Loan Think

Investors in bank stocks are not happy campers these days. On Monday morning Citigroup reported earnings of $2.2 billion in 3Q. But its stock is up all of 17 cents to $4.12, a not-so-whopping gain of 4%. Of course, Uncle Sam owns Citigroup and seeing that its stock was at just over $3 in the spring, perhaps taxpayers should be rejoicing.

The California 4th District Court of Appeal held that brokers for home sellers have a legal duty to tell buyers about mortgage problems such as a short sale where existing lender may not accept less than what is owed and that might prevent sales from closing. Brokers are "obligated to disclose to the buyers" when there is "a substantial risk that the seller [can] not transfer title free and clear of monetary liens and encumbrances."

ANGELO'S ASHES: On Friday, Bank of America's stock slid by 7%. It was also the very same day that former Countrywide Financial Corp. chief Angelo Mozilo inked a deal with the Securities and Exchange Commission, settling the massive insider trading case against him and his lieutenants, David Sambol and Eric Sieracki. B of A, of course, bailed Countrywide out more than two years ago, just as the firm bordered on near collapse.

It often seems as though men and women are from different planets, but every day millions of couples navigate through day-to-day and even life-altering decisions. Because a home is the biggest purchase most people will make in their lifetime, we surveyed 1,000 individuals to discover how much men and women differ in the home-buying process.

The Foreclosure-gate scandal appears to be having a real effect on loan closings — at least for some mortgage bankers. John Walsh, CEO of Total Mortgage Services in Milford, Conn., told us the other day that Connecticut's 60-day moratorium on foreclosure sales has caused his firm to scuttle closings scheduled for last week and this week.

Some recent developments will more than likely put reverse mortgages in a favorable light once again. The announcement of the extension of the lending limit of $625,500 for Federal Housing Administration Home Equity Conversion Mortgages will allow seniors with higher home values to continue to benefit the reverse mortgage programs is the first.

Foreclosure-gate has caught the national media's attention, but not only that, apparently a documentary filmmaker based in the New York area is working on a film about the foreclosure mess, starring Litton Loan Servicing of Texas. I talked to the director the other day and he seemed a little confused about the difference between 'servicing' and 'subservicing' but I think I straightened him out.

To say that the image of the mortgage originator has taken a beating over the last few years is an understatement. There have been a number of attempts to combat that perception from the inside of the industry.

On Sept. 29, Lawrence William Dunning, 78 of Highland Beach, Fla., was sentenced to 24 months in federal prison and ordered to pay restitution of $2,889,492 followed by three years of supervised release for mail fraud. Additionally, three individuals have been sentenced for their roles in the multi-million-dollar Ponzi scheme or other related offenses, and two more individuals await sentencing.

THE BIG PICTURE: As the annual convention of the Mortgage Bankers Association approaches the industry, once again finds itself at a crossroad. Just when it appeared that housing/mortgages had turned the corner, the “foreclosure-gate” scandal erupted, putting lenders and servicers back in the public eye.