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on Wed Mar 25 2015, 10:06 AM
Here we go again... so many counterpoints to make, but don't have the space. 1) Low appraisals based off of Zillow estimates - Really? 2) Hodges thinks we need a "number that guides us to a value?" - Cant believe he went there - Really? 3) Does CU have an impact? Does "market manipulation" ring a bell? - you bet it has an impact. 4) Appraisers "refusing" to consider "sales (FYI -they are not comps)" - Really? I bet the mass majority of appraisers "consider" all "sales", but for a variety of reasons discredit and don't consider them "comps." We have lots of educating to do....
on Mon Mar 23 2015, 1:55 PM
HVCC and Dodd/Frank over regulation chickens coming home to roost.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Sun Mar 22 2015, 1:49 PM
After I wrote the last sentence, I begin to wonder: is housing finance even really about home ownership anymore? Perhaps the simple truth is the primary mortgage market serves to feed the secondary market debt machine, which trades in multi-trillion dollar securities all over the global economies. In the most cynical view, upside down homeownership is necessary--and even desirable--to control prepayment speeds. Loss mitigation is more desirable than refinance booms, since the default timelines can be controlled more than a flood of refinancing. Even then, refinance prepays be can controlledwith capacity constraint measures--such as requiring 60 days locks, or adding layers and layers of QA--or even as referenced above, forcing a more conservative approach to appraised valuations for refinances verses appraisals that force higher LTVs, with their corresponding point driven LTV LLPAS to offset the lower interest income. Either way, it seems that the MBS must be protected far more than the individual homeowner. Perhaps the needs of the few underwater homeowners outweigh the needs of the global mortgage debt securities operations.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Sun Mar 22 2015, 12:49 PM
Barry-thank you thank you thank you for being another voice to point out the simple speculative inefficiency of the asset valuation system we have in place for residential real estate. It is amazing to me that we rely on such a subjective system of valuation-the 'opinion of value', considering how miserably it failed systemically when combined with extremely leverage homebuying, pressure from real estate sales forces to support the higher price 'trends' and ridiculously lax underwriting standards. With so much brain power and brilliance going into to the design of an entirely new MBS platform for mortgage financing, it is rather remarkable we are not using some algorithmic metric to use for housing valuations related to lending, rather than 3 or 4 sales in a 90 to 120 period, within a few miles negotiated by agents, who as as you indicated, are trying to 'push up the listings to unreasonable high prices and hoping (here retiring) cash buyers will support them. If we are going to have any chance or gaining the trust of housing consumers again, this issue is going to need to resolved to avoid creating another wave of underwater homeownership.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Sat Mar 21 2015, 11:48 PM
One of the factors I see locally (St Louis region) is that with fewer comparable sales to choose from, appraisers can essentially be forced to use a comp they might have preferred to avoid, given other options. It's also difficult to know just what is, and isn't, a distressed sale. Divorce situations, estate sales, and job transfer motivated sales are all potential causes for a "less than market" sales price, but there's no way to take those factors into account during the appraisal process. REO or short sales are easily identified, but are not the only reason for homes to sell cheaply.
on Sat Mar 21 2015, 1:41 PM
In our area, as a Certified Residential Appraiser and Broker I see almost across the board, agents putting their listings well over Current Market by appraisal standards of Market Value research. Then - the accepted price drops them down to still about (+-) 5-10% over Market and they hope the Appraiser can find comps that will support it. 8 out of 10 times they can't - so who is the villain ! Yup, the Appraiser. And this is coming from the Broker part of me! Agents are remembering the inflationary rise 2003 through 2006, when sales were so active and fast, an inflated sales price of 10 - 15% over the market would find comps to support it, all seeking approval as they flooded the market and eager buyers sought to buy before it went up another 20%. Local Brokers used to curse me when I mentioned inflationary unreasonable rise in Market Values. Yes, curse me, as a turncoat Broker who didn't realize the values were going up and would "never come back down again!" They had forgotten everything in life is cyclical. ESPECIALLY REAL ESTATE. The appraisers, in this strange era, could, yes, now find four or five comparable sales to match the inflated price - so the Market must be supporting the value...? And it spun up. Now, this is not happening, but many of the mostly newer agents seem to think it should, and they try to push up the listings to unreasonably high prices and hoping (here, retiring) cash buyers will support them. There aren't enough of those, and the number of listings are rising - thus pulling down the prices to compete with all the others seeking the more elusive purchase.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Sat Mar 21 2015, 1:02 AM
Mar 13 2015, 12:38PM With increased competition for precious few homes, prices have no where to go but higher, faster Mar 17 2015, 12:13PM …the number of underwater homes increased seasonally in the fourth quarter of 2014, Mar 20 2015, 7:45AM A few weeks ago there were a flurry of comments on MBS Live from members expressing concern about a sudden increase in appraisals reflecting market values well below what had been expected. Does this reflect a one week transition from fantasy to reality? Hmmm.. Something ain't right here.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Sat Mar 21 2015, 12:54 AM
This is a very well written, if not sobering article. One has to wonder with these kinds of negative equity numbers increasing, alongside what could arguably be a strengthening job market in may parts of the country, if there will be a wave of rational defaults if these homeowners seek out employment opportunities outside of the depressed markets they currently live in. I attended a workshop a few years ago hosted by a local county government office about 'mortgage free' homeownership, and the statistical analysis by the Phd who hosted the event suggested another drop in valuations within 5 years. This would be 3 years on his doomsday clock. Maybe it's time to begin plans for HARP 3, or get serious about principal write down options.
