Pipeline Press

Jumbo Loan Market; Short Sale Responses; Updates: Chase, SunTrust, GMAC; DR Horton Loses $223 Million

Rob Chrisman — Fri, 20 Nov 2009 14:55:00 GMT

One top ex-secondary guy wrote to me and said, "Things I sort of miss hearing in mortgage banking: "What are rates gonna do tomorrow?" "Why is IndyMac a point better than we are?" Anything associated with "Did you hear what they said on CNBC this morning.......?" "How come I'm losing money on the hedge?" And "See that rep over there? We ended up naked in a hot tub at a conference back in '94." I tell you, sometimes this commentary writes itself. Right now, companies all over the US are talking about next Friday: Black Friday! Either companies are closed, and the employees have the day off to go spur the economy, or companies are open. Those that are open may have low seniority people at the desks, or people who don't care about...(read more)

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Short Sale Basics; Global Mortgage Standards; FHA Streamlines; Lots of Investor News

Rob Chrisman — Thu, 19 Nov 2009 15:13:41 GMT

When I talk to realtors in many parts of the nation, they admit that foreclosures and short sales continue to be a key part of the housing activity in their area. Many analysts feel that the pace of short sales is likely to increase, especially given market conditions and the opinion that short sales are an alternative to foreclosure that can benefit the borrower and the lender. The lender sees potentially lower losses on the loan, and the borrower avoids the stigma of having a foreclosure on their credit history. The government continues to use various tools, such as modifications or foreclosure moratoria (moratoriums?) to prevent more loans from entering the REO market. The short sale option is mostly offered to borrowers who are ineligible for or have failed to succeed in loan modifications...(read more)

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Primer on the Dollar; 2010 Production Volumes; GFE Delay; Servicing Transfer News from the Fed

Rob Chrisman — Wed, 18 Nov 2009 15:03:51 GMT

My 86-year old Dad caught me taking a nap over the weekend. Not one to miss an opportunity, he said, "You practically invented lazy. People should have to call you and ask for the rights to the word "lazy" before they use it." That's my Dad... Lock Desk personnel are seldom lazy, and in fact are often the unsung heroes of mortgage banking since they are in the frontline on pricing and program issues. Last week they had a little more time on their hands, since the volume of mortgage applications filed last week fell a seasonally adjusted 2.5% from the week before . Refinancing was down 1.4%, and purchases were down 4.7%. The MBAA survey, which covers about half of all US retail residential production, supports the Wall Street belief that origination, and loan sales, have...(read more)

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Google's Mortgage Comparison Tool; Bank Rankings; GMAC, US Bank, FHA Updates

Rob Chrisman — Tue, 17 Nov 2009 15:46:00 GMT

I had an aunt who never liked to do housework. She told me her secret. "Always keep several get well cards on the mantle. So if unexpected guests arrive, they will think you've been sick and unable to clean." Makes sense to me! Would you like to give your client free access to a pricing engine, similar to what agents use with Optimal Blue? Even if the answer is "no", that's too bad. In Google, a user can type in "mortgage" and up pops a comparison device. "Comparison Ads" , usually hi-lighted in pink as the first choice, lets potential borrowers select the type of loan they are looking for and to compare various rates after entering the mortgage amount, borrower credit rating, down payment and information on the location of a prospective property...(read more)

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Bank Failures; Guideline Updates: GMAC, PMI, CitiMortgage, Caliper; Fraud in NorCal

Rob Chrisman — Mon, 16 Nov 2009 15:02:27 GMT

It was reported that for the ninth year in a row, the most popular car color was silver. In fact, GM says that this year, all three of the cars they sold were silver. But I saw a clever sign at a car dealership: "The best way to get back on your feet? Miss a car payment." We had some good news last Monday when it was announced by the Federal Reserve that 9 of 10 large banks ordered to raise capital in May "had met or exceeded their goals, the exception being GMAC Financial Services , an auto lender still negotiating for a fresh infusion of taxpayer funds." The Fed said that together, the 10 institutions determined by regulator stress tests to need bigger cushions against losses had boosted their Tier 1 common equity by $77 billion. Even GMAC is expected to meet its remaining...(read more)

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Freddie's 2010 Loan Limits;News from SunTrust, AgFirst, CMBA, TBI, Flagstar, USBHM

