This week the experts from Credit.com contributed to a wide range of publications on subjects including credit cards, identity theft, ...
Thursday, October 4, 2012
Credit.com in the News 9/29/12
This week the experts from Credit.com contributed to a wide range of publications on subjects including credit cards, identity theft, ...
Wednesday, October 3, 2012
Chicago Illinois Mortgage Rates Week in Review for the Week Ending 09/14/2012
Fed Chairman Ben Bernanke donned his Superman cape again this week, and announced a new wave of quantitative easing that goes well beyond the two previous attempts. This program is designed to boost a sluggish economy by injecting a huge wave of money directly at the housing market, to lower mortgage rates and spur growth. [...]
Chicago Illinois Mortgage rates Week in Review for he Week Ending 09/21/2012
The Fed?s new program of Quantitative Easing is progressing as intended. Under the new program the Fed will be buying mortgage backed securities, not treasury bonds, so the money is flowing directly into mortgages and rates have dropped to new record lows. The market was choppy for most of the week following the Fed?s announcement, [...]
Unintended Consequences of QE3; Letters from the Trenches on Current Lending Standards; Fannie to Roll out State-Based Pricing?
Don't do the crime if you can't do the time. Here's a loan officer in Washington facing 10-14 years for falsifying documents.
Will those in the government who regulate the mortgage industry understand risk-based pricing? The Wall Street Journal ran a story saying that the FHFA, which oversees Freddie & Fannie, will propose "charging slightly more for all mortgages in a handful of states where it takes longer for banks to foreclose." It is no surprise to the industry that the longer it takes a lender to repossess the collateral behind a mortgage, the higher the potential costs. And the SRP's (servicing released premiums) paid by aggregators are already usually less due to this. But the smart money says politicians from Connecticut, Florida, Illinois, New Jersey and New York will cry bloody murder. But heck, if it costs more to do business there, the cost should be passed along, although there are those that will make the argument that we should all bear the brunt of the additional expense of doing business in those states. "The proposal says Fannie and Freddie would increase the fees that they charge to lenders by 0.15 to 0.3 percentage point of the loan amount in the five affected states".
Here is a retraction. A week or so ago I mentioned that the CFPB had selected its non-government employee advisory board, and noticed no one from mortgage companies, Realtors, small businesses, etc. I stand corrected: Gary Acosta (NAHREP) is a realtor on the CFPB Advisory Board. (As a reminder, the Consumer Financial Protection Bureau (CFPB) announced the appointment of 25 consumer experts from outside the federal government to its newly-formed Consumer Advisory Board which will provide advice to CFPB leadership on a broad range of consumer financial issues.)
Here's a classic: "I worked with a guy who did so many immigrant loans and made so much money years ago he named his daughter after the Nina, As in No Income No Asset."
"Why do organizations like the National Association of Realtors, or the National Home Builders, implicitly or explicitly put the blame for tight lending back on the lenders? Realtors and builders aren't subject to the same scrutiny, the lost money if the servicing portfolio goes bad, the same potential future liabilities from the CFPB or the Department of Justice. Or large class action lawsuits or billions due the State Attorneys General. Take a look at this piece from MarketWatch. It is a very good criticism of NAR's criticism of tight lending."
"Realtors, Loan Officers, Builders, etc. have been complaining about stricter underwriting criteria preventing a housing recovery. I would love to see a top ten list of underwriting standards that these folks feel are excessively strict."
And this note. "Why would a NAR survey be held as a factual piece of data for lawmakers? Do we ask bus boys if restaurant food prices are too high or if waiter service is too slow? I do a large number of loans for agents who represent REO's here in Southern Cal. The biggest hurdle I'm finding is the "17 day" contingency period listed in the RPA's. Agents and the REO banks are more concerned with contractual (and antiquated) verbiage than working together to close the loan. The way I view it is the bank has owned the property for at least 90 days, hasn't received a mortgage payment for 24 months and will probably sell within 45 days of it being listed. So why concern themselves with a '17 day' contingency period? The verbiage ought to read '17 BUSINESS Days'. I'd rather focus on getting the loan funded than meeting some arbitrary date set by NAR."
A chief risk officer for a well-known lender wrote, "Rob, I wish people would stop blaming the programs for any perceived lack of lending. Remember the 70's & 80's when we had 25/35 & 33/38 DTI? Credit guidelines are still favorable today compared to historical guidelines. Speaking for mortgage lenders, Lenders are not to blame for the lack of credit today either. We are forced to address increased regulation, investor QC & repurchases, and litigation in our business models today. Lenders make money closing loans & lose money denying loans. What Lender wants to lose money today and go out of business tomorrow? If the majority of Americans cannot get a mortgage, it is the same as previous decades (exclude 2000-2008), i.e., bad credit/no credit, lack of down payment (savings), and insufficient income/too much debt. Program guidelines cannot address these deficiencies. We tried that and it lead us to a credit melt-down."
Yesterday the housing market had a lot of statistics to chew on. Zillow's August Real Estate Market Reports showed that home values decreased 0.1 percent to $152,100 from July to August. This is the first monthly decline after nine consecutive months of appreciation. "Overall, the positive trend will hold as evidenced by home values being up by 1.7 percent in August 2012 on a year-over-year basis."
In other news, housing starts rose 2.3% in August to 750,000 units at an annual rate, coming in below the 767,000 rate the consensus expected. But Starts are up 29% versus a year ago. The increase was attributed to single-family homes (+5.5%) versus multi-family (-5%), but for the year single-family starts are up 27% from a year ago and multi-family starts are up 35%. Permits, however, dropped 1% in August, and compared to a year ago permits for single-unit homes are up 19% while permits for multi-family units are up 35%.
The U.S. economy can't recover (sometime I'd like to hear what "recover" means) without jobs and housing. And Existing Home Sales is always a treasure trove of statistics. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 7.8% from July, and are 9% higher than a year ago. Lawrence Yun, NAR's chief economist, said, "More buyers are taking advantage of excellent housing affordability conditions...However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices." (Given the dreaded shadow inventory and delinquency issues in Florida and the West, one wonders how this can be.) The national median existing-home price for all housing types was $187,400 in August, up 9.5 percent from a year ago. The last time there were six back-to-back monthly price increases from a year earlier was from December 2005 to May 2006. The August increase was the strongest since January 2006 when the median price rose 10.2 percent from a year earlier.
The stats continue. Distressed homes (foreclosures and short sales sold at deep discounts) accounted for 22% of August sales (12% were foreclosures and 10% were short sales), down from 24% in July and 31% in August 2011. Lastly, per NAR, the total housing inventory at the end August rose slightly to a 6.1-month supply with the median time on the market being 70 days in August, consistent with 69 days in July but down 23.9 percent from 92 days in August 2011.
How about some quick bank M&A and structural company updates?
