Loan Think

The Federal Housing Administration wants to raise the minimum net worth requirement for its lenders to $2.5 million within three years, an idea that doesn't warm the hearts of small correspondent lenders. However, we're told that at least one large wholesale/correspondent lender thinks the minimum should be hiked to $3 million (for the first year) and $4.5 million by 2012. If this happens a correspondent that is light on capital would be forced to find another source of funding, merge, or close their doors...

The phrase "short sales" was probably the most popular usage at the Mortgage Bankers Association's annual Servicing convention in San Diego. No, make that definitely. Everyone was talking about short sales and how they can help tame the massive foreclosure and/or modifications mess, helping out the borrower, lender and vendor in the process.

Every once in a while I get a slew of questions and comments centered on the family members of the seniors. And yes you guessed it, those questions and comments are about the kids.

Everywhere you look, there's loan "buyback" requests: Fannie Mae and Freddie Mac are sticking it to their seller/servicers, the Federal Home Loan Banks are trying to get Wall Street firms to repurchase the crummy nonprime ABS sold to them a few years ago, and large correspondents are jamming product back to the little guys. Well, at least, the Government National Mortgage Association hasn't gone that route -- yet. Or is that the next shoe to drop in the industry? Meanwhile, last week it appeared that a large wholesaler was ready to introduce a new "stated income" program. (Don't faint.) But alas, there was no such program. The way the story was told to me, a new account executive mislabeled a program as such. "It turned out that the new program was really a Fannie 'DU Plus' at 110% with no debt ratio and a Freddie HARP up to 125% at no debt ratios," one loan officer told us. Readers of this website should be familiar with both Fannie DU Plus, and HARP...

There have been plenty of stories in the media about the cash flow crunch facing many small businesses today. Many business owners have been making cutbacks looking to get by.

HUD TO ALLOW LOAN CORRESPONDENTS UNTIL APRIL 30, 2010 TO FILE THE ANNUAL RECERTIFICATION FINANCIAL AUDIT FOR 2009

In the Monday edition of National Mortgage News, we report that former Government National Mortgage Association chief Joe Murin is advocating that the agency should be cut loose from the Department of Housing and Urban Development. Mr. Murin goes as far to suggest that GNMA should be given a new charter that provides the agency with independence. Mr. Murin's idea comes at a time when GNMA issuance volume (not surprisingly) is booming. Mr. Murin runs The Collingwood Group, a somewhat new advisory firm based in Washington. Its website declares that the financial services industry "is transformed. From the global economic crisis has come permanent change. It is change that is evolving by the day. It's unsettled. It's uncertain." You can't argue with those sentiments...

Is Citigroup's stock a "buy"? That's a tough call. Renowned bank analyst Richard Bove said this morning that it could be a $7 stock in a few years. Of late, its shares have been trading in the $3 range but got a boost today after Mr. Bove made some positive comments on CNBC. But anyone who works in mortgages knows that Citigroup is no longer the fierce competitor it once was. Even though it has made some new overtures to loan brokers, its wholesale channel is a fraction of its former self, and according to the new 4Q edition of the Quarterly Data Report, CitiMortgage of O'Fallon, Mo., was the only lender among the top 10 to experience a decline in production. In 4Q the lender's residential volume fell 38% to $11 billion. Everyone else among the top 10 had gains of 16% to 116%. And keep in mind that the fourth quarter of 2008 (the comparable here) was the worst in 10 years. If a lender couldn't manage a gain in 4Q09 (compared to 4Q08), then something is definitely amiss...

"I'm looking for a smooth ride," I told the tire salesman.

THIS JUST IN: Who says everyone in government hates brokers and would like to see the industry run out of town on a rail? (TARP overseer Betsy Warren doesn't count.) Late Friday, the Federal Housing Administration extended the deadline for brokerage firms to submit their audited financials until April 30. This means they won't have to shell out upwards of $15,000 (for the pricey accounting firms) to get an audit. FHA is working on a final rule that will effectively take them out of the broker approval process. It will then be up to wholesalers to police their brokers. Now, some you are probably thinking this: "My wholesaler is going to require an audit and it's going to cost me anyway." Good point. The update, written by National Mortgage News' Brian Collins is now up on our website. If you have an opinion about the issue comment at the end of this column or drop an email to: Paul.Muolo@SourceMedia.com...