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on Fri Oct 12 2018, 3:54 PM
More proof of above statement. Subprime is back.
on Fri Oct 12 2018, 3:07 PM
Be a part of or stop whats coming. Its not a mystery or a "puzzle". The cause is greed. CEOS, CFOS, Owners, Shareholders, Banks demand maximum income which means reduced or minimal income increases (squeeze). This is only a piece of the puzzle. Its not rocket science what happens next. Just need to use the long view. This particular resulting dynamic which the Forbes article refers to as a "mystery" (one of many results greed causes) is not new either as recently as 2008. The saying is "housing causes and corrects recessions/depressions". The smart CEO/Investor asks "How do I/we profit from it". As home prices increase and wages stagnate, buying pool decreases. Growth/income stalls. Greed doesn't. Banks, FNM, FRM, FHA, VA, FED solution --> looser guidelines = new exotic mortgages are now encouraged and buyers previously unqualified for a home loan are suddenly approved in spite of previous regulations and consumer protections, which conveniently happen to have been "removed" prior to slowdown. Bubble creation (huge consumer owned real estate pool ripe for taking) avoided or sustained as long as possible (due to lessons learned from the previous 81, 90, 2001, and 2008 recessions) in order to maximize massive profits at shorter terms than stock market returns, 30 year mortgages, or government bonds (with minimal loss to income widget). Risky? No. Its real estate. Its going to sell and will be sold when the price is right for the current holder of the note. Banks/investors knew what the result of previous looser guidelines would be long before the 2008 recession hit. Massive defauts leading to massive foreclosures leading to massive buying and later selling opportunities. Tired of old income producing models. Why wait. Make your own income producing vehicle but do it on a massive scale with easy scapegoats. The consumer and the lenders who enable them. Don't be surprised. Rather, be prepared. Buy low, Sell high. Billionaire's rule: Wait for the panic, buy, buy, buy low and often. Wait for the calm, sell, sell, sell high and often. Billionaire's new mantra: Why guess the low price of a widget in order to maximize profit when you can control when the low price will happen. Buy low, sell high defined? Buy Low, Sell High. The practice of buying a security when its price is (or is perceived to be...
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Fri Oct 12 2018, 12:02 PM
Higher rates/home prices and the expansion of low down payment options has definitely impacted buyers' debt ratios. Increased property tax and insurance costs haven't helped either.
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Tue Oct 2 2018, 1:04 PM
This survey seems pretty meaningless. if you ask me. 3% down payment programs are widely available for the vast majority of homebuyers, and closing costs vary WIDELY by state and locality. If I'm a potential buyer and read I need 26K or more to buy a house, I'm probably renewing my lease.
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Wed Sep 26 2018, 9:15 AM
I have no doubt that rising rates and home prices have slowed home sales, Jim. Higher payments due to increased loan sizes/higher rates means less buyers qualify, decreasing demand, and boosting inventory.
on Wed Sep 12 2018, 3:21 PM
Exactly, Pauline Drake! Agreed!
on Mon Sep 10 2018, 12:17 PM
Why on earth would anyone want to hear from Angelo Mozilo? I guess now that subprime is rearing its ugly head, that orange smurf is back. Hasn't he done enough damage?
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Wed Sep 5 2018, 4:13 PM
It's true there are downsides as well. Wasn't intending to review both programs in their entirety in one piece, due to length. Yes, there are income limits, Yes, FHA rates "can" be lower, although MND shows best ex for FHA at 4.7% and 4.39% on FHA (so less than 3/8% difference). I was addressing the difference between FHA MIP being cancellable (previously) and NOT cancellable for lifetime of the loan as it is now. Yes, borrowers can ask their servicer to remove conventional PMI at 20% equity, and it's required to be removed at 22%.
on Sat Sep 1 2018, 11:41 AM
You are also forgetting to mention FHA rates are about .500 lower. So the MI of .85 is really only .35. Also the rates for sub 680 kills the Home Ready. Frankly I see the main reason to use Home Ready is to exceed the FHA loan limits..
on Sat Sep 1 2018, 10:43 AM
The Home Ready program also has income limits in many areas. FHA does not have income limits.
on Thu Aug 30 2018, 5:32 PM
You mean "Non-Occupant Borrower's NOT "Non-Owner Occupants! BIG difference!
on Thu Aug 30 2018, 12:06 PM
I have reviewed the bulletin and do not see anything regarding the maximum income limits... Will this limit the ability to purchase a NOO property? Being able to qualify for two mortgage payments might mean that your income is too high for qualifying for a Home Possible Mortgage...?