Frank Ceizyk
Mortgage Industry Consumer Advocate,
on Sat Mar 21 2015, 12:07 AM
This simply speaks to the inefficiencies that still exist with 'opinions of value'. The appraisers are an easy target, but the simple fact is they derive their opinions of values from closed sales. Maybe the sales price that was negotiated before was simply speculative. A frenzy of buyers drove up things for awhile, and then things cooled off, or perhaps a few more foreclosures or fire sales hit the market a few months later. Refis in my world here in Tucson seemed to hit pretty much up or down 3% from the valuation models I use. The purchase prices seems to mysteriously hit every time, with maybe a 1 or 2% miss to the low side worst case. This may spoil the 'housing is a good investment psychology' and certainly doesn't set well with customers who you helped with purchase financing a year before when the housing recovery seemed to be moving along. Hopefully no one is pitching housing as an investment anymore anyway. It's a foundation for wealth down the road when the house is paid off--a long term financial tool to acquire shelter that you own rather than rent or pay debt on for your entire life. You can then pass that free & clear shelter down to future generations. Glad to see someone courageous enough to take this topic on though it may not exactly instll consumer confidence with the housing bubble burst so fresh in the homeowning public's psyche.
John DeLeva
DeLeva Group
on Fri Mar 20 2015, 6:44 PM
Unfortunately the debate will be driven by the dollar and good policy will come second, this is the way of Washington. As for 'protecting the American tax payer' I find it odd even laughable that the very legislative body responsible for 18 TRILLION in debt has such clarity of purpose in the need to reform the GSE's...
on Fri Mar 20 2015, 5:27 PM
Get rid of FNMA and Freddie and replace with what? no one has a solid workable solution to this question. Don't kill the government golden goose, they are making money and helping the deficit. Who will stand in their place if wound down?
on Thu Mar 19 2015, 2:24 PM
Excellent article Ms. Swanson! It is very thoughtful and well detailed. Moreover, every real estate and mortgage professional should be reading this in order to develop their skills!
on Fri Mar 13 2015, 6:39 PM
This is happening because politicians thought it would be ok if they did nothing to prevent hedge funds and private equity syndicates to buy up all the foreclosed properties before they hit the market.
Sheryl Laskie
Loan Consultant, Universal Lending Corporation
on Tue Mar 10 2015, 1:16 PM
I am curious about the requirement to remove the paid medical collection debt after it has been paid by insurance. How is that going to be proven by a consumer. Those medical debts should just be removed no matter who pays them. They are from someone being sick, not someone being irresponsible on a regularly paid debt. Make these changes really help people.
on Sun Mar 8 2015, 10:09 PM
There are many advantages to buying a manufactured home, first of all you will be able to design your own home to your needs and satisfaction. When it comes to floor covering, vaulted ceilings, the design of your bathrooms, bedrooms, granite countertops, fireplaces, your outside porch scenery and not to mention your kitchen with stainless steel appliances. Secondly when it comes to the comparison of manufactured homes and site-built homes, they both use the same building materials in the construction phases and the cost is lower. Construction costs per square foot are anywhere from 10 to 35% less than a site-built home.
on Fri Mar 6 2015, 1:20 PM
Where was Hampton Pearson today? CNBC was a cluster fvxck today without him. I should say CNBS but I digress. I'm not buying it!
Jeff Hall
Bank of America
on Tue Mar 3 2015, 10:20 AM
Rates continue to rise. If job reports show any weakness, this will continue. First thing this morning was another increase, so that's two days straight. Lock'em if you got'em.
Jeff Hall
Bank of America
on Tue Mar 3 2015, 10:20 AM
Rates continue to rise. If job reports show any weakness, this will continue. First thing this morning was another increase, so that's two days straight. Lock'em if you got'em.
Jeff Hall
Bank of America
on Tue Mar 3 2015, 10:20 AM
Rates continue to rise. If job reports show any weakness, this will continue. First thing this morning was another increase, so that's two days straight. Lock'em if you got'em.
Jeff Hall
Bank of America
on Tue Mar 3 2015, 10:20 AM
Rates continue to rise. If job reports show any weakness, this will continue. First thing this morning was another increase, so that's two days straight. Lock'em if you got'em.
Jeff Hall
Bank of America
on Tue Mar 3 2015, 10:20 AM
Rates continue to rise. If job reports show any weakness, this will continue. First thing this morning was another increase, so that's two days straight. Lock'em if you got'em.