Last Friday Truman Bank ($282mm, MO) was closed and sold to Simmons First National Bank (AR). Simmons gets 4 branches, all deposits and entered into a loss-share agreement on $117.8mm of assets. (Truman lost $61mm since 2008.)
Over in Washington Heritage Financial ($1.3B) has signed a definitive agreement to acquire Northwest Commercial Bank ($72mm) for $3mm in cash and an earn-out provision that could be
worth another $1.8mm.
Out in Illinois, Wintrust Financial ($17B) will buy the parent of Hyde Park Bank & Trust ($390mm) for $27.5mm in cash/stock.
Three credit unions in Ohio are merging together to form Pathways Financial Credit Union ($187mm, 6 branches, 25,500 members). The three (Members First Credit Union, Powerco Credit Union and Western Credit Union), were not in financial trouble, but took the action in order to expand, better deal with regulatory pressures and offer more products.
Out in Colorado FirstBank ($12.1B) will close 15 branches, amid lower traffic and a change in customer behavior to more online activity. After the closures, FirstBank will still have 118 branch locations. And along the same lines, Texas' Frost Bank will close 4 branches as it seeks to streamline operations and boost efficiency. After the closures, Frost will still have 111 branch locations.
As everyone continues to ruminate on QE3 (QE Unlimited), Jessi B. writes, "Rates are so low that traditional monetary policy is no longer effective in stimulating the economy. Hence QE3, unconventional monetary policy, where the Fed plans to print money & buy up securities 'well into the economic recovery.' Great for us folks in the mortgage biz; perhaps not-so-great for the value of our dollar. Lenders are busy because the Fed is doing everything possible to keep rates low, but it's not sheer volume keeping us busy. It's also time spent interpreting & attempting to predict regulations and then implementing changes accordingly. Many of us would agree the regs. are well-intentioned, but they are numerous, often confusing & it's usually the borrower who is the most put out by their enforcement. Ensuring compliance is becoming increasingly costly, but the fear and risk of noncompliance could prove to be far more costly in the future. Wholesale lenders fork out a lot of money to firms & attorneys to interpret regulations, and honestly gamble their livelihood in hopes that these firms are accurate. We risk hundred million dollar fines for 'unintended actions' characterized by legal terms with no legal precedence established. Of course margins are good when the Fed Funds Rate is at or near zero; the interest rates on pools of loans has to be high enough to attract investors. That profit is largely spent on compliance and probably sacked away for potential fines and settlements, trying to earn enough interest to keep up with inflation."
Here are some more unintended consequences. The Financial Times reports that, "A top US bank regulator has warned that the Federal Reserve's aggressive new easing program, known as QE3, may lead to banks taking on increased risk, raising concerns for supervisors charged with overseeing the soundness of the nation's banking system. Tom Hoenig, a director at the Federal Deposit Insurance Corp, said on Wednesday that he is worried that the Fed's open-ended third round of quantitative easing could lead to banks taking on longer-duration and higher-yielding assets as the central bank promises to buy $40bn of mortgage-backed securities a month in a bid to keep borrowing rates near record lows." As rates stay low, banks may "go out on the curve and take some risk. A low-rate environment creates a strong push by banks to get higher yields and that means getting riskier assets.
But yesterday was another good day for anyone owning mortgage-backed securities. It is not much fun trying to pair off (buy back) MBS positions, however, as any hedger is basically bidding against the Fed, right? MBS prices were better by over .250 in price, setting yet more record prices and the 10-yr closed at 1.78%.
We are learning, however, that great MBS prices don't lead to job growth, at least not right away. Initial Jobless Claims came in at 382k - much higher than expected. At 7AM PST we'll have Leading Economic Indicators for August expected at -.1% and the Philly Fed Survey. Early on the 10-yr is down to 1.74% and MBS prices are a shade improved versus Wednesday's close.
WOMEN
A real woman is a man's best friend.
She will never stand him up and never let him down.
She will reassure him when he feels insecure and comfort him after a bad day.
She will inspire him to do things he never thought he could do: to live without fear and forget regret.
She will enable him to express his deepest emotions, and give in to his most intimate desires.
She will make sure he always feels as though he's the most handsome man in the room and will enable him to be the most confident, sexy, seductive and invincible...
No wait...
Sorry....
I'm thinking of whiskey. It's whiskey that does all that stuff.
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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/09202012-qe3-unintended-consequences.aspx
Investors leave stock funds amid concerns over Spain: ICI
NEW YORK (Reuters) - Investors in U.S.-based mutual funds pulled the most money out of stock funds since the start of the year and continued to pile into bond funds as concerns rose over whether... 
Today?s Mortgage Rates : Real-Time MBS Pricing, October 2, 2012
Real-time mortgage market updates for October 2, 2012. Updates provided by MBSQuoteline, an MBS subscription provider for loan officers.
Click for the complete post : Today’s Mortgage Rates : Real-Time MBS Pricing, October 2, 2012.
6 Ways to Make the Landlord Pick You
To give yourself the best opportunity to wow potential landlords you need to be prepared, professional and polite.
Source: http://feedproxy.google.com/~r/ZillowBlog/~3/3clHuScb5UQ/
Part 1: Defending Ed DeMarco
Below is part one of a two-part series–”The argument about mortgage principal reductions”–which discusses the role of principal reductions in loan modifications. Part one explains, and partially defends, the decision not to include principal reductions as part of loan modifications. In part two, which will be published on Friday, we offer a compromising, cost-saving solution [...]
Could Congress let Mortgage Forgiveness Debt Relief Act Expire? ICON Residential sold; LO Compensation Comments Due
It is good having a roof over your head. But sometimes even well-known TV actresses find themselves without one. What would The Fonz do?
Maybe Erin should apply to the CFPB for a job, perhaps in the "public comment" section. (Okay, that was a stretch.) But LO's are keenly interested in the comments on compensation - and who wouldn't be interested in thousands of people determining how they will be paid? Industry comments regarding the Consumer Financial Protection Bureau's proposed rules governing loan originator compensation must be submitted by October 16. The proposal contains clarifying amendments to definitions set forth in the current TILA compensation restrictions. For example, the proposal aims to clarify that clerical employees of creditors and loan originators who do not "arrange, negotiate, or otherwise obtain an extension of credit for consumers" are not covered by the rule, while producing managers who meet the definition of a loan originator are subject to the compensation restrictions. Here is the place to comment on this and other proposals.
Given the agency sales caps, here's one industry observation: "To heck with Basel III, and its consequences of bringing more assets to the largest of banks. That will take years. The mortgage industry should be more focused on the unintended consequences playing out a little closer to home: Fannie (and Freddie?) delivery caps will result in an increase or at least maintenance of risk concentration as opposed to a disaggregation of it. Whether or not it is policy for all sellers and servicers, or just a few (we got our addendum letter this week, so anyone who thinks it is a myth is wrong), the trend under the heading 'counterparty risk' is an issue among others in our peer lending group. The chatter is, 'Any agency would much rather deal with 20 counterparties than 2,000' and it is reminiscent of a derivation of Warren Buffett's investment advice: "Put all your eggs into a few baskets and watch those baskets very carefully."