on Thu Aug 23 2018, 5:13 AM
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on Mon Aug 20 2018, 11:28 PM
Inevitably it always appears rates move faster going up than they do going down...especially moreso now, since I am doing one last refi...go figure.
on Fri Aug 17 2018, 8:54 PM
Josh, I think you give too much credit to the GSEs and investors as far as the LLPA schedules. Because these fees are passed onto the consumer either via rate or cost (discount), they are a v insurance pool that taxes low-risk borrowers to subsidize high-risk borrowers. Per Fannie's posted LLPAs, a borrower with a 719 mid, with a 23% DTI and 24months reserves, is hit with a 1.25 adjustment at a 76% LTV. Meanwhile, a borrower with a 640 mid and a potentially 50% DTI and no savings gets the same hit at 71%. Something tells me the risk of default is being unfairly shouldered by Mr. 719 on this rate/term example.
josh darrimon
Branch Manager, Movement Mortgage
on Thu Aug 16 2018, 4:51 PM
The sweeps are crazy for sure. I'm not excited about the LLPA pricing/risk structure either but if it were that out of wack the marketplace would create a lower priced solution and I'm not seeing it.
Patrick Nolan
Mortgage Originator, MCS Mortgage Bankers, Inc.
on Thu Aug 16 2018, 11:42 AM
As a former New Mexico State Police officer I like your analogy!
Larry Gray
Senior Mortgage Banker, Guarantee Mortgage
on Fri Aug 10 2018, 3:13 PM
I understand Alessandro's point...some people with credit scores or credit issues that maybe currently prevent them from qualifying for most mortgage loans just need an exception made so they too can utilize their home equity to get them out from under debilitating monthly debt, Those that provide the loans have to calculate the maximum level of risk to what they and the many investors directly or indirectly involved feel is acceptable. You have to look to portfolio lenders who might loan at an overall risk level that is higher. When you find one the maximum cashout loan seems to always be to 80% loan to value. Rates tend to be at least a couple of points higher which can be discouraging. Sometimes one might be able to get to the minimum to get a better rate cashout loan by hanging in there and making timely payments as needed. As to the many thousands of people who do pay off mainly revolving debt through a mortgage loan refinance...there are plenty of people who realize they do not want to build up such debt again and do not. Many others need to be counseled on perhaps considering tearing up most of their credit cards after refinancing out of debt. I have clients who paid off revolving debt and reduced their loan from a 30 year fixed to a fifteen year fixed...or a 15 year fixed to a 10 year fixed to reduce their mortgage debt faster as well, As a mortgage planner, I strongly think we need to include debt counseling in the process.
on Tue Aug 7 2018, 4:54 PM
If they denied or not offered loan modifications they were entitled to and this cost the owners their home Wells Fargo should make them whole. Which should include them making sure these people get a home of equal value in an equal value area and pay it down to what their old home value would have been when they lost it. Then they should make sure the loan is the same as the home they lost after the modification! They should also make sure the cost of moving out and back into the new home is covered. Cost to them should not be a concern. Their credit should be cleared. $12,800 is nothing! It would not even cover a down payment or the added taxes it will cost these people for about 5 years they will pay more than they should have. This should hurt Wells Fargo as much as it did the people they injured.
on Tue Aug 7 2018, 4:27 PM
I think its pronounced, "Scrumpf"
on Mon Aug 6 2018, 3:16 PM
Alessandro, My experience in 40+ years is that if you payoff revolving and installment debt on a mortgage it tends to reduce payments and possibly raise credit scores but in most of those cases the borrower then gets more credit and more installment debt and they end up worse off than they were before. All you can rely on is past history to make future judgments. If it happens once, it usually happens again.
Alessandro Machi
on Sun Aug 5 2018, 2:09 PM
One thing that I find appalling about the entire process is there are people who are denied credit, who if they had been approved, would see their credit scores jump 100 points. Why? Because they removed high interest debt and put it into the refi mortgage. So why not give people a second chance if they have a certain amount or percentage equity in their home even if they are a borderline case?
on Thu Aug 2 2018, 12:37 PM
Jann, the technical term is "government sponsored enterprises." I think your final sentence numbers are WAY OFF, since the GSEs started repaying the Treasury (an issue being disputed in federal courts by some plaintiffs who argue the 2008 financial aid wasn't necessary), Fannie and Freddie have sent more than $460 Billion to Uncle Sam and US taxpayers. Suggest you check those facts out before you write again about the subject. .
