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Entries posted on “December, 2009”
Ten months ago, I was commissioned to refinance a very large “entitled” land parcel in the low country section of South Carolina. The loan request was calculated just north of $30,000,000. As this was a sizable loan amount, and land financing to boot, I began thinking…”Am I that insane to spend another minute on this?” Instantly I knew our primary investor pool would not entertain this scenario.
I initially had reservations taking on this request as I knew the search itself would be challenging. And just as I predicted, upon presenting the scenario to a few initial investors, they laughed and followed up with “Good Luck” or “Not in this lousy market!” If the subject property was not a cash-flowing entity, or a “lien free” land parcel, most investors were just not interested.
December 17th, 2009 | Posted in Articles | Read More »
And why it’s not going away
I get feisty when I hear that wholesale is going away!
Truth be told, I get feisty about a lot of things. But seriously, who are these people making that prediction? Have they worked in Wholesale? Do they think about the mortgage industry as a business and its value propositions, are they just trying to advance their own agenda or looking for the next ‘trend’ to make a quick dollar?
Today, I am what I feared I would become when I started in my business; an “old timer”. For the last 25 years I have experienced quite a few cycles as well as seen different aspects of my business get strong, weaken and then coming back bigger and better to have a positive impact. I have seen originators struggle with what was perceived as high rates (9percent 30 year fixed), which to those starting in the early 80’s is relatively low (as fixed rates at that time were 12percent and higher). In addition, I have seen GPM’s (Graduated Payment Mortgages) and how the hot product in my first full year was a 3month/1year negative amortization ARM (start rate 6.50percent). But no matter what cycle I have lived through, we always have two considerations relative to our borrowers: How can we get those who want to buy a home qualify responsibly and what product best meets their needs?
December 17th, 2009 | Posted in Articles | Read More »
Plan by Investing in Mortgages: Part III
This will be the third in a six part series of articles on using your IRA to investment in non-traditional investments such as mortgages.
The US Treasury Secretary asks for $700 Billion to buy “toxic assets” from the banks – then says, “oops“– let’s buy bank stock instead. Then joining the banks and insurance companies in the bailout queue – the automakers say, “me too –you can’t afford to let us fail”. The purveyors of the policies that got us into the mess not so surprisingly are unable to extricate us from the growing uncertainty of both a national and international economic crisis.
Our stock and bond portfolios have taken a nose dive, at the very time our jobs and industries are at risk – with no personal bailout likely for any of us. We are told by many of our advisors to stick with our (or their) investment strategies – they say it’s a poor time to sell, because we must be at the bottom. Any flight to safety seems to come with little if any earnings, as yields are beaten down by the stampeding herd of investors who are sickened by the continuing losses of principal.
December 17th, 2009 | Posted in Articles | Read More »
More hazardous than the Yellow Brick road.
Although new lending regulations become effective each year, the new regulations and rules that became effective this year and those scheduled to become effective on January 1, 2010 are the most dramatic changes the industry has seen in years.
This year an appraisal code of conduct became effective on May 1, 2009 along with major changes that impacted lending practices and disclosures that became effective at different times in 2009. Additional HUD regulations requiring the use of a standardized good faith estimate form and HUD-1 settlement will become law effective January 1, 2010.
Lastly, loan originator licensing requirements under the SAFE Act were passed by all the states that will become effective in 2010.
December 17th, 2009 | Posted in Articles | Read More »
T’was the night before Christmas-2009,
With 12 months having passed, it was finally time.
To pen this Christmas poem, and recap the past year,
So I sat by the fire and cracked open a beer.
Last Christmas, if you recall, we were watching the clock,
Awaiting a new president, by the name of Barack.
For he had won last year’s bout, over McCain he came sailin’,
No surprise when you consider the factor named Palin.
And when Barack Obama, into office was sworn,
With almost half the nation feeling disdain and scorn,
Finally the man who had pledged hope and change,
Would be our 44th President, although his name did sound strange.
December 17th, 2009 | Posted in Articles | Read More »
There are two kinds of jobs: those we go to school for and those we don’t. It seems that it’s rare to find someone who is “doing what they set out to,” this is as true for the mortgage industry as it is for any other. Maybe that’s why we are woefully underserved from an educational standpoint.
This isn’t to say that there is NO EDUCATION available to the mortgage industry… Between setting up one of those drinking-bird toys to refresh your online CE every 9 minutes and 59 seconds and the awesome origination handbook you’re using as monitor stand, there are a few options. But certainly, there is no mortgage lending college degree, and the certifications and coursework pale in comparison to the CFA and other more specialized degrees in finance.
December 17th, 2009 | Posted in Articles | Read More »
What a difference 18 months can make.
Need an example?
Look no further than recent news from the GSEs that lenders are thumbing their noses at repurchase and reimbursement requests in record numbers.
As reported in their quarterly filings, Fannie Mae and Freddie Mac are seeing an increase in the number of lenders not honoring agreements to repurchase loans that breached representations about the eligibility and quality of loans they sold.
While this is not uncommon in the current economic environment, there is noticeable difference: Lenders have told us that the GSE’s are showing real stamina and commitment to auditing non-performing loans, and a new toughness towards collecting on repurchase demands.
December 17th, 2009 | Posted in Articles | Read More »
Wow! There were 17 rule and regulation updates within the last 30 days or so—the biggest number this year! And these are just the ones that affect loan originators, processors and managers. Here are just a few of them (condensed version) that you will find at
www.MortgageCurrentcy.com.
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FHA Condominium Approval Process – Final Rules with Temporary Exceptions (Effective December 7, 2009)
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This new comprehensive guideline is a huge reprint of Mortgagee Letter 2009-19 plus the new stuff. Use this new version as your guide and throw away 2009-19. If you want more detail on the entirety of these guidelines you can read the
Mortgagee Letter 2009-19.§ Temporary Guidance for Condominium Policy – Mortgagee Letter 2009-46A
Spot loans: You can do them on case numbers issued before February 1, 2010. After that they are gone. But after December 7, 2009 your spot loan approval checklist is going to have to change to accommodate the new requirements.
December 17th, 2009 | Posted in Articles | Read More »
Me LLP
A business is an entity that provides a service or creates a product for profit or not for profit. The business may have hundreds of thousands of employees or be a sole proprietorship. It could also be incorporated, limited, a partnership, or just you. In fact, I would suggest that regardless of where you work, the type of work or the amount of people with whom you work, you should never loose sight of being your own self-contained company; Me LLP.
The idea of the nuclear family, job security and an eight percent interest rate on a savings account at the neighborhood Savings and Loan are ghosts of a past economy. The classic notion of post World War II, ‘…get a good education, get a good job, buy a house with a 30 year fixed mortgage and pay it off, and retire after 40 years at the same company,’ is now on display in the Smithsonian next to the Dinosaur exhibit.
December 17th, 2009 | Posted in Articles | Read More »
On May 21, 2009, Michael Barr was confirmed by the United States Senate to serve as the Treasury Department’s Assistant Secretary for Financial Institutions, which means he’s the guy responsible for developing policy on legislative and regulatory issues that affect the banks et al. You might not remember him because he paid his taxes.
Barr is predominantly an academic. He taught at University of Michigan’s Law School, and was a Senior Fellow at the Center for American Progress and at Brookings. He was also Treasury Secretary Robert Rubin’s Special Assistant, Deputy Assistant Secretary of the Treasury, Special Advisor to President Clinton, Special Advisor at the State Department, and Law Clerk to Justice Souter. He got his law degree at Yale and was a Rhode Scholar.
December 17th, 2009 | Posted in Archive,Articles,Bringing Up the Rear | Read More »
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