Thursday, April 17, 2008 - COOK JOINS LENDER LEAD SOLUTIONS’ REVERSE MORTGAGE TEAM

Senior Lending Network, a reverse mortgage wholesale lender and a division of KBC Bank, recently named David Cook as vice president of sales for the Western Wholesale Division.

Cook’s responsibilities include overseeing customer relationships for the western region of the United States.

Prior to joining Lender Lead Solutions, Cook was regional vice president of Financial Freedom, managing the central region.

Cook has more than 40 years experience in the mortgage industry and began his career as a loan officer in Irving, Texas.

Cook has been active on the committees for the Austin Mortgage Bankers Association and Texas Mortgage Bankers Association. He is also a member of the Texas Association of Realtors and an MCE Instructor approved by the Texas Real Estate Commission.

David can be reached at 512-267-6790 or at dcook@LenderLeadSolutions.com.

David is the author and educator for
our Reverse Mortgage Fundamentals Seminar. 
Please see our course calendar online for scheduling information.

Wednesday, April 16, 2008 - FHA Modernization and Loan Limits

The FHA Modernization Act has now passed both the Senate and House.  Now they are working on merging the two different versions of the bill before it can be put before the President for signature.

It has not been made clear whether or not the Surety Bond program, as was being previously promoted to bring in Mortgage Brokers into the origination business, will pass or what the dollar amount of the bond will be.  The program would allow Brokers to get a Surety Bond in lieu of high net worth requirements and expensive annual HUD audits.

In the meantime, the HUD loan limits have increased through December 31, 2008 to allow more people to borrow via the FHA loan program.

See the attachment for specific TX guidelines.

Monday, March 17, 2008 - Subprime - American Pie Song

Sung to the tune of Don McLean's "American Pie"

Long, long time ago...
I can still remember
How that yield spread made me smile.
And I knew if I had my chance
Those mo-hos I could finance
And I could pay my bills for a while.

But February made me shiver
With every good faith I'd deliver.
Bad news on my e-mail;
I just lost one more deal.

I can't remember if I cried
When I saw the Fremont slide
But something touched me deep inside
The day the Subprime died.

So bye-bye, BC money supply.
Sent my package to four lenders
But they all asked me why.
And good old boys were on a crack induced high
Singin', "This'll be the day the loans die, This'll be the day the loans die."

Did you write some BC loans,
Did you blow bucks on the iPhone?,
Did that nut Cramer tell you so?
Do you believe in rate control,
Can FHA save your borrower's soul,
Why is underwriting today so damn slow?
 
Well, I know you'll have to cut those fees
And you're wondering who has
moved your cheese.
Bernarke's on the news.
You can't afford the MBA dues.
 
I was a semi-rich middle-aged broncin' buck
With a master plan and a lot of pluck,
But I knew I was out of luck
The day the Subprime died.

So bye-bye, BC money supply.
Sent my package to four lenders
But they all asked me why.
And good old boys were on a crack induced high
Singin', "This'll be the day the loans die."

And the three that I admire most, Fannie, Freddie and Indy's ghost....caught the last train for the coast...the Day the Subprime died.

Monday, February 11, 2008 - NAMB PRESIDENT GUEST SPEAKER AND STUDENT

Harry Dinham, President of NAMB, the National Association of Mortgage Brokers from 2006-2007, was the Guest Speaker and Student at Alliance Academy, Dallas Campus.

Mr. Dinham, a seasoned Mortgage Broker in Texas, attended the 2 day Compliance Course for the 15 hrs he needed to renew his license. He was the President of TAMB, the Texas Association of Mortgage Brokers from 1999 - 2000, the year the law was written and passed requiring a Residential Mortgage License.

Speaking as President of NAMB, Mr. Dinham reveals his experience this year by sharing with the class a current Mortgage Market update, his testimony before Senate and Regulations in Washington D.C. and his view of changes being proposed.

President Dinham complimented Alliance Academy by saying, “I want to thank you for all that you do to help people better understand our industry. In today’s market it is a very hard job to keep up with all the changes that take place almost daily and your group does a great job.”

At the completion of his 2 day class, Harry turned to me on the way out and said, “Jerry, you’re 100%. I’ve taken all my required 15 hrs of CE from you.”

Thank you, NAMB President Harry Dinham, for your outstanding contribution of time, talent, experience, and personal sacrifice for the benefit of the Mortgage Professionals nation wide.

Thursday, June 7, 2007 - Down Payment Assistance Companies Closing as Predicted

Saturday, May 5, 2007 - Fannie Mae – DU Changes

Beginning May 19, 2007 you will see some big changes to Fannie Mae’s Desktop Underwriting (DU) system.

CREDIT STANDARDS MODIFIED FOR HIGH-RISK LOANS

The credit standards for loans underwritten with the assistance of DU will be modified for all loans that have considerable layering of risk (i.e. high CLTV where the borrowers have had significant credit problems in the past).  As a result of this modification, certain high-risk loans that previously would have received an Approve, Refer, or EA-I, EA-II, or EA-III recommendation may now receive a more conservative recommendation.

COLLECTION PAYOFF POLICY MODIFIED FOR CERTAIN DU LOANS

Paying off collection accounts can be a challenge for borrowers with less-than-perfect credit.  Therefore, we are changing our policy for one-unit, owner-occupied loans underwritten with the assistance of DU so that borrowers will NOT be required to pay off outstanding collections – regardless of the amount – provided the collection will not threaten Fannie Mae’s first-lien position.

Note:  Although borrowers will not be required to pay off outstanding collections, DU will continue to consider the presence of collections in its risk assessment.

Thursday, January 18, 2007 - Credit Report Fees Increasing Soon

There is an upcoming policy change affects two major credit reporting agencies that are passing on fees for reissuing credit reports.  Effective January 1, 2007, both Equifax and Experian will begin charging all credit resellers a fee each time a credit report is reissued. 

UPDATE:  Experian has announced a new start date for the reissue fee of February 1, 2007 and Equifax announced a new start date of April 1, 2007. 

• Reissue fees will vary from approximately $0.85 to $3.80 depending upon the credit agency, credit reseller and type of report (individual vs. joint).
• TransUnion has not announced a reissue fee policy at this time (12/20/06).

A "reissued" credit report can be described by the following: 

• When a credit report re-pull is requested outside of your office or your Loan Origination System (LOS), it indicates another lending institution is ordering a re-pull.
• When a credit report is pulled through your LOS and then later re-pulled into an Automated Underwriting System (AUS). Note: Freddie Mac's LP and Fannie Mae's DU are excluded from this rule.  
• If a credit report is pulled into your own LOS and then later re-pulled into another lending institute's LOS.

Again, this is an industry-wide policy change and you should discuss the effects on your credit report billing directly with your credit provider.

Monday, January 1, 2007 - New Tax Deduction Will Make Housing More Affordable

Borrowers closing loans to purchase homes in 2007 who have annual household incomes of $100, 000 or less will be able to get a low down payment mortgage and deduct the full cost of their mortgage insurance premiums on their federal tax return.  Make up to $110,000 and you'll be permitted to deduct part of your mortgage insurance.  Any more than that and, unfortunately, you're out of luck on this one.

Unlike a mortgage, which you'll probably pay for decades, private mortgage insurance can come to a relatively quick end.  You can usually cancel it when you have at least 20% equity in the value of your home.

Remember: The mortgage insurance contract must be issued in 2007, and currently only 2007, unless they extend it.

Myths and Facts About "Piggyback" Loans

Some loan originators have been promoting "split" loan structures such as 80-10-10 loans where the home buyer puts 10 percent down, borrows another 10 percent through a second mortgage (with a higher interest rate) and finances 80 percent through a conventional mortgage. For many typical home buyers, a single mortgage with cancelable private mortgage insurance (PrivateMI) makes more sense than 80-10-10 loan deals.

Following are some myths and facts about 80-10-10 loans:

Myth: An 80-10-10 loan is a better financing option for home buyers than a single loan with PrivateMI.

Fact: For many home buyers, a single mortgage with PrivateMI makes more sense than so-called "piggyback" loans. PrivateMI enables home buyers to put down as little as 3 percent and even less for qualified borrowers, while an 80-10-10 structure requires a 10 percent down payment. Once enough equity is achieved along with a good payment history, PrivateMI can be canceled.

Myth: 80-10-10 loans are less costly than a loan with PrivateMI, because homeowners do not have to pay PrivateMI premiums.

Fact: PrivateMI generally costs less over the life of the loan. When comparing costs between a single mortgage loan with PrivateMI versus an 80-10-10, the loan with PrivateMI typically results in lower monthly payments and lower life-of-loan costs. When cancellation is factored in, the savings are even greater.

Fact: 80-10-10 loans often have balloon payments which cloud the financial horizon. While originators of 80-10-10s typically amortize the second "10" over 30 years to minimize monthly costs, they "call" the mortgage after 5, 10 or 15 years. This results in a balloon payment that most borrowers will have to pay either by tapping their home equity or by obtaining a new loan, often at less favorable terms.

Myth: 80-10-10 loans are a good financial choice because the interest on both loans is tax deductible.

Fact: Home equity and family wealth grow faster with PrivateMI. Equity accrues faster using a loan with PrivateMI than with an 80-10-10 since more of each monthly payment goes toward reducing the principal balance (due to lower interest costs). 80-10-10s create a second lien at origination, meaning that borrowers will find it more difficult to tap their home equity for other things such as college tuition, furniture or home improvements.

Furthermore, payments on the second mortgage do not stop until the loan is paid in full, while PrivateMI payments can be canceled when enough equity is accrued. Borrowers also may receive a refund of PrivateMI premiums, depending on the payment plan selected at origination.

Myth: Homeowners can pay lower interest using an adjustable rate 80-10-10 loan.

Fact: A single mortgage loan with PrivateMI is more predictable than a piggyback loan with an adjustable rate. Many 80-10-10 structures use introductory adjustable interest rates to keep down costs. However, when interest rates rise, homeowners find that their total monthly mortgage payment increases as well. In contrast, a single mortgage loan with PrivateMI represents a fixed cost.

Friday, December 22, 2006 - 30-Year Rates Still Climbing

Contra Costa Times (CA) (12/22/06); Aversa, Jeannine

After a month-long downward trend, interest on long-term mortgages moved up for the second consecutive week. Freddie Mac puts the average 30-year fixed rate at 6.13 percent this week, up a notch from 6.12 percent last week; while the 15-year fixed rate that is popular for refinancing borrowers edged up to 5.89 percent from 5.86 percent.

Initial interest on five-year adjustable-rate loans increased as well, rising to 5.96 percent from 5.92 percent, but one-year ARMs fell slightly to 5.44 percent from 5.45 percent. "This could bode well for housing in the new year," speculates Freddie Mac chief economist Frank Nothaft. "Indeed we have seen a spike in refinancing activity over the past few weeks as rates have come down.

Borrowers who have adjustable-rate mortgages that are scheduled for a rate adjustment in 2007 may want to consider refinancing those loans now."

Wednesday, December 20, 2006 - Riskiest Mortgage Bonds May Fall as Fannie Mae Cuts Purchases

Bloomberg (12/20/06); Shenn, Jody

Fannie Mae and Freddie Mac are expected to reduce their purchases of subprime mortgage-backed bonds in 2007 in response to an order from their oversight agency that they use nontraditional loan guidelines issued recently by U.S. banking regulators to establish systems that prevent them from purchasing securities backed by the riskiest loans.  Friedman Billings Ramsey Group analysts say spreads on subprime securities could widen next year, boosting interest rates on subprime mortgages.

Non-agency securities accounted for 15 percent of Fannie Mae's mortgage portfolio at the end of September and 33 percent of Freddie Mac's mortgage portfolio at the end of the following month--up from 13 percent and 34 percent, respectively, the previous year.