How well do you know your own real estate or mortgage company's ethics? There are two days left to participate in Innoveta Strategies' survey - which will result in a white paper on restoring trust in the financial services industry. Go here to participate. They thank you for your time and comments.
Regarding underwriting trends and appraisals, Michael Cleveland with Stratis Financial writes, "I really don't feel that the guidelines via Fannie and Freddie are such a big issue. The folks that qualify and are willing to provide the needed documentation can take advantage of the artificially low interest rates. The main issue we see is the use of AMC's and the non-accountability of the appraisers themselves. To open refinances up to those who do not qualify is no answer - it is back to the state of mind that 'homeownership is a right.' Well, it's not, it's a privilege! A privilege to those who operate their lives and finances correctly. Sure, if guidelines were scaled back I could double my income. It would also bring the industry back to the days were we had elementary school students producing mortgages and selling homes. To be successful in the current market place, you need to be smart, work hard and provide a value to your customers."
And another comment: "Given the current underwriting (auditing) environment, we're not seeing an increase of people getting declined. But we're seeing more and more 'ticked off' customers when I have to ask them what was that $200 deposit you made into your bank account a week ago? Especially when we're doing a rate and term refinance and they're NOT coming in with any money at closing. It's frustrating when I take a file to --------- Funding and the wife, who's NOT even on the loan, has to make sure her $500 W-2 matches the tax returns even when her husband makes $150k on a W-2. It's frustrating to customers when I have to ask to see what the terms of your 401k withdrawal procedures are. The typical answers I hear in Arizona are, 'Trust me, if I lose my job and I am $50k+ underwater I will NOT be pulling money from my 401k loan to keep this house afloat.' Or when I need to ask for a CPA to write a letter of explanation that the client, who's pulling money from his business account to pay down his mortgage, will not lose his business by doing that. How does the CPA know better than Joe, who owns Joe's Crab Shack? It's just more and more ridiculous BS that we're asking for. It's not that people aren't getting approved, it is all the work and hurdles getting them to the closing table."
In a little non-mortgage financial news, the Postal Service is about to miss another multi-billion dollar payment. Unfortunately it must rely on Congress to help fix it - and they're all out scrambling for their jobs. It can't even cut Saturday deliveries without a vote.
Here's something else that Congress probably won't act on: the clock is ticking on the Mortgage Forgiveness Debt Relief Act - it expires on December 31. The San Francisco Chronicle reports that "Before the housing downturn hit, 'forgiven debt' on home mortgages could be taxed as income. For instance, if your lender lopped $50,000 off what you owed (a type of loan modification called principal reduction), if you short-sold the property for $50,000 less than your mortgage or if your lender foreclosed on a property worth $50,000 less than you owed, the $50,000 would be treated as income, adding up to a potential big bill for state and federal taxes. But with millions of struggling homeowners in such situations, both the Congress and the California Legislature passed bills to exempt forgiven home debt from taxes." Remember that it only applies to the mortgage you originally got to acquire the home or to a refi used to improve the home - no cash out. I guess that anyone thinking of short-selling their homes have a pretty good reason to act on that thought process sooner rather than later.
How about some M&A, investor and lender updates? These are from recent weeks, and will give you a flavor for what is going on out there.
US Bank has announced a new 7-day lock period for all new locks or float to locks taken on or after September 4, 2012 on closed loan files ready for purchase or delivery. Loans that haven't yet expired may be granted an 8-day extension using the original rate sheet 15-day price and expiration date. Loans that have already expired may be granted a 15-day relock where the pricing is the worse of the original rate sheet 15-day lock price or the 15-day price on the date of relock.
Stearns Lending spread the word to clients that, " As a result of the new FHFA mandated G Fee increase, any lock that may require an extension, may be subject to an additional 50bps cost (for 30yr, 25yr, and 20yr amortizations) and 25bps cost (for 15yr, and 10yr amortization terms) in addition to the current relock or extension charges. New locks or Relocks taken BEFORE October 1st AND extended on or after November 1st will be subject to Stearns current rate lock policy, extension policy plus any additional charges incurred."
As of September 7th, Stearns Lending has retired its DU Refi Plus High Balance and DU Refi Plus programs, effective for all amortization types. DU Refi Plus will remain available through the Agency Retained DU Refi Plus programs, which are less restrictive than the generic programs. Existing pipeline loans may be locked under the retired codes until September 21st. If not locked by this date, they must be changed to the applicable Agency Retained program.
New Jersey's Grand Bank announced today it has signed an agreement with Rushmore Loan Management Services, in which Rushmore will purchase the business of Grand Bank's ICON Residential Lenders. Terms of the transaction were not disclosed. We all know California's ICON as a national wholesale mortgage originator and servicer which sources loans through a nationwide network of over 1,400 mortgage brokers. The company is an approved Fannie Mae seller and servicer and Ginnie Mae issuer of mortgage-backed securities, and has a strong FHA and VA niche loan business. The closing of the transaction is subject to regulatory approvals as well as other customary closing conditions, and is expected to close in the fourth quarter of 2012 or the first quarter of 2013.
Kinecta has revised the qualifying rate for 5/1 Jumbo ARM loans. As of September 5th, the rate is either the fully indexed, fully amortizing rate or the note rate plus 2%, whichever is larger. The qualifying rates for 3/1, 7/1, and 10/1 Jumbo ARMs are not impacted.
West Coast wholesaler Pinnacle Capital has added guidance on conforming loans stating that leaseholds on Native American land are not eligible. Guidance on asset documentation requirements and the disaster policy for FHA loans has been updated as well. The 10-year warranty requirements for USDA loans have been changed to indicate that they must be purchased by a USDA-approved company, and the Jumbo loan limit for VA loans has been increased to $1.5 million for borrowers with FICO scores over 700. Superfund site guidance for conforming, FHA, USDA, and VA loans has been amended as well.
In the wake of Hurricane Isaac, M&T Bank is requiring that all properties located in the Louisiana and Mississippi counties indicated by FEMA be re-inspected, provided that their appraisals were completed before August 26, 2012. The inspection should include a photo of the exterior, a certification that the property is free from damage and in the same or better condition than it was when it was first appraised, and commentary on any conditions that may negatively affect its marketability.
Following the USDA's announcement that it would once again be issuing conditional commitments for refinance transactions, Plaza has resumed funding, purchasing, and accepting locks for Rural Housing refinances. Purchase transactions remain unaffected.
As part of its efforts to combat fraud, MSI has tightened its policy on verbal verification of employment for self-employed borrowers. The borrower's business should be verified at least five calendar days prior to the note date through a letter from the CPA or copy of the current business license in addition separate documentation from yellowpages.com, supersearch.com, or searchbug.com. Sources where business owners are permitted to add their own information will not be accepted.
