Loan Think

Don't panic. Mortgage rates are rising but maybe it won't turn out to be such a disaster after all. Mark Savitt, who runs a small brokerage in West Virginia, said the rate move is actually driving some consumers to buy a house because they fear rates have already hit bottom and could go even higher. This morning, Savitt was offering a 30-year conventional FRM at 5.25% and no points. The former president of the National Association of Mortgage Brokers also said he is seeing more buyers walk away from REO and short sales because it takes too long to get those deals done because banks are dragging their feet and being unresponsive…

The holidays are now just a short time away. Many will be traveling to be with family and friends. There are parties with your neighbors and co-workers. Then of course there are the business parties you get dragged to with your spouse and significant other.

Trying to size the nonperforming loan market is a little like trying to nail Jello to the wall. We know that of the nation's $10 trillion in outstanding home mortgages, roughly 10% are delinquent which means $1 trillion in "late" mortgages need to be resolved through sales or workouts.

There is an opportunity for mortgage originators to connect with their customers via the social media and that is because your competition is dropping the ball on this one.

The New York Post is reporting that Bank of America has a $1 billion package of nonperforming mortgages out for bid. But is the deal for real? Investors in the NPL market said some B of A traders were scratching their heads on Monday because they knew nothing about the sizeable auction.

On Dec. 3, KATHY PUCKET OF RICHMOND, IND., was sentenced to 51 months upon her guilty plea to mail fraud and obstructing justice. This followed an investigation by the Richmond Police Department, Indiana Secretary of State Todd Rokita's Prosecution Assistance Unit, and the Federal Bureau of Investigation, Muncie Office. (Notice the cooperation of multiple agencies)

THIS JUST IN: Add the name of Goldman Sachs to the list of firms eyeing the jumbo conduit space. And possibly PIMCO. We've heard the Goldman name before, but more confirmations have come in on that one. (Keep in mind that Goldman owns subservicer Litton Loan Services.)

On December 15 the board of the California Public Employees' Retirement System will hold a meeting to discuss (among other things) the future of its mortgage program. Some mortgage bankers that fund these loans told National Mortgage News that underwriting on the loans has been tightened up and a jumbo option was killed a year ago.

Even though there are signs of life in the auction market for nonperforming residential loans, we continue to hear reports that several banks and investment bankers won't sell their dirty linen in the public market for fear of taking a big hit. There are exceptions, of course, and we're working on a story about that.

What a difference a few weeks make. The yield on the 10-year Treasury was close to 3.3% today and although mortgages are not pegged to the bond, everyone knows that if the 10-year rises in yield, usually mortgage rates follow in tandem.