Rob Chrisman — Fri, 13 Nov 2009 13:53:00 GMT

I regard any day that my 15-yr old daughter doesn't call me "annoying" as a missed opportunity, a waste. Yesterday, for example, I told her that I was tired of hearing Taylor Swift on the radio every time I turned it on. "Dad, stop being annoying." Glare. (I used to like listening to Taylor, but enough is enough, and besides, Cat Stevens is going on tour.) No doubt the folks at Freddie Mac were tired of hearing people ask them about high-cost loan limits, and Thursday they released them. "Today, we are announcing that our base conforming loan limits will be maintained at their current 2009 levels for 2010, with the maximum loan limit for a 1-unit single-family property remaining at $417,000. The temporary high-cost loan limits for properties located in designated...(read more)

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JP Morgan Chase Hiring Originators; YSP, RESPA, DU 8.0 Chatter; Flagstar and PennyMac Updates

Rob Chrisman — Thu, 12 Nov 2009 15:11:52 GMT

I had a co-worker once tell me, "After a holiday, the only thing that makes me glad to see the people I work with is having just seen the people I am related to." Anyone looking for a job should visit JP Morgan's career site . According to the San Antonio Business Journal, JP Morgan Chase Bank plans to hire 1,200 mortgage loan officers in 23 states nationwide by the end of 2010 . (Of course, that averages out to 100 per month, or four per state per month, but what the heck - they're still hiring.) "The additional workforce will increase the financial institution's sales force by 60 percent and will help more Chase customers finance home purchases or reduce their monthly payments through refinances. The new loan officers will be spread across bank branches in 23 states...(read more)

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Mortgage Insurance Incontestability Opinion; Tax Credit; Flagstar Update; Where are Rates Going?

Rob Chrisman — Tue, 10 Nov 2009 14:46:16 GMT

Want a car for 2010, but don't have much money? HERE is Ford's answer. A few years ago my 80-something year old Mom talked herself out of a speeding ticket by telling the young officer that she had "to get there before she forgot where she was going". Where does the market think rates are going? The futures market is pricing in a 78% chance that the Fed keeps rates somewhere between 0% and .25% through mid-March . Overnight lending rates between banks have a very limited correlation with 30-yr mortgage rates, so the odds of mortgage rates going sky-high between now and then are small. In fact, relative to the risk-free Treasury rates, mortgages have been on a tear for the past week . They have been "tightening", which means that their rates are moving slightly closer...(read more)

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Freddie Mac & PennyMac Earnings; Tax Credit Extension; HPML Test; S.A.F.E. Forms

Rob Chrisman — Mon, 09 Nov 2009 15:08:00 GMT

After hearing about Fannie D4L's program (Deed for Lease), my cousin made sure that Fannie owned his loan , and then called them because he was having trouble with his water heater's pilot light. As you can imagine, the call didn't go very far up Fannie's organizational chart. Many are viewing the program somewhat skeptically, saying that Fannie and banks can't manage the properties that they own now. The program is meant to allow some homeowners facing foreclosure to hand the deed back to their lender but remain in the home as a renter - the servicer has to decide that the borrower qualifies for a "deed in lieu of foreclosure." The rent can't exceed 31% of their monthly gross income, the borrower cannot have 12 or more past-due payments on their mortgage and...(read more)

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Foreclosure and Lending Regulation News from North Carolina. Updates from Fannie, Freddie, PMI, AIG; Tax Credit Extended

Rob Chrisman — Fri, 06 Nov 2009 14:43:17 GMT

A co-worker recently asked me about "instant messaging". I told him that the only instant messaging that I do is with my middle finger. (Illustration not necessary.) In a move that other states may take note of, North Carolina, the N.C. Office of the Commissioner of Banks (NCCOB) is sending a message by announcing that it is proposing mortgage rules to help reduce foreclosures, to improve consumer protection and the functioning of the mortgage market, and to implement the S.A.F.E. Act. (North Carolina's NCCOB regulates state-chartered banks, thrifts, savings and loans, trust companies, and more than 875 mortgage lenders/servicers/brokers and 9,800 mortgage loan originators, as well as numerous consumer finance companies, check-cashers, and other financial services.) They are considering...(read more)

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Fed Funds Unchanged; Results from GMAC, Radian; Updates from Fannie, UBOC, USB