MSI has updated its LP Relief Refinance policy to state that sellers who select Option Two for their appraisal must enter and resubmit the HVE value to LP as an estimated value, which ensures that the final finding discloses the correct LTV. The LP feedback certificate containing the HVE value should then be included in the loan file. Sellers should note that they no longer have the option of using the HVE value to calculate the LTV/TLTV if an appraisal has already been obtained; instead, they are required to use the appraised value, even if it is less favorable.
Sellers in Alabama, Florida, Louisiana, and Mississippi whose loans closed or were delivered to MSI after August 26th must document that the property hasn't been damaged by Hurricane Isaac as per MSI's disaster policy.
ACT Appraisal was added to MSI's list of acceptable AMCs and began receiving new order placement along with the rest of MSI's AMC roster as of August 24, 2012.
Rate-wise, Treasuries opened in New York Thursday morning slightly softer, with traders blaming talk of Chinese stimulus. We saw a little improvement after the weak numbers in the U.S., but never really went anywhere. (For housing, Pending Homes Sales declined 2.6% in August, but we're still nearly 11% above 2011's levels. In fact, the index shows 16 consecutive months of year-over-year increases, and that has translated into a higher number of closed sales.) Lock desks and hedgers were busy, as volumes picked up way above the recent daily averages. Still, the Fed is buying more than that every day. By the end of the day agency MBS prices were worse nearly .5, snapping a long winning streak and the 10-yr closed at 1.64%.
This morning we've had Personal Income for August (expected +.2%, it was +.1%) and Personal Consumption/Spending was +.5% (just as expected). Later we'll have the Chicago PMI for September (expected unchanged) and the University of Michigan survey for September. Early on, rates are little changed, and the 10-yr is now at 1.62% and MBS prices better by about .125.
An amateur group of Islamic film makers have posted a video on YouTube which mocks Christianity and Jesus Christ.
It is believed to be so offensive that St Peter's church in Shrewsbury, England has postponed their tea and cake morning until next Wednesday, and Dorothy Green from Margate has written in to the BBC.
When will the madness end?
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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/09282012-icon-agency-sales-caps-moral.aspx
Ed Sullivan?s Connecticut Country Home for Sale
The iconic television host's former Connecticut weekend home is on the market for $460,000.
Source: http://feedproxy.google.com/~r/ZillowBlog/~3/PyZyn24o8Q8/
Top U.S. Banks Hit With Massive Hacking Attacks
Some of the largest and best-known banks in the country were recently targeted by hacking attacks that crippled their websites, ...
Interview with Dr. Housing Bubble: ?You shouldn?t take on a mortgage that is 3 times your annual household income.?
Today we bring you an interview with Dr. Housing Bubble, whose blog promises to take a critical look at the policies that have created one of the largest asset bubbles ever known to mankind and whose mission is to�provide a candid account of what is going on in today?s housing market. Below, Dr. Housing Bubble [...]
Today?s Mortgage Rates : Real-Time MBS Pricing, October 1, 2012
Real-time mortgage market updates for October 1, 2012. Updates provided by MBSQuoteline, an MBS subscription provider for loan officers.
Click for the complete post : Today’s Mortgage Rates : Real-Time MBS Pricing, October 1, 2012.
Tuesday, October 2, 2012
Today?s Mortgage Rates : Real-Time MBS Pricing, September 27, 2012
Real-time mortgage market updates for September 27, 2012. Updates provided by MBSQuoteline, an MBS subscription provider for loan officers.
Click for the complete post : Today’s Mortgage Rates : Real-Time MBS Pricing, September 27, 2012.
Amid Uncertain Housting Market, Electrolux Invests in Media
Though the U.S. housing market is just beginning to show signs of a recovery, appliance giant Electrolux is already betting big on a turnaround. The Stockholm-based company, which markets brands like Frigidaire, Eureka and Electrolux, plans to proactively market its brands in the coming months, even as the appliance category continues to be soft. For [...]
Source: http://stlhba.hbablog.com/2012/10/01/amid-uncertain-housting-market-electrolux-invests-in-media/
IMF says planned Slovenia reforms can avert bailout
LJUBLJANA (Reuters) - Slovenia can still avoid becoming another euro bailout recipient if the government enforces planned reforms, the International Monetary Fund said on Tuesday. 
Source: http://feeds.reuters.com/~r/news/economy/~3/HOJ1Ratblt0/us-slovenia-imf-idUSBRE8910MS20121002
Today?s Mortgage Rates : Real-Time MBS Pricing, September 26, 2012
Real-time mortgage market updates for September 26, 2012. Updates provided by MBSQuoteline, an MBS subscription provider for loan officers.
Click for the complete post : Today’s Mortgage Rates : Real-Time MBS Pricing, September 26, 2012.
Basel III to Help Big Banks? A Calculation Tool to Show it's Impact; Texas Ratio Helps LO's Think About Bank Health
Even though last Saturday was the equinox, here's the weird thing: five days after the equinox today is the "longest" day of the year! If you're thinking about the sun and the earth, or time, you're barking up the wrong tree...just like statistics, and ways of reducing the deficit, there are different ways of looking at the same thing. In this case, there are a lot of ways to measure how long things are. "Thursday September twenty-seventh" is the longest day of the year! The longest in terms of text, that is: Thursday September twenty-seventh. Give that one to your kids!
As California goes, so goes the nation? We'll see, but Governor Brown signed into law several mortgage-related bills.
I am sitting here wearing my Countrywide golf shirt, drinking out of my Long Beach mug, my mouse sitting on my WAMU mouse pad, a little yellow Greenpoint duck somewhere in the drawer. (My Taylor Bean & Whittaker bourbon is hidden, otherwise my dog gets into it.) And now my Smith Barney t-shirt has made the cut! Morgan Stanley has officially dropped the Smith Barney name from its wealth management business, making the former Citigroup brokerage the latest name casualty. Morgan Stanley Smith Barney (kind of like that Bank of America Merrill Lynch name that is still with us) has 17,000 financial advisers in 740 locations, will now be known as "Morgan Stanley Wealth Management." Smith Barney's been around since the 1800's - a little longer than Household Finance (pencil holder) or First Magnus (cap).
"I am hearing that what LO's are busy with is refinancing folks they refinanced 6 months ago. True?" You bet it is true. Lots of folks that didn't qualify then don't qualify now, thus the hope for property values to increase so that equity can increase, slowly expanding the pool of eligible borrowers to...refinance. Rates are certainly cooperating. QE3 gave the mortgage market a shot in the arm as $40B per month in Fed purchases has helped to boost MBS prices. However, this policy change, in addition to others, is certainly creating some turmoil in the "specified pool" market. (That is the market where the agencies or aggregators slice and dice pools of loans, assembling groups of loans with certain characteristics that investors "specify" and for which they'll pay a higher price.) Higher prices/lower rates will likely increase prepay speeds but the immensity of Fed buying can also cause heartburn. When the Fed targets a coupon for purchases, paper can become scarce and this typically results in higher roll costs if a security hedge isn't filled and has to be moved to the next month. The higher cost or "specialness" of the roll translates into MBS becoming more expensive to use as a hedge. Consequently, traders, who typically use TBA trades to hedge their position, are being forced to consider other alternatives, including treasuries and swaps.
