Loan Think

Have your plan of attack ready in order to secure the most deals and generate the optimal income.

How are you planning to keep your loan volume up once the stimulus program ends?

For the last few days, I have received so many inquiries about the changes to the HECM fixed rate product that choosing a topic for this article required no thought on my part whatsoever - it was obvious.

REMINDER THAT REGULATION Z IN TILA REQUIRES YOU TO HAVE AN ESCROW ACCOUNT FOR HIGHER PRICED MORTGAGES

A mantra among businesses that have difficulty competing on price is that survival is based on the customer service level being provided.

The mortgage industry continues to be front and center. Congress and the current administration have made regulatory compliance and enforcement a top priority. There are constantly changing rules and risks from the FTC, Federal Reserve and HUD, which is focused on flexing their authority over marketing, origination and servicing.

The new White House plan is out to stem the foreclosure crisis and skeptics are probably scratching their heads, saying "Why bother?" (You can count me among those skeptics.) Maybe some 'A' paper borrowers who lost their jobs and are facing long term unemployment will be saved. And that's a good thing. But let's look at the hard numbers. At year-end, consumers owed $777 billion on their A- to D loans and you can anticipate that at least half these mortgages are toast -- dead and done for. That amounts to $389 billion (rounded). You can figure at least 15% of the 'A' paper market will wind up in foreclosure, amounting to $780 billion in dead paper. Add the two together and we get: $1.169 trillion in foreclosure trouble. (Figures courtesy of National Mortgage News' Quarterly Data Report.) The Obama plan entails spending $50 billion. If the White House really wants to stem the foreclosure crisis I have one suggestion: concentrate on getting more Americans back to work and stop wasting everyone's time...

Goals suck, right? Well, only if you have failed to develop a process of improvement as a way to develop goals appropriately. This article was supposed to be phase two of goals suck and how to develop a "Process of Improvement" that is reliable. I will return to that subject next week.

THIS JUST IN: The National Credit Union Administration plans to unload $50 billion of troubled MBS belonging to now-defunct "corporate" CUs. It's just a matter of how and when. Keep in mind that $50 billion is the "face value" of the bonds. How much these problem assets will fetch in the secondary market is unclear. For more details see the Monday edition of National Mortgage News. Don't subscribe? Call 800-221-1809...

Is it really any surprise that Bank of America will attempt to cut the principal amount on 45,000 troubled mortgages it inherited courtesy of Countrywide Financial? (Should we call this project, "Angelo's Ashes"?) Ten days ago BoA spokesman Rick Simon told National Mortgage News' Brian Collins that principal reductions were a done deal -- especially on payment option ARMs. Of course, the bank is dealing with some nasty mortgage abuse lawsuits brought against Countrywide by the states so this makes the bank look like a good corporate citizen for at least trying principal reductions. But the big question is this: will other mega servicers with legacy POA loans follow suit? Stay tuned. Meanwhile, it appears mortgage bankers are on the hook for overtime pay for inhouse loan officers. This new development is now on the NMN website...