Rob Chrisman — Thu, 05 Nov 2009 14:47:34 GMT

Yesterday was a special day. In the late afternoon I visited Costco, which some people feel simultaneously represents everything that is both bad and good about the retail channel. The change in time over the weekend had made it so the setting sun showed through the front entrance, illuminating the Samsung 46 inch plasma, the flannel shirts, AND the pre-lit Christmas tree boxes all at once. It was a tender moment. What are Fed Funds? These are cash balances held by banks with their local Federal Reserve Bank, typically involved in an "inter-bank sale" of a Fed fund deposit for one business day - overnight. And the Fed Funds Rate is the overnight interest rate charged by those banks with excess reserves on hand. Why would this impact the mortgage rate that James & Jen Borrower...(read more)

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Community Banks Taking Mortgage Market Share; Production Profits Increase; DU 8.0; News from Ally, Pulte

Rob Chrisman — Wed, 04 Nov 2009 14:43:49 GMT

My boss told me that I should take an "anger management" class in 2010. I told her that I was already angry enough with management. How much money are mortgage bankers, including management, making? According to the MBAA, average profit per loan is up nicely versus the first quarter moving to over $1,300 on each loan originated in the second quarter . In addition, production volumes were up and average pull through went from 67% up to 73%! READ MORE Although the death of the mortgage banker and broker is greatly exaggerated, a good share of their business has gone elsewhere. Community banks have seen their relative volumes increase , and some believe that they are well qualified to fill the void left by mortgage brokers. These banks are chartered to serve their local markets; their...(read more)

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Primer on MI Rescission; Updates from Wells, Flagstar, Freddie, PMI, FAMC; Rates Lower

Rob Chrisman — Tue, 03 Nov 2009 14:55:49 GMT

My five-year-old nephew wanted to caddy for my brother's golf game. "You have to count my strokes," my brother told him. "How much is six plus nine plus eight?" "Five," answered the nephew. "Okay," my brother said, "let's go.." Mortgage banking is a numbers game. Although the illustration above might remind some of their CFO, in other circles it might illustrate what some mortgage bankers are facing right now: MI rescissions. Rescissions are not new. But what is this chatter about MI companies and their rash of rescinding coverage? One well-informed person wrote to me and said, "It seems that some MI companies are employing a rescind now/appeal later approach." It is important to remember that MI companies generally only see...(read more)

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USB Expands; CIT Declares Bankruptcy; GMAC & Financial Mortgage Updates;

Rob Chrisman — Mon, 02 Nov 2009 14:29:44 GMT

What do Bank USA, National Association of Phoenix; California National Bank of Los Angeles; San Diego National Bank; Pacific National Bank of San Francisco; Park National Bank of Chicago; Community Bank of Lemont, Illinois; North Houston Bank; Madisonville State Bank of Madisonville, Texas; and Citizens National Bank, of Teague, Texas have in common? Their deposits and assets all became part of US Bancorp after being shut down by the FDIC on Friday . The FDIC and taxpayers (in a roundabout way) are out $2.5 billion. USB, who has not been immune to their stock sliding almost 20% in the last year, has repaid almost $7 billion in TARP money. Friday they added 153 branches with combined assets of $19.4 billion and deposits of $15.4 billion. And what do Eddie Bauer Holdings and Dunkin' Donuts...(read more)

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Loan Limit & Tax Credit Updates; USB, Flagstar, Freddie, GMAC News; Treasury Purchase Program Over

Rob Chrisman — Fri, 30 Oct 2009 13:34:26 GMT

Attack of the FHA loan files? Most of the United States begins Daylight Saving Time at 2:00 a.m. on the second Sunday in March and reverts to standard time on the first Sunday in November. So by my calculations, that means that this Sunday here in the U.S. most of us "fall back" and it will dark by dinner time. I doubt if this will impact the pace of the Fed buying securities backed by mortgages. For the week ending on October 28 th (yes, they end their week in the middle of the calendar week) the Federal Reserve's MBS program was a net buyer of $18 billion agency MBS , which was the similar to last week. For the year purchases of agency MBS stand at $977 billion. Recently the Fed has had an appetite for 30-year 5.0s and 5.5s (which include 5.25-6.125% mortgages). The Federal...(read more)

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