Larry Gray
Senior Mortgage Banker, Guarantee Mortgage
on Fri Jul 27 2018, 4:01 PM
Typically now in brokering to some Bank's wholesale division on a conventional conforming or jumbo loan, the lender provided commission is 1.5 points to the Broker. Typically I think the commission to the loan officer is 60 BPS. So whatever the bank is expecting to make on the loan would be the question thereafter. I would think, whether they keep the loan, sell it to a private group of investors, or to Fannie Mae or Freddie has to be worth their while. They compete among banks to acquire loans from brokers. FHA/VA loans are another matter but generally they get sold to Fannie Mae or Freddie Mac, and with less competition for these loans generally, the Branch and the loan officer might get better compensated then most. However, regulations require the loan officer receives the same commission for conventional loans and must thus compete on that basis. Whatever compensation a net branch, a loan officer, and ultimately the company receives in commissions on each loan, two things are still in place. One, commissions must be the same for each loan the loan officers originates, and two, rate/pricing can be shopped. Otherwise, the only way two compensation plans may exist for a loan officer is between in house loans (direct to investor; with correspondent lenders) and a separate, generally lower commission for brokering loans. One interesting thing in looking at individual loan officer comp plans at each might find they do vary among loan officers. Thus, if average L O compensation is 80 BPS, there still could be a specialist in FHA/VA loans who chooses to receive 160 BPS on each loan.
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Mon Jul 23 2018, 11:14 PM
Do you also compare the length of terms for their current debt compared with future debt? Sure, adding up the payments on that car note (with 2-6 years remaining), current mortgage (with term under 30 years), and credit cards, then comparing with a new, 30 year payment may lower the cash going out monthly, but that's not the same as "saving money", ie: total obligation over the life of the debt. I've advised many a client to get a HELOC when refinancing didn't make sense, even though it cost me money. My responsibility is to advise my clients as accurately as I can, whether their best solution is a new loan, a HELOC, or simply handling their existing situation in a more efficient manner. You're correct that there is no "one size fits all" solution, but playing games by comparing monthly payments is the oldest car dealer's trick in the book.
on Sat Jul 21 2018, 12:50 PM
Yet, it is ok for the Mortgage Banker to make 6pts on the 2ndary Market? However paying an LO a garbage comp plan is ok?...If borrowers actually knew what Retail makes on them. There would be a war. Now, I do understand overhead, but I know some small TPO's who fund under 150mil making 5-7pts on FHA/VA loans.. That sickens me. I went back to Wholesale due to my so called boss's driving 750 BMW's and taking 2 week vacations to the Maui Four Seasons.......
Larry Gray
Senior Mortgage Banker, Guarantee Mortgage
on Tue Jul 17 2018, 1:42 PM
"Legislative blowhards get through their grandstanding more quickly with Powell as the Chair.." Ha, ha! Let us hope he continues to do a good job at minimizing their posturing.
on Mon Jul 16 2018, 10:47 AM
Interesting, Lenders trying to cut overhead with technology that is not free and cost frankly quite a bit. You want to save go back to old school Broker model like I did. NO Retail Lender can beat and I still never miss a close while offering up to a .250-1pt better in rate.
Larry Gray
Senior Mortgage Banker, Guarantee Mortgage
on Thu Jul 12 2018, 2:11 PM
Oh my goodness... how very long ago it was, after learning someone's specific goal (s), that I learned in refinancing to help direct the comparison to actual monthly savings regardless of rate! It was sales 101 for a Mortgage Consultant, and I had to learn it well as so many people can get fixated on rate. But I understand what you are saying Ted.."a person has their mortgage loan at 3.5% and why would they want to give that up for 4.625%?" Often I have to show the monthly savings comparison after paying off debts and obtaining a rate a point higher compared with what they currently have. And...what if you took the actual savings and used it to pay down the mortgage quickly, how much would you save? Usually, they then would save many thousands of dollars. Rate can be a psychological hurdle though..."oh my goodness...yes I see I save $600 a month, but I do not want to give up my 3.5% rate for 4.625%"! Then there is always the heloc. So often borrowers are paying the interest only and never pay the heloc down while the interest rate may be rising and rising. But they may hope some day they will get a rate to their satisfaction to finally refinance the heloc into a first mortgage only. Also, a heloc is not tax deductible generally unless it was for home improvements, right? I have heard that but am not a tax consultant and always recommend you consult yours before deducting the interest in calculating your income taxes
John Rodgers NMLS 88677
CEO, Prime Mortgage Lending Inc. NMLS 69551
on Tue Jun 26 2018, 11:19 AM
Dan, Sales, and Marketing account for over 60% of loan costs. Many believe that if you build a slick front-end customer solution then you can reduce the costs for sales and marketing. Lenders have cut and are finding ways to cut out or reduce third-party spend but the LO's don't want to participate in cost-cutting. Something has to give and LO's bouncing from company to company chasing margins and bonuses are not a long-term solution.
on Mon Jun 25 2018, 8:56 PM
Collecting borrower data via tech no ology doesn't save $ since LOs still have to review it. There lenders that think a tech-driven system that the borrower just takes a picture of their asset statements with their phone and uploads it will solve the cost issue are clueless. There are so many other wasteful areas for lenders to cut costs before trying to replace the LO with technology.
