Loan Think

For the next few weeks, Broker Universe will feature some of our favorite Sue Haviland columns from the past year.As we look forward to 2010, we continue to see stories of companies closing their doors or scaling back their operations. Have you taken decisive steps to be sure that in 2010 your reverse mortgage business will continue and you'll be able to serve the seniors in your community? You've heard it said, "hope is not a strategy" Are you sitting around just hoping that things will be OK in 2010? Or have you taken stock of your business and put a plan in place that reflects your goals and current conditions?

ARIZONA LAW PROFESSOR STATES IT IS NOT IMMORAL TO 'WALK AWAY' FROM A MORTGAGE HOME LOAN

What's that line in 'Godfather III' where Al Pacino says, "Every time I try to get out, they pull me back in"? It's something like that. Any way, I was thinking of that line when I heard that Kyle Walker, the former CEO of Fremont Investment & Loan, and Bob Clafford, another alumnus of that subprime shop, are back in business. However, this time they are buying REO properties through their somewhat new firm, Home America of Lake Forest, Calif. During his career, Mr. Clafford also worked at Associates Financial Services, a subprime lender that was once owned by Ford Motor Co. Associates later went public and was bought by Citigroup. If you don't know what happened to Fremont, then you shouldn't be reading this...

To be a success in 2010, mortgage originators need to understand the macro trends that brought down the financial services industry the past couple of years. Consumers are still weary about the past, and it is going to affect their behavior in the near term, if not the long term. Marketing success means understanding these mind-set changes,

Here are some thoughts on turning around a trend of declining income.

Over the weekend I asked readers which loan types were the most underserved in today's tight credit market where Fannie Mae, Freddie Mac and FHA rule the roost. Jon Overfelt, sales manager for Academy Mortgage in Raleigh, N.C., said manufactured homes. Another reader noted that a huge problem is a lack of solid mortgage money for homeowners who cannot refinance their first and second liens into one loan. "With a degree of LTV controls as the REFI PLUS can you imagine how much money this would free up for the economy in the mortgage sector thereby lowering overall debt load and keeping people in their homes?" writes Ralph Reitan, a broker. On Friday National Mortgage News Online noted that consumers extracted just $11 billion in equity from their homes using cash-out refinancing loans in the fourth quarter, the smallest such volume in nine years. And today, of course, is the big day. We find how much FHA will hike its annual insurance premium. Stay tuned...

Come March 1, the so-called 'spring home buying season' starts with consumers (supposedly) rushing out to buy new abodes, scouring newspaper ads and online listings for their "American dream." A key ingredient for a booming spring is there: rock bottom interest rates. The other key ingredient is absent: a strong job market. This morning the government released the 4Q GDP number: a stunning 5.7%. The stock market initially spiked and then fell limp by late morning. One would think that with the new GDP reading at 5.7% that employment would soon surge, thus helping the housing market but economists are throwing cold water on what the number means for the nation's jobless. Translation: the strong GDP showing is all about "inventory replenishment" and not real growth. Could the nation's economists be wrong? Speaking of economists, Jay Brinkmann of the Mortgage Bankers Association told us earlier in the week that he believes the Federal Reserve will indeed stop buying GSE MBS come March 31 and that private sector investors will fill the void...

I recently hired an assistant for my information technology director. I asked, "by the way, can you install ACT on that laptop?" He said, "I'll work on it." That is everyone's answer these days - "I'll work on it."

THIS JUST IN: It appears that certain account executives from CitiMortgage are quietly contacting some of their top performing brokers to see if they would like to rejoin the flock. For full details see the Monday edition of National Mortgage News. Don't subscribe? Call: 800-221-1809...

Late next week the Mortgage Bankers Association will hold a briefing on the Real Estate Settlement and Procedures Act. If you want to pay MBA to hear what your taxpayer supported government officials have to say, feel free. But if you want to read about it in the press, forget it. MBA has closed the briefing to reporters. Scheduled to speak about RESPA changes is Ivy Jackson, director of HUD's RESPA office. Another HUD official is speaking as well. Meanwhile, according to a recent report by Reuters, there are rumblings that (perhaps) a new private label MBS (backed by conservatively underwritten jumbo loans) could hit the market in the next few months. According to Allonhill of Denver, third-party reviews of the collateral are going to play a major role in the revival of this market...