Why should anyone care about any of this? Specified pay-ups for these coupons will be lower. Pools of conventional loans of less than $85k, for example, were priced higher than "normal" production by 1.5 points at one point. Now, however, $85k max Fannie 30-yr 3.5's are now "only" 1.25 better. Meanwhile, Fannie and Freddie's recently announced an increase in guaranty fees will likely have the inverse impact of QE3 and will be passed along to borrowers in the form of higher costs/rates, thus slowing speeds. How's a Capital Markets guy supposed to keep up?
While the industry deals with QE Unlimited volatility, now is not the time to forget Basel III and its proposed restrictions on servicing and capital. The OCC and FDIC announced the availability of a regulatory capital estimation tool to help community banking organizations and other interested parties evaluate recently published regulatory capital proposals. The tool will assist these organizations in estimating the potential effects on their capital ratios of the agencies' Basel III Notice of Proposed Rulemaking (NPR) and Standardized Approach NPR. By the way, the comment period on current regulatory capital standards ends on October 22. The Basel III NPR focuses primarily on strengthening the level of regulatory capital requirements and improving the quality of capital. The Standardized Approach NPR proposes a number of enhancements to the risk-sensitivity of the agencies' capital standards. The tool is intended to help institutions estimate the potential effect the proposals could have on their capital ratios. It should not be relied on as an indicator of an institution's actual regulatory capital ratios and is not part of the NPRs nor of any final rule(s) that the agencies may adopt. The estimation tools are available for banks, savings associations and their holding companies. And if you just can't get enough, here is the link to the Basel III NPR and the Standardized Approach NPR.
A story in the Financial Times reports, "Rules aimed at curbing financial sector excess could drive more business to the biggest banks and make it even more difficult to allow the world's largest lenders to fail, the International Monetary Fund has warned. The IMF argued in a paper released on Tuesday that the Basel III rules - global regulators' response to the financial crisis - would exacerbate the too-big-to-fail problem, where governments were forced to rescue financial institutions deemed so large, or interconnected, that their collapse would wreak havoc on the entire financial system." "Big banking groups with advantages of scale may be better able to absorb the costs of the regulations; as a result, they may become even more prominent in certain markets, making these markets more concentrated," IMF analysts wrote in the chapter of its latest Global Financial Stability Report. The IMF cautioned that the rules were also raising the incentives to develop new products to circumvent the framework. There was also a 'high chance' that the framework would push riskier activity into less regulated parts of the financial system." Has anyone seen my SISA rate sheet?
"I am a retail LO in Georgia, thinking about throwing in the towel and going to work for a bank. A bank has offered me a spot, but then a friend told me that the bank's 'Texas Ratio' is above 100. Does that matter for a lowly LO?" Sure it does. The Texas ratio is a measure of a bank's credit troubles: the higher the Texas ratio, the more severe the credit troubles. The actual ratio is calculated by dividing the value of the lender's non-performing assets (Non-performing loans + Real Estate Owned) by the sum of its tangible common equity capital and loan loss reserves. The history of recent bank failures suggests that any bank above 100 has a much higher probability of closing down. Per Pacific Coast Bankers, there are "248 banks remaining with a TR greater than 100% scattered across 39 different states. Overall, given there were 6,639 institutions ("banks") in the country, this group represents about 3.7% of the total. That is a strong improvement from the peak when it was much higher. Broken down by state, GA still has the most strained banks by this measure at 49, followed by IL (31) and FL (30). Taken as a group, these three states alone represent about 44% of all the troubled banks in the country." At this point, of all of Georgia's banks, 21% of them are strained with a TR of 100% or more, followed by Washington DC with 20%. For a list and more information visit here.
The M&A, MI, and investor updates have been a deluge in September. As always, it is best to read the actual bulletin, and "good luck" if you're looking for less documentation, lower net worth requirements, or easier processing.
Bank mergers continue. In the Pacific Northwest, Columbia Banking System and West Coast Bancorp (both are publicly held) jointly announced that the companies have agreed to combine their two leading Pacific Northwest community bank franchises in a transaction valued at approximately $506 million. The combined company will have approximately $7.2 billion in assets with over 150 branches throughout Washington and Oregon and will rank number 1 in deposit market share amongst commercial community banks in the combined states of Washington and Oregon.
"Republic Mortgage Insurance Company ("RMIC") has received a Notice of Hearing from the North Carolina Department of Insurance ("NCDOI"). The Hearing is scheduled for October 16, 2012, and its purpose is to enable the NCDOI and stakeholders to consider a revised Corrective Plan ("the Plan") submitted by RMIC on September 14, 2012, as required by the NCDOI Commissioner's Summary Order ("the Order") dated January 19, 2012. The Notice of Hearing and related information has been posted on the Company's website at www.rmic.com."
GMAC has made a few alterations to its Lock Loan Flow interface on the Correspondent Funding website. The Borrower Name, Borrower SSN, Co-Borrower Name, Co-Borrower SSN, and Street Address fields are no longer available when locking a floating loan; any corrections to these fields should be made by contacting the GMAC Registration Desk. Once a floating loan has been submitted for underwriting, all data fields will become inaccessible apart from the lock window and commitment type. To make any corrections or updates after the loan has been received and/or the underwriting team has made a decision, clients should, again, contact the GMAC Registration Desk. Clients are reminded that it is their responsibility to notify the underwriter of any data changes following a loan's submission.
Fifth Third reminded clients that, if title was held by an "ineligible entity" in either the last 24 months or in cases where it has been less than 24 months since the borrower purchased the property, refinance transactions are not permitted. "Any entity other than a natural person, qualifying Inter Vivos Trust or Illinois Land Trust" is considered to be an ineligible entity.
The Fifth Third Interested Party Transaction Policy has been updated such that an Interested Party is now defined as a family member of an employee who works for the entity originating the loan or someone who both works for and is seeking financing from the originating entity. Children, parents, grandparents, spouses, foster children, brothers, sisters, stepsiblings, uncles, and aunts are all considered to be "family." All such transactions will be reviewed to ascertain that the relationship has not compromised the transaction. A 4506T must be completed to verify the income, and sellers are required to document the 1008 and include commentary. These loans should be submitted through pre-close or post-close channels and flagged as being an interested party transaction. Failure to do so will result in the loan being referred to the Fifth Third Risk department for audit.
And verbiage concerning lender-paid broker compensation in the Fifth Third Broker cert. form has been updated, which is now available on the Wholesale Connect site. The updated form replaces the old one with immediate effect. The Principal Curtailment matrix has also been updated and is available on the product manual page of the site.
