my 91-year old Dad's sense of humor grows tiresome. For example his,
"How do you know it when you see a mortgage guy at the supermarket? He
asks, "Paper or plastic (cackle cackle)." The plain fact of the matter
with thousands in the biz, and thousands having left the biz, many of
them have a lot going on not directly related to mortgages. For example,
one who left the business several years ago not only is a mystery
writer using a mortgage underwriter as a protagonist,
but now has created a publishing house: Cindy Sample Books. Cindy's
written three books, and all three titles have hit the humor and mystery
bestseller lists, with "Dying for a Date" reaching # 1 in both humor
and in "cozy mysteries" in mid-March. (It also hit # 49 of over 4
million titles on Amazon.) Here's the Amazon link for "Dying for a
Date." Way to go, Cindy!
When the marketing companies that sell leads start talking about purchase money, you know the market has moved.
At the recent LeadsCon in Las Vegas, Lending Tree CEO Doug Lebda said
his top priority was getting local LOs mixed in with the usual call
center price offers. That's going to be great for retail purchase money
lenders like Prospect Mortgage. Prospect is looking to acquire companies who want to focus on Agent referrals. Contact John Manglardi at Prospect (john@tmpinvestments. com) if you'd like to hear more about what they are doing.
On the jobs side, TruHome Solutions, LLC is seeking a highly motivated and proven leader to join their leadership team as the Vice President of Mortgage Technology who will be responsible
for oversight and direction of a cross functional technology team,
systems management and development of software as well as managing
vendors that provide system support. Strong negotiation skills,
analytical thinking and process improvement/efficiency in a mortgage
lending environment is necessary to ensure technology initiatives are
accomplished while sustaining mortgage business priorities. This
position plays a critical role in creating and maintaining the strategic
partnership between Business needs and Technology delivery. TruHome
is a solid organization that offers first in class benefits, great work
life balance and competitive compensation! Interested parties should
email for a complete job description or forward resume to Karen Steen at
And Citibank, N.A., is strategically adding new correspondent sellers for delegated and non-delegated delivery.
Citi offers competitive pricing with additional incentives for CRA
eligible loans. It also offers a thorough pre-purchase review process to
help improve quality manufacturing and delivery to Investors and
Agencies. A relationship-centric organization, all clients benefit from
the expertise, support and resources that Citi offers. For consideration
please complete the Prospective Mortgage Correspondent Questionnaire
A thought, for what it's worth: I don't think it's fair or accurate to use the phrase "...one of the products that contributed to the housing crash." The appropriate phrase to me is . . . "one of the products whose abuse contributed to the housing crash." Plenty of companies are involved in repairing the damage done to housing, others maybe not. The
latest lawsuit has turned some heads, this one involving a RICO
(racketeering) charge against Ocwen and Cross Country Home Services.
haven't heard much about eminent domain recently, especially with many
markets appreciating and troubled borrowers declining. In fact, Maryland lawmakers just passed a bill blocking the use of eminent domain for two years.
Bill Henry, a member of the Baltimore City Council, had asked the city
to look at a plan by Richmond, Calif., to seize underwater mortgages in
an effort to bolster the housing market. However, the plan has faced
opposition from the financial industry and other interested parties.
updated its licensing regulations to allow, applying to certain
circumstances, federal savings banks to retain and sponsor mortgage loan
originators. The updated provisions apply to federal savings banks that
are exempt from statutes concerning the licensing of creditors in first
lien mortgage transactions. The new regulations state that such banks
may voluntarily register with the Department of Financial Institutions
to retain and sponsor licensed mortgage loan originators. These
regulations are effective on July 1, 2014.
South Dakota has adopted Senate Bill 68
and the Uniform Real Property Electronic Recording Act. As many know,
in some states in order to qualify as a "document" and thus recordable, a
few conditions are mandated; such as: it must be original, be on a
tangible medium, be in writing, or be signed. The newly adopted act now
allows an electronic document to satisfy these requirements. South
Dakota becomes the 30th state to adopt such closing regulations.
recently modified several provisions of its Consumer Credit Code to
facilitate the multi-state licensing process. With the new legislation,
the administrator must receive and act on all applicants for licenses to
make supervised loans. Bankers Advisory writes, "a
supervised loan is a consumer loan, including a loan made pursuant to
open end credit, in which the rate of the finance charge, calculated
according to the actuarial method, exceeds 12 ¼% per year, or which is
secured by an interest in real estate." Maine's state code S.P. 643
and 678, which does not outlaw the term "Mainiacs" when referring to
state residents, becomes effective on July 15, 2014.
What's the District of Colombia up
to? I don't know, but sometimes I think they shouldn't even be a state.
Recently, the Department of Insurance, Securities and Banking jumped on
the amendment bandwagon and modified its rules regarding the
foreclosure mediation program. The new rules clarify the operation of
the foreclosure mediation program which assists homeowners and provides
alternatives to foreclosure. The rules can be found here, and became effective immediately with its passage.
New York's Department of Financial Services recently amended provisions
pertaining to its sub-prime banking laws, specifically to terms
associated with sub-prime home loans. The amendments addressed the
definition of the terms "commitment", "week", and "good faith estimate."
All these terms are used to define sub-prime loans in the state of New
York, and also are used to determine if a loan is considered
"sub-prime." These amendments are effective immediately.
