How Long Should You Keep a Loan File? Government Report on Appraisals; One Take on DOJ/Wells Settlement
"Rob, do you have any idea how long an originator, broker, whoever,
has to keep a copy of the loan file? That is probably a question that has
many conditions and answers, but any insight would be helpful." It depends
on when you think you'll have to defend yourself against a buyback! Seriously,
that is a simple question with a complex answer which is based on the state,
whether or not the loan funded or cancelled, who the investor is/was, what the
program is, whether or not tribal lands are involved, who the agency is, who is
servicing the loan, etc. Fannie and Freddie, for example, have it in their
seller/servicer guides. But here, thanks to the folks at DogMagic, uh, I mean DocMagic,
is a handy-dandy guide.
As a quick note, it seems that the 2012 STRATMOR compensation survey link
I provided yesterday didn't work, and many wanted to participate. Here it is,
in all its glory.
In addition, those interested in the job listing for Mason-McDuffie
Mortgage (seeking Producing Managers and Loan Officers in California, Arizona,
Nevada, Oregon, Washington, Virginia, Indiana and Texas) should write to
Danielle Danson at ddanson@mmcdcorp .com.
Here's one take on the Department of Justice settlement with Wells Fargo:
"Mitt Romney's search for a VP continues. The reason it's taking so long
is because Romney has never hired an American before." Humor aside, but speaking
of hiring, Spain's unemployment rate is 24%. Given the benefits paid out, and
the tax base, how is Spain supposed to pay anyone anything on interest? Global
economic growth may be more heavily affected than previously thought due to
fallout from the European Financial Crisis and resulting recession in Europe.
The International Monetary Fund (IMF) most recent economic forecast showed
growth slowing around the globe, with a slightly deeper recession in Europe
this year, weaker growth in China and much of the developing world, and slower
growth in the United States. The slowdown is clearly evident in recent economic
data, which have shown manufacturing activity and consumer spending weakening.
There are several areas where the ongoing Eurozone recession is affecting
growth prospects for the various states, notably a pullback in exports from
these states to Europe. But the impact is not limited to reduced exports to
Europe, as Europe's recession is also weighing on growth in China and other
parts of emerging world, reducing the demand for U.S.-produced goods there as
Besides the direct effect on exports, regional economies may also be
affected by a slowdown in international tourism. This continuing uncertainty
surrounding the European banking system is contributing to tighter lending
standards, increased stock market volatility and widening credit spreads around
the world, which raises the hurdle rate for new investment and further
restrains economic growth. So be careful what you wish for - slower world
economies mean lower rates here in the U.S., but it would be nice to have the
economies pick up a little steam.
Brian Coester with Coester Appraisals noticed that the Government
Accountability Office released a report in late June that scrutinized real
estate valuations in the wake of the recent mortgage crisis. The report
revealed that valuations received through broker price opinions and
automated valuation models take less time and are less costly than traditional
appraisal reports, but traditional appraisal reports are still mandated for
almost all first-lien residential loan originations due to their greater
reliability. Almost all appraisal reports utilize the sales comparison
approach, which bases the property value on recent sales of similar properties.
Fannie, Freddie and the Federal Housing Administration all require the use of
comparable properties in appraisals. The report noted that appraisal management
companies are becoming more prominent because of regulations that prevent
conflicts of interest in the appraiser selection process. However, the expanded
use of AMCs has caused doubt about their oversight and impact on appraisal
quality - namely that they give higher priority to low cost and speed than
quality and competence. Federal regulators and Fannie and Freddie claim that
they hold lenders responsible for ensuring that AMCs' policies and practices
meet their requirements; however, lenders typically don't directly review the
operations of the AMCs they use. The Dodd-Frank Act requires state appraisal
licensing boards to supervise AMCs and that federal banking regulators, the
Federal Housing Finance Agency and the Consumer Financial Protection Bureau
create minimum standards for states to apply in registering AMCs. But the ASC
has been restricted in meeting its responsibilities under Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of1989. ASC also
lacks specific policies for determining whether activities of the Appraisal
Foundation that are funded by ASC grants are Title XI-related. Link
(Thank you Brian.)
Here, as is nearly becoming standard, are some relatively recent
updates from vendors, agencies, and investors. As I warn folks, these will give
you a flavor for current trends but for exact details read the bulletin.
Bank of America has decided to buy Countrywide. (Okay, so not that far
behind...but if BofA could turn back time...)
Holdings announced Minnesota-based attorney William B. Butler of the Butler
Liberty Law, LLC has been sanctioned for continuing to file and litigate
frivolous, "show-me-the-note" lawsuits designed to thwart foreclosure
proceedings in Minnesota. Butler has been ordered to personally pay the sum of
$75,000, plus an additional undetermined reimbursement of legal costs incurred
by counsel for MERS and its co-defendants. The judge found sanctions were warranted
because of Butler's repeated attempts to assert the rejected 'show me the note'
theory, as well as his baseless quiet title claims and meritless slander of
title arguments. The personal fine was levied due to "his cruel
arousal of unrealistic hope in his clients, all of whom face foreclosure and
for whom this is an extremely emotional issue." Butler's insistence on
re-litigating losing arguments is staggering, and it comes with the cost, of multiplying
the expense of litigation and monopolizes scarce judicial resources.