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Fri Jun 22 2018, 8:41 AM
Seems to be an issue of an "economic tracking" mindset versus that of the average mortgage rate stakeholder. From an economic tracking standpoint, this amount of lag time and accuracy is quite good! The catch is that almost anyone who reads articles about mortgage rates is either in the mortgage business or in the market for a mortgage.
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Thu Jun 21 2018, 6:34 PM
Thanks for mentioning Freddie's "somewhat obsolete" rate survey again, Matt. As outdated as it is when it comes out, it gets even worse when media outlets pick it up several days later after rates have had even more time to change. No one would want to track last week's stock movement 4-8 sessions later if they were interested in current stock prices, but for some reason that logic doesn't always carry through to bonds.
on Tue Jun 19 2018, 11:04 AM
The author should have also mentioned the untapped equity for those over 62 with the new HECM or H4P product. Over 50% of baby boomers will outlive their retirement savings and will be looking for ways to tap into their home equity.
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Mon Jun 18 2018, 8:17 PM
Here's your key takeaway: "60 percent is held by homeowners whose mortgages rates are below 4.0 percent". Cash out refinances aren't as appealing (equity or no) if your rate's going to go up considerably. Sure, HELOCs are an option, but their rates are headed up, seemingly every quarter.
on Mon Jun 18 2018, 6:02 PM
Maybe they don't WANT to tap into their Equity, possibly putting their homeownership at risk...
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Tue Jun 12 2018, 5:15 PM
Rates seem quite content where they're at, which is both good news and bad....Good, in that they're no longer rising daily.....bad, in that they're at multi-year highs. Guess it depends on whether you see the "rate glass" as half full, or half empty!
Ted Rood
Home Mortgage Loan Advisor, First Bank
on Fri Jun 8 2018, 7:05 PM
As an 18 year loan officer, I'd love to hear more about those 100%, no appraisal loans, guessing if they really exist they are strictly a very local (likely CU) product. As far as the data, it's from the Urban Institute, which is hardly an objective party here. To say "default rates are "as low as they can possibly be" is completely subjective and hardly factual.
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Fri Jun 8 2018, 5:11 PM
Greg, why do you assume it's "the author?" Jann is a reporter who is reporting on research published by the Urban Institute. Don't shoot the messenger.
on Thu Jun 7 2018, 2:18 PM
This may look good for manufactured housing, and some will cheer this. But a close reading of various industry commentary would suggest that Fannie is giving yet another head fake. Example:
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Tue Jun 5 2018, 5:12 PM
The source material didn't include AK/HI on the charts, and AK wasn't even mentioned in the text of the report except as a line item on one table. It included the following stats: Delinquency: 2.9%, Foreclosure: 0.5%, Non-Current: 3.4%, yr/yr change in non-current: -4.1%. That puts it at number 15 in terms of loans in any stage of delinquency (non-current is an umbrella that includes the other 2).
on Mon Jun 4 2018, 2:32 PM
Why is data for Alaska & Hawaii not included in those graphs showing a state breakdown of Payment-to-Income? Just wondering if it's a space issue, one regarding the availability of that data, or something else. Most of our mortgage origination is in Alaska, so it's especially interesting to me.
on Wed May 30 2018, 12:02 PM
Mortgage Rate Recap
on Tue May 29 2018, 12:25 PM
This article helps create confidence in first time home-buyer programs, especially the ones that involve an infusion of government accountability and financial support. If you are short on time, please read the following two key sentences. Please read this if you want to see young people have a shot at owning a home. Not only are HFAs more likely to require full documentation and careful underwriting, they also serve as a third-party monitor on the partner lenders originating loans through the state program, creating an additional incentive for careful screening by the lender. This highlights the potential role for policies that increase the transparency of lender origination practices and that incorporate mechanisms for monitoring by third-parties.

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Mortgage Rates:
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  • 15 Yr FRM 4.45%
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  • Jumbo 30 Year Fixed 4.40%
MBS Prices:
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  • 30YR FNMA 5.0 104-11 (0-03)
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Recent Housing Data:
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  • Refinance Index -0.10%
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  • Purchase Index 0.12%