Mark Twain said, “If you don't read the newspaper you
are uninformed, if you do read the newspaper you are misinformed.” If one
read the newspaper lately, you’d have seen that it's getting pretty
crazy; we're bailing out Wall Street, we're bailing out banks, we're bailing
out car companies...In fact, there was a special box on your tax form this year
you could check if you want a portion of your taxes to actually go to running
the government.
Yesterday Chrysler filed for Chapter 11 bankruptcy
after talks with a small group of creditors fell apart. Analysts believe that
this will give the company time to finish writing the partnership with the Italian
car maker Fiat. The government, which is in effect you and me, has already
poured $4 billion in loans into Chrysler and would provide up to $8 billion
more to carry the company through bankruptcy. Our tax money at work.
Speaking of biting the dust, here is another one. GB
Mortgage is gone. As a reminder, “GB Mortgage is a wholly owned
subsidiary of Guaranty Bank, FSB of Milwaukee, Wisconsin. GB Mortgage works
(now “worked”) with an extensive network of third party originators
who provide consumer direct mortgage lending services. We continue to
experience strong growth and currently serve more than 5,000 independent
mortgage brokers and bankers in 47 states. Our parent company, Guaranty Bank,
is a fourth generation, family owned company. Founded in 1923 during the Great
Depression by Joseph Saffro, its one small office in downtown Milwaukee, Wisconsin
offered only mortgages and savings accounts. It survived the lean years of the
twenties and began growing in the 1930s.”
Contrary to popular rumors, I have not seen or heard of Las Vegas odds makers
betting on how successful HVCC will be. So we may as well take it
seriously. Fannie Mae offers a Webinar on it: https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/
<https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/>
and a cottage industry has sprung up around it. One, named ServiceLink,
includes an appraisal management company, appraisal panel management, and
warranted valuations. Look for more companies to start offering help for
originators in dealing with the HVCC.
The “Cramdown” legislation, which would have
allowed bankruptcy judges to modify mortgages, failed to pass the Senate
yesterday. Despite the administration’s attempts to negotiate
with Bank of America, J.P. Morgan Chase and Wells Fargo for weeks in order to
get their support, but the financial services industry refused to support it.
Supporters argued that the measure would have kept 1.7 million borrowers in
their homes, and would have allowed bankruptcy judges to lower the interest
rate or principal balance on troubled mortgages.
Taylor Bean reminded their customers that the HVCC policy
only applies to conventional loans. “If TBW underwrites a
Conventional loan for you and the application date is on or after May 1st, you
are required to order the appraisal via the TBW Correspondent website
(www.tbwcorr.com) from SecurityOne Valuation Services. The appraisal will
be delivered to TBW where it will be matched with your credit package.
Once the TBW UW has reviewed and approved the appraisal you will have access to
view it via our website.” For loans underwritten by correspondents,
“you rep and warrant to TBW that you are in compliance with the
HVCC.”
ING reminded their brokers that
they’ll process loans faster if the appropriate income documentation is
submitted. “Income documentation is required at loan submission:
“Employed borrowers: (a) most recent paystub, and (b) W2s or tax
returns for the past 2 years. Self-employed borrowers: (a) personal and
business tax returns (all schedules) for the past 2 years, and (b) evidence of
extension if tax returns from the most recent tax year are not submitted.
“
Who were the top 10 loan producers (all channels) during the
first quarter of 2009? It is probably little surprise that the top 5 were, in
order, Wells Fargo
with $103 billion, BofA with $90 billion, Chase with $39 billion, Citi with $24
billion, and the SunTrust with $13 billion. These were followed by US Bank,
Provident, Metlife, Flagstar, and Res Cap. (Wells did twice
as much volume as the #6-10 combined, according to the Inside Mortgage Finance
numbers.)
Yesterday the market learned that the Chicago
Purchasers’ April Index Increased to 40.1, the highest level since
September, from 31.4 the prior month. (Anything below 50 is a contraction.) Is
the recession beginning to ease? Especially if one looks at consumer confidence
and home sales, for what they’re worth, maybe. And if we come out of
recession, does that lead to higher rates? Perhaps, and currently the market
seems to believe so although it is difficult
to figure out if the higher rates are due to supply by the Treasury or by the
economy improving. (The US sold $101 billion this week, and
is slated to do another $71 billion next week.) Treasury prices fell, and rates
increased, for a 3rd straight day yesterday (and we could be there
again today) and April may have the largest price drop since January. The yield
on the 10-yr hasn’t been this high since around Thanksgiving. Stocks,
however, seem to have had their biggest monthly gain in 9 years! The only news
out this morning is the University
of Michigan survey,
Factory Orders, and the ISM survey – all later in the morning – and
rates are continuing to move higher. Mortgage prices are worse by another
125, and the 10-yr is up to 3.17%.
Mick met Paddy in the street and said,
“Paddy, will you draw your bedroom curtains before making love to your
wife in future?”
“Bejaysus why?” Paddy asked.
“Because,” said Mick, “the whole street
was laughing when they saw you making love yesterday.”
Paddy said, “Well, the laugh’s on them...I
wasn't even home yesterday.”
Rob
(For archived commentaries, check www.robchrisman.com,
or to subscribe write to rchrisman@robchrisman.com)
