Salary review? April Fools – I wouldn’t touch
that with a 10-foot pole! Teachers and policemen still don’t make enough,
investor wholesale reps and baseball players still make too much. How’s
that? If you want to know what mortgage industry professionals make, ask your
co-worker what their salary is.
Colonial BancGroup, out of Alabama, who apparently is close
to running out of money due to loan losses, will receive $300 million –
much of it from Taylor Bean & Whitaker. What’s in
it for TBW? Gaining control of Colonial and its new thrift charter would help
them win federal clearance for a significant expansion of its deposit-gathering
operations and provide a stable source of low-cost funding, e.g., critical
warehouse capability.
According to the S&P/Case-Shiller Home-Price Index of 20
major metropolitan areas, my house, purchased near San Francisco many years ago, is worth $8.20.
Well, at least it seems that way. Their index showed prices down 19% from
the prior year, and 2.8% from December. At least consumer confidence,
reported by the Conference Board, was relatively unchanged in March after
hitting an all-time low in February. Lastly yesterday we had the ISM Chicago Purchasers’
Index which declined to 31.4 in March from 34.2 the prior month,
contracting for a sixth consecutive month.
With all of this dour economic news, it is hard to believe
that rates could go up much – inflation threats are muted. But they have
indeed crept up so far this year, mostly based on the tremendous amount of
supply coming into the market. (Remember those supply and demand
curves from Econ 1A? They really do work…) In March, however, rates came
down due to the Federal Reserve's government debt purchases program. The Fed
has bought $17.5 billion (out of the announced $300 billion) in Treasury
securities since it began the program last week.
The Mortgage Bankers Association's applications index rose
by 3% in the week ending March 27th. The purchase applications index was
basically unchanged, and refis gained 3.7 percent. The only other scheduled
economic news for today comes out at 10AM EST, 7AM PST, with the
“generally-non-market-moving” ISM Manufacturing Index, Construction
Spending, and Pending Home Sales numbers. Ahead of that the 10-yr is
wallowing around at 2.67% and mortgage prices are… about unchanged.
After a seemingly long wait, all lenders have seen that
Fannie Mae has issued Announcement 09-08, Temporary High-Cost Area Loan Limits and Revised
Eligibility Requirements for High-Balance Mortgage Loans, to implement the
temporary increase in conforming loan limits for high-cost areas authorized by
the ARRA. The ARRA permits loans originated this calendar year to
“use the higher of the current permanent high-cost loan limits, or the
temporary loan limits in place for loans originated in 2008 that were
applicable to jumbo-conforming mortgage loans.” Effective May 1, Fannie Mae will accept for
delivery from all approved lenders loans originated in 2009 using these new
limits.
Although there is no word yet on pricing (I guess that
investors will figure that out over the next month, but hope for the best and
expect the worst), Fannie revised loan-to-value ratios for certain loan types,
implemented new minimum credit score requirements, and added additional
appraisal requirements. (And no, I don’t know what they are, but hope for
the best and expect the worst. And investors will follow their lead.) Underwriting-wise,
for DU case files “effective for deliveries on or after May 1, lenders
must manually apply the revised eligibility requirements for loan case files
that receive an Ineligible recommendation due to the loan amount exceeding the
permanent loan limit for the area in which the property is located. These loans
will be eligible to receive the DU limited waiver of underwriting
representations and warranties. Because the new eligibility will not be
implemented in DU immediately, we will continue to permit deliveries of
high-balance mortgage loans that receive an Eligible recommendation from DU and
will not require lenders to apply the revised eligibility to these loans until
a later date. For manual underwriting, the revised eligibility requirements apply
to loans for amounts over the permanent limit for the specific property
location, and all manually underwritten high-balance loans with application
dates on or after June 1, 2009. Lenders are encouraged to implement the new
eligibility guidelines immediately. All manually underwritten high-balance
loans with application dates before June 1 that do not comply with the revised
eligibility guidelines must be delivered to Fannie Mae before October 1,
2009.”
Announcement
09-08: Temporary High-Cost Area Loan Limits and Revised Eligibility
Requirements for High-Balance Mortgage Loans and the new High-Balance
Feature Matrix and reference materials to identify the loan limits for
specific areas are available on the Loan
Limits page on eFannieMae.com.
Need some April Fools material?
On borrower:
“You
know we lost your file.”
“I thought you wanted 5.75%?”
“Underwriting is asking for a blood sample.”
“We can’t fund until the Red River ebbs---It’s a patriotic
thing---we sent our staff to North Dakota!
Would you like an extension?”
On Lender:
“We got a better rate elsewhere.”
“Oh, I thought we could float down for free.”
“My borrowers actually signed the right of rescission.”
Your Company Manager:
“Uh, all those loans I closed last month - I am redoing them this
month.”
“I cancelled 12 locks with your bank this morning.”
“Why is your name is on this Stated Income Application?”
On the Mortgage Broker
“Your locks are cancelled.”
“The warehouse line melted down.”
“Loan is denied.”
“This loan is being audited.”
“Your borrower wants 3.625% o pts---he heard it on the news—why
can’t I have that rate?”
Rob
(For archived commentaries, check www.robchrisman.com,
or to subscribe write to rchrisman@robchrisman.com)
