Loan Think

I held a roundtable discussion on origination issues with the following attendees at the Mortgage Bankers Association's annual conference in San Diego: Griff Straw, president, Solidifi U.S.; Steve Jacobson, chief executive, Fairway Independent Mortgage; Lisa Schreiber, chief strategy officer, NetMore America; and Jonathan Corr, chief strategy officer, Ellie Mae. Brad Finkelstein, managing editor of Origination News, also participated.

If there is any one food topic where there is endless debate, it is who makes the best pizza. This is not just in terms of the individual pizza maker, but also one of style (New York vs. Chicago, for example).

The "sand states" (that would be Arizona, California, Florida and Nevada) will take a decade to come back and all looks bleak when it comes to property values. But as I write this, I'm surrounded by 30 inches of snow with 100,000 Montgomery County, Md., residents still without power (read heat) 48-plus hours after the blizzard of 2010. Today, the federal government is officially closed. Many neighborhoods aren't plowed and the kids are starting to get a little bit sick of sledding. The thing is, I don't mind the cold and snow but plenty of mid-Atlantic residents are probably starting to wonder if maybe having a home (or second home) in one of the sand states isn't such a bad idea after all. I'm not ready to move but sometimes disasters create opportunities in real estate...

By now almost everyone has heard about Apple’s introduction of its tablet the iPad. Blogs, Twitter and mainstream media have all weighed in on Steve Jobs’ announcement. Will it be a game changer? How is it going to change the eReader market? Did Apple miss the mark? What is missing in the iPad? In reading all of these differing opinions, I ran across an interesting blog from Stan Schroeder, European Editor at Mashable. His insights made me think of the mortgage industry and the ongoing debate of “Best-of-Breed vs. End-to-End”. Here is what Stan had to say about the iPad.

In the early 1950s my parents bought a Levitt-built house in Wantagh, out in Long Island, paying about $8,000 for the property. (It was an FHA loan. My dad was in the Air Force.) They sold the home seven years ago for roughly $330,000, making a tidy profit. This past week I interviewed Kyle R. Walker of Home America, Lake Forest, Calif., whose specialty is buying REO properties -- including some from Fannie Mae -- for between $1,000 to $10,000. Some of the homes reside in inner city Detroit, a metropolitan area that is hemorrhaging residents. Stated differently: a home in Detroit today costs less (or about the same) as a newly built house in the potato fields of Long Island 60 years ago. What's wrong with this picture? Is this the buying opportunity of the century or is something else afoot? Meanwhile, the new jobs number is out. The government said the economy shed 20,000 jobs after losing 150,000 jobs in December. November was revised to a gain of 64,000, up from 4,000. Follow all that? The good news is that the jobless rate fell to 9.7% from 10%. Are there fears the economy is truly improving and that the Federal Reserve soon will hike interest rates? Don't bet on it. The yield on the 10-year Treasury is falling as I write this...

Effective accurate action is what you must demand, not just action alone. In last week's article, a very good article according to the responses, I made a major error. The headline used a word incorrectly. I hate when I do something like that.

THIS JUST IN: A midtier bank that is knee deep in the credit card business is looking for residential servicing help and has contacted 10 "combat servicers" for their assistance. For full details see the Monday edition of National Mortgage News. Don't subscribe? Call 800-221-1809...

A large portfolio of nonperforming payment option ARMs has hit the market. Investors that have seen the offering book and talked to the seller say the asking price might be a bit rich, though others suggest it's merely a starting point. "Some of these loans have LTVs of 105," one vulture fund manager told National Mortgage News. For the full story and complete analysis see the Monday edition of NMN. Meanwhile, the stock market was in the tank Thursday morning after a weak private sector job report and concerns over debt troubles in Greece, Portugal and Spain. On Friday morning the Department of Labor releases unemployment figures for January...

Is your licensing info on the Consumer's NMLS website yet? We played with the site and its pretty much impossible to find "individual loan officers" - consumers are going to freak out if they can't find you. Learn a few tricks on how to find your NMLS listing - to make sure your clients can verify that you hold a valid mortgage license.

The Federal Reserve is staying firm on its commitment to stop buying Fannie Mae and Freddie Mac MBS (and debt) by March 31. That said, speculation began to increase that the GSEs themselves would start buying their own MBS, holding these tradable bonds in portfolio. And maybe they will -- or maybe not. A new letter from Ed DeMarco, acting director of the Federal Housing Finance Agency, says (more or less) don't count on the GSEs being big buyers. In fact, he's sticking to an earlier plan to make sure their portfolios are no larger than $810 billion by yearend 2010. (Both are under that figure presently.) But the cap means they won't be buyers. And if the GSEs aren't buying and the Fed isn't buying that leaves the private sector. And the private sector will want something in return -- yield. Yield means higher rates. Will it play out this way? Stay tuned...