Loan Think

It's not easy being a technology company these days. And it's not easy being a mortgage lender either. Although origination profit margins are still wonderful, applications are starting to thin out a bit. So, where does that leave technology firms that sell their products to the market?

This past weekend I had a booth at a Senior Expo. It was held at a religious institution in our neighborhood. Typically, I would not attend one of these expos and I definitely wouldn’t have a booth.

The new risk retention/QRM proposals are out and it appears that mortgage insurers might be winners after all – over the short-term, that is. The draft notes that Fannie Mae and Freddie Mac will "be able to satisfy their risk-retention requirement...as long as they continue to operate under conservatorship or receivership."

If there is one lesson that any natural disaster, such as the earthquake in Japan, should teach a business owner, is that one must be prepared for anything. The reach of problems caused by the earthquake has hit this country, and I am not talking about radiation.

It's not easy out there for executives (past and present) who are at the helm of troubled institutions or firms that have already failed. Mortgage analyst Joe Garrett is predicting a spike in divorces among bank CEOs "whose banks get CAMELS-5 ratings and Prompt Corrective Action Letters in 2011."

Starting this year and following, you must issue 1099’s to anyone you pay over $600 cumulatively during the year. Previously this did not apply to corporations. Now it does. If you pay your office supply company, your business landlord rent, any and all vendors paid over $600, then at year-end you must send them and file the appropriate 1099.

Fannie Mae was kind enough to give National Mortgage News some guidance on what's going on regarding all those rumors we've been hearing about the GSE outsourcing some of its technology chores supposedly to IBM.

The (combined) lawsuit filed by the National Association of Independent Housing Professionals, and the National Association of Mortgage Brokers against the Federal Reserve Board will be decided next week or so we're told by NAIHP chief Marc Savitt.

Aurora Loan Services continues to keep a tight seal on its plans for the future. The only thing we know for sure is that the company is once again originating loans (a good sign) but it's unlikely that ALS will be sold any time soon, especially with the issue of 'servicer compensation' hanging in the balance.

I've been kicking some tires the past few days, trying to get to the bottom of this whole 'risk retention' mess and how it applies to MBS collateralized by Fannie Mae and Freddie Mac loans. As you may recall, last week HUD officials said GSE loans would not be exempt from risk retention meaning that anyone who issues MBS backed by Fannie/Freddie loans must retain 5% of the credit risk (whatever that means.)