Enough investor stuff! Although rates were nudged a little higher yesterday, how high can mortgage rates really go with the Fed buying twice the average daily production? Prices started out well, but then moved back nearly to unchanged from Tuesday's close resulting in a few price changes. For news we learned that New Home sales declined for August.
Today we've had quite a bit of information. The weekly numbers for Initial Claims showed +359k, better than expected. Durable Goods for August fell by about 13%; it is always volatile but this was quite a drop! And Real GDP for the 2nd quarter was surprising at only +1.3%, much lower than expected. Our economy is heading in the right direction, but very slowly. Later the Treasury closes out the monthly note supply with the $29 billion 7-yr note auction. In the early going the 10-yr yield, which closed Wednesday around 1.65%, is little changed (1.64%), while agency MBS prices are down.
I don't speak or write Chinese, but you don't have to - in 60 seconds you'll learn that this is a pretty clever way to separate an egg.
Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/09272012-texas-ratio-basel-iii-fdic.aspx
20% of Consumers Get Different Credit Scores Than Lenders
When consumers seek a line of credit, they may be fairly confident that they know where they stand with regard ...
Debt Consolidation vs. Credit Counseling: What?s the Difference?
When escaping the country and hiding from the law are your best ideas for dealing with debt, you know you’re ...
Tatum O?Neal Re-Lists Manhattan Apartment for $1.645M
Tatum O’Neal, who entered rehab again in August after a drug arrest in June, has once again listed her New York City condominium for sale. The [...]
Source: http://feedproxy.google.com/~r/ZillowBlog/~3/andBRWqvjbY/
Venture capital for medical technology harder to come by: report
CHICAGO (Reuters) - Venture capitalists, long the lifeblood of medical technology firms, are growing cautious on the sector after seeing their returns squeezed in a time of growing cost pressures for... 
Source: http://feeds.reuters.com/~r/news/wealth/~3/v_tciZ4hIPs/us-medtech-investing-idUSBRE89104D20121002
Pricing My Home Right
Pricing a home correctly is defined as pricing a home in a price range of comparable Phoenix Arizona Homes sold in the last 3 to 6 months. A home priced more than 5% under the lowest sale may be considered under priced. A home priced more than 5% above the highest sale would be considered [...]
Source: http://www.ThompsonGroupAZ.com/pricing-my-home-right/
CAR Inaugural Gala ? 9.13.12
CAR Inaugural Gala – 9.13.12 was originally published on Chicago Agent Magazine, the leading source for news and perspective for real estate professionals in the Chicagoland area.
The Chicago Association of Realtors hosted its 129th Inaugural Gala on Thursday, Sept. 13 at Chicago?s InterContinental Hotel-Magnificent Mile. The Inaugural Gala is the annual installation and awards ceremony for incoming CAR leadership and preeminent leaders in Chicago real estate, including the newest member of the CAR Hall of Fame and the 2012 Realtor of the Year. The evening attracted nearly 600 participants.
CAR Inaugural Gala – 9.13.12 was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.
Source: http://feedproxy.google.com/~r/chicagoagentmagazine/news/~3/_km2tWsUWf0/
$1 Billion Realogy IPO Shows Increasing Confidence in Housing
$1 Billion Realogy IPO Shows Increasing Confidence in Housing was originally published on Chicago Agent Magazine, the leading source for news and perspective for real estate professionals in the Chicagoland area.
By Peter Ricci Realogy, the real estate services company that owns Coldwell Banker and Century 21, is planning on going public late next week, and its IPO is expected to raise more than $1 billion from investors, according to numerous reports on the offering. In what would be the third-largest initial public offering in the U.S. in 2012, the Realogy IPO will involve 40 million shares of stock priced between $23 and $27 each; should Realogy raise the anticipated $1.08 billion, the company would be valued at $3.51 billion. Realogy IPO ? �Oh ...
$1 Billion Realogy IPO Shows Increasing Confidence in Housing was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.
Source: http://feedproxy.google.com/~r/chicagoagentmagazine/news/~3/nWtk4K92tSs/
Monday, October 1, 2012
Residential Construction Spending Up 0.9 Percent in August
Residential Construction Spending Up 0.9 Percent in August was originally published on Chicago Agent Magazine, the leading source for news and perspective for real estate professionals in the Chicagoland area.
By Peter Ricci Residential construction spending increased 0.9 percent from July to August to a seasonally adjusted annual rate of�$273.5 billion, according to new numbers out today from the U.S. Census Bureau. Overall, private construction spending was down by 0.5 percent from July to $562.2 billion, and that decline was probably because of nonresidential construction, which declined 1.7 percent from July to $288.7 billion. Residential Construction Spending ? The Bright Spot In fact, residential construction spending was the sole bright spot in the Census Bureau’s report, with all the other sectors of�construction�spending showing declines ...
Residential Construction Spending Up 0.9 Percent in August was originally published on Chicago Agent Magazine - For the well-informed real estate professional, the leading source for news and perspective for real estate professionals in the Chicagoland area.
Source: http://feedproxy.google.com/~r/chicagoagentmagazine/news/~3/c6x7FIM82SM/
VA Streamline Refinance: The VA IRRRL Mortgage Program (Plus Rates)
Complete review of the VA mortgage loan program, including a Q&A, information on the VA Streamline Refinance (IRRRL) program, and mortgage rates.
Click for the complete post : VA Streamline Refinance: The VA IRRRL Mortgage Program (Plus Rates).
Source: http://feedproxy.google.com/~r/TheMortgageReports/~3/kk9OHTe22bY/va-streamline-refinance
Bernanke tackles critics of Fed's growth push
INDIANAPOLIS (Reuters) - Federal Reserve Chairman Ben Bernanke on Monday delivered a broad defense of the U.S. central bank's controversial bond-buying stimulus plan, saying it is necessary to... 
Source: http://feeds.reuters.com/~r/news/economy/~3/-cDTwyke06c/us-usa-fed-idUSBRE89010D20121001
5 lesser-known benefits of homeowners insurance
Below is a post by Jonathan Slappey, first appearing on our partner site Quicken/Zing:
In the event of an environmental disaster or an accident on your property, homeowners insurance is a safety net that can protect your finances from potential depletion.
While homeowners insurance typically includes liability coverage and property insurance, damages to your home due to [...]
In the event of an environmental disaster or an accident on your property, homeowners insurance is a safety net that can protect your finances from potential depletion.
While homeowners insurance typically includes liability coverage and property insurance, damages to your home due to [...]
UPDATE 3-JPMorgan investment official Tse to leave - memo
NEW YORK, Oct 1 (Reuters) - Another top executive at the
JPMorgan Chase & Co unit that lost $5.8 billion on
derivatives trades this year is leaving the company. 
JPMorgan Chase & Co unit that lost $5.8 billion on
derivatives trades this year is leaving the company.
