Loan Think

As Bank of America continues to lop off mortgage divisions, and lets its retail residential work force wither away there is renewed talk that it may finally throw Countrywide Funding Corp. -- the mortgage banker it bought three years ago -- into bankruptcy.

Yesterday we broke the news that Bank of America will exit six states in retail lending: Alabama, Alaska, Montana, Nebraska, Wisconsin, and Wyoming. But wait a second, aren't some of these states among the best performing in terms of home prices?

So, is the mortgage industry really deconsolidating, something we've been writing about for the past nine months? Answer: it would appear that way.

Who says rising foreclosures are bad? Keep in mind that there are many default management firms and specialty servicers that make a living off of high touch loans and foreclosures. In a new report Sterne Agee analyst Greg Smith notes that according to a just published 'Mortgage Monitor' report from Lender Processing Services, foreclosure starts totaled 248,000 units in August, up 20% over July.

If there is any one thing the author of a blog post or the speaker at a live presentation wants is that the audience should remember what the post or the speech was about. The lack of success in this area means a lack of connection with the intended target as well as frustration on the part of the author.

What's the hold up on the Obama refi plan? We continue to hear the same old same old: MBS investors, big banks, and hedge funds are lobbying against it, and they apparently control our nation's politicians. A few weeks ago it was anticipated that President Obama would make a speech on housing issues and unveil the refi plan, but suddenly it's all radio silence in Washington.

When there's blood in the water sharks circulate. A half dozen or so warehouse lenders I know are receiving telephone calls from certain nonbank funders that are extremely nervous about Bank of America's future in warehouse finance.

Edward DeMarco, the acting director of the Federal Housing Finance Agency, believes the future of Fannie Mae and Freddie Mac is bleak. In a recent speech he noted that (despite improving loss numbers) the two will never "be able to earn their way back to a condition that allows them to emerge from conservatorship."

Are you tired of facing organizational crisis? Have you missed your last deadline? Well join the ever-growing crowd that is tired of it right along with you. But the real question: Are you willing to join the ranks of those that need you to do something about it? It's time to get organized. Shall I show you where to start?

One of the biggest complaints I hear from lenders these days – besides too much regulation – is the state of the appraisal market. Time and time again I hear of deals being blown up because the appraisal was just too low. But should (or can?) the appraisal be subject to an appeals process?