Loan Think

As owner of an appraisal company, I hear it all the time. "These conservative appraisers are killing my deals." I’m going to tell you a secret. No appraiser wants to kill transactions. In fact, for appraisers, the only thing worse than providing values that don’t support transaction amounts is losing their licenses or getting blacklisted by a lender.

There are many challenges associated with principal reduction as a tool to heal our ailing housing market. Many concerns are raised when this type of loan modification is being contemplated.

Five years back who would have ever thought that Fannie Mae and Freddie Mac would be an issue in a GOP primary? To the uneducated and ignorant the housing crisis was caused by the two GSEs. To anyone who has been in this business for more than say, seven years, they know the housing implosion had multiple fathers, the GSEs being on a long list, many rungs below Wall Street.

If your pipeline isn’t full, don’t blame the market. I see many loan officers that get caught up in the "Ain't it Awful Club" and more often than not, their production reflects a (hopefully, temporary) lack of motivation and passion.

Currently there is considerable attention being given to a fair housing case the Supreme Court is set to hear in the near future. Some have said that this case could have substantial effects on fair lending litigation. While it is not impossible this is the case, in all likelihood, I believe that the case will have little effect on fair lending litigation.

Just when Redwood Trust was starting to look a bit like the Maytag repairman of the jumbo MBS market, we began to hear reports this week that two top 10 ranked banks are working on jumbo deals - for later in the year.

Let's cut to the chase. With all the shouting, flailing and verbosity on the subject of the REO problem, does anyone offer a practical, workable solution?

Even the most well-intentioned lenders sometimes fall short in terms of compliance with certain aspects of the Final Interagency Appraisal and Evaluation Guidelines, most notably when it comes to having policies and procedures in place to evaluate and monitor the ongoing performance of appraisers and having the required supporting documentation to show that the lender is evaluating and monitoring the appraisers.

By now you've read the exclusive on the National Mortgage News website - that Bank of America is halting (for now) cash-out refinancings. Maybe cash-out refis don't account for much of the bank's production. Then again, relatively speaking, there isn't much production left at B of A. In 4Q the bank funded $20 billion in home loans compared to $120 billion at the number one ranked Wells Fargo.

In today's challenged housing market, creating and preserving value in REO portfolios is critical. There are three ways servicers can protect their bottom lines.