Loan Think

In case you haven't been paying close attention and reading the National Mortgage News website (and our paper weekly) the past year, there's a gargantuan shift underway in the mortgage industry. We correctly predicted that the servicing side of the business is 'deconsolidating.'

Despite the government's promise to crack down on violators of the new LO comp rules, nearly one year after they went into effect regulators have failed to deliver on their stern warnings and promises. Not surprisingly, some companies have elected to largely ignore the law, instituting compensation policies that are an obvious and blatant effort at circumventing the new compensation rules.

It's known as the 'Oops' loan market - where Fannie Mae/Freddie Mac lenders get jammed on a buyback request not because the loan is delinquent, but because one of the GSEs finds an underwriting flaw and demands a repurchase or damages. The seller/servicer then takes that loan and resells it to another buyer.

Just wanted to give you a few more observations from Barry Habib from his presentation at the Regional Conference of Mortgage Bankers Associations in Atlantic City.

As if today's changing regulatory environment was not enough for the industry to contend with, the recent federal government and state attorneys general settlement for $25 billion with the country's top servicers has added a new wrinkle.

If we’re going to tackle our industry’s areas of weakness, we need to be able to define risk. We need a standardized way to classify the various types of risk.

What's the most common complaint I hear these days from mortgage executives? Answer: too much regulation. I'm not going to sit here and tell you to "get used to it" but we all know that given the continued housing recession/depression that there will be no easing up on the regulatory climate any time soon.

Mortgage originators have a moment now that could be their defining moment in dealing with consumers, declared Barry Habib, one of the industry's top trainers. I had the opportunity to once again listen to Barry give his views on the mortgage market, this time at the Regional Conference of Mortgage Bankers Associations in Atlantic City.

The inaugural Zillow Rent Index shows "a healthy and growing rental market" across most of the country, even as home values continue to fall. And according to Zillow's chief economist Stan Humphries, rents are not rising at the expense of home values. "The opposite is true."

Remember the good old days when mortgage bankers were considered the "good guys," the ones who put people in houses? And remember when it appeared that plenty of outside capital was itching to get into this industry?