OK, for
anyone who deals with appraisals in any form, here's a great
YouTube.
One of the better lines is, "Wells Fargo and BofA getting appraisals
done
by appraisal companies they own - It's like Michael Jackson running a
freaking
boys camp! My E&O is going to go through the roof!" Definitely
worth 2-3
minutes: http://www.youtube.com/watch?vlDUpXwoj5Ck
Despite the fun poked at the appraisal process in that video, many
lenders are
still searching for help for the hurdles that HVCC has thrown up in
their
process. I am often asked about appraisal "soup to nuts" solutions.
If you are interested, or want to see how one company is managing
appraisal
requirements for Fannie, Freddie, and FHA, you should take a look at ValuFinders.
The firm has been around for many years, and has primarily focused on
being a
technology company that manages all of the REO's for the government,
but
lately it has set up a system that helps brokers and lenders carry
out the
appraisal process and comply with the complete set of government
regulations.
Check with Paul Anderson at www.Valufinders.com.
You shouldn’t look for any new products from Fannie or Freddie.
Neither will
not be allowed to introduce new loan products in the mortgage market
while they
are under the control of the U.S. government, FHFA announced, given the
companies'
massive losses and looming challenges. A story in the Wall Street
Journal noted
“permitting the enterprises to engage in new products is inconsistent
with the
goals of conservatorship." The new rule won't apply to foreclosure
prevention efforts, which are considered separate from new product
offerings. Therefore,
until investors are willing to introduce products on their own, don’t
look for
any new industry-wide programs.
So what is the latest on jumbo products? You know,
the loans that seem to be needed within 10-30 miles of any coastline,
on many
waterways, or in the nice neighborhoods of any city, and are now being
underwritten to very tight guidelines? The National Association of
Realtors
(NAR) estimates that the national share of home sales above $750,000 is
approximately 2.3% for 2009, down from 4.4% three years ago.
Everyone knows
that putting jumbo loans into securities is not an option, currently.
The
loans are not part of the Fed's MBS purchase program (although loans of
up to
$729,750 done in high cost areas can constitute up to 10% of a pool),
and many
are ARM's, which constitute less than 10% of current production.
Institutional
investors don't want the product, although many banks are adding the
loans to
their portfolios since the spreads are attractive versus their cost of
funds.
But banks are cautious about adding 30-yr maturity instruments to their
balance
sheets, even for their best customers, so many jumbo loans are ARM
loans that
either go to banks or may have some interest from hedge funds, money
managers,
private funds, etc.
How about the
$1 Trillion in reserves banks are supposedly sitting on? If you ask
someone off
the street, “Who would YOU lend it to?” you might receive a shrug and a
blank
stare. Any mortgage banker might reply, "How about self employed or
jumbo
borrowers?"
Anyone taking
a look at the budget saw that, once again, the mortgage deduction is
viewed as
low hanging fruit whenever there’s a deficit. In this case, the attack
is on
itemized deductions. The proposal to reduce itemized deductions,
including
the deduction of mortgage interest, for taxpayers reporting income
above
$250,000 (joint) and $200,000 (single) is being fought by various
mortgage
banking groups, including the MBAA. The MBAA has also publicly come
out
against the proposal to tax carried interest at ordinary tax rates (as
opposed
to the capital gains rate, as it is taxed now), as it would discourage
capital
formation for lending.
Flagstar lost almost
$72 million in the fourth quarter of 2009, which compares favorably
with their
third quarter net loss of $298 million and a fourth quarter 2008 net
loss of
$218.5 million.
For all of
2009 Flagstar’s net loss was $514 million, compared to a 2008 net loss
of $275
million. Eventually an institution runs out of millions, although
Flagstar did
just receive another $300 million from a large investor.
Franklin American announced their MERS
policy, which is summed up by
saying, “All loans must be registered with MERS
at the time the closed loan is delivered to FAMC. The registration must
be
completed using the 18 digit MIN assigned to each loan on the MERS
Security
Instrument and/or Assignment. In addition, all other registration
fields must
be completed in their entirety and must be accurate.” Pretty
straightforward.
I will freely
admit that I saw nothing in writing, but sources are reporting that CitiMortgage
is back in touch with many of the brokers that they cut off last year.
SunTrust recently
updated its Mortgage Insurance guidelines, specifically in relation to
Single
Premium Mortgage Insurance. “Single Premium Mortgage Insurance must be
financed
in its entirety in the loan. It cannot be ‘partially’ financed.”
Chase
revised their extended rate lock costs,
making 90-180 day locks .125 in price worse. One always wonders who,
besides
builders in certain situations, really needs a 180 day or 360 day lock.
Regardless, there must be interest out there since most economists
believe that
rates are going to begin creeping up later this year. Chase also
reminded
clients that these extended rate locks are “not available on Agency
High
Balance, Non-Agency, or any Mandatory commitment types.”
PennyMac Mortgage Investment Trust, formed last
August, reported a net loss for the fourth quarter of $1.15 million
with total
investment income for the quarter was $1.49 million. Since formation,
PMT's
total investment income amounted to $2.30 million and its net loss was
$1.88
million.
I wish that I
could sum up the 83 page HUD document on explaining the roots of the
foreclosure process in a few lines. But I can't. So feel free to visit http://www.huduser.org/portal/publications/hsgfin/foreclosure_09.html
In a story
that I saw in Mortgage News Daily, the Census Bureau released
their “Report
on Residential Vacancies and Homeownership”. This data covered fourth
quarter
2009. For example, national vacancy rates in the fourth quarter 2009
were 10.7%
for rental housing and 2.7% for homeowner housing. The homeownership
rate stands
at 67.2%. Lastly, at the end of the fourth quarter of 2009, there were
130.58
million housing units in the US.
The National Association of Realtors announced that December’s
Pending
Home Sales ("pending" is when the contract has been signed but the
transaction has not closed) improved slightly in December. So what?
Well, the
level of monthly sales-contract activity from 2001 through 2004
parallels the
level of closed existing-home sales in the following two months. (No, I
don’t
know what happened in the last 5 years!)
There isn’t
much happening on the trading desks out there. Limited price movement,
rates
stuck in a narrow range, the Fed in buying the customary amount… but
looking at
the price movement between coupons, and between Ginnie & Fannie
products,
things are a little more volatile. Some investors are complaining that
they are
going to “stay on the sidelines due to FED/Govt uncertainty in our
market.” And
thin markets can mean volatile markets. Later this morning we have
another
Institute of Supply Management number, and the only other scheduled
economic
news, of sorts, was the ADP employment number. (ADP, by the way, is the
world’s
largest payroll processing company, but its statistics do not include
government jobs.) U.S. private employers cut 22,000 jobs in January,
less than
the 61,000 jobs lost in December. So far this morning the 10-yr
yield is up
to 3.68% and the 5-yr and mortgage prices are worse by about .250.
At Any Given Moment:
FACT:
79,000,000 people are engaged in sex - right now.
FACT:
58,000,000 are kissing.
FACT:
37,000,000 are relaxing after having sex.
FACT: 1 old person is reading emails.
You hang in
there, Sunshine!
Rob
(Check
out http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx. To
subscribe/unsubscibe write to rchrisman@robchrisman.com.)