Jeff Hall
Bank of America
on Tue Mar 3 2015, 10:20 AM
Rates continue to rise. If job reports show any weakness, this will continue. First thing this morning was another increase, so that's two days straight. Lock'em if you got'em.
Jeff Hall
Bank of America
on Tue Mar 3 2015, 10:20 AM
Rates continue to rise. If job reports show any weakness, this will continue. First thing this morning was another increase, so that's two days straight. Lock'em if you got'em.
on Mon Feb 23 2015, 4:51 PM
Re the new Point2 platform - Point@, or at least its syndication services, were purchased by ListHub. So isn't this new product competing against itself?
on Mon Feb 23 2015, 2:03 PM
Wow great post. Really puts a good perspective for the mortgage lenders.
on Sun Feb 15 2015, 11:00 AM
I agree with Jeffrey Miller, the 1960's is not even close to all the new variables of the 21st century. For a statistic company CoreLogic certainly is making multiple assumptions to derive their desired answer. First of all with all the factor of the entire GREAT RECESSION we were ALL were upside down with NO LEVERAGE. So any FORECLOSURES included in the study during the GREAT RECESSION is skewed. Let's talk about ability to FORECLOSURE? The BIG banks decided after buying mortgage for pennies on the dollar from Countrywide and other companies that Moody misrepresented C paper loans as A paper loans, decided why not make money on selling homes verse servicing home. The Making Homes Affordable did nothing for all those loans, it was a green card to take these homes and make hundreds of thousands of dollars. Tell homeowners to go into default for 2 months knowing they did not qualify for HARP and take their homes. In 2010 Foreclosing was not a negative aspect for most BANKs, (as the loans did not cost them face value, so from the BANKS perspective it was perfect time, the borrower had no leverage but the BANK had tons of leverage.Yes for the economy yes, foreclosing as a nighmare but for the BANKS they made millions. So for Corelogic to try to give risk factors to the lenders about foreclosures is hysterical. The entire system a skewed due to Moody's A paper BS, Wall Street insuring loans that were C paper for A paper and making money on the insurance when the loan did not perform. And then Banks picking up loans for pennies on the dollar.....So doing statistics during these times of BANKS and INVESTORS not being ethical certainly skews any results as what caused the problem, did NOT exist in 1960. And it is what caused the GREAT recession that CoreLogic is choosing to ignore. Good try CoreLogic, but the level foundation must be established before comparing apples to apples. It's studies like these that are harmful to the system. And insult the rest of us. I pray the majority of us agree with me on that.
WN
on Sat Feb 14 2015, 10:55 AM
this is a stupid comparison, in 1960-1965 people did not lose their jobs every two or three years due to huge economic swings. Your job was secure.. I rarely to NEVER see anyone at the same job for more than 10 years....
on Fri Feb 13 2015, 10:20 PM
I think the QM Ability to Pay rules should be different for refinances than for purchases, allow a higher DTI for the refis if the new payment is lower than the one they've been paying successfully for a number of years without late payments. On jumbo refi's acquired with 50% DTIs ten years ago, I've proposed taking them from an interest-only 10/1 ARM to a fully amortized 7/1 ARM that lowers there payment by $500/mo, but doesn't pass the 43% DTI test. Also, it's difficult for most to qualify for a 15 year loan and still clear the 43% DTI test, even though it would reduce lender risk because it gets more equity "skin in the game" much faster. The cynic in me says the QM rules are designed to protect MBS investors and loan servicers from refinances that cost them money.
on Fri Feb 13 2015, 8:34 PM
I love the way all theses studies try to negate the culpability of The Big Banks. So it's back to comparing now with way back then... but the situations couldn't be more different. I don't recall back then 11,000 Certified Property Appraisers submitting a petition to the FBI stating the Banks had told them either overappraise... or you'r out of work. I don't recall, back then, mortgage loan officers being paid EXTRA in the form of Yield Spread Premiums to put Prime customers into sub prime loans, I don't recall back then (although it probably was happening) the LIBOR being purposefully manipulated by the Banks... in favor of the Banks. I could go on and on and on. Articles like the above are an attempt by industry insiders to apply apathy to the largest theft in the History of Mankind.... and that's just a shame.
on Fri Feb 13 2015, 5:38 PM
It's called - ability to SELL. Not LTV. People don't foreclose if selling is an option.
on Thu Feb 12 2015, 3:38 PM
Hi Matthew. Great article. I am in mid of refinancing, but have not locked a rate yet. Based on your expertise and experience, do you think rates might go back down, or should I quickly lock at the current rate? I am thinking 25 or 30 year Refi. Thank you - really appreciate your advise.
on Mon Feb 9 2015, 4:50 PM
Hello I appreciate your input please. I am planning a home purchase and it is new construction availble only in may. So should I lock for a 90 day lock or should I wait for 1 month and do a 60 day lock ? Also if I go for a 90 day lock, what is the best rate any one can offer me please. thankyou
 

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