Simple Real Estate Definitions : Home Inspections
A home inspection is a thorough, top-to-bottom check-up of a home's structure and systems.
No related posts.
No related posts.
Source: http://www.floridamortgageblogger.com/2012/06/06/home-inspections/
Mortgage Pre-Approval is Still Worth Getting
The majority of home-buyers conduct their house-shopping before obtaining financing. After all, how can you obtain a loan for a property that you have not yet purchased?! What if I told you, however, that you could achieve a loan guarantee from a prospective lender at the beginning of the process, such that you could close [...]
Source: http://news.mortgagecalculator.org/mortgage-pre-approval-is-still-worth-getting/
Mortgage Rates Hit Record Lows Again. Yawn.
Once again, mortgage rates fell to a record low according to Freddie Mac’s Primary Mortgage Market Survey. �Long-term borrowing rates have been trending downward for the past several months as the country’s economic outlook deteriorates. The average rate on a 30-year fixed rate mortgage fell from 3.56% to 3.53%. �The rate for 15 year fixed [...]
Source: http://www.totalmortgage.com/blog/mortgage-rates/mortgage-rates-hit-record-lows-again-yawn/17678
Who Wins, Loses on Record Low Mortgage Rates
There’s never been a better time to get a mortgage. Ever. The average interest rate on a 30-year mortgage dropped ...
Trends in Subprime Collateral and Homeownership; Ready for Fannie DU 9.0?
I'll be standing in line Saturday in Austin, TX to enter the UT football game. For something non-mortgage related, but interesting from a human nature perspective, no one likes standing in lines. But there are experts on them, and the psychology of standing there.
I have been contacted by a metropolitan bank, wishing to remain confidential, looking for a mortgage originator with the ability to do private label loan originations, and preferably servicing too, on its behalf. The anticipated volume is $150-200 million per year, and very high standards of policies and procedures are expected. Leads are 100% retail and generated through bank branches and banking relationships. If you are the CEO of a company who is interested in offering these services, please email me at rchrisman@robchrisman .com.
On the job front, American Capital Corporation is searching for Sales Managers and LO's in California, Oregon, Colorado, Washington and Hawaii. They are also looking for Underwriters in Northern and Southern California. ACC has been around since 1994 and is a well-capitalized privately held mortgage banker doing over $1 billion annually, offering a "full product mix." The company already does both retail and TPO originations (wholesale is the ACBN channel) in California, New Mexico, Colorado, Hawaii and Oregon, and will be soon expanding into Idaho, Tennessee, Utah, and Montana. The company has some other good bells & whistles: e-mail Allen Cravello at acravello@amcapmortgage .com for more information or to send a resume.
Why are investors snapping up bonds backed by subprime mortgages? After all, not that credit rating agency' moves carry the same weight they used to, but S&P downgraded 187 AAA jumbo RMBS classes, noting higher re-defaults on previously cured loans and longer timelines required to liquidate nonperforming mortgages. These are pre-crisis jumbo residential mortgage-backed securities previously rated AAA. "The downgrades were primarily driven by increased losses due to an increase in our default and loss multiples at higher rating levels," S&P said, and found higher re-defaults on previously cured loans and longer timelines required to liquidate nonperforming mortgages. Some of those subprime securities are well priced!
But property values are not falling precipitously, so the collateral is safer. In fact, CoreLogic reported another strong month-over-month U.S. home price appreciation of over 16% (non-seasonally adjusted annualized rate) for July 2012. And of course the Case-Shiller Index, with its two-month lag, is showing improvement. CoreLogic points out that "Non-distressed home prices grew at a pace of 22.9% annualized. The YOY price growth through July was 3.8%, the biggest increase since August 2006. Year to date, CoreLogic shows home prices are up 8.1% through July, or 14.3% on an annualized basis."
Realtors and analysts know that, especially in the Western U.S., two major factors driving the strength in home price indices have been the drop in inventories and the decline in the share of distressed sales share relative to expectations. Moreover, the increased use of short sales over REO sales as the form distressed sale is providing further support to home prices. Have prices bottomed? Perhaps, but enough smart folks think they have, and this has helped alleviate fears of further "collateral damage" in subprime securities, and is thus helping demand.
How about home ownership in general - is it now in "stronger hands"? The real homeownership rate, defined as the percentage of households who own a home and are not 90 days or more delinquent on their mortgage, has fallen to 62.1%, the lowest level in nearly 50 years. (The Census Bureau's 65.5% homeownership rate overstates the real level of homeownership in the country since it counts all 3.8 million homeowners who are 90-plus days delinquent on their mortgage as homeowners.) Historically, the spread between the published and real homeownership rates has been slightly below 1%, even in a strong economic environment there is always some level of delinquency. But as we all know, the spread has widened from 1% to 3% due to the economic downturn, and understaffing at the banks who cannot deal with the huge inventory of delinquent mortgages and the complications of loan modification or foreclosure with so many parties involved. We also have lenders treading very cautiously, fearing fees, sanctions and even jail time (in Nevada) for not properly documenting the foreclosure process, and still some confusion from dealing with many Federal government attempts to intervene in the process like HARP and HAMP.
But a recent survey of 20,000 consumers conducted by John Burns Real Estate Consulting, and many surveys by others, confirms that the American dream of homeownership is still strong. And, believe it or not, time goes fast, so in states where the foreclosure process has moved more smoothly than others (such as Arizona and Texas), foreclosed homeowners are returning as homebuyers after the three-year waiting period required by most mortgage programs.
Remember that the application of Basel to banks will significantly increase the risk weighting for mortgages designed for first time homebuyers - that won't help. Declining home ownership can constrain economic growth and mortgage lending, including declines in some home equity portfolios. On the positive side, it should create long-term growth opportunities in apartment, credit card, and auto lending - but not many of those folks read this commentary.
What about young folks - where are graduates taking their underwater basket-weaving degrees? Though they're in deeper debt than ever before, new college graduates still need to live somewhere. Conventional wisdom holds that these bright young minds flock to centers of influence like New York, Boston, and San Francisco, all known for being "cool" cities with high concentrations of "smart" people. Census data from 2000-2010 suggests otherwise, however: Las Vegas, of all places, recorded growth of 122,304 recent graduates, which represents a staggering 78.4% increase. Rounding out the top five metropolitan areas playing host to new graduates were Riverside-San Bernardino, CA; Raleigh-Durham, NC; Austin, TX; and Charlotte, NC-hardly perceived to be hotbeds of commerce and culture. In contrast, New York ranked 38th in terms of new graduate growth, while San Francisco ranked 48th, just above Detroit.
It's no secret that it can be cripplingly expensive to live in one of US's major urban centers, especially for recent graduates in a weakened economy. This demographic is more likely to settle down in places they can actually afford to live, and companies looking for skilled labor are realizing that their recruiting options are no longer limited to the primary coastal cities and Chicago. As an added bonus, it's cheaper for companies to operate in second- or third-tier cities with less expensive commercial real estate. As recent graduates' and companies' presence in these cities grows, they tend to develop culturally, making them more enticing places to live and further fuelling growth.
From a regional perspective, the Sun Belt cities have experienced the greatest development, with metropolitan areas like San Antonio, Orlando, Nashville, and Phoenix all recording recent grad-growth of over 40%. Rust Belt cities like Cleveland, Buffalo, and Detroit, despite the attraction of low living costs, all recorded growth of 20% and under, nearly 10% below the national average. New graduates, it would appear, are as averse to northern winters as the rest of the aging population.
How about some recent Fannie Mae and Fannie-related updates?
Fannie Mae announced a week or so ago that 22 of its servicers had produced results in its Servicer Total Achievement and Rewards (STAR) Program for the first half of 2012 that put them at or above the median levels for others in their peer group. STAR was created in 2011 to establish servicing standards and recognize Fannie Mae servicers in their overall performance, customer service, and foreclosure prevention efforts. The program measures servicers across key operational and performance areas relative to their peers and acknowledges their achievement through star designations. Servicers are divided into three peer group based on the size of their servicing portfolio and their performance is measured against other servicers in their peer group. Nineteen servicers achieved Three Star status for their performance in 2011. In announcing the results Fannie Mae made special mention of Fifth Third Bank's performance which came closest of the servicers enrolled in the program to reaching the fourth star for its 2011 performance.
Wendy Barnett with DataQuick reports that, "Fannie Mae has no bulletin to be found, but has been notifying clients in person and by phone that Custom DU (CDU) will no longer accept new submissions after September 30, 2012 and resubmissions after December 31, 2012. This was a tool that used the DU engine to also provide decisioning on non-Fannie Mae loans. DataQuick has been providing a solution for several lenders, with our Mindbox - Art Enterprise component framework for Pre-Qualification, Product, Pricing and Automated Underwriting. Your readers can contact me at wbarnett@dataquick .com.
Fannie Mae plans to provide propriety feedback on appraisals submitted to the Uniform Collateral Data Portal that will address the quality of the data within the appraisal as per Fannie policy and delivery requirements. The feedback will be available in the form of opt-in monthly reports beginning in October 2012 and via the UCDP as of January 2013.
Fannie has revised its policies on regarding the transfer of document custody such that both the current and new document custodians must provide at least 30 days' written notice in cases where the servicer remains the same. Fitch, Inc. has been removed from the list of financial rating firms that may be used to satisfy the document custodian's eligibility requirements; clients should use either IDC Financial Publishing or Kroll, the latter of which was previously known as LACE.
Fannie Mae has relaxed its guidelines on custodial accounts such that servicers are no longer required to provide the GSE with notification of a depository's ineligible status, ask for approval to hold custodial funds in a depository that was previously ineligible, or request the implementation of a different remedy for a depository that is currently ineligible. Under the previous policy, servicers were permitted to commingle T&I escrow funds with all remittance types in the same custodial accounts, but the updated policy allows servicers to maintain multiple T&I custodial accounts for the purposes of depositing hazard insurance loss drafts, partial payments, and/or unapplied funds. Servicers should identify whether the custodial account is a replacement for an existing account using the P&I and T&I Letter of Authorization forms (Fannie Form 1013 and 1014), which have been updated accordingly and can be found on www.efanniemae.com.
Fannie is set to release DU Version 9.0 over the weekend of October 20th. As there is a mix of changes that can be viewed as a negative or positive, but overall they say approvals will be consistent with Version 8.3. Some of the highlights are reportedly "Limited Review for Condominiums is going to be maxed at 80% (currently at 90%), Retirement of Expanded Approvals (with the exception of DU Refi Plus), Maximum LTV/CLTV for ARM Purchases and Rate/Term will be reduced for 97% to 90%, All other ARM programs will receive a 10% reduction in the maximum LTV/CLTV, Two-Unit Purchases INCREASED from 80 to 85%LTV, and Self Employed Borrowers will be required to produce TWO years of 1040's (currently allows for 1 year). Put another way, Fannie Mae tightened some underwriting standards based on performance data. In addition, the agency will end its flexible FannieNeighbors program supporting underserved areas.
Fannie will be hosting a webinar on Version 9.0 of Desktop Underwriter that will cover the updates to the system's credit risk assessment and eligibility requirements on October 20th. Interested parties can register here.
Wednesday was a ho-hum day, which is fine. Investors are keenly interested in the fact that residential MBS trading volumes are sliding lower, as echoed by the MBA application figures. Perhaps refi's are indeed slowing down, and not being replaced with purchases? U.S. markets seemed to fret more about today's ECB monetary policy decision. The U.S. 10-yr closed at 1.60%.
It's a whole new ballgame today, however. We've had the ECB announcement, and the ADP numbers (+201k - stronger than expected) which are usually of questionable validity for tomorrow's official payroll numbers. (NFP is projected at +125k with the unemployment rate unchanged at 8.3%.) We've also had Initial Claims (377k down to 365k, lower than expected), while 10AM EST offers up Non-Manufacturing ISM for August, projected little changed at 52.5 versus 52.6, and the Treasury's announcement at 11AM EST of next week's auctions of 3's, 10's, and 30's. In the early going rates are higher with the 10-yr at 1.65% and MBS prices worse .125-.250.
The following list of phrases and their definitions might help you understand the mysterious languages of science and medicine. These special phrases are also applicable to anyone working on a Ph.D. dissertation or academic paper anywhere. (Part 1 of 3)
"It has long been known" = I didn't look up the original reference.
"A definite trend is evident" = These data are practically meaningless.
"While it has not been possible to provide definite answers to the questions" = An unsuccessful experiment, but I still hope to get it published.
"Three of the samples were chosen for detailed study" = The other results didn't make any sense.
"Typical results are shown" = This is the prettiest graph.
"These results will be in a subsequent report" = I might get around to this sometime, if pushed/funded.
"In my experience" = once.
"In case after case" = twice.
Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/09062012-subprime-bonds-outsourcing.aspx
UPDATE 1-First Reserve sells majority interest in Acteon to KKR
LONDON, Oct 1 (Reuters) - Private equity group KKR
has bought oil and gas services group Acteon from rival First
Reserve as it beefs up its investment in energy and
infrastructure businesses. 
has bought oil and gas services group Acteon from rival First
Reserve as it beefs up its investment in energy and
infrastructure businesses.
Fed won't "enable" irresponsible fiscal policy-Bullard
WASHINGTON (Reuters) - The Federal Reserve will not "enable" bad fiscal policy by deliberately holding down borrowing costs to allow the U.S. government to go on a spending binge, a senior Federal... 
Source: http://feeds.reuters.com/~r/news/economy/~3/7WRSSU4WW3U/us-usa-fed-bullard-idUSBRE88Q1MA20120927
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