Any time someone mentions HUD, 203(k), and investors, it attracts some
Mae has announced that it will implement Desktop Underwriter (DU) Version 9.0
during the weekend of Oct. 20. Loan case files created in DU Version 8.3 and
resubmitted after the weekend of Oct. 20 will continue to be underwritten
through DU Version 8.3. According to Fannie, the new DU version will include an
update to the DU credit risk assessment and eligibility requirements that
consider the probability of future serious delinquency, rather than default. "Based
on an analysis of recent loan case files submitted to DU, the new credit risk
assessment is expected to have a minimal impact on the percentage of eligible recommendations
that lenders receive today," says Fannie Mae. "DU Version 9.0 will
evaluate loan case files using the same risk factors currently evaluated in DU
Version 8.3." Furthermore, with DU Version 9.0, the retirement of the
Expanded Approval (EA) recommendations will be completed and the EA-I
recommendation will no longer be returned.
home Mortgage Servicing, Inc. seems to be doing just fine after its name
change earlier this year. Remember that the change to Homeward Residential,
Inc. was to reflect the Company's expansion into the residential lending and
other real estate finance related businesses. The Correspondent Lending
division is known as Homeward Capital, which includes Warehouse and Residential
Lending. All mailing addresses are remaining the same, but all email addresses
will change from @AHMSI3.com to @gohomeward.com. Also, any file purchased on or
after May 29 was required to reflect the new name of Homeward Residential, Inc.
and the Correspondent Lending website address is homewardcapital .com.
Zions Bank reported 2Q
earnings of $55.2mm, or double that of 1Q and almost double the same period
last year. Loan growth was moderate and charge offs were down. Despite the growth,
earnings were below estimates and hurt by greater ALLL provisions and shrinking
Region's 2Q earnings
spiked to $284mm, more than double 1Q and 4x higher than the same period last
year. Credit quality was up, provisions down, loan growth flat and NIM
improved. In addition, the sale of Morgan Keegan added $4mm to net income this
In an effort to cut costs, company filings show Bank of America
has reduced its ATM network by 9% this year.
Speaking of bank news, a Fed study shows that U.S. banks established more than
10,000 special subsidiaries over the past 22 years using these structures to
limit liability, reduce capital, pay lower taxes or avoid regulation. Who can
Life continues on in the fixed-income markets as the market prices in
another Quantitative Easing (QE3) from the Fed. By the time the dust settled on
Thursday, traders reported average volumes. So with the Fed averaging about
$1.3 billion a day of agency MBS purchases, there seem to be plenty of buyers
for whatever volumes are above that. So things drift along with the 10-yr
closing around 1.43% and MBS prices starting the day where they began: worse by
.125 on no substantive news. Yes, rates are great, but originators report few "slam
dunk" loans - they all have a little hair on them.
Today we had our first look at second quarter GDP. The median call at
+1.5%, down from Q1 growth of just 1.9%, and it came in at exactly that. In addition,
the report included revisions going back to Q1 2009. We'll also have the final
July reading for Consumer Sentiment, expected unchanged at "72." Rates had slid
slightly higher, and stocks were showing another rally, prior to the GDP news. And
there they stayed: in the early going the 10-yr is up to 1.48% and MBS
prices are worse .125-.250.
(The retirement series is interrupted for this late-breaking news.)
MENLO PARK, Calif. - After Facebook's shares plummeted in after-hours trading yesterday,
Facebook C.E.O. Mark Zuckerberg issued the following personal letter to all
nine hundred million Facebook users.
"Dear Facebook user:
Hey it's Mark.
It seems like just yesterday that Facebook had its historic I.P.O. and, thanks
to you, my net worth soared to a staggering $20 billion. What an awesome day
that was for both of us.
Today was a different kind of day. Facebook shares are plunging because the
geniuses on Wall Street expect us to, and I quote, 'make money.' That's why
your Facebook friend Mark needs your help.
Facebook only makes money if people click on its ads. Do you know what Facebook
ads are? They're those things on your Facebook page that you have never clicked
on even once.
But at Facebook we're looking to change that. After doing extensive market
research, we learned that there is one time when people actually do click on
Facebook ads: when they're drunk. This is the same business model that iTunes
is based on. I'm sure a few of you have had the experience of using Facebook
late at night, only to wake up and find that you've gotten seven auto-insurance
quotes or enrolled as a criminal-justice major at the University of Phoenix.
Why am I sharing this information with you? Simple. If you want to save
Facebook-and I know that you do-I need you to start drinking now.
At Facebook headquarters, we like to have all-night coding parties where we get
shitfaced and write algorithms and other computer stuff you wouldn't
understand. I want you to do the same thing, except instead of coding, I want
you to click on random ads for Ancestry.com and Christian Mingle, over and over
and over again. You don't even have to buy anything-just keep clicking. And
Now, you might be asking yourself, 'Why do I have to help Mark out? Isn't
Facebook's stock price his problem?' Well, in a sense, yes. But maybe this is a
good time to remind you that I have cached all of those photos you posted of
yourself doing Jägerbomb jello shots at that Tri Delt party in 2007. And I'll
bet your future employers would love to take a peek at them.