Loan Think

It used to be that everyone and their brother contacted the human resources department of local companies offering them discounted restaurant coupons, banking and insurance specials and yes, mortgage discount programs.

With all the talk of breaking up the big banks (by Obama advisor Paul Volcker) how come no one is talking about breaking up the big mortgage companies, including how much in the way of servicing rights each can control? According to figures compiled the Quarterly Data Report and National Mortgage News, the top two -- Bank of America and Wells Fargo -- together control 40% of the nation's $9.94 trillion in home mortgages. Just think of all the bulk servicing rights that could change hands if a breakup is forced upon the industry? It would mean a boon to servicing brokerage firms, that's for certain. Meanwhile, in other news, Citigroup was the most heavily shorted stock on the New York Stock Exchange, with nearly 381 million shares sold short during the last two weeks of December. Citigroup's mortgage division ranks fourth among all servicers but has a meager market share (compared to the big two) of just 7.47%...

HUD OIG AUDITS MORTGAGE COUNSELING SERVICES AND RECOMMENDS IT BE DISCIPLINED

For the next few weeks, Broker Universe will feature some of our favorite Sue Haviland columns from the past year.In a follow up to my previous piece, let’s look at what we as reverse mortgage originators can do to be proactive about how we and the reverse mortgage product are perceived in the market place. What can you do today right in your town to improve your standing in the community and your profession? It’s probably a bit out of the box but you CAN do it. And it will elevate you to a new level and bring you more credibility.

Once again, I have to ask: what is it with Long Island and FHA lenders? Late Monday FHA slammed the door on Premium Capital Funding of Jericho, which was doing business as TopDot Mortgage. The government permanently and immediately ripped the government eagle from TDM's loan menu. The company, it appears had stolen a page from Lend America's playbook by advertising heavily on TV (in multiple markets) using late night infomercials. (One source said the lender was spending $200,000 a month on TV ads.) And like Lend America (they of Melville), TDM has claim rates that are through the roof. (See theNational Mortgage News website early this afternoon for a full update on what went wrong at TDM.) But even though FHA shut them down on Monday, it appears the writing was on the wall last week. I received a tip that the company was about to layoff a large chunk of its staff in Long Island. Also, a mortgage firm in the area advertised for an underwriter position (just one opening) and according to one source familiar with the story, this firm received 50 resumes -- all from TopDot underwriters. One company insider told me this morning that TDM's owners "will fight" the FHA action. Perhaps, but will they hire Rudy Giuliani to do their bidding, which is what Michael Ashley over at Lend America did?...

Relief efforts continue to pour into Haiti after last week’s catastrophic earthquake there. Here in the U.S., technology is changing the face of giving, providing effective tools for raising money for those in need. Provided are a few examples of technology and social media’s impact on the relief efforts.

Networking is one of the keys to developing a successful referral-based mortgage loan origination business. Loan officers need to have personal contact and relationships with other professionals so that those professionals can trust them with their clients.

Will the Federal Reserve really stop buying Fannie Mae and Freddie Mac MBS come March 31? That's the big question hanging over the mortgage market right now. If the Fed stops buying will the GSEs themselves step up and buy their own MBS? If they do, one can hope that Fannie and Freddie have some darn savvy mortgage traders running their desks. Both could stand to make -- or lose -- a lot of money in the months ahead. If the Fed does, indeed, go 'Cold Turkey,' mortgage rates will rise, which will increase the value of mortgage servicing rights. And which companies own the most servicing? The answer is obvious: Bank of America, and Wells Fargo & Co. with 45% of the market. As Mel Brooks once said, “It’s good to be king”...

The Republicans couldn't have had a better week. It started with Scott Brown winning a Massachusetts senate seat and was capped by the Supreme Court ruling that corporations have 1st Amendment rights and the right to be the deciding contributor in the election of presidents and congressmen.

As we reported last week, Total Mortgage Services of Connecticut soon will enter the wholesale sector and hopes to table fund its first loan by the end of this month. For 13 years it's been a retail lender. But we continue to hear rumors that a handful of hedge funds might enter the wholesale space with an eye toward jumbo lending, a niche that is suffering terribly from a lack of liquidity. John Walsh, who runs TMS, told us he recently facilitated a $2.2 million jumbo loan, offering the borrower a no-points 4 and 1/8th five-year ARM. Of course, the borrower put 50% down on the property. Mr. Walsh declined to name the funder. As for TMS' move into table funding, the company has hired Jim Lynch to be its EVP of wholesale and Robin Buttner as wholesale coordinator. Mr. Lynch used to work for Chase, Ms. Buttner for Homecomings...