Loan Think

"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...

During the housing boom the 'Pending Home Sales Index' from the National Association of Realtors was a big ho-hum to me. I mean, who really cared? Back then home sales were booming -- pending or not. Today, the PHSI is a closely watched barometer on housing trends. Times change. The new PHSI came out this morning and the news is this: the number of buyers who agreed to purchase a home fell sharply in January. Does that mean the sky is falling? Not exactly. Don't forget Eastern states had a ton of snow. For me, the best indicator of where housing (and mortgages) is headed is the unemployment number -- which comes out Friday. Already, economists are saying it could be a bad number because of that crummy weather in the east. We shall see...

Did you know that 78% of all first time buyers rented an apartment (condo or home) prior to buying their first home? This is according to the National Association of Realtors 2009 Survey of Home Buyers and Home Sellers.

As we reported a few months back, the Federal Deposit Insurance Corp. is working on a plan to securitize up to $20 billion in single-family loans, most of which are "covered" assets or loans with loss sharing agreements that were bought by buyers failed banks. (The details are still being worked out.) Meanwhile, the agency is tapping the capital markets with some smaller residential and commercial deals. (See the National Mortgage News website later today.) As for the loan delinquency market, perhaps some relief is on the way -- that is, if you believe a better employment picture will result in less mortgages going bad. The number of planned layoffs at U.S. companies fell in February to the lowest level since 2006...

DO NOT FILE YOUR FHA/HUD AUDIT TOO SOON OR IT MAY BE WRONG

For the last few weeks, it seems that here in Baltimore where we've had a lollapalooza of a winter, everyone's in a funk. Yes it's been tough to get outside and the snow is finally almost gone. I've taken this time to look at a few projects I've been considering and also trying to figure out how to make the best of this time of the year. By the way, spring is only a couple of weeks away.

Here's a little piece of research I heard this morning -- and I don't know if it's true -- but it is interesting: there are more nonbank mortgages lenders out there with net worth positions above $10 million than there are firms in the $5 million to $10 million category. Of course, these nonbanks live and die on warehouse credit. Late last year the Federal Housing Administration issued a proposal requiring its lenders to have a minimum net worth requirement of $2.5 million within three years. In other matters, Bloomberg reported that GMAC CEO Michael Carpenter earned $1.2 million for the 45 days he worked for the company in late 2009. Mr. Carpenter, of course, is still on board, trying to assess GMAC's future. Based on the 2009 run-rate, Carpenter's annual salary would have been $9.5 million, putting him in the same compensation category as Lloyd Blankfein, CEO of Goldman Sachs...

Remember, your mortgage shop is still a business and it needs to be operating on the same principles other businesses do. And there are many resources that will provide ideas for surviving and thriving that come from those in a similar situation in all sorts of business operations, not just mortgages.

PHH Corp. unveiled its 4Q earnings this morning, revealing that it had to reduce the asset value of its mortgage servicing rights by $57 million during the period "due to prepayments and recurring cash flows and $10 million of credit-related charges, which was comprised of foreclosure-related charges of $11 million partially offset by a reduction of reinsurance-related charges of $1 million." The writedown isn't all that surprising given the nature of interest rates these days, but as we pointed out a month ago, many of the 'mega banks' are writing up the value of their MSRs. Under new CEO Jerry Selitto, PHH is in the midst of reengineering how it conducts business in an effort to save up to $120 million annually...