Loan Think

It's all a crap shoot, really. We've had ultra low mortgage rates for 24 months, and still the housing market isn't improving a whole lot. (Then again, it's not falling off a cliff anymore either.) And how we have the Federal Reserve trying to stimulate the U.S. economy with $600 million in "quantitative easing."

If only Freddie Macdidn't have to shell out that quarterly 'vig' to the U.S. Treasury, perhaps its numbers would look better. In case you missed it, the GSE lost $4.1 billion in 3Q but that was after shelling out $1.6 billion in dividends to Uncle Sam. But if you look at Freddie's supplemental 3Q earnings statements, an argument can be made that the mortgage behemoth is turning the corner.

The Dodd-Frank Reform Act is an enormous piece of business. It may require over 300 separate rules to be promulgated—and then lenders are going to have to comply with all of them!

By now you've seen the news reports that the foreclosure mess has actually caused home prices to rise in certain (judicial) states because REO inventory has been pulled off the market, thus reducing the pool of homes that are for sale. But keep in mind that whatever moratoriums are still in place, won't be for long.

During my free time before the Mortgage Bankers Association convention last week in Atlanta, I had the opportunity to visit the new World of Coca Cola, a museum that is a tribute to the company's mostly successful marketing campaigns.

The U.S. Department of Housing and Urban Development proposed new regulations to force certain lenders to indemnify or reimburse the Federal Housing Administration for insurance claims paid on mortgages that are found not to meet the agency's guidelines. In addition, HUD's proposed rule would require all new and existing lenders with the ability to insure mortgages on HUD's behalf to meet stricter performance standards to gain and maintain their approval status.

Bank of America — the nation's second largest mortgage lender — has had the crap kicked out of it lately. It posted a large third quarter loss, its share price has been hammered, and bond investors are trying to collect damages because Countrywide (which the bank bought 27 months ago) allegedly did a poor job as a master servicer. Also, it has been slammed by the foreclosure scandal.

THIS JUST IN: Paul Best, head of warehouse lending at National City/PNC, is leaving the bank for another job. PNC, of course, had pulled the plug on the business with its last lines drying up a few weeks ago. (Best, who declined to comment, is under contract for a few more months.) Meanwhile, we understand that a handful of warehouse firms are staffing up.

More title insurance firms are easing up on indemnification demands from mortgage companies that are selling REO properties. Late this week First American, Old Republic, and Stewart Title all said they would not demand that REO sellers provide written assurances that everything was kosher with the paperwork.

If your "why" isn’t big enough, you will not develop the "what" you need to do to succeed; nor will you have the fortitude to bear under the "how" to overcome the obstacles that life and this business have yet to throw your way.