Some will call this a useful tool and a time saver - others will say it is another sign of our privacy going away and "Big Brother" seeing everything. Enter an address, and it displays a map of the area showing all residences/businesses, including their phone numbers:

In Northern California, WBC Lending is looking for experienced wholesale AE's to call on brokers. WBC Lending has "an aggressive product offering, including a super jumbo portfolio product with start rate 1.625% and life cap of 6.25%, up to $2 million dollars with a 50% DTI, and a 40-year term." With over 65 years of combined wholesale mortgage banking experience, the executive management team at WBC Lending believes they have put together a wholesale platform that is second to none, and would prefer that candidates have a minimum of 2 years' experience. WBC has local underwriting, docs and funding all out of the San Jose based corporate offices.   If interested, please inquire today by contacting John Giagiari at, and for more information on the company visit

Perhaps Bank of America home loans president Barbara Desoer could apply - she will retire this month after being at the bank since 1977! Her most recent assignment was the "integration of the Home Loans business into Consumer Banking" after the 2008 purchase of Countrywide.

HUD, and the FHA, is definitely a big part of the home mortgage environment. In the name of further learning, HUD is offering a variety of training programs, including an online course on the new HOPE LoanPort (HLP) enhancements.  You can register for classes, which are take place every Tuesday and Thursday.  Also available is a series webinars on Loss Mitigation, offered in conjunction with the FHA.  Some of the upcoming courses cover HUD's Neighborhood Watch System, loss mitigation, default reporting and FHA claims.  See the HUD website to register.

Early pay-offs (prepayments) of Ginnie Mae securities, made up primarily of FHA and VA loans, is causing some concern among investors. Besides the initiatives announced by President Obama in his Plan to Help Responsible Homeowners and Heal the Housing Market, more changes, such as tweaks to the FHA mortgage insurance premiums (MIP), could be unveiled in the next few weeks. President Obama's plan describes "Streamlined Refinancing for FHA Borrowers" by excluding streamline-refinanced loans from comparison ratio calculations. Most believe that this plan will be implemented and has the potential to raise GNMA prepayment speeds. (There has been a recent increase in early pay-offs; most attribute this to the "GNMA universe" becoming a lot more refinanceable after the improvement in FHA rates this year.)

(As a quick refresher, the compare ratio is the serious delinquency rate of all loans originated by a lender during a one or two-year period relative to the average of all lenders operating in the same region. If this ratio rises above 150%, the lender may lose the ability to make new FHA loans out of that region or branch - 200% is almost a sure thing. As higher coupon and seasoned loans have a weaker credit and greater default risks, lenders worry that streamline-refinancing them could push up the compare ratio.)

If Streamlines are excluded from the compare ratio calculation, this should remove a disincentive for streamline-refinancing higher-risk borrowers. This argues for an increase in GNMA prepayments, particularly on higher coupons and pre-2009 originations since these have the worst credit quality. But data from HUD suggest that the compare ratios of most national lenders are now significantly below the 150% threshold (see below), implying that this is not the only binding condition for refinancing riskier loans. In addition, FHA's indemnification rules essentially grant put-back amnesty for loans originated before 2009 - refinancing these loans would reset the clock and put the lender on the hook for fresh rep & warranties. Unless FHA grants put-back amnesty for all streamline refinances, lenders are likely to remain skittish. And let us not forget the various overlays that most investors have in place on FHA Streamlines.

So where are the compare ratios of "the big boys"? The current national compare ratios for the big lenders, from research piece I read from a large broker-dealer, are all below 130% - well below 200% recommended by FHA. Only 6% of lenders have a compare ratio of above 200% and these lenders comprise of only 2% of the total loans outstanding (that are considered for calculating compare ratios). BofA has 126, Chase 39, Wells 79, Quicken 78, US Bank 69, Fifth Third 59, PHH 66. Bank of America 90+ delinquencies have been steadily rising and there are concerns that they will be forced to do a one-time buyout as their 90+ delinquencies hit 5%, and/or, similar to GMAC, BofA starts buying out just enough delinquent loans to maintain delinquencies at that level.

Critics of the compare ratio ask, "Isn't it more of a long term snapshot of performance than short term?  If a lender tightens up their guidelines would you see an immediate impact to the compare ratio?" Some liken it to turning a cruise ship, and only looking in the rear view mirror. And further complicating things is the theory that most delinquencies are caused by unforeseen job losses, rather than other reasons that might have been caught during the underwriting process - unless one's underwriters were very poor and the company was seeing a first payment default problem.

Speaking of which, the serious delinquency rate for FHA mortgages reached 9.6% in December, and the highest level in more than two years, HUD recently announced. More than 711,000 FHA-insured loans were seriously delinquent, up almost 19% from one year earlier, according to the HUD report, and up 3% from November. At the same time, mostly for pricing reasons, originations are down. In December, the FHA insured 93,700 mortgages, a nearly 30% decline from the 133,000 insured in December 2010. Analysts are most concerned with the FHA's insurance fund: in its fiscal year 2011, the FHA Mutual Mortgage Insurance Fund slipped to a 0.24% capital ratio from 0.5% the year prior. By law, the fund must remain above 2%. Lenders should not be surprised if the FHA insurance premiums go up again this year.

Here in Miami, and everywhere else condos exist, condo buyers are having a hard time obtaining FHA mortgages, and often it's down to the building's financial status, not the borrower's.  Since February 2010, the FHA have required that the whole building be deemed financially viable rather than just the single units, which has resulted in a proliferation of rejected buildings, a headache for condo sellers who rely on the FHA stamp of approval as a marketing mechanism, impeding the housing market's recovery. FHA regulations now dictate that buildings must be 50% owner-occupied, that no more than 10% of the units are owned by one entity, that no more than 15% of the units are 30 days past due on their monthly assessments, and that at least 10% of the association budget be set aside for capital expenditures and deferred maintenance.  The general consensus in the housing industry is that, given consumer demand for FHA-backed mortgages, the regulation is short-sighted.

FHA mortgagees participating in the Lender Insurance ("LI") program will be required to indemnify HUD for self-endorsed loans that HUD deems ineligible for FHA insurance based on a final regulation published by HUD on January 25. The regulation finalizes changes to the LI regulations and will take effect on February 24. In addition to the significant changes to HUD's indemnification authority for self-endorsed loans through the LI program, the final regulation also amends mortgagee eligibility criteria to participate in the LI program, including acceptable default/claim rates, amends HUD's authority to monitor lenders participating in the LI program, and implements a process for FHA lenders terminated from the LI program to request reinstatement of their LI authority.

HUD made clear that these amendments are designed to improve and expand the risk management activities of the FHA and to strengthen the FHA Insurance Fund by limiting "unnecessary and inappropriate risks" to the Fund associated with loans that the Department determines should not have been endorsed through the LI program. As HUD notes, this is the latest in a series of steps the Department has taken to strengthen the financial soundness of the FHA program and mitigate the risk of possible insolvency of the FHA Insurance Fund as HUD continues its efforts to increase FHA's capital reserve ratio to meet the congressionally mandated threshold of two percent.

Last week was not kind to fixed-income U.S. securities, especially after that strong jobs number Friday. But the U.S. economy is not setting the world on fire, and Europe still poses a threat - and could for years. So we can all expect rates to drift and drift down. Rates are holding record lows as mortgage bonds (MBS) rally ever higher. Any modest improvement in our economy would nudge investors into equities and out of bonds - but the overhang of the Eurozone debt crisis proves to be too much. Our 10-yr T-note closed Friday at about 1.94%

The economic calendar will be very light this week - so watch for Europe to perhaps regain center stage. We do, however, have some Bernanke testimony and Treasury auctions tomorrow, Wednesday, and Thursday; the Trade Balance and Consumer Sentiment will be released on Friday. Ahead of that rates and prices are nearly unchanged from Friday.

HIGH SCHOOL -- 1957 vs. 2010 (Part 1 of 2)
Scenario 1:
Jack goes quail hunting before school and then pulls into the school parking lot with his shotgun in his truck's gun rack..
1957 - Vice Principal comes over, looks at Jack's shotgun, goes to his car and gets his shotgun to show Jack.
2010 - School goes into lock down, FBI called, Jack hauled off to jail and never sees his truck or gun again. Counselors called in for traumatized students and teachers.
Scenario 2:
Johnny and Mark get into a fist fight after school.
1957 - Crowd gathers. Mark wins. Johnny and Mark shake hands and end up buddies.
2010 - Police called and SWAT team arrives -- they arrest both Johnny and Mark. They are both charged with assault and both expelled even though Johnny started it.
Scenario 3:
Jeffrey will not be still in class, he disrupts other students.
1957 - Jeffrey sent to the Principal's office and given a good paddling by the Principal. He then returns to class, sits still and does not disrupt class again.
2010 - Jeffrey is given huge doses of Ritalin. He becomes a zombie. He is then tested for ADD. The family gets extra money (SSI) from the government because Jeffrey has a disability.
Scenario 4:
Billy breaks a window in his neighbor's car and his Dad gives him a whipping with his belt.
1957 - Billy is more careful next time, grows up normal, goes to college and becomes a successful businessman.
2010 - Billy's dad is arrested for child abuse; Billy is removed to foster care and joins a gang. The state psychologist is told by Billy's sister that she remembers being abused herself and their dad goes to prison. Billy's mom has an affair with the psychologist.
(Part 2 tomorrow.)