Loan Think

The time for small business owners to start preparing for the changes coming under health care reform is right now, according to a financial planner. Actions taken today could save money down the road.

I received an interesting question from reader last week and I want to share it because she made an excellent point probably without even knowing it. She asks, "Sue you have your hand in so many different projects (yes I do write, speak, and teach in addition to my own reverse origination), how do you get it all done?" She goes on to say that she has a hard time just getting the few reverse mortgage applications that she has to closing. Great question!

The United States District Court for the Northern District of Ohio denied certifying a Real Estate Settlement Procedures Act class action lawsuit on March 11, 2010. The Carter v. Welles-Bowen Realty, Inc., case No. 3:05 CV 7427, consolidated No. 3:09 CV 400, 2010 WL 908464 (Northern District of Ohio) is a case where the plaintiffs asserted that Welles-Bowen Realty, Inc was engaged in operating illegal affiliated business arrangements (aka sham AfBAs) which is a violation of RESPA Section 8(a) and 8(b) (12. U.S.C. 2607 (a) and (b))

It appears the Federal Deposit Insurance Corp. will begin taking final bids on the $23 billion AmTrust servicing portfolio by the end of July with a winner picked shortly thereafter, or so we're told. Only a handful of players can take down the whole portfolio but investors can buy portions of it. The FDIC and its investment banker on the deal, Milestone Merchant Partners, aren't giving much guidance on the pool these days. Meanwhile, General Electric reports 2Q earnings this Friday. We only mention this because GE is a fairly large player in the commercial mortgage servicing market. Stay tuned...

It appears to be one of those "good days" for mortgage-related financial news. According to our sister publication, American Banker, new Federal Housing Administration rules are actually helping loan brokers.

Jay Sidhu, the former head of Sovereign Bancorp, is a busy man these days.

Before we get to the main event, I should point out that the coming week is the beginning of "earnings season" which means all the big boys—Bank of America, Wells Fargo and Citigroup—will be reporting. The second quarter was decent in terms of residential loan production thanks to the expiring federal tax credit for first-time and move-up buyers. But it will be especially interesting to see what type of "new" mortgage hits these megabanks take and how their overall profits were hurt by a horrible quarter for the stock market. All three (and many other "investment banking" related firms) have enjoyed strong trading profits (stocks, bonds) during the stock market boom but the bloom (as we all well know by looking at our 401k statements) is off the rose. Stocks stink, this past week being an exception. Also, all three of these banks hold or service billions of delinquent mortgages thanks to "legacy" acquisitions. And yet, we hear little about the big boys unloading their problem loans in the secondary market...

Who says the commercial real estate market is in the tank? All the doomsayers were saying CRE would be the next shoe to drop in the economy.

Wells Fargo & Co. officially pulled the plug on its consumer finance unit yesterday, saying it would no longer originate "nonprime" residential loans through its Wells Fargo Financial unit. Truth be told, WFF wasn't exactly doing much true real estate-related subprime lending anyway, which makes the story a bust of sorts in mortgageland. The unit's core residential product was the FHA loan. Meanwhile, in other matters, we understand the 'Octomom' may be needing a loan workout. The woman who gave birth to octuplets in January 2009 is about to go into foreclosure on her house, a source close to the situation told us. "The holder of the mortgage is a private lender," said the source. He noted that the Octomom bought a (roughly) $600,000 home in California with the proceeds of her reality TV show…

A few months back CitiMortgage stopped funding jumbo mortgages through loan brokers, a story broken by National Mortgage News on its website. It now appears that Citi is beginning to get a bit more aggressive on jumbo lending through its retail branches. But one former Citi jumbo broker told us that the bank's jumbo prices "are not competitive," adding that "they can keep the broker out and charge what they want." Meanwhile, we continue to hear reports from factions of the mortgage industry that certain servicers are refusing to modify loans unless a borrower is already delinquent. Perhaps, that's not big news, but we can only wonder that if a "current" loan is not modified whether it might eventually lead to a strategic default…