West Virginia has amended provisions in section 46A article 2 of the state's Consumer Credit House Bill pertaining to the conduct that constitutes "unfair" or "unconscionable" conduct when collecting or attempting to collect a debt. There goes my retirement plan.
was in a meeting one time when my secondary marketing guy said to
product development, "wake up and smell the profits." No one can deny
that banks have been making money, and contrary to financial news
reports, banks have been performing in such a manner counter intuitive
to the macro economies pace. Depository institutions have been
performing for the better part of four years, with 17 out of the last 18
quarters with year-over-year growth. Commercial banks and savings
institutions insured by the FDIC reported aggregate net income of $40.3
billion in the fourth quarter of 2013, a $5.8 billion (16.9 percent)
increase from the $34.4 billion in earnings that the industry reported a
year earlier. According to the FDIC's recent release on bank
performance, the improvement in earnings was mainly attributable to an
$8.1 billion decline in loan-loss provisions, and litigation expenses.
Lower income stemming from reduced mortgage activity and a drop in
trading revenue contributed to a year-over-year decline in net operating
revenue. More than half of the 6,812 insured institutions reporting (53
percent) had year-over-year growth in quarterly earnings. The
proportion of banks that were unprofitable fell to 12.2 percent, from 15
percent in the fourth quarter of 2012. We'll see what happens tomorrow
with Wells & Chase's earnings.
and Chase are in pretty deep with Freddie and Fannie, and the FHFA, as
are mortgage insurance companies. The MI company umbrella sent out, "USMI applauds Senate Banking Committee Chairman Johnson and Ranking Member Crapo for reaching a bipartisan agreement
on housing finance reform legislation, drawing largely from the
bipartisan Corker/Warner bill. We are pleased that the bill recognizes
the important role of private mortgage insurance in ensuring access to
housing finance for borrowers while protecting taxpayers and serving
lenders of all sizes. We look forward to working constructively with
Congress and other policymakers to build a well-functioning housing
finance system backed by private capital."
The recent spate of agency news has been interesting to follow. Arguably F&F should not stay under government conservatorship, but what are the alternatives?
And what are the implications for their other roles in housing, such as
apartment financing? Sarah Mulholland wrote an article for Bloomberg
saying that, "The apartment-lending units of Fannie Mae and Freddie Mac
were among their few money makers after the U.S. housing collapse. Now
they should help transform the U.S. mortgage industry. Lawmakers...see an
antidote...in the structure of the firms' multifamily operations, which
share risks with lenders. Senate Banking Committee Chairman Tim Johnson
and Republican Mike Crapo are proposing legislation to create a new
government-backed reinsurer of mortgage bonds that would require private
investors to bear losses on the first 10 percent of capital. The model
for the provision mirrors Fannie Mae and Freddie Mac's multifamily
lending operations, requiring lenders to shoulder some of the risk on
loans they originate. Unlike the firm's residential units, the divisions
that lend to apartment landlords came out of the financial crisis
relatively unscathed, partly because of better underwriting. The
multifamily lending model works "because the lender, in one way or
another, explicitly is on the hook for losses," said Andrew Jakabovics,
senior director of policy development at Enterprise Community Partners, a
non-profit affordable housing investment company. 'There is a lot more
due diligence that goes into those deals.' The Johnson-Crapo bill
creates a new lender, the Federal Mortgage Insurance Corp., which would
begin operations within five years. Here's the link.
And of course investors in Freddie and Fannie are trying to figure out which side of the trade to be on.
in the industry know what may happen if Freddie and Fannie fade away
and the fabled "private capital" enter into things in the secondary
markets. "Fannie, Freddie Overhaul Will Translate Into Higher Mortgage Rates,"
says the Colton-Carliner paper of The Harvard Joint Center for Housing
Studies. Mortgage rates could rise by as much as 1.5 percentage points
for homeowners with weaker credit or smaller down payments under various
legislative proposals to overhaul Fannie and Freddie. A separate study
published last month by Moody's Analytics estimated that the
Johnson-Crapo bill would increase rates by around 0.4 percentage point
for borrowers with a 750 credit score and a 20% down payment, bringing
the today's mortgage rate of around 4.5% for a 30-year, fixed-rate loan
to around 4.9%. On a median priced home, the increase translates into a
monthly payment that is around $40 higher. Such an increase would have a
"measurable but very modest impact on the housing market". They
estimate that the higher financing costs could reduce home sales by
around 250,000 units and housing starts by 100,000 units over three
let's not forget the belief that removing F&F from the scene will
negatively impact those special interests best served by consumer and
civil-rights organizations. (Was that politically correct enough?) "Housing Bill Threatened by Rift on Help for Disadvantaged"
screamed the headline. A bipartisan bill drafted by Senate Banking
Committee leaders Tim Johnson and Mike Crapo relies on incentives to
persuade financiers to lend to groups with higher risk profiles.
Consumer and civil-rights organizations are pushing instead for a
mandate that those groups must be served.
the markets...we really didn't have much news this week until the release
of the Fed minutes yesterday afternoon. But when all was said and done,
the 10-yr was nearly unchanged at a yield of 2.68% and agency
mortgage-backed securities had rallied...back to unchanged! There was a
fair amount of shuffling between coupons and maturities, but really, the
economy continues to do a little better, housing and employment are
still the cornerstones and neither is setting the world on fire, and it
comes down to supply (by lenders) and demand (by the Fed and investors).
early here in Memphis, where I am fortunate enough to be attending the
Tri-State conference, and MBS prices have not been established yet, but
overnight it was pretty quiet. Today we'll have Initial Jobless Claims
(expected -6k to 320k) and Import Prices (expected at +.2%). Later we
will have the primary dealers stepping up to buy a piece of the $13
billion 30-yr bond auction. Ahead of that the
10-yr's yield is down to 2.65% after closing Wednesday at 2.68% which
would suggest agency MBS prices are perhaps .125 better in price.
Okay, I've seen a few of these before, but they are clever and hilarious.