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Jul. 13, 2009: News from Wells, TBW, Flagstar, FHA, Toll Brothers, the PPIP, UBOC, BofA, and the FDIC
Rob Chrisman
I don't know what
Attorney's Title Insurance Fund of Florida did wrong,
but effective immediately Flagstar Bank will no longer be
accepting
Closing Protection Letters from them.
Congratulations
to David Stevens. On Friday the U.S. Senate confirmed Dave
to head the Federal Housing Administration (FHA). Stevens will take
over
the agency in the middle of their huge surge in business, and many feel
that
with the non-HVCC appraisals and the fact that the FHA insures
mortgages with a
small down payment for borrowers who meet its standards are creating
the next
possible “cause for concern” in the mortgage business.
Would a 3.75%
mortgage make you buy a newly built house? TBI, the
mortgage arm of Toll Brothers, is offering a 7/1 ARM for 3.75% for
loans under
that magical level of $417,000. After 7 years, the life cap is
8.75%,
which isn't too bad especially if rates head up. As usual, borrowers
can decide
to take the current market 30% rates, which have moved back down toward
5%, or
below, or take a flier on the ARM loan (probably a good option if the
buyer is
going to move before seven years). The Wall Street Journal noted that
back in
January Toll Brothers came out with a 3.99% 30-yr loan, followed by
Lennar's
3.625%, but a few months ago Hovnanian Enterprises said its 3.99% rate
sparked
"underwhelming" interest from buyers.
After several
months of waiting, the PPIP (Public Private Investment
Program) program for securities was finally announced. Why should a
mortgage
banker care? PPIP gives institutions a way to leverage non-agency
RMBS, and
TALF ineligible CMBS [read: securities backed by jumbo loans] so it may
help
prices of non-Fannie & Freddie securities. Apparently there are
still
many questions to answer and market-related concerns in the next
several weeks,
but it is a step in the right direction for jumbo product. (Eligible
assets
include CMBS and non-agency RMBS securities issued prior to 2009. These
securities are required to have been rated AAA by at least two rating
agencies and
be backed by loans and leases and not other securities. This would keep
re-REMIC's outside the universe of eligible securities.)
What is
Wells Fargo's wholesale HELOC gang up to? Effective today, they
are going to roll out a CLTV expansion program for certain markets, and
when
the senior lien with already with Wells Fargo and is a conventional
conforming
fully amortizing fixed-rate 1st with a term less than 30
years.
Other criteria, if the borrower needs an 80% CLTV loan on their primary
residence, include a FICO of > 740, a DTI of <40%, a maximum loan
amount
of $350k; condos are ineligible.
Union Bank
of California told their
sellers that, there are two major
Regulation Z changes that will be affecting all lenders for loans
submitted
after July 27th: the originator must certify, using a new
form, that
“the broker, directly or indirectly, has not and will not collect any
fees
(other than a credit report fee) until Union Bank’s early disclosures,
as
required by Regulation Z, are provided to the customers, or the broker
previously submitted the application to another lender and has
collected upfront
fees in accordance with Regulation Z for that prior submission.” And
UBOC
follows others by stating that if the APR varies by +/- more than .125%
prior
to closing, Union Bank is required to provide a revised disclosure 3
days prior
to consummation. In addition, the customer has 3 days to review the
revised
terms.
Late last week Taylor, Bean, & Whitaker announced that it
will be
imposing a new minimum FICO requirement for FHA Streamlines (credit and
non-credit
qualifying) and VA IRRRL’s of 620. And “any Conventional, FHA
(including
Streamline Refinance), or VA (including IRRRL) loan that exceeds
$417,000 with
a Credit Scores below 660 must be LOCKED prior to July 13, 2009 and
must close no
later than September 15, 2009, and must be delivered to TBW within 10
days
after closing Loans in this category locked on and after July 13, 2009
will
require a minimum FICO of 660.” In fact, TBW told sellers that all
loans
must have a minimum score of 620, if not higher for certain programs.
Can Bank of
America Corp saves its stockholders billions of dollars in
fees, supposedly due to U.S. taxpayers for guarantees against losses at
Merrill
Lynch, by saying the rescue agreement was never signed and the funding
never
used? Apparently the legal
agreement was never completed, possibly allowing
BofA to pay nothing of the $4 billion fee it agreed to pay in January.
(Do you
remember the reaction of your boss when you forget to do something so
simple,
like sign a form?) Regulators say that the money is owed since BofA
benefited
from the Merrill deal. Bank of America received a total of $45 billion,
plus $188
billion in asset guarantees, so that it could cover Merrill's losses. Bank
of America, by the way, comes out with earnings later this week – and
does
anyone really want to cross the government?
They
don’t seem to be garnering headlines, but on
Friday the FDIC closed their 53rd bank this year: the Bank
of
Wyoming. The BoW had $70 million in assets and $67 million in
deposits, and
is expected to cost the FDIC deposit insurance fund $27 million by the
time it
is taken over by Central Bank & Trust (based in Wyoming).
What is going
on with the markets? Many expect stocks to continue their
slide after Treasury Secretary Geithner agreed with what many analysts
felt:
that there are still “enormous challenges” for the economy. What do we
have
this week for economic news, given that, aside from the auctions, the
news was
fairly limited last week? It is a big news week. There isn’t
much today,
but tomorrow we have the Producer Price Index, along with the Core PPI,
and Retail
Sales. Wednesday we’ll see the Consumer Price Index, with Core CPI,
Industrial
Production and Capacity Utilization, and Business Inventories. Thursday
bring
weekly Jobless Claims, and the Philly Fed survey, and we end the week
on Friday
with Housing Starts and Building Permits. Whew! Currently the yield
on the
10-yr Treasury note is at 3.30% and mortgages are about unchanged from
Friday
afternoon.
A woman went up to the bar in a quiet rural pub. She gestured
alluringly to the
bartender who approached her immediately. She seductively signaled that
he
should bring his face closer to hers. As he did, she gently caressed
his full
beard.
"Are you the
manager?" she asked, softly stroking his face with
both hands.
"Actually,
no," he replied. "Can you get him for me? I
need to speak to him," she said, running her hands beyond his beard and
into his hair.
"I'm afraid I
can't," breathed the bartender. "Is there
anything I can do?"
"Yes. I need
you to give him a message," she continued, running
her forefinger across the bartender's lips.
"What should I
tell him?" the bartender managed to say.
"Tell him,"
she whispered, "There's no toilet paper, hand
soap, or paper towels in the ladies room."
Rob
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