery. Rhetoric is a very popular word these days.

re: MBS MORNING: Explaining the Mortgage Supply Chain

Steve Feiden — Wed, 22 Apr 2009 14:22:10 GMT

The borrowers whose only option is a loan mod can request it themselves through their existing lender. They have to agree to the modification regardless of who contacts them. In my experiences with loan mods, the average cost is around 3K, half up front and then the other half due within 30 days. They have no guarantee of getting the mod for the client and only refund half of the collected fees if the mod isnt completed. Scam is the word that comes to mind, how can anyone honestly bilk people that are simply trying to lower their rates to keep their homes out of 1,500 - 3000K? If they had that money laying around dont you think they would be making the payment? If the govt is serious about helping people with mortgage issues, set up a mod service and work out the process for these people. While you are at it, govt should require the subordination of 2nd mortgages on the du refi plus program or provide the MI to allow for consolidation of 1st and 2nds. As of right now, I dont know of one company doing a du refi plus loan with higher than 80% ltv that currently has no MI. The MI co's wont write the ins on them and the lenders wont take them without it. Hmmmmm seems like a lot of talk and not much action.

re: MBS MORNING: Explaining the Mortgage Supply Chain

Mike Leach — Wed, 22 Apr 2009 02:09:00 GMT

Ethical twilight zone... I love it!! Adam - I love the market information and the editorial of this blog. If I ever loose my day originating will be my next career. I would like to pose a general question... Is anyone aware of FHA resending the owner-occupied requirement for 203k financing?? I know in the past this was not a requirement. It would be instant P-PIP for local real estate investors, putting local contractors to work. Its the perfect grassroots recovery plan. If I just had a moment of genius it's my first. I feel motivated to contact my elected representatives... If they have anything useful to say I'll let you know.

re: MBS MORNING: Explaining the Mortgage Supply Chain

Raymond J Ruddy III — Tue, 21 Apr 2009 21:31:20 GMT

There is a place for loan mod companies. At this point, from my experience, most of them charge advance fees and produce minimal, if any results. It's very much a buyer beware situation. I would be interested in networking with a legitimate, honest and professional outfit. It's just that all the guys I know who are in loan mods, were in subprime. They live in the ethical twilight zone from what I can see.

re: MBS MORNING: Explaining the Mortgage Supply Chain

Adam Quinones — Tue, 21 Apr 2009 20:20:33 GMT

yeh but what about the borrowers who will only benefit from a loan modification?

re: MBS MORNING: Explaining the Mortgage Supply Chain

Raymond J Ruddy III — Tue, 21 Apr 2009 18:18:50 GMT

Adam, yes, I have looked into it a bit. Thanks for the direction. Good point Jeff, taking it to the next level would require WAY more responsibility. As far as being a sucker fish, Glen, not a chance. It was more an objective question of, 'where do i fit it to the food chain'. I see myself as more of a dolphin...not a whale by any means, not a shark either...certainly not a minnow...I see the loan mod companies as the parasitic sucker fish. Ultimately my goal is to increase my financial intelligence and understanding of this global corporate system i am in for the time being.

re: MBS MORNING: Explaining the Mortgage Supply Chain

Glen W. Spencer — Tue, 21 Apr 2009 17:45:09 GMT

I agree with Ruddy, feel like the "sucker fish" (pun intended) so far down the chain.

re: MBS MORNING: Explaining the Mortgage Supply Chain

Glen W. Spencer — Tue, 21 Apr 2009 17:42:00 GMT

Great Post AQ, I keep thinking I might have the Big Picture in my mind how things work and then you go throw a huge wrench in my thought process. Wonderful information. Keep It Up

re: MBS MORNING: Explaining the Mortgage Supply Chain

Jeff Larson — Tue, 21 Apr 2009 17:07:15 GMT

Qualify for a warehouse line, get some correspondent agreements with the big guys and keep all you want. But... along with that comes the overhead, compliance, accounting etc....and on and on.. oh, and the risk. good luck!

re: MBS MORNING: Explaining the Mortgage Supply Chain

Adam Quinones — Tue, 21 Apr 2009 17:07:13 GMT

you can contact your account executives about different sales conduits or go to FN/FRE websites and read up on all the execution options they offer. FRE is probably going to be the easiest to use initially bc their lock and post closing procedures do not involve using flat files and multiple uploads

re: MBS MORNING: Explaining the Mortgage Supply Chain

Raymond J Ruddy III — Tue, 21 Apr 2009 16:55:11 GMT

The Mortgage Food Chain. That makes me curious to know where I fit in. Somewhere near the bottom probably. I can see about 5 levels about me. The FED, FNM and FRE, our Price Leader, my principal broker, and then my self...maybe there is a warehouse line in there too taking a cut... the question is...how can I skip a grade or two for better profit margins?

re: MBS MORNING: Explaining the Mortgage Supply Chain

Jeff Larson — Tue, 21 Apr 2009 16:48:53 GMT

Nice....!

re: MBS MORNING: Explaining the Mortgage Supply Chain

Michael Wood — Tue, 21 Apr 2009 16:07:10 GMT

Very nice summary AQ -- keep it up!