Loan Think

This Thursday (April 22nd) is Earth Day, making this the perfect time for small businesses such as mortgage brokerages to make the effort to "go green."

Icon Residential, a nonbank that is still actively funding residential loans using brokers, recently lost two wholesale account executives in the New York/New Jersey area to Chase, the mortgage arm of JPMorgan Chase. We're told these AEs will be working as retail loan officers. Meanwhile, Icon -- which doesn't reveal much about itself on its corporate website -- is looking to hire an internal compliance auditor in Irvine, Calif. And it's also seeking wholesale account executives nationwide. According to the Quarterly Data Report, wholesale lending as a percentage of all loans funded, increased slightly in the fourth quarter from the third but is still bumping along the bottom...

The government's Home Affordable Modification Program has plenty of critics who are disappointed with its slow implementation and limited impact in preventing foreclosures.

It appears the nonperforming loan market is once again heating up. Investors in NPLs say over the past few weeks they've seen an increase in offerings by sellers -- and that deals are actually getting done. "It's not like it used to be when sellers were just testing the waters," said one West Coast based NPL investor, requesting anonymity. "I actually might go out and raise more money for my fund." However, there is one "caveat" in this good news. The improvement in activity is for smaller sales only -- portfolios of $50 million or less...

Editor's note: Today we are rerunning one of favorite Joel Pate columns. We hope you enjoy it.

THIS JUST IN: A (somewhat) large investor in scratch and dent and nonperforming loans is about to close down. At press time details were still sketchy. The company, backed by private equity money (what other kind is there?) is based in the Western U.S. Any unused money will be returned to investors. Its holdings will be liquidated. Interestingly enough, sources told me this past week that some investors are now paying upwards of 85 to 90 cents on the dollar for performing loans that have been sent back to the originator because-for one reason or another-they violated Fannie Mae or Freddie Mac underwriting standards. Have any information about all this? Drop me a line at Paul.Muolo@SourceMedia.com or comment at the end of this column...

It being April 15, a day in which many rich Americans gladly pay Uncle Sam what is rightly owned to the Treasury Department, we present this bit of tax-related news: distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. According to one reader, enacted into law recently was California Senate Bill 401 which aligns the state's tax treatment of mortgage debt relief income with federal law. He writes that, "For debt forgiven on a loan secured by a 'qualified principal residence,' borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000." At press time, I could not verify this information but it sounds about right...

Life's too short to work with whiny, negative, abusive and condescending real estate agents. You know who some of them are already! But, how do you reasonably determine if you can create a partnership-like relationship if you don't know them very well?

Higher mortgage insurance premiums being charged to FHA borrowers are hammering the origination market. The Mortgage Bankers Association cited the recent hike in premiums while discussing its just-released application index. In other news, former Washington Mutual CEO Kerry Killinger was on the Congressional hot seat Tuesday and -- as I anticipated -- he blamed everyone but himself for that mega thrift's downfall. His most ludicrous assertion entailed saying WaMu would not have been seized if only the institution had been part of some type of Wall Street/financial services "club." Killinger seems to think club membership would've spared WaMu. JPMorgan Chase CEO Jamie Dimon was asked about Killinger's club comment during the bank's earnings call this morning. He insisted that he is "unaware" of any such club. (JPM bought WaMu in a federally assisted transaction during the fall of 2008.) Memo to Dimon: if Killinger is right, you'd better join that club quick, just in case...

With all the pricing changes that have occurred over the last few weeks, I've had to calm down a good number of reverse mortgage originators. They are saying, "I've never had to deal with this in the reverse space." Yes, I'll admit the current environment is not something we in the "reverse world" are used to, but guess what, it's here.