I am so confused by numbers. 3rd quarter origination data is out....
Wells, in spite of back-office back ups, was #1 with $102 billion originated and a 25% market share. BofA was #2 at $74 billion & an 18% market share. Then came Chase, Citi, US Bank, GMAC/Ally, PHH, Quicken, SunTrust, and finally Flagstar (with about $8 billion and a 2% market share).
Where my confusion comes is...if Flagstar funds a loan in its name, and then sells the loan to Chase, who receives credit for the loan? If both receive credit, are we over-counting loan production? I am sure that the folks that gather this information are doing it correctly.
Some less confusing numbers are the mortgage application survey results from last week. Apps were up almost 6%. Refi's were up 6%, and purchases were up 5.5%.
I had a little free time yesterday, so I set up Chrisman Servicing Inc. - I wanted to be ahead of the curve. There are many concerns out there about the impact of Basel III on MSR's (mortgage servicing rights), and in turn the value of servicing in general, especially to a bank that has a huge servicing volume. (I listed them yesterday) MSR's took a "capital haircut" in the final international regulation down to 10%. It seems that there are roughly 60 banks with $1.5 trillion in assets where MSRs account for 10% or more of capital. Although implementation is years away, if you're BofA with $2.2 trillion of servicing, you can bet it is a concern. The current belief is that these banks will have to retain less residential servicing and sell more, "which plays into the hands of a new theory forming out there that non-banks, REITs and hedge funds could move into the mortgage industry and fill the void. After all, nonbanks and hedge funds don't have to face Basel III or banking regulators."
Back in May the FHA revised its lender approval policy to eliminate the approval of Loan Correspondents at the end of next month. After New Year's, Loan Correspondents will no longer have access to HUD's secure system, the FHA Connection, but many are establishing a sponsorship relationship with an FHA-approved Mortgagee and should be registered as such in the FHA Connection site by their sponsoring Mortgagee. HUD reminded companies that "Mortgagees may register a Sponsored Originator via the new Sponsored Originator Maintenance screen in the FHA Connection. It is recommended that Loan Correspondents be registered prior to January 1, 2011, as only registered Sponsored Originators will be permitted to participate in the origination of FHA loans." Smaller lenders had better find a sponsor, since after 1/1 they may no longer close mortgages submitted for FHA insurance in their own names, regardless of when the case number was assigned or the current status of the case (e.g. approved, closed).
Last week I mentioned some mortgage jobs in the private sector. HUD-FHA also has new career opportunities for qualified individuals, like "Supervisory Contract Oversight Officer" - anyone interested in that, and other HUD jobs, should go to USA JOBS DOT GOV.
Here's someone who is thinking ahead: "Rob, given the Ginnie Mae net worth requirement moving from $1 million to $2.5 million, I wonder if any GNMA approved issuers will be up for sale any time soon. On top of that, the formula for calculating the additional net worth required above the base net worth requirement is changing. Institutions that are seeking Issuer approval will be required to meet the new minimum net worth requirements. Existing Issuers will have another year to meet the new net worth requirements.
SunTrust has seen an increase in principal reductions or principal curtailments appearing on final HUD1 Settlement Statements submitted with closed loan files. SunTrust warned its clients that principal reductions will only be acceptable for certain situations and lenders must recalculate loan amounts prior to closing to avoid "unacceptable" principal curtailments. The situations vary depending on program (DU Refi Plus, FHA, VA, Texas Rate/Term Refi). SunTrust also alerted clients that given the compliance errors that its staff was seeing, its review process has been adjusted to pay particular attention to third party fees, etc.
You can retire to Florida where...
1. You eat dinner at 3:15 in the afternoon.
2. All purchases include a coupon of some kind -- even houses and cars.
3. Everyone can recommend an excellent dermatologist.
4. Road construction never ends anywhere in the state.
5. Cars in front of you often appear to be driven by headless people.
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