JUN 20, 2013

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Part 3: Technological Considerations for Leading in the New Mortgage Marketplace
Read Part 2: Changing Lender Process in the name of Consumer Protection
Part 1: Leading in a Changing Mortgage Marketplace
What We're Hearing

Mixed Market Signals


WE’RE HEARING from the great state of Washington where there has been an increase of almost 1,200 loan originators from November 2012 through March of this year. If you like to analyze numbers there is a 25% increase of new licensee applications in the first quarter 2013 over 2012. What I find most amazing is that the state processes 80% of the new licensee applications in under two weeks. Imagine if loans could be processed that fast.

Also from Washington I have learned that the Department of Financial Institutions has been receiving a number of inquiries about private lending and whether conventional rules applicable to licensed lenders apply to private loans. In fact the term “hard money” was even mentioned! In case you are under a certain age “hard money” referred to a type of private loan that one would usually try to avoid at all costs. Now we have payday loans which are legislatively approved yet they make hard-money loans seem quite reasonable.

In case you missed it the FHA may need about $1 billion before the end of this year to come up with enough required reserves to cover loan losses. In the scheme of things a billion dollars is not as much as it used to be. What is interesting though is that the FHA has over $5 billion in losses on the reverse mortgages it insures. Maybe that will improve if home prices can keep going up.

Some “bad” news comes from RealtyTrac’s Foreclosure Market Report in May. Foreclosure filings increased 2% from April caused largely by an increase in bank repossessions. Some states saw crazy statistical increases like Maryland at 229% year-over-year. Of course home values have increased in many markets. The RealtyTrac report went on to point out that in the metro areas where home prices are rising foreclosure inventory has cleared faster, meaning in the nonjudicial foreclosure states.

I live in Michigan which is a nonjudicial foreclosure state. There are bills pending in the legislature relating to the foreclosure process. There had been a mandatory counseling type of process set up which is set to expire. That process was designed to help homeowners do workouts with their lenders. That process may or may not continue. Stay tuned for an update next week.

Meanwhile in very small town America, Chelsea, Mich., things are heating up. I have Realtors cold calling me to sell my house. An old client rang my doorbell Saturday night asking me to review her sales contract which a title company prepared for her. She sold her home on her own saving a sweet $15,000. That is of course if the appraisal goes well.

In other news NMLS is about to make life easier for some with advance change functionality. As of Monday, June 24 state-licensed companies and branches will now be able to submit advance notice of certain future changes to their record to state regulators. These changes include name and address changes, the addition or modification of affiliates, subsidiaries or owners. Also changes to branches can be reported. This functionality will not apply to individuals who must promptly report changes after the fact.

Based in Chelsea, Mich., John McDermott is a real estate and elder care attorney who represents both consumers and businesses. He can be emailed at jamcd@comcast.net.

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