Loan Think

It used to be that if you called the FHA Hotline to find answers to your underwriting questions, you’d be on hold forever. Worse yet, if you used their advice and it was wrong, you’d could not trace who gave you the answer—nor would they give you the chapter and verse from the HUD manual.

Anyone looking for Treasury Secretary Tim Geithner to endorse a specific approach to the future of Fannie Mae and Freddie Mac (and the housing finance system at large) came away disappointed by his testimony before the House Financial Services Committee on Tuesday — where he repeatedly declined to take a concrete stand.

In our past few articles, we have been discussing the one sentence that will generate more clients for you. Here’s the sentence: People will do anything for those who encourage their dreams, justify their failures, allay their fears, confirm their suspicions and help them throw rocks at their enemies.

Do you have any idea where the term “correspondent lending” came from? How about “amortization?” You will if you read a new book from an unusual author, a mortgage banker who has been in the trenches for many years.

Regulators have supposedly inked a risk retention rule which says this: borrowers will have to make at least a 20% downpayment to meet criteria that exempts lenders from retaining a portion of the loan when selling it into the secondary market.

It is inevitable that when one starts up a new business, there are going to be mistakes made. And many of those mistakes are done because of a lack of knowledge about what does it take to run a business.

Juan Rangel, Downey, Calif., has been sentenced to 22 years in Federal prison for running two fraud schemes—a Ponzi scheme that took in at least $30 million from more than 500 victims, and a mortgage fraud scheme that preyed on working-class homeowners by stealing the equity from their homes and secretly taking title to their properties.

The film 'Inside Job' took home the Oscar Sunday night for best documentary. Director Charles Ferguson used his acceptance speech to deliver pointed criticism of Wall Street and the financial industry: "Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that's wrong."

THIS JUST IN: Loan brokers are starting to get a glimpse of their new wholesale contracts and the early reviews aren't good. One broker who works the mid-Atlantic market said he has reviewed three contracts so far (one from CitiMortgage) and the most he can make on any loan is 2% with a $7,000 maximum. If you care to share what you're seeing in your contracts drop me a line at Paul.Muolo@SourceMedia.com...

Late this week rumors were floating around Washington that the final 'qualified residential mortgage' test rule might be released (unleashed?) in a matter of days. But apparently there's a hang up and mortgage lobbyists say it's FDIC chief Sheila Bair who is still insisting that servicing standards